|
PureBytes Links
Trading Reference Links
|
Bruce,
The reason why citizens in countries such as Sotheast Asia, Japan, China
and particularly Russia are using gold more and more instead of dollars is
because there's too much counterfiet US money in circulation in those
countries. The only medium the average citizen knows has value and can
trust is gold. It is becoming, once again, the currency of choice in these
areas of the world, not out desire but necessity. If the world's central
bank refuses to continue to supply this increasing demand, then gold could
rise.
B.
-----Original Message-----
From: bruceb@xxxxxxxxxxxxx [SMTP:bruceb@xxxxxxxxxxxxx]
Sent: Wednesday, July 22, 1998 11:03 AM
To: bmassey@xxxxxxxxxx; 'List, Omega'
Cc: 'Chuck "put your pants back on" Cohen'
Subject: RE: It's free margin!
>
> Have you noticed that the Canadian dollar continues to sink lower
> and lower
> against the US? This means that US dollars can buy more Canadian stuff
> then ever. ...
> This alone makes Canadian markets very attractive and the trend seems to
> be headed even further in that direction.
>
Brian, you just answered your own question by saying "and the trend seems
to
be headed even further in that direction." If the US dollar continues to
appreciate against the Canadian, then any gains you make in the stock
market
will be offset by the losses you incur on the exchange rate. When you bet
on a Canadian Stock, you're also betting on their currency. If one goes up
while the other goes down, then it's a wash. You're better off waiting
until you think the US dollar has peaked in value Vs the Canadian, and then
buy Canadian stocks.
>
> PS. In countries like China and Russia where the markets have
> been severely
> broken down, gold is becoming the currency of choice. More and
> more people
> in these countries are trading in paper money for grams of gold and using
> that to buy the day to day goods they need to survive. One could
> argue that
> this continuing trend will lend support to gold. What do you think?
>
I highly doubt it. These countries tend to turn to US dollars as their
medium of exchange during risky times. Gold is too difficult to use in
terms of its quality, weight, etc. The fact that they're using more
dollars
is just another reason why the dollar should continue to rise.
|