What to buy??? Commodities Falter in Currencies as History Shows Dollar Wins
Opinions vary on "safe havens"(see below) .... do YOU feel you need a hedge against inflation due to purposeful, central bank currency devaluation.
Why care about currency devaluation? -- how else are gov't's and central banks going to get their "stimulus-created debt-loads" back in line with GDP ratios? (nevermind in line with Revenue?)
.... by raising tax levels?
....by selling sovereign assets?
... or by inflating away "problems" --it's the tried and true solution (sad but true).
My opinion .... buy something you know ..... not an exotic in a faraway place.
Buy something you control (not a piece of paper adminstered by someone else, acquired help from with credit/money they've borrowed to loan to you)
Buy something that 'pays a cash dividend' (generates income)
Buy something that provides a benefit to you .... shelter or capital appreciation or equity growth due to debt retirement.
Does it sound like I'm just a shill for real property investments?
Commodities Falter in Currencies as History Shows Dollar Wins
From Bloomberg
By Yi Tian and Debarati Roy
Dec. 20 (Bloomberg) -- Speculators betting the commodities rally will continue into a third year are being confronted by currency investors wagering the dollar will strengthen in 2011. If history is any guide, the foreign-exchange market will win.
Traders have almost tripled their net-long positions in 20 raw-material futures the past five months to the highest level in at least four years, driving a 26 percent gain in the Thomson Reuters/Jefferies CRB Index, government data show.
snip ...
The U.S. Dollar Index has risen 5.9 percent since Nov. 4 on signs the Federal Reserve’s quantitative easing policy was boosting the U.S. economy. The inverse relationship between the currency market and commodities has strengthened since 2005 and last month reached the highest level in a year. Open-interest data shows investors are stepping back from raw materials after gold and cotton climbed to records and oil and copper reached the highest levels since 2008.
“A lot of the big rise in commodities has not been about fundamentals, but was driven by hot money pouring in as people backed away from other assets,”
snip ...
Investor demand for commodities increased amid the worst financial crisis since the Great Depression and widening budget deficits in Europe and the U.S. because raw materials tend to maintain their value as confidence in financial assets ebbs.
snip...
‘Rather Dubious’
“I’m becoming concerned over the degree of speculation in the commodity” markets, said David Rosenberg, the chief economist at Gluskin Sheff & Associates, a wealth management firm in Toronto. “The outlook for a continuation of the bull market over the next six months appears to be rather dubious.”
Rosenberg predicted in December 2007 that the U.S. would enter a recession, a year before it was declared by the Cambridge, Massachusetts-based National Bureau of Economic Research. He said in late July that the rebound in the Standard & Poor’s 500 Index “has run out of steam.” The benchmark gauge for American equities has gained 13 percent since July 30.
He’s now projecting the dollar will gain as much as 10 percent over the next six months as Europe’s debt crisis spreads from Greece and Ireland to Portugal and Spain. Bets by hedge funds and other large investors that the dollar will strengthen have climbed this month to the highest level since Sept. 10.
snip...
None of the currencies of countries whose economies are most tied to commodities are likely to strengthen next year, according to surveys of strategists and economists by Bloomberg News. Exchange-rates for Australia, South Africa, Brazil, Canada, New Zealand and Chile are all at least 10 percent overvalued based on the relative costs of goods and services, after rallying at least 17 percent, according to the Organization for Economic Cooperation and Development in Paris.
read the whole thing
Why care about currency devaluation? -- how else are gov't's and central banks going to get their "stimulus-created debt-loads" back in line with GDP ratios? (nevermind in line with Revenue?)
.... by raising tax levels?
....by selling sovereign assets?
... or by inflating away "problems" --it's the tried and true solution (sad but true).
My opinion .... buy something you know ..... not an exotic in a faraway place.
Buy something you control (not a piece of paper adminstered by someone else, acquired help from with credit/money they've borrowed to loan to you)
Buy something that 'pays a cash dividend' (generates income)
Buy something that provides a benefit to you .... shelter or capital appreciation or equity growth due to debt retirement.
Does it sound like I'm just a shill for real property investments?
Commodities Falter in Currencies as History Shows Dollar Wins
From Bloomberg
By Yi Tian and Debarati Roy
Dec. 20 (Bloomberg) -- Speculators betting the commodities rally will continue into a third year are being confronted by currency investors wagering the dollar will strengthen in 2011. If history is any guide, the foreign-exchange market will win.
Traders have almost tripled their net-long positions in 20 raw-material futures the past five months to the highest level in at least four years, driving a 26 percent gain in the Thomson Reuters/Jefferies CRB Index, government data show.
snip ...
The U.S. Dollar Index has risen 5.9 percent since Nov. 4 on signs the Federal Reserve’s quantitative easing policy was boosting the U.S. economy. The inverse relationship between the currency market and commodities has strengthened since 2005 and last month reached the highest level in a year. Open-interest data shows investors are stepping back from raw materials after gold and cotton climbed to records and oil and copper reached the highest levels since 2008.
“A lot of the big rise in commodities has not been about fundamentals, but was driven by hot money pouring in as people backed away from other assets,”
snip ...
Investor demand for commodities increased amid the worst financial crisis since the Great Depression and widening budget deficits in Europe and the U.S. because raw materials tend to maintain their value as confidence in financial assets ebbs.
snip...
‘Rather Dubious’
“I’m becoming concerned over the degree of speculation in the commodity” markets, said David Rosenberg, the chief economist at Gluskin Sheff & Associates, a wealth management firm in Toronto. “The outlook for a continuation of the bull market over the next six months appears to be rather dubious.”
Rosenberg predicted in December 2007 that the U.S. would enter a recession, a year before it was declared by the Cambridge, Massachusetts-based National Bureau of Economic Research. He said in late July that the rebound in the Standard & Poor’s 500 Index “has run out of steam.” The benchmark gauge for American equities has gained 13 percent since July 30.
He’s now projecting the dollar will gain as much as 10 percent over the next six months as Europe’s debt crisis spreads from Greece and Ireland to Portugal and Spain. Bets by hedge funds and other large investors that the dollar will strengthen have climbed this month to the highest level since Sept. 10.
snip...
None of the currencies of countries whose economies are most tied to commodities are likely to strengthen next year, according to surveys of strategists and economists by Bloomberg News. Exchange-rates for Australia, South Africa, Brazil, Canada, New Zealand and Chile are all at least 10 percent overvalued based on the relative costs of goods and services, after rallying at least 17 percent, according to the Organization for Economic Cooperation and Development in Paris.
read the whole thing
posted by Walk a Kb or Two in my cassins | 7:57 am
0 Comments:
Post a Comment
<< Home