Damn Sulavaca, your last line made sense even if I think your obsession with gold can get a bit ‘run off to the hills and raise chickens’ like sometimes 
. I would definitely NOT buy US dollars with the defecit going to hell. Debts catch up with you eventually as we have seen spectacularly with the housing crash. UK pound, I also agree it could be at the bottom yet it also runs the risk of a bigger collapse before switch to Euro. Too risky for me to speculate savings on. I’d say gold, Yen, RMB due to large reserves of Chinese goverment, Korean won as it has severely devalued already… I don’t have any idea about the Euro.
I understand why people say stay away from the , but to be honest, it is always the that people run to in times of uncertainty and crisis. The £ is in real trouble due to the incredibly weak UK economy news.bbc.co.uk/1/hi/business/7820728.stm and our borrowing levels which are as bad as when we last went bankrupt as a nation in the late 70s. I personally can see the UK going bankrupt again and ending up at the IMF’s door, so the £ would be a basket case by that stage. The US is in a mess, no doubt, but it is still the place that Asian nations peg their currencies to and bother about the most. The Euro has done well, but some European nations are in as big if not a worse mess than poor Old Blighty, so don’t expect the Euro to escape and it may well even break up eventually. The idea of gold is not as desperate as it sounds. It is great in times of inflation, which will surely come after 2010, but it is also good in times of deflation as you do not pay banks to keep your cash. I have bought gold and will buy some more early this year and then keep hold of it. No currency is entirely safe, but the Yen, $ and Swiss franc are usually the ones to have in times like these, but then again, maybe we haven’t seen times like these before, so who knows. I’m sticking with gold for now and heading to the hills with my chickens
These have worked well for me in the past. Very portable.
The pound appears to have bottomed out for a while, given that interest rates are about as low as they can meaningfully go. But I don’t see anything intrinsic to the UK economy which is going to make the pound more valuable. It may rise slightly cf. the euro and US dollar as they are sitting on the edge of a cliff, but I think the pound will be at its current low value for a while until other currencies complete their competitive devaluation. I like watching how currencies dive against the CNY, which is uniformly strong (being a controlled currency) and a good benchmark. Sterling has cakked its bags against the CNY, but the euro and dollar are still hanging in there with only half-full trousers.
Some interesting lines to feed off here.
First I believe the run to the Euro is a safe haven mistake. The European economy is riddled with holes and is suffering, yet the Euro of late has risen in value due to hedging. I don’t believe the E.U. can manage to support the Euro at these levels. We also have the major issue of Germany (Angel State) and Britain being major contributors to the poor Euro countries such as Greece, Spain and Italy who now run the risk of total meltdown since their donors have just run out of blood. If just one of these countries dumps the Euro in favor of its old currency, the zone could face catastrophic consequences and so will the currency.
The R.M.B. according to China may be devalued to encourage export growth now that things have clogged up and slowed right down, so that would be a dangerous investment, besides China is one or two months lagging behind the current Western crisis and is due to continue its catchup and slowdown effect over the coming months.
Read about the Yen carry trade to get an idea of how that may pan out.
Its funny you mentioned chickens as my father reports from England that the neighbors are ramping up production of their own produce as well as turning our local football pitch into allotments. Several neighbors have already purchased chickens for eggs and meat. According to him inflation has meant that people have less money than ever for food and transport specifically, and so have been forced by inflation to go into home growing.
Some figures for you. Total U.S. dollar numbers have increased 75% since Dec 2007~Dec 2008. 54% of that was from the month of Sept 2008~Dec 2008. Trust me, once those numbers filter through the system, there will be some scary times ahead indeed.
We have seen what has happened to Brit pounds over the past two months and that is the beginning of its problems. U.S. dollars are far more inflated than British pounds and the only reason dollars are held up like an anvil in the sky are that they presently represent the world currency. When Asia can no longer afford to maintain the value of that currency, things will change. The Bond market in the U.S. is already practically collapsed and gold returns have surpassed Bond returns and dollar interest, which tells me only one thing. That anvil looks heavier than ever, and what is gold priced in?
