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Later in 1984, the worm will begin to turn in favor of inflation hedges. Inflation will not return to double-digit levels this year, but the markets will begin to anticipate it. Gold, silver, and the platinum-group metals will finally start their long-awaited resurgence toward year-end.
The dollar will probably begin its slide even before then. Those with a speculative turn of mind will be able to make large profits going long in such currencies as the Japanese yen, German mark, and Swiss franc. The less speculative can hold foreign-currency-denominated CDs (certificates of deposit) abroad or invest in foreign securities.
The one thing that could nix this admittedly gloomy forecast is if the Fed simply refuses to permit another resurgence of inflation and takes the politically unpopular course of letting the economy lapse back into recession. But if it tried such a policy, the Fed would likely have its hand forced the other way.
Steve Beckner is a financial reporter and columnist for the Washington Times and the author of The Hard Money Book.