European Economy Collapse, Investment in the Dollar vs Gold and the Trade Deficit

Listeners’ Questions, Peter’s Answers- November 3, 2011

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Jan from Copenhagen (Denmark)
I’m a huge fan living in Denmark, the most socialistic nation in the world. Could we face a situation where the European economy collapses first which makes the dollar rise and subsequently the U.S. economy falls, making the European currencies rise leaving no gains for gold? And would you invest in gold if you were living in Europe?

Kevin from Dubai (United Arab Emirates)
With all the market uncertainty, why are investors pouring money into the dollar and not into gold?

Tom from Schaumburg, IL
How do the companies such as Google, Facebook, and LinkedIn add to the country’s economic output if they don’t really produce anything tangible? They are worth billions of dollars, hire thousands of people, yet I don’t see how they can help reduce our trade deficit even though they serve people all around the world.

Jeremy from Fort Lauderdale, FL
How do you substitute your free market, dollar-adverse, investing style into the standard models? I.e., traditionally, international equity positions are considered very risky, and U.S.-based “blue chips” are considered safer. So is it as simple to just swap conventional wisdom? Is there a structured way I can fo about confidently building portfolios?