News It's Really Time To Own US Dollars (ECB Money Printing)

[RummyBoy]

Draghi Commits to Trillion-Euro QE Plan in Deflation Fight - Bloomberg

If I were in the Euro Zone right now, I would be swiftly taking my ass to the FX exchange to buy US Dollars (the "All American Currency" will be as sweet as an "All American Milkshake" which I had earlier today) because the all European currency is headed for the shitter over the next year..... parity with USD now looks very possible.

USD is going to be king.... It's too late to buy some Swiss Francs, so id probably have a secondary with Chinese RMB. Id also have at least 10% of my cash in gold & silver.

The only concern I have is this - all the talk is about raising US rates this year but there is a lot of skepticism about whether this will "ACTUALLY" happen considering inflation is subdued and considering its a form of tightening which the markets/economy wont like. If the US instead opts for QE4 to match the euro zone, then what?

[Paul&John]

Finally something that will make up for shitty sales lol

[JTC]

Who knows

[RummyBoy]

Peter Schiff seems to think the HKD (Hong Kong) and RMB (Chinese Yuan) could pop...

[CAHEK]

EUR USD has crashed to the lowest level since 2003

1USD=1.13 EURO

[RummyBoy]

Originally Posted by CAHEK

EUR USD has crashed to the lowest level since 2003

1USD=1.13 EURO

This is just the start. I'm so glad I ditched my euros back at 1.36 but I just feel sorry for people holding the bag. It's not a great time to get out but things probably will get worse for the euro over the next year.

[aka123]

Originally Posted by RummyBoy

Draghi Commits to Trillion-Euro QE Plan in Deflation Fight - Bloomberg

If I were in the Euro Zone right now, I would be swiftly taking my ass to the FX exchange to buy US Dollars (the "All American Currency" will be as sweet as an "All American Milkshake" which I had earlier today) because the all European currency is headed for the shitter over the next year..... parity with USD now looks very possible.

USD is going to be king.... It's too late to buy some Swiss Francs, so id probably have a secondary with Chinese RMB. Id also have at least 10% of my cash in gold & silver.

You realise that what ECB does now, is what FED has been doing for long time with much bigger quantities and is somewhat still doing?

Also, currency trading is one thing, and actually converting euros to physical USD dollars is another. And why not sell US stocks and to buy European stocks? Stocks did already rise. The currency rate change is not that much anyways that bying US stocks now and selling those later, would be that good idea.

[pornmasta]

For Germany, this is the sound of the dropping euro:

[Barry-xlovecam]

Where is the top?

[RummyBoy]

Originally Posted by aka123

You realise that what ECB does now, is what FED has been doing for long time with much bigger quantities and is somewhat still doing?

Of course I do, but they completed the taper and are giving forward guidance about raising rates this year so that's tightening and in the face of loose monetary policy around the world, that's why the USD has strengthened so much in the last year and probably will continue.

However, as I said, the skeptics say that the FED will reverse trend (because they're now hinting about it) and hence we could possibly receive QE4 end of this or early next year.

The problem is that there weak inflation and the inflation target is 2%. Privately they could be seeking 3 - 4% inflation and QE will help them get there.

[RummyBoy]

Originally Posted by Barry-xlovecam

Guess where the smart money went?

Euro hit a low of 1.11 to USD today and when it hits record lows everyone will show surprise. What interests me is how Gold and Silver are up in the face of a stronger dollar when usually they are inversely correlated to the USD. Now when the USD has finished that uptrend, metals will get even more pop.

So far this year (Just One Month In) Gold is up:

10% in USD
10% in CNY
11% in AUD
14% in GBP
17% in CAD
17% in EUR

[Barry-xlovecam]

Inflation Adjusted Gold Return Calculator - Don't Quit Your Day Job...
Measuring Worth - Measures of worth, inflation rates, saving calculator, relative value, worth of a dollar, worth of a pound, purchasing power, gold prices, GDP, history of wages, average wage

Period	Annualized Growth Rates
Range	From	To	                                DJIA	S&P500	NASDAQ
1	January 23, 1995	January 22, 2015	7.88%	7.73%	9.61%
2	January 23, 1995	January 22, 2015   Annualized Gold Return 6.265%

Calculate it in time spans. Like a casino churn -- in the long run you lose
Of course, there are exceptions to the rule

Watch copper prices for a barometer (and harbinger) of future industrial demand and economic performance. Hopefully, this is just a commodities price draw down affect.



Doesn't look too good.

Euro
1.119760
-0.016590 -1.46%

[RummyBoy]

Originally Posted by Barry-xlovecam

Period	Annualized Growth Rates
Range	From	To	                                DJIA	S&P500	NASDAQ
1	January 23, 1995	January 22, 2015	7.88%	7.73%	9.61%
2	January 23, 1995	January 22, 2015   Annualized Gold Return 6.265%

Calculate it in time spans. Like a casino churn -- in the long run you lose
Of course, there are exceptions to the rule

Gold isn't an investment for anyone, the function of gold is basically that of money (as opposed to fiat currency) and thereby it is supposed to "preserve wealth" (defeat inflation) and not do much more than that.

