Something tells me that gold wont move much either up as speculative demand for commodities goes down or down(usd weakness should create a floor) . I'm building a position on a 'recession' stock however it will get crushed if we are in for stagflation so I'm looking for other ideas
We are obviously into stagflation. Not as bad as it was in the 70's, but in that direction. High tech defense did well, but that was because Reagan got elected and pumped up government spending on defense. I don't think there will be the option of increasing defense spending this time. I have no idea where to hide, other than I put some into gold unless/until interest rates go 2% above the real inflation rate, which I estimate to be 7% at least.
About the only two things that did well during the Great Depression were real estate and Gold Mining Stocks. In fact, Gold Mining Stocks soared in value during this era.
I will start looking at GLD to buy on a nice pullback, not here though to high, unless one ones to dollar cost average, which I am not willing to do. I am glad this thread was started I was wondering the same thing. Curious to see feedback.
US indexes drop on average 40% the period before and during recessions however I dont have the guts to short these. Not unless we get another 'mini-crash', then I'm jumping with no mercy
Then perhaps you will agree with what I have recently done - moved 2/3 of my TIAA/CREF + Vanguard (403b pension) assets into TIAA/CREF's TIP fund. (Could not take out of TIAA/CREF for tax reasons. I have larger value in ADR holdings - so only trying to not lose purchasing power with these TIPs, as dollar declines.) About five years ago, I took all my other assets and bought ADRs of Brazilian and Indian companies with funds then totaled about half of my pension assets at that time, but now in depreciated dollars, these ADRs are double the pension assets. Best increase was SBS (water and sewer of Sao Paulo, where I retired to.) In dollars, up >700% now, but the ADR average is up >350% Most think TIPs dull - wait till the US mint's presses run 24/7 to honor foreign central bank's maturing Treasury Bonds, which they will not roll.
I like your diversified setup. I think thats wise. How is the TIP rate determined? I thought they use the reported CPI. That's why i've avoided them. Also, if rates rise, bonds decline. Maybe that's not true for TIPS, though. In 1980, bonds got creamed when rates went to the moon to kill gold and inflation, but then bonds went to the moon when the rates started going back down. As for gold mining stocks doing well, the chart you want to look at from 1929 to post war would be Homestake mining. It went up by a factor of 10 as I recall reading. I think the key is to own something that will produce rediculous income when gold is at $1200 or $2000. The printing of paper money around the world will get it there in the next few years, I think.