Saturday, February 11, 2006
What Is The Best Mix Of Metals And Currencies?
A reader suggested this as a weekend topic: "It would be interesting to get an idea of what the portfolios look like of some of the posters on here. You can get as detailed as you want, or just keep it simple."
To expand on that idea, what does a model portfolio of currencies and precious metals look like?
To expand on that idea, what does a model portfolio of currencies and precious metals look like?
# posted by Ben Jones @ 8:29 AM 
Comments:
<< Home
I can't help but think that forex plays are inherently short-term. Although the USD is ultimately headed downward, how long before all others follow? As they say, when the US sneezes, the world catches a cold.
On another note...
An investment newsletter stated that GLD has gone from the 25th largest holder of gold to the 13th. Consider the implications of it's continued growth, and you really have to wonder if any dollar value isn't out of reach.
The whole cycle is self-reinforcing and strengthening -- the more GLD they take off the market, the "rarer" and more valuable the remaining available gold becomes, thereby raising the value of GLD and attracting even more investors!!!
What happens when GLD has emptied COMEX and is sucking the miners dry? My guess is that mining will have ramped up, but GLD's appetite will have grown exponentially, too.
Could be gold (and silver) may end up being the biggest international bubbles ever due to GLD and the upcoming silver ETF. Of course, at some point these developments can't help but attract official attention and action, but again... by then we'll all be rich because we started early and cashed out before the train's forceably derailed.
An investment newsletter stated that GLD has gone from the 25th largest holder of gold to the 13th. Consider the implications of it's continued growth, and you really have to wonder if any dollar value isn't out of reach.
The whole cycle is self-reinforcing and strengthening -- the more GLD they take off the market, the "rarer" and more valuable the remaining available gold becomes, thereby raising the value of GLD and attracting even more investors!!!
What happens when GLD has emptied COMEX and is sucking the miners dry? My guess is that mining will have ramped up, but GLD's appetite will have grown exponentially, too.
Could be gold (and silver) may end up being the biggest international bubbles ever due to GLD and the upcoming silver ETF. Of course, at some point these developments can't help but attract official attention and action, but again... by then we'll all be rich because we started early and cashed out before the train's forceably derailed.
'tj&the bear said..I can't help but think that forex plays are inherently short-term. Although the USD is ultimately headed downward, how long before all others follow?'
For most, I think your right. I like to keep a good percentage of my pure cash in foriegn currencies. It's really easy, cheap and if you use Everbank, FDIC insured. It's nice to earn interest in that currency, as there is no transaction fee. This blog is an affiliate of EB, and you'll find a link in the sidebar.
As for the short-term currency plays, those guys use a lot of leverage. I prefer to go buck for buck.
While some paper currencies will follow the greenback down if it goes, many nations don't have the trade and financing deficits that the US wallows in. Now some writers like China's currency along those lines. But I can't make the leap to hold communist paper. The Japanese are fairly sound, but are stuck in the deflation/negative interest rate spiral.
If you're interested, we could have a topic on the countries that are finacially safe and pay sane returns on savings. Who they are may surprise you. Good luck!
For most, I think your right. I like to keep a good percentage of my pure cash in foriegn currencies. It's really easy, cheap and if you use Everbank, FDIC insured. It's nice to earn interest in that currency, as there is no transaction fee. This blog is an affiliate of EB, and you'll find a link in the sidebar.
As for the short-term currency plays, those guys use a lot of leverage. I prefer to go buck for buck.
While some paper currencies will follow the greenback down if it goes, many nations don't have the trade and financing deficits that the US wallows in. Now some writers like China's currency along those lines. But I can't make the leap to hold communist paper. The Japanese are fairly sound, but are stuck in the deflation/negative interest rate spiral.
If you're interested, we could have a topic on the countries that are finacially safe and pay sane returns on savings. Who they are may surprise you. Good luck!
4.8% Gold ETFs
2.2% Silver mining stock
5.2% Physical silver/gold/palladium
32.6% Various foreign currencies (these keep changing around)
Canada is determined to be valued 1:1 with USD (i.e. stronger loonie). The only thing they lack is a timeline for this.
I like Canada too much ... I have too much interest in their energy, maple leaf coins, and currency. :) Maybe if I can find something else as appealing, I can diversify more.
2.2% Silver mining stock
5.2% Physical silver/gold/palladium
32.6% Various foreign currencies (these keep changing around)
Canada is determined to be valued 1:1 with USD (i.e. stronger loonie). The only thing they lack is a timeline for this.
I like Canada too much ... I have too much interest in their energy, maple leaf coins, and currency. :) Maybe if I can find something else as appealing, I can diversify more.
Some of the Nordic countries have attractive currencies. They produce some oil and don't run trade deficits.
I like Canada the country, but not the currency so much. Everything is expensive there, which could mean inflation.
South Africa is a mess and gold production is falling. It would be nice if there was a country that backed their money with gold and let the market set rates (are you listening Swiss?) but I can't really think of one right now.
Australia is a good candidate; produces commodities and can benefit from China's trade. I understand their dollar is highly priced. Maybe if it comes off a bit.
I like Canada the country, but not the currency so much. Everything is expensive there, which could mean inflation.
South Africa is a mess and gold production is falling. It would be nice if there was a country that backed their money with gold and let the market set rates (are you listening Swiss?) but I can't really think of one right now.
Australia is a good candidate; produces commodities and can benefit from China's trade. I understand their dollar is highly priced. Maybe if it comes off a bit.
Do it, Ben.
Denning had lots of nice things to say about Australia in "Bull Hunter". Despite Japan's turnaround, they have a huge public debt level, so they still worry me. I'm definitely interested in other countries you may have a line on.
Denning had lots of nice things to say about Australia in "Bull Hunter". Despite Japan's turnaround, they have a huge public debt level, so they still worry me. I'm definitely interested in other countries you may have a line on.
CL:
I currently have a New Zealand currency in two CDs. Once they mature this month, I'm pulling out based on advice from Daily Pfennig. S&P is downgrading the country based on its debt, so their currency is set to slide.
It does have an attractive interest rate, and it's a beautiful country that I'd like to visit. Though based on data, I will no longer trade their currency for 2006.
South African Rands have been the best performer for me, but that was complete market manipulation. Since the currency is shady and volatile, I will also pull out of that. They have so much potential especially with all that gold.
I currently have a New Zealand currency in two CDs. Once they mature this month, I'm pulling out based on advice from Daily Pfennig. S&P is downgrading the country based on its debt, so their currency is set to slide.
It does have an attractive interest rate, and it's a beautiful country that I'd like to visit. Though based on data, I will no longer trade their currency for 2006.
South African Rands have been the best performer for me, but that was complete market manipulation. Since the currency is shady and volatile, I will also pull out of that. They have so much potential especially with all that gold.
wmbz,
help me out. Why so heavy in USD? I'm heavily in gold precisely because I feel extremely exposed in USD with inflation looming. How much faith do you have in Bernanke?
I'm surprised so many here are pro USD. 'Certainly an easy strategy to follow, but I'm not convicend. Rationale?
TIA
Soho
help me out. Why so heavy in USD? I'm heavily in gold precisely because I feel extremely exposed in USD with inflation looming. How much faith do you have in Bernanke?
I'm surprised so many here are pro USD. 'Certainly an easy strategy to follow, but I'm not convicend. Rationale?
TIA
Soho
wmbz's just being a tad sarcastic.
I don't know that anyone here is exactly pro-USD, otherwise they wouldn't be here.
I don't know that anyone here is exactly pro-USD, otherwise they wouldn't be here.
Lasting strength? Depends on your definition of lasting...
The Iranian Oil Bourse (if it comes to pass) should boost the Euro and hammer the dollar against most other currencies. Otherwise, I just don't see the EU being a long-term powerhouse.
Post a Comment
The Iranian Oil Bourse (if it comes to pass) should boost the Euro and hammer the dollar against most other currencies. Otherwise, I just don't see the EU being a long-term powerhouse.
<< Home