The next thing you have to understand is that a gold account in most Asian countries must have actual gold to back it, so when Taiwan bank tells you that you have purchased a value of gold and your account shows that credit, then by law they actually have it. You can go there on Monday and withdraw it as soon as the bank opens and they are obliged to fulfill your request. In the U.S.A. they don’t have it, even though your account may show a dollar value amount in gold there, and U.S. citizens are resorting to purchasing it from Ebay for immediate delivery. Check out the actual physical price of gold in the states and compare that to what the gold chart (banks) proposes its worth and the chart is low by about 150 U.S. per ounce.
Again if countries stop trusting the dollar as a world currency, then gold will be priced in something else, and when that happens all hell can let loose.
At present there is a battle between banks which are trying to cap the value of gold and silver so that their precious fiat currencies don’t immediately become worthless, and other affluent banks and countries that hold physical which are hording ever more as we speak, knowing that their time will come. Banks are drawing a fine line between selling their gold to maintain paper currency value, or hoarding it should we soon reach the end of days for our present financial system.
Well you already know what my money is bet on happening. China seems to have a hungry capacity for gold right now too with announcements of purchase plans for 4,000 tons (Wherever they’ll find that amount, I have no idea). The middle East is buying. Poor old Britain sold nearly all of its when Brown was chancellor and decided that old yellow stuff was cluttering up public vaults and that the days of boom and bust were over. Ho, hum…here we go again! Now poor old Britain can’t pay off its debts as it doesn’t have enough collateral, which is the other reason Britain is so severely screwed right now. ‘Iceland’ ring any bells?
Some recent sentiment for you: Merrill Lynch says rich turning to gold bars for safety
The GBP-TWD and EUR-GBP rates are fucking me sideways right now. I am almost completely horizontal. What else can I say?
:blah: I seem to remember offering some good advice on the upside potential of the pound to a few people… I just can’t find those comments now… :blah:
[quote=“sulavaca”]
U.S. dollars are far more inflated than British pounds and the only reason dollars are held up like an anvil in the sky are that they presently represent the world currency. When Asia can no longer afford to maintain the value of that currency, things will change. The Bond market in the U.S. is already practically collapsed and gold returns have surpassed Bond returns and dollar interest, which tells me only one thing. That anvil looks heavier than ever, and what is gold priced in?
The next thing you have to understand is that a gold account in most Asian countries must have actual gold to back it, so when Taiwan bank tells you that you have purchased a value of gold and your account shows that credit, then by law they actually have it. You can go there on Monday and withdraw it as soon as the bank opens and they are obliged to fulfill your request. In the U.S.A. they don’t have it, even though your account may show a dollar value amount in gold there, and U.S. citizens are resorting to purchasing it from Ebay for immediate delivery. Check out the actual physical price of gold in the states and compare that to what the gold chart (banks) proposes its worth and the chart is low by about 150 U.S. per ounce.
Again if countries stop trusting the dollar as a world currency, then gold will be priced in something else, and when that happens all hell can let loose.[/quote]
How exactly is gold “priced in” USD??
There’s a price at which some particularly sized chunk of gold can be bought by paying for it in USD, but it isn’t “priced in” USD any more than bread is “priced in” USD.
You can also buy that same chunk of gold for a certain number of Euros, or a certain number of TWD, or a certain number of GBP. Not only that, but you can buy a certain number of Euros for a certain number of USD, and then you can use those Euros to buy the chunk of gold. (Feel free to switch “Euros” or “USD” or “gold” to any other of these symbols if you so desire. They’re all basically interchangeable, at the market rates.)
Probably the only currency that won’t work is Zimbabwean dollars (or whatever they call their toilet paper), simply because they’re so thoroughly fucked that nobody wants to exchange their toilet paper for anything else. Their currency isn’t current, ha-ha.
In other news, SRS is up nicely today, and with the coming collapse in commercial real estate in the U.S., I expect it to continue to rocket. That said, at this point I’m so sick of the lossiness of the double-inverses, not to mention the constant “rescue” plans that those vermin in office have been carpet-bombing me and my ilk with, that I’m actually shorting stocks instead, Bog help me. But I digress.