So when I look at your figure of 6.26%, its reasonable to suppose an inflation rate taken as an average over the 20 year period that you describe was probably around 6% and therefore Gold may have done its job.

However, you can look at a different time span and get a totally different result. For example, if you take the period from 1966 ($35/oz) to 2015 ($1300/oz), then Gold is up 37 times or 3700% over 50 years - not too shabby and equates to what - over 60% per annum in USD terms?

But I don't think you can compare copper (an industrial metal) with gold (a monetary metal with very little industrial use). Maybe silver is closer to copper but not gold.

[Barry-xlovecam]

Originally Posted by RummyBoy

Gold isn't an investment for anyone, the function of gold is basically that of money (as opposed to fiat currency) and thereby it is supposed to "preserve wealth" (defeat inflation) and not do much more than that.

So when I look at your figure of 6.26%, its reasonable to suppose an inflation rate taken as an average over the 20 year period that you describe was probably around 6% and therefore Gold may have done its job. ...

No, those figures are not adjusted for inflation -- never assume anything.

Gold as a hedge is nowhere in the period shown.





Nice Chart Site: chartseeker.com

Peaks and valleys average out. Idiots could make money in the stock market the past 18 months -- will their luck continue?

[RummyBoy]

Originally Posted by Barry-xlovecam

No, those figures are not adjusted for inflation -- never assume anything.

The only thing I assumed is an inflation rate around 6% per annum on average (it was probably less on average) and so Gold did its job (as a preserver of wealth) provided it rose in paper terms, higher than the inflation rate.

Gold as a hedge is nowhere in the period shown.

I don't get this - during the period you've shown (5 year view), Gold rose from $1052 to $1300 - a 19% gain.

Inflation (US Govt figures) was:

2010 - 1.5%
2011 - 3%
2012 - 1.7%
2013 - 1.5%
2014 - 0.8%

Gold has vastly outperformed as an inflation hedge.

[wdsguy]

I switched a decent percentage of my paper currency holdings over to the RMB a few years ago. It was a pain in the ass to get it out of China though.

[fappingJack]

Originally Posted by CAHEK

EUR USD has crashed to the lowest level since 2003

1USD=1.13 EURO

lets all migrate to US

[RummyBoy]

Originally Posted by wdsguy

I switched a decent percentage of my paper currency holdings over to the RMB a few years ago. It was a pain in the ass to get it out of China though.

I have RMB but its better to be money you don't need often as its not fully convertible yet. Although, this year there is expectation that RMB will appear as a weighted in the SDR (Special Drawing Rights) and that be one more reason that China makes the RMB fully convertible.

So if you still have RMB out there, you might find that you can convert to any currency within a year or two.... that's my expectation as they've already moved heavily in that direction. When they do that though, I think a lot of people will want to own some and it could strengthen a lot so im reluctant to ditch it especially if China gives up its tracking of the USD in the same way as the Swiss gave up the EUR.

[woj]

A rise since 2000 is a bit misleading I think, a lot has changed, especially a lot of gold related financial products emerged in that time frame, tradable gold funds, ability to buy gold funds on margin, internet trading, online dealers that sell gold, etc... making it possible for anyone to buy gold with a few clicks of a mouse...

I think good chunk of the gain since 2000 is solely due to the fact that it became easier to buy gold, a change which is unlikely to happen again...

think about yourself, were you investing in gold before 2000?
I would guess no...
a. it was a pretty damn poor investment before then...
b. it was relatively hard to invest in gold

[RummyBoy]

Originally Posted by woj

think about yourself, were you investing in gold before 2000?
I would guess no... a. it was a pretty damn poor investment before then...

As for it not being a good investment before 2000, well again it depends on the period you're talking about. Gold went from $35 USD in 1970 to over $840 USD in 1980 which is a more than 24 times or a 2400% gain over the 10 year period. Damn good ROI....

As for why it didn't perform well between 1980 and 2000, well the fundamentals were simply not there. Relative peace time, low inflation, low inflation expectations, low uncertainty, a booming stockmarket, reasonable economic picture, less debt (comparatively) and optimism.

b. it was relatively hard to invest in gold

Well, you're right that it has got easier and there has been a massive increase in paper products as well as ETFs and GLD and so on. However, that has only increased the fundamentals of gold and it is now said that the market is entirely driven by the paper market and not the physical market.

There is something like only 1 oz physical metal owned for every 99 oz owned in a paper form. That is something that is completely unsustainable. Incidently, Gold is my easiest prediction for the next five years - my call is over $2500 USD/oz for Gold by 2020.