Big price collapse in oil may push dollar higher, gold lower

Mar 18, 2020

It's not a good time to own the traditional safe havens of gold and silver amidst deflationary pressure on the dollar from oil's selloff. True, the federal government is injecting a lot of cash into the financial system and has interest rates at zero, which traditionally would be inflationary. But the price drop in oil is just SO big that it offsets those drivers of inflation. In my opinion, cash remains the best investment until oil prices stabilize.

Mar 18, 2020

Note

Another thought: the reason the Fed has had to inject so much money into the financial system is because of cash shortages. I've seen articles about a few bank branches actually running out of hundred dollar bills and being unable to cash paychecks. Brad W. Setser of the Council on Foreign Relations today published an article claiming a "global dollar shortage" and a "scramble for dollars" by overseas insurers and central banks. I'm not sure yet how big a deal this actually is, but it suggests to me that holding onto your dollars may be the best investment right now.