I'm waiting for the pitch to buy gold and the suggestion we buy guns etc to get ready for the riots. If the the dollar stops being the reserve currency, it won't happen in my lifetime.
No one currency will rise as strongly as did the dollar following the failure of Lehman Bros. There will no longer be an automatic jump up in the value of the dollar, and corresponding decline in the value of other major currencies, when financial volatility surges. There will be no reason for the rates between them to move sharply, something that would potentially upend investors. One obvious change will be to the foreign-exchange markets. With the dollar, euro and yuan all trading in liquid markets and all seen as safe havens, there will be movement into all three of them in periods of financial distress.
But the impact will extend well beyond the markets. American companies will have to cope with some of the same exchange-rate risks and exposures as their foreign competitors. This will all change in the brave new world that is coming. companies. They don’t have to incur the cost of changing foreign-currency earnings into dollars. They don’t have to purchase forward contracts and options to protect against financial losses due to changes in the exchange rate. Clearly, the change will make life more complicated for U.S. Until now they have had the convenience of using the same currency—dollars—whether they are paying their workers, importing parts and components, or selling their products to foreign customers.
If the dollar stops being the reserve currency, it won’t happen in my lifetime. I’m waiting for the pitch to buy gold and the suggestion we buy guns etc to get ready for the riots.
[News Gatherer]
ReplyDeleteNo one currency will rise as strongly as did the dollar following the failure of Lehman Bros. There will no longer be an automatic jump up in the value of the dollar, and corresponding decline in the value of other major currencies, when financial volatility surges. There will be no reason for the rates between them to move sharply, something that would potentially upend investors. One obvious change will be to the foreign-exchange markets. With the dollar, euro and yuan all trading in liquid markets and all seen as safe havens, there will be movement into all three of them in periods of financial distress.
But the impact will extend well beyond the markets. American companies will have to cope with some of the same exchange-rate risks and exposures as their foreign competitors. This will all change in the brave new world that is coming. companies. They don’t have to incur the cost of changing foreign-currency earnings into dollars. They don’t have to purchase forward contracts and options to protect against financial losses due to changes in the exchange rate. Clearly, the change will make life more complicated for U.S. Until now they have had the convenience of using the same currency—dollars—whether they are paying their workers, importing parts and components, or selling their products to foreign customers.
If the dollar stops being the reserve currency, it won’t happen in my lifetime. I’m waiting for the pitch to buy gold and the suggestion we buy guns etc to get ready for the riots.
Dollar=Love
ReplyDeleteAlen Gordon - when the time you spend buying gun, that will be the time missed the pitch buying gold.