Anyway, yeah, grab some gold while the grabbing is good. I am. We’re boned. Good luck to most of you.
I can now confirm that the once great £ sterling is officially at its lowest ever rate against the Yen and even the mighty NT$!!! How fucked is that? Even the Zimbabwe $ is starting to look more attractive. Still, if it keeps dropping, the Tai Tai’s planned PhD studies in 2010 will look cheaper and cheaper. Sad to see my nation bankrupt again though, and it is a Labour government that has done it once again. Damn fine effort boys and girls :fume:
I’m here at the moment. My work seems to follow in countries with shit currencies. I don’t think the UK has anything which intrinsically makes the pound more valuable. But what the UK does have is the ability to devalue, which the PIGS don’t (Portugal, Italy, Greece & Spain).
Right now I see the Euro as unsustainably high (against most currencies) and I think the Europeans are 6 months behind UK in declaring all their troubles. Germany is in much bigger trouble than it would appear as they manufacture the equipment for manufacturing equipment. Either the Euro will have to devalue or there is the possibility that certain countries may leave it.
You wouldn’t believe how many ‘For Let’ signs are in most high streets across the UK - more than I’ve ever seen anywhere. Lets see what toll unemployment has on property prices during the next 6 months - but I see further slides.
We’ll experience worldwide deflation for 1, maybe 2 years before the effects of printing money create significant inflation where fixed assets jump in price - that’s where the government gets to fuck you over in capital growth taxes for so called ‘appreciation’ of value.
So we’ve had a tech bubble, property bubble and a short lived commodity bubble - whats next?
Well hot shit. With the pound edging below NT$46 I am now officially on English Teacher wages. 
Economic reality.
I’m here at the moment. My work seems to follow in countries with shit currencies. I don’t think the UK has anything which intrinsically makes the pound more valuable. But what the UK does have is the ability to devalue, which the PIGS don’t (Portugal, Italy, Greece & Spain).
Right now I see the Euro as unsustainably high (against most currencies) and I think the Europeans are 6 months behind UK in declaring all their troubles. Germany is in much bigger trouble than it would appear as they manufacture the equipment for manufacturing equipment. Either the Euro will have to devalue or there is the possibility that certain countries may leave it.
You wouldn’t believe how many ‘For Let’ signs are in most high streets across the UK - more than I’ve ever seen anywhere. Lets see what toll unemployment has on property prices during the next 6 months - but I see further slides.
We’ll experience worldwide deflation for 1, maybe 2 years before the effects of printing money create significant inflation where fixed assets jump in price - that’s where the government gets to fuck you over in capital growth taxes for so called ‘appreciation’ of value.
So we’ve had a tech bubble, property bubble and a short lived commodity bubble - whats next?[/quote]
I’ve seen this statement on a lot of forums recently but I haven’t had it adequately explained to me yet. It seems lots of people think inflation will make fixed assets more expensive and eat away debts. But I can’t understand how that can happen unless
- Banks opening up easy credit to consumers again (stagnating incomes, rising inflation impacts consumers abilities to pay back loan, increasing risk)
- Consumers are willing to take on big loans (hard to see that happening)
- Salaries go up (no way Hose!)
So I just don’t get this argument to be honest. I think there will be inflation due to weakening currencies in many countries like US, UK, but fixed assets being more expensive, why? Products yes… but salaries and incomes in general will not go up.
in 1994 it was 34 NT to the pound, so now is not the lowest rate.
It was also 45NT/ 1 pound in 2000.
From an uneducated point of view I try and avoid currency risk. My simple take on life is to work out where I need the money and put it there. As my pension and most of my long term investments are in US$ as are my wages that is what I tend to stick to.
I did buy a house at the top of the market in the UK however - and the price is sliding merrily. Funny thing is I am not unhappy about this because: -
The repayments have become massively cheaper thanks to the exchange rate
The rent now covers the mortgage payments by 200% because the interest rates have gone down
What I have learned from this I think is that buying property in an overheated economy - using debt - can be a good thing.
Not sure whether this will help anyone else… but it might.