April 2nd 2009 - The Day to Watch

What's so special about this day? Its a day when a new world order will be put into motion, either by agreement or by disagreement.

On this day the leaders of 20 nations are meeting in London. The meeting will be chaired by Gordon Brown (European leaders have already "unofficially" slammed Obama's latest Public-Private Investment Program (PPIP) for buying toxic assets). Wonder what their reactions will be when they meet face to face.

The interesting aspect of this meeting is that there will be participation from the developing nations as well. My predictions of the outcome are:

1. Neutral reserve currency or a basket of Dollar, Euro and a pan-asia currency (maybe yuan being the fourth currency in the basket) backed by Gold with a fixed exchange rate (rather than the current floating system)
2. Devaluation of all currencies together to re-inflate the asset value so that the debt becomes a fraction of the inflated asset prices
3. Back the new currency with Gold (not a Gold Standard as such)

What does this mean to you and me. Gold may be at USD 2,000/ounce to USD 10,000/ounce, who knows, but for sure it will rally higher. Make gold 20% of your ("investment money") portfolio, wait and watch, book profit or stay put.

Fingers crossed.