On Knife's Edge
Crisis Coming, But When & Where?
Al Friedberg (AA) sees the global economy perilously balanced on a sharp knife's edge .. "As sure as night follows day, the present state of affairs will break down. It will almost certainly start with a unilateral declaration of default and the abandonment of fiscal restraint by one or more of the indebted nations. A disorderly default will bring on a second global crisis .. Terrifyingly, governments will be unable to intervene as they have been unnecessarily maxed out .. Terrifyingly for citizens, the social unrest could turn violent and unbounded; terrifyingly for investors, it is not clear what type of investment asset, if any, will escape the crisis." .. sees economic conditions in Europe as getting worse, is pessimistic on European economic solutions due to Europe's statist & paternalistic mindset .. it is not clear if the U.S. economy will be able to withstand Europe's crisis .. emerging markets also have increasing economic challenges .. remains long-term bullish on gold, points out central banks increasing their reserves in gold .. his investment philosophy now: go long (buy) assets on countries that are likely to benefit from muddling through this global economic crisis, go short (sell) assets on countries that are not likely to benefit greatly from muddling through or that will go into economic recession.LINK HERE to download the report in PDF