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DavidE
Ultra Nomad
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Location: Baja California México
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Mood: 'At home we demand facts and get them. In Mexico one subsists on rumor and never demands anything.' Charles Flandrau,
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Peso Heavy? Keep An Eye On The Currency Markets
We may see a repeat of the conditions that lead to the Christmas Surprise of 1994. If Japan devalues the Yen and China follows suit with the the Yuan,
this is going to throw the USA and Mexico into a most awkward position. Below is a cut n paste
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"Recent actions on the part of the Fed, the ECB, the Bank of Japan, the Swiss National Bank, and the Bank of England all suggest that financial
repression (or the perpetuation of negative real rates on sovereign debt) is likely to be the most enduring investment theme for the foreseeable
future," Trennert said.
In 2012, global central banks cut interest rates some 75 times in an effort to create conditions that would spur growth.
Economists, though, expect growth to meander around 3 percent globally this year, a level generally considered to reflect little actual growth at all.
(Read More: US Economy to Grow 2.5% This Year: Fed's Evans)
The hope, though, for those engaged in currency devaluation is that it cheapens the price of their goods globally and thus increases exports and
creates positive inflation.
But the initial stages of inflation are usually bad for stocks and send investors to commodities and fixed income indexed for inflation, such as
Treasury Inflation Protected Securities.
"So what could cause a market correction over the first half of 2013?" Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch,
said in an analysis. "In our view it will either be 1) a rapid rise in interest rates and a re-run of the 1994 story; or 2) the economy fails to
respond to the liquidity, forcing nations to devalue their currencies in an attempt to stimulate growth."
A Lot To See And A Lot To Do
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Bob and Susan
Elite Nomad
Posts: 8813
Registered: 8-20-2003
Location: Mulege BCS on the BAY
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Mood: Full Time Residents
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...so for us "simpletons" what does that mean?
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monoloco
Elite Nomad
Posts: 6667
Registered: 7-13-2009
Location: Pescadero BCS
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It might mean a lot to the "simpletons" who work for pesos.
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55steve
Senior Nomad
Posts: 857
Registered: 4-24-2006
Location: Warner Springs, CA
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| Quote: | Originally posted by Bob and Susan
...so for us "simpletons" what does that mean? |
Invest wisely!
I'm meeting with my financial guy real soon to go over this years strategy.
I'm thinking my wife has the right idea - she was out doing the garage sale thing this past Sat and comes home with a coin - the next day she gives it
to me and says here's a 1910 Mex peso I picked up for 50 cents. I checked it out and it's .78 oz of silver! I asked how many this guy had and she
said a whole table of them...sure wish she would have got 100 or so...oh well...
[Edited on 1-17-2013 by 55steve]
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Barry A.
Select Nomad
Posts: 10007
Registered: 11-30-2003
Location: Redding, Northern CA
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Mood: optimistic
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| Quote: | Originally posted by DavidE
We may see a repeat of the conditions that lead to the Christmas Surprise of 1994.
"So what could cause a market correction over the first half of 2013?" Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch,
said in an analysis. "In our view it will either be 1) a rapid rise in interest rates and a re-run of the 1994 story; or 2) the economy fails to
respond to the liquidity, forcing nations to devalue their currencies in an attempt to stimulate growth." |
Well, since #2 has been happening for about 5 years with little indication that the economy is responding (surprise!!!)  , I would expect more devaluation to occur from the crazy governments in
many parts of the World, including us----(or not).
I have been expecting #1 for a long time, but Markets seldom behave as expected, so nobody REALLY knows what will happen.
Just remain nimble, and pay attention, I think. I am always about 5% in Gold & Silver, just in case. 
Barry
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Marc
Ultra Nomad
Posts: 2802
Registered: 5-15-2010
Location: San Francisco & Palm Springs
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Mood: Waiting
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I keep about $1,000 USD in Pesos in the safe. Should probably not.
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monoloco
Elite Nomad
Posts: 6667
Registered: 7-13-2009
Location: Pescadero BCS
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| Quote: | Originally posted by Barry A.
| Quote: | Originally posted by DavidE
We may see a repeat of the conditions that lead to the Christmas Surprise of 1994.
"So what could cause a market correction over the first half of 2013?" Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch,
said in an analysis. "In our view it will either be 1) a rapid rise in interest rates and a re-run of the 1994 story; or 2) the economy fails to
respond to the liquidity, forcing nations to devalue their currencies in an attempt to stimulate growth." |
Well, since #2 has been happening for about 5 years with little indication that the economy is responding (surprise!!!) , I would expect more devaluation to occur from the crazy governments in
many parts of the World, including us----(or not).
I have been expecting #1 for a long time, but Markets seldom behave as expected, so nobody REALLY knows what will happen.
Just remain nimble, and pay attention, I think. I am always about 5% in Gold & Silver, just in case.
Barry |
#2 has been happening since 1913.
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CortezBlue
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Posts: 2213
Registered: 11-14-2006
Location: Fenix/San Phelipe
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| Quote: | Originally posted by Marc
I keep about $1,000 USD in Pesos in the safe. Should probably not. |
Yes go spend it as fast as you can.
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CortezBlue
Super Nomad
Posts: 2213
Registered: 11-14-2006
Location: Fenix/San Phelipe
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I have positions in gold, but I am looking to silver currently. There is a 16:1 ratio silver to gold scenario. i.e., with gold at 1600 silver should
be at 100, but it's not, currently. So I am looking into bags of silver US pre 1965 coins.
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Barry A.
Select Nomad
Posts: 10007
Registered: 11-30-2003
Location: Redding, Northern CA
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Mood: optimistic
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| Quote: | Originally posted by CortezBlue
I have positions in gold, but I am looking to silver currently. There is a 16:1 ratio silver to gold scenario. i.e., with gold at 1600 silver should
be at 100, but it's not, currently. So I am looking into bags of silver US pre 1965 coins. |
-------and THAT makes you quite wise!!!!  
Barry
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Bob and Susan
Elite Nomad
Posts: 8813
Registered: 8-20-2003
Location: Mulege BCS on the BAY
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i STILL don't understand where you get "buy coins" from this article...
it is what it is...spend your money
you can't take it with you
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Hook
Elite Nomad
Posts: 9011
Registered: 3-13-2004
Location: Sonora
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Mood: Inquisitive
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Well, in essence you're advocating the same thing as the "buy coins" crowd, Bob.
Invest in commodities!! Goods are a commodity, too.
Their investing is a little more long term........
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Marc
Ultra Nomad
Posts: 2802
Registered: 5-15-2010
Location: San Francisco & Palm Springs
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Mood: Waiting
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I am thinking of investing in another Porsche.
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bajagrouper
Senior Nomad
Posts: 964
Registered: 8-28-2003
Location: Rincon de Guayabitos, Nayarit, Mexico
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Mood: happy and retired
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silver
| Quote: | Originally posted by CortezBlue
I have positions in gold, but I am looking to silver currently. There is a 16:1 ratio silver to gold scenario. i.e., with gold at 1600 silver should
be at 100, but it's not, currently. So I am looking into bags of silver US pre 1965 coins. |
Buy high and sell low?
Probably better to but 100 oz. bars than bags of coins...
I hear the whales song
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Hook
Elite Nomad
Posts: 9011
Registered: 3-13-2004
Location: Sonora
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Mood: Inquisitive
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| Quote: | Originally posted by Marc
I keep about $1,000 USD in Pesos in the safe. Should probably not. |
The value of having that amount in your possession probably outweighs the loss of value in a devaluation, IMO.
Cash can be difficult to lay your hands on, especially in outlying areas.
Try buying items with 100 oz silver bars.  Yeah, they may make for a long term
investment, but you still will need operating cash to get you to the border.
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Pescador
Ultra Nomad
Posts: 3587
Registered: 10-17-2002
Location: Baja California Sur
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| Quote: | Originally posted by Bob and Susan
...so for us "simpletons" what does that mean? |
What it means to the average person is that the Federal Reserve is putting money that they printed up to buy bonds and the inflation rate is expected
to rise radically this year. So, if you have $1,000 in the bank, the actual buying power will be reduced to $750 or maybe lower. When that happens,
investors jump out of the market with their 401 K's and other investments, and have a tendency to put their money in either commodities or precious
metals which are not only inflation proof, but may well double or triple in value.
This happened on a minor scale when the US went from AAA rating to an AA rating.
So the theory is. $1,000 in the market and inflation turns that into $250 or so, whereas $1000 in Gold or Silver becomes $2,000.
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Bajajorge
Ultra Nomad
Posts: 2604
Registered: 10-13-2005
Location: Topaz Lake, NV/San Felipe
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Always keep the fuel tank in your vehicle full, so you can head north. That's if you live close enough for a just one tank trip.
Not even 10 years ago silver was around 8-9 bucks an ounce. Today nearing 32.
Why do Liberals insist and demand that achievers pay the way for nonachievers who are to lazy to succeed, or are just failures by their own choice?
Criminals prefer unarmed victims, dictators prefer unarmed subjects.
Why do ignorant people continue their blabbering when it only proves to others how stupid they are.
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Bajaboy
Ultra Nomad
Posts: 4375
Registered: 10-9-2003
Location: Bahia Asuncion, BCS, Mexico
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buy rental properties with cheap money...pay back with inflated dollars.
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DavidE
Ultra Nomad
Posts: 3814
Registered: 12-1-2003
Location: Baja California México
Member Is Offline
Mood: 'At home we demand facts and get them. In Mexico one subsists on rumor and never demands anything.' Charles Flandrau,
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Watch the Mexican stock market for signs of slowdown, sluggishness, and increased volatility to any forthcoming USA rising interest rates. Idiots
never learn and much of the Mexican market is awash in derivatives.
My best guess? STAGFLATION at best DEFLATION at worst. How does one devalue a service based economy like what the USA has become? Hang on to your
shorts.
A Lot To See And A Lot To Do
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durrelllrobert
Elite Nomad
Posts: 7393
Registered: 11-22-2007
Location: Punta Banda BC
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Mood: thriving in Baja
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| Quote: | Originally posted by CortezBlue
| Quote: | Originally posted by Marc
I keep about $1,000 USD in Pesos in the safe. Should probably not. |
Yes go spend it as fast as you can. |
I've had this for about 20 years and no body will let me spend it.
Bob Durrell
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