Back to the 70's

It is an interesting comparison made in the following article. There are many similarities to the 1970's. Only that now the U.S. has its military on the ground near th eworlds oil hub. It only takes an order...it only takes an order.

This article points to the similarities with the 1970's while talking about the current developments.

Back to the 70s

Resource prices like oil would inflate well beyond current price ranges under such circumstances, just like in the 1970s. But that was not a good time for stock markets as inflation hit corporate profits with rising input costs, real estate slumped and then drifted upwards and those on the fixed income of bonds were really stuck.

Hence energy and resource related financial assets like oil company shares, and precious metals would likely be the best investments in such a scenario. Whatever Dr Bernanke says this looks the direction in which the US and global economy is heading.

The next step should be a stock market crash which would rally the US dollar followed by much lower interest rates which would devalue the greenback. Thereafter inflation would sort out global debt levels and rebalance the world economy.

But most investors are invested for precisely the reverse scenario and so will suffer badly.

Do note that this is not reported in the mainstream.