nevajism Posted March 16, 2006 Share Posted March 16, 2006 Ok i havnt checked everywhere so this may have been discussed already in which case please point me to it my thinking is this (im not an economist btw) - although the american economy isnt too healthy at the moment they do seem quite keen to stop inflation (i.e they have incereas interest rates alot and there is talk about further increases in IR) on top of this the dollar is tied directly to other currencies (chinese) which makes you think its likely to be stable- compare this with the UK situation- there seems to be no noises at present for interest rate rises and there seems to be alot of redundencies and bankrupcies- if you look at the graph of the pound against the dollar (see graph) you can see that there was quite a drop in the pound after the last crash . what im thinking of doing is puting my savings in a 12 month currency account with nat west- they will offer 4.5% - that way if The BoE try to stop a HPC by a devaulation (i.e. lowering interest rates) then im covered and if they dont there isnt too much reason to think the pound is going to go up in value in the next year- what do peopl think- as to the idea and is there a better way to hold the money than in a currancy account (where you have to hold it for a fixed term and need a minimum deposit) thanks nevajims Quote Link to comment Share on other sites More sharing options...
Guest Posted March 16, 2006 Share Posted March 16, 2006 I discovered this site about a year ago now, and there were people who were transferring out to foreign currency then. Of course, at the time I didn't know much about it, and you don't take advice from a bunch of nutters on some web site or other but increasingly I am considering this too. I'm also waiting to find an appropriate time to get into the gold run - if indeed it has any further upside to it now that world interest rates are rising. MarkG seems to know about this, and has moved his money out to Canadian Dollars. The pound has fallen against the Canadian dollar over the past year - quite significantly - but I think this is to do with investors moving into Canada, rather than us being *quite* that crap, so to speak! MoneyWeek also ran an article a couple of weeks ago about Canada, and described the country as a potential financial safe haven for 2006. Quote Link to comment Share on other sites More sharing options...
Goat Posted March 16, 2006 Share Posted March 16, 2006 Frankly, looking at US federal & trade defecit, I would suggest that the potential is for the dollar to fall relative to sterling and not vice versa. Quote Link to comment Share on other sites More sharing options...
Karen Posted March 16, 2006 Share Posted March 16, 2006 I'm an American. I wouldn't buy dollars. Quote Link to comment Share on other sites More sharing options...
Guest Posted March 16, 2006 Share Posted March 16, 2006 neva: I agree with your observation about the value of the pound during the last crash. The country was in recession. It seems to be standard practise to lower interest rates during a recession (comments welcomed here). In fact, they need to go both ways at once! But down seems to win, to try to kick start things. Personally, I believe that the BOE - acting alone in the world - raised rates in a very careful and controlled manner in 2004 to stop the house party going tits up BEFORE the general election. I don't totally accord with the BOE-bashing that goes on on this site. I have a little more faith: They know that housing booms drag the country's consumer economy into recession. I am beginning to strongly suspect that their game is to keep the country "ticking over" (but not in a great way, but not in an obviously bad way) until the USA catches up with us (happening now), since they've been behind us in their housing boom. If the US economy goes into recession (!) then it will take out other countries too. It would have been a disaster for Britain to see us in a home-brewed recession for a couple of years, say, 2004-2006, for the USA to then go tits-up in 2006 and induce a wider global recession for X many years. I suspect that the BOE monetary policy is to synchronise us with our foreign partners, so we have as small a period in recession as possible. From a political standpoint, this hands New Labour the 2005 election with no ill feeling from the house-mad electorate (no jobs lost also), and it also means that when/if we do go belly up, it will be at the same time as the foreigners so we can blame them, AND we have the flexibilty to do a "quickie quarter point cut" if need be (ahem... August '05). So, a long reply to your point, but I do belive IRs will stick and then go down as we sink into recession. Sorry guys. IMHO. I'm prepared to be proven wrong. Quote Link to comment Share on other sites More sharing options...
MarkG Posted March 16, 2006 Share Posted March 16, 2006 (edited) MarkG seems to know about this, and has moved his money out to Canadian Dollars. Yeah, but right now I'd put the odds of the Canadian dollar rising or falling against the pound at about 50:50. It's tied to the US dollar and the price of oil, so if either drops it should drop against the pound... on the other hand, if Bush blows up Iran, it will rise quite a bit . If I was speculating I'd think about moving my money somewhere else now, but I just want to get the best possible deal with my 'buying a house in Canada fund'. Edited March 16, 2006 by MarkG Quote Link to comment Share on other sites More sharing options...
sp1 Posted March 16, 2006 Share Posted March 16, 2006 Its an important ime i think to be contrarian in cable. The hysteria of house price rise for ever only has a paralell with the USD must fall and Gold forver. I would play contary to all three... On USd there is no attention on why even though the Anti dollor story gains wider wider audiance and bernanke is in and inflation is in. Yet the usd is up from 1.95 So where is the market wrong....cos erm they cant be wrong can ther the USD bears..... The market is not wrong there are reasons...by the time averone realises they will clamour to buy back USD... Quote Link to comment Share on other sites More sharing options...
Realistbear Posted March 16, 2006 Share Posted March 16, 2006 Who wants to see a strong US $? China, Japan, OPEC, India. Therein lies the answer. Quote Link to comment Share on other sites More sharing options...
MarkG Posted March 16, 2006 Share Posted March 16, 2006 (edited) China, Japan, OPEC, India. Therein lies the answer. In the short term, perhaps: but they're increasingly becoming competitors with America and have less reason to prop it up. The US dollar has mostly been supported lately by expectations of plenty more interest rate rises, but with recent economic data that's looking less likely. Edited March 16, 2006 by MarkG Quote Link to comment Share on other sites More sharing options...
Craig Posted March 16, 2006 Share Posted March 16, 2006 Has anyone any thoughts on Swiss Francs? Quote Link to comment Share on other sites More sharing options...
BoredTrainBuilder Posted March 16, 2006 Share Posted March 16, 2006 JPY seems to be likely to firm over the medium-longer term. And I agree with MarkG that the Canadian dollar looks good. I've just closed out my USD position, I think GBP looks stronger. Its still a petrocurrency, at least for the next few years. Quote Link to comment Share on other sites More sharing options...
sp1 Posted March 17, 2006 Share Posted March 17, 2006 (edited) In a distant hystria people will need alot of USD to buy enrgy (oil spike $200-$400 ) In a distant Hysteria people will need alot of USD to meet thier interest payments on USD denominated debts. When this double whammy arrives it will put alot of the multi level SELL USD propaganda into context. Am I the only wone who can see the ship on the horizion?? Accumilation markup distribution. And political context to rerack the debt game inflation deflation. The good ship Wealth Transfer heading this way calling at all global destinations... Edited March 17, 2006 by sp1 Quote Link to comment Share on other sites More sharing options...
TheJudge Posted March 17, 2006 Share Posted March 17, 2006 (edited) In a distant hystria people will need alot of USD to buy enrgy (oil spike $200-$400 ) In a distant Hysteria people will need alot of USD to meet thier interest payments on USD denominated debts. When this double whammy arrives it will put alot of the multi level SELL USD propaganda into context. The good ship Wealth Transfer heading this way calling at all global destinations... Thanks sp1, for making me think. (I was focusing on short-to-medium term fluctuations, but the longer term picture is more important.) Edited March 17, 2006 by TheJudge Quote Link to comment Share on other sites More sharing options...
Realistbear Posted March 17, 2006 Share Posted March 17, 2006 Buying into the US$ now is like STRing before 2004. You'll end up losing a packet! Why are people recommending the US$ when it's been tanking all week? Hasn't it become obvious that the FED are gonna do the dirty and stop their rate hiking fairly soon? IMHO, they may be following Warren Buffett's philosophy of investing. 1. Go for value. 2. Watch the herd and go in the opposite direction. Medium to long term, the US $ will be more resilient when the recession bites and they hold massive oil reserves. Quote Link to comment Share on other sites More sharing options...
Pent Vaer Posted March 17, 2006 Share Posted March 17, 2006 If I was speculating I'd think about moving my money somewhere else now, but I just want to get the best possible deal with my 'buying a house in Canada fund'. Yes, IMO CAD is actually quite risky if USA head for recession. Most of their trade is with USA and most of their reserves are USD. I'd have moved out when CAD peaked at 0.74 against the euro, if the old mining stocks weren't doing so well. Pent Quote Link to comment Share on other sites More sharing options...
brainclamp Posted March 17, 2006 Share Posted March 17, 2006 Well, all I can say is, good luck to you. It's worth bearing in mind that the herd get it right as often as they get it wrong; therefore, I'll be basing my decisions on more reliable gauges rather than pure speculation. Since you last bought up the subject on Wednesday, the US$ has loss significant ground across the board, and there's no sign of it abating as yet. Now that the Japs are beginning to ratchet up their rates and the US seems to have decided to stop before long. I'm afraid I don't have much faith in the Yanks at this point in time. No doubt we'll have a clearer picture before long; but I for one, won't be touching the US$ until I see real some real evidence of the FED acting against inflation in the longer term. If I were to hazard a guess now, I would say that US is trying to inflate their way out of trouble with a bit of brute force chucked in for good measure. If the dollar drops Chinese and Asian goods become even cheaper. I hope your right - Something I am aiming to buy will get even cheaper!. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted March 17, 2006 Share Posted March 17, 2006 Yes, IMO CAD is actually quite risky if USA head for recession. Most of their trade is with USA and most of their reserves are USD. I'd have moved out when CAD peaked at 0.74 against the euro, if the old mining stocks weren't doing so well. Pent If the US catches a cold Europe catches the _____. Canada are very dependent on the US. China, India and Japan have more to lose with a soft dollar. Quote Link to comment Share on other sites More sharing options...
sp1 Posted March 21, 2006 Share Posted March 21, 2006 Please explain why the market is wrong! Q1: As I mentioned the Anti-dollar story from various angles continues to gain traction yet the dollot is up from 1,95 since Dec 04. Your informatative article from money week is really nice, thanks. But it is mainstream now so it lack any empowerment. The first rule of speculation is that there is only one rule; He who has ALL THE GOLD SETS ALL THE RULES!! Think about this....Is the market free are people free? What ever the motives and Intent of those with all the gold is what you need to ponder on. A clue you wont find any mention in the mainstream before the move is well under way. I keep hearing about the USA debts...well guess what the creditors are not "FORCED" to respond equally to all situationts. The wholse system i s cartel and the one With all the gold will do and make happen what ever pleases his position and interestes.... One day you may learn this. Read the links i have been making in my posts over the last few weeks. Take care Sp1 ps before you reply think of an answer for Q1 above, and before you post it ask some one who has consistiently been profitable in markets if your answer is reasonable. Quote Link to comment Share on other sites More sharing options...
CapeFear Posted March 21, 2006 Share Posted March 21, 2006 Thanks sp1, for making me think. (I was focusing on short-to-medium term fluctuations, but the longer term picture is more important.) sp1's post to which you were referring looked to me like an avantgarde play. You know, like the one portrayed in "Spaced". A chain of words without any obvious meaning. You're not a guru, sp1. Try to express your thoughts more clearly please, thanks. Please explain why the market is wrong! The market is never wrong. MoneyWeek, Financial Sense, Daily Reckoning etc are to be ignored just as everyone else with a fixation. They aren't in touch with reality as they don't allow themselves to be. Having said that, the clouds ARE gathering. The twin deficits do need to be dealt with. I'm betting on the US personally, but I'm not expecting a smooth ride... Quote Link to comment Share on other sites More sharing options...
sp1 Posted March 23, 2006 Share Posted March 23, 2006 You're not a guru, sp1. Try to express your thoughts more clearly please, thanks. SOme how energy spikes up say crude takes out $200 or even $400... Thais can come from Iran strike or some thing else that leads to and Opec emargo ar some other energy related geopolitical situation comming together. This forces official infaltion above targets and gives the Central banks an excuse to send rates up. In this senario capital flight from investments start cos organisations realise there investied cash is not doing well as by now recession and negative economict sentiment abound. Capital leaves Uk and is converted Disproporitnatley converted to USD more than other currancies because most will need USD to buy extreemly expensive enrgy (will need loadsa USD). On its own this streagthens USD And at the same time Need alot of USD to service dollor denominated debts...Significant number of recent debts over the last 2 years will be from a time the USD was weak so the currancy risk and high interest rates compound the amount of ther currenciers sold to raise enough USD to service the debts. This adds to the strengthening of USD Over here the result is sterlin gets trashed and BOE need to crack up higher and for longer to limit this importation of inflation via weak sterling this feeds back to increase capital flight from sterlin. At the moment of victory the situations and nature of things become all alighned so that it seems all the forces of nature are working to make it effort less. Quote Link to comment Share on other sites More sharing options...
BayAreaBear Posted March 23, 2006 Share Posted March 23, 2006 For what its worth here is my 2c worth. Dollar and Pound trend together. Pound moves first. The pound has recently moved down to .69 eur for the first time in a while and looks like it might be breaking out of a triangle. If o then look for the poound to trend down against the euro followed after 2 - 4 weeks by a dollar downtrend. Scenario cancelled if pound moves back over .69 Fundamentally the dollar and pound are very dependent on interest rate differentials and y intermediate scenario includes nominal interest rates rising while real interest rates fall (using inflation expectations not inflation as the determinant of real). Widening yield curve and panicky collapse at the short end by CBs. Watch out when the yield curve start to steepen (next week? next year?) Dollar and pound both going down GOLD is the answer but hard to buy at present after the big run up. Buy some now buy more later. BAB Quote Link to comment Share on other sites More sharing options...
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