Strange Doings in Currency Markets
 

Now I don't get it; mayhbe somebody is smarter than I am on these matters. Day after day, we read how the US economy is headed for the dumpster yet in looking at today's closing currency quotes, the euro is under $1.35, sterling is under $1.55 and both the Canadian and Australian dollars which had been running as high as $1.07. are not well under par at about 97¢ US....I don't get it.

Flight to safety. When the world is collapsing, investors dump other currencies and go to the one that is the most "global" or liquid (won't say safest:) ) Same reason that through all this US bonds have been selling well. People will live with no or minimal return.

Same reason again there was a run up in the Swiss franc, to the point that the government there was frantically trying to lower the value of the currency.

What I found a bit more puzzling was that gold had gone down.

That pretty much sums it up Michel. I would add that the Greece crisis (and ramifications for Portugal, Ireland, Spain and- worst of all- Italy) is putting a particular strain on the EU (and the Euro) that, for now, outstrips US concerns.

The end is coming closer. Hasn't do to do anything about sefty but about liquidity. Some of the REALLY big banks need to sell and bring their QE money home. They are laveraged like mad. Which bank will go bust first. BoA looks like a candidate for takeover by the state.

The end of the game is very close. Be prepared, buy gold, silver real assets, if you're still able to get some. Have a few $1000 in cash that you're willing to lose, just in case your bank shuts down and everybody wants his money. It'll become ugly.

>sefty
safety

I exepct that EU will be planning some big, worldwide plan, with Germany sucked into it. Perhaps issuance of euro bonds, or maybe some commitment from G-20 to provide backing.

It can't go on forever. But the long term damage..

logos....just to show you how little you know....all deposits in US banks are insured up to $250,000 by the FDIC so there is 0 chance if you have that amount or less in an account in a US bank that you have anything to worry about.

>.all deposits in US banks are insured
LOL, xyz123. That's a good one. :-). Yo still don't have a clue.

I'd really like to explain to you how the this works. As a start, think about why the FED is giving free money to all the banks that want it. Free as in "no interest", "give it back someday when you have the money". Why would anybody do such a thing. Does this originate from foreign investors or from somewhere else?

I'm not sure what you are talking about, but the FDIC program is an insurance program, as I understand it. Banks pay premiums for that insurance to cover their deposits. It isn't just something the US govt does for banks to be nice and for free (although they might, I agree, to get consumer confidence in the industry). But I know the bank pays something for it. I think it's sort of like a pool of money the bank has to contribute to which can then be used to bail out banks that fail.

Nobody has ever lost a penny in a bank insured by the FDIC...if you're dumb enough to put your money in a bank that does not have FDIC, you deserve what you get.

Just look up FDIC on a search engine to see how it works and how nobody whose moneyh is in an FDIC bank as long as they don't exceed the maximum has never lost a red cent...to protect the FDIC what they often do is merge a "failing" bank into a strong one.......Washington Mutual into Chase, for example. Nobody lost a cent.

But the whole substance of the problem is anxiety as to whether and how governments would be able to cope if those promises had to be fulfilled all at once. Are German voters willing to see their government take a further step towards taking other countries' liabilities through eurobonds or some other mechanism? Are Republicