Friday, June 3, 2011

The Rush for Value in Currencies: A Rock and a Hard Place.

The Rush for Value. Where do I put my Money?

USD going down NZD up...the race, to maintain the value of wealth, is getting faster.

But with currencies it is a race to the bottom. How could it possibly be anything else? The credit creation by all nations is going exponential. This to cover the repayment of current debt and interest.

Credit creation is also called 'inflation' and it debases the value of a currency in order to ease the load on debt repayment.

The US is debasing their currency by around 1 trillion dollars per year, and growing. The Chinese have pegged their yuan to the dollar, so they too get the benefits of a decreasing US dollar currency.

But China also imports the biggest disadvantage, high inflation. For a country like China, where people spend a larger proportion of their income on food, it is s high-wire act to keep rebellion at bay.

Nations try to gain an export edge through devaluation. New Zealand on the other hand needs to borrow an exorbitant amount of money in the next twelve months, so the current record high exchange rate against the US dollar, works in their advantage. But when they start to repay this debt, look out. It will be debase or die.

In this environment, a move into hard assets offers a sensible way to protect wealth. Precious metals is the best save haven asset for protection. Today the US dollar went down and gold went up. Protection right there for all to see.

The sands of time may be running out. It may take one last 'black swann' event to cause a hyperinfaltionary panic.

Gold in New Zealand dollars: $1892.22 per oz
Previous all time high: $1955.10 per oz

Silver in New Zealand dollars: $45.41 per oz
Previous all time high: $48.58
per oz

The Anglo-Far East Company
The Original Private Bullion Custodian
Your reference: an-001

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