...and for extra marks (especially if you're putting your money on it!), let's see what currency or precious metal looks like the best store of the value of your dollars.
Warren Buffett recently revealed he's hedged against the greenback, and gold and silver bugs are contesting the merits of their respective hoards. If your preference is for currency but you wonder about the backing, remember that Germany has the world's second-largest stock of gold, whereas Switzerland and the UK have been persuaded to get rid of about half their gold holdings since 2000.
Meanwhile, Japan and China are both struggling to hold their currencies down, to protect their export markets. Russia seems keen on claiming half the Polar region and is already able to use its energy supplies as an economic weapon. India is developing fast, and may turn out to be an interesting rival for China.
Here's our starting point today, using the figures from the Currency Converter widget on the sidebar. $1,000 will currently buy:
729.74 Euros
1,427.25 German Marks (there's a glitch in the currency converter, so I've done this in two stages)
119,080 Japanese Yen
7,581.23 Chinese Yuan or Renminbi
492.40 British Pounds
40,383 Indian Rupees
25,548.20 Russian Roubles
1,203.70 Swiss Francs
An ounce of gold costs $665.03
An ounce of silver costs $12.92
Where would you hold your savings until the New Year?
An elderly Italian uncle of Mr HG always stated that a gram of gold bought a decent lunch in Florence all his life, 1890 - mid-1960ish.
ReplyDeleteEither gold is seriously undervalued, or irrelevant, for nowadays a decent lunch costs 30 euros (if you know your ristorantino)
I've moved everything into euros just to escape the grasp of Brown, never mind dollar falls.
I'm impressed also by the German economy and its dispositions, though Voyager had to put me straight on some over-enthusisatic misconceptions.
It's euros acting like Deutschmarks for the smaller investor.
(Is this irrelevant? Mr HG wrings his hands over my 'finance with feeling' approach.
Hi HG - not at all irrelevant, I've read more than once that, historically, an ounce of gold buys a good suit.
ReplyDeleteThe currency widget on the sidebar also includes gold, so we can work it out. An ounce of gold is currently going for 485.299 Euros, and a troy ounce is 31.1034 grammes, so a gramme of gold is worth 15.60 Euros. Assuming that the quality of uncle's lunch has remained constant, gold is heavily undervalued, but this is indeed the thesis of some perfectly serious American investors. Some say it should be above $1,000 per ounce.
Coming back to the Euro, it skews prices because it is a one-size-fits-nobody lycra bodystocking trying to cover all economies from endomorph to ectomorph. The Austrians noted price rises on the changeover and have nicknamed the Euro "der Teuro" ("expensive"). Theoretically, similar goods across Europe should converge in price, because the cheaper producer will undercut the dearer; but restaurant service isn't so portable. And if the rich element of the populace are getting disproportionately richer, maybe that affects the market in posh dinners. I wouldn't know - I'm home-making a nice cheap tomato, bell pepper and onion sauce for my pasta today.
Mucking about with the currency helps governments steal from you. That and "oil on the beaches".
It's all a bit of a mess, like UK decimalisation - I never got my penny's worth of farthing chews again. And memory plays tricks - not only were Wagon Wheels larger, the smaller version Kit-Kat once had three fingers, not two, I'm almost sure.
Getting cash away from Gordon looks like a good move. And seeing what the experts have done with money, finance with feeling seems more sensible and avoids all those Greek letters and spiky graphs.