Although the European crisis has shown that despite the enormity of the U.S’s public debt, bonds that back it still have the confidence of many investors, the dollar as a reserve asset raises many doubts. Other traditionally strong currencies like the euro or the yen, are also uncertain bets in terms of serving to preserve the value of our assets. Not to mention the stock market where you have to have nerves of steel and daring of a pirate to keep be at ease.
The financial planning specialist Joey Levy, in an article in Prensa.com, emphasized the validity and wisdom of his advice three years ago, when he warned about the financial problems in the U.S., and recommended buying gold as protection from the upcoming crisis. An ounce of gold was then trading at $850. Now it is trading at $1690, having reached $1900, which means a decrease of 16% from this record price.
When asked "Despite this, do you still recommended that people buy gold?" Levy says, "Yes! Gold is priced in dollars and, in general, if the dollar rises in value, the price of gold falls. But the recent appreciation of the dollar is temporary. I say this because a country's currency is simply a reflection of the financial health of its economy. And the U.S. economy is very sick. The U.S. government will borrow and its central bank will inflate the dollar. All this indicates that the dollar will eventually fall and, therefore, that gold will rise much more. "
Source: Prensa.com
More on this topic
October 2008
Tradition says that in moment of panic gold is the refuge, but this time gold has not been a good recommendation.
These are the questions being asked to antiamericans. Why, in the middle of the worst financial crisis since the great depression, the collapse of the banking system and the strongest recession experienced in our lives, is the dollar getting stronger and is giving a hard and strong lesson to the the traditional gold?
September 2010
Volatility in the foreign exchange market and a dollar priced under 500 colones are strongly affecting the Costa Rican tourism industry.
For example, lack of stability in the currency exchange rate is preventing tourism companies from evaluating how profitable an investment could be.
May 2012
Hedges are instruments whose results depend on an ongoing risk analysis of the exchange rate differential.
An article in Elfinancierocr.com states that "monitoring leading indicators, accounting, and using averages for time periods and curves are some of the recommendations provided by Amedeo Gaggion, HSBC's financial markets manager in the country."
August 2008
The entity is dedicated to the transaction of non-financial assets, and despite its low profile, it has managed to grow considerably.
"The objective of Bolcomer is to provide the possible to create markets for non-financial assets, and to promote a market that generates liquidity, thereby allowing those persons that are not financially bound to a bank to trade their commodities on the exchange," indicated Luis Campos, Executive President of the entity.
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