Gyroscopic Investing

This article piggybacks off some of the posts me and others have made recently.  I'm not saying Europe will necessarily play out this scenario this year or ever, but I think there is a reasonable chance it could play out this way.  If true, the PP asset classes will exhibit far greater volatility than most expect.   

http://lewrockwell.com/slavo/slavo87.1.html

One aspect of this article that puzzles me is the role of gold.  The writer thinks it could drop significantly while I've thought it would rise dramatically if the Euro tanks.  All I know for sure is I'm darn glad I'm in the PP now. 

FarmerD wrote:One aspect of this article that puzzles me is the role of gold.  The writer thinks it could drop significantly while I've thought it would rise dramatically if the Euro tanks.  All I know for sure is I'm darn glad I'm in the PP now.

Well, the dollar has surged over the past month against the Euro and gold went down. But, did gold really go down? Or did the dollar just get stronger? Too many moving parts to know for sure, but we know that the dollar didn't get weaker versus gold.

When large European banks start selling everything to raise cash in a hurry, the dollar should surge and gold could easily get slammed for a few weeks. But, just because the dollar surges, doesn't necessarily mean that gold is getting weaker against other currencies or that gold is toast.

Gumby wrote: When large European banks start selling everything to raise cash in a hurry, the dollar should surge and gold could easily get slammed for a few weeks. But, just because the dollar surges, doesn't necessarily mean that gold is getting weaker against other currencies or that gold is toast.

Certainly possible.  But if the Euro starts circling the drain, wouldn't this lead the a "crackup boom" von mises talked about?  I'm thinking individual europeans might rush to gold as well as dollars.  Would the gold sellers (i.e. banks) offset individual buyers (average people)?  Who knows.