Hypotheticals

[Atlas79]

I ask this purely for interests sake.

If the following happened, where would you want your money, and why?



-A war broke out in the middle east, not directly involving Australia



-the US dollar crashed / the US entered a period of stagflation



Would Australian stocks suffer? Would any thrive? Any thoughts appreciated...

 

[jono1887]

-A war broke out in the middle east, not directly involving Australia

-the US dollar crashed / the US entered a period of stagflation

Would Australian stocks suffer? Would any thrive? Any thoughts appreciated...

1 - Isn't there always war/conflict in the middle east. But I will assume a large scale one with the entire region affect. With wide scale oil embargo from there to the rest of the world. This will severely affect the entire world market where essentially every industry is reliant on oil in some form or another...

I would guess oil would go over 500 or even 1k a barrel.. the US would probably stop all civilian use of oil, and keep all reserves for military use. Not to sure what would happen to the economy, probably a recession many times worse than the one that the US was hit with last year.

I'd say any remaining oil companies not in the US and their stocks would sky rocket to ridiculous prices. Would be quite nice to own one of those, or own some stocks in them...

I would like my money in gold asap.. fear in the overall market would inflate the price of gold significantly from uncertanity in world currencies. Property would also be good i suppose and the rest in oil stocks!!

 

[Atlas79]

Interesting...

Any thoughts on what would happen here if the US dollar crashed and became worth much less than it currently is?

 

[swm79]

problem with gold is that if the USD crashes and the gold price goes up both are almost perfectly negatively correlated - as we've seen recently; if you look at the AUD gold price vs the price of gold - POG has skyrocketed but AUD gold price has remained flat

 

[skyQuake]

Just like to point out Iran imports 70% of its refined oil. Sure it exports a lot of crude but it has very little refining capacity.
Disagree with property prices soaring, I would have thought a potential chemical missile exploding in your backyard detrimental to property valuations. Caravan prices however, may soar. Gold will rally, USD will rally (its the safe haven currency still).

If the USD decides to implode, everyone is screwed. Gold and metals will soar (only cause its priced in USD). China will grind to a screeching halt and will have to depeg its currency pronto; Its massive FX reserves in USD will hurt. Alot.
Aus would be screwed, without the china story nor the american consumers to feed it; Plenty of articles on kitco but read them with a grain of salt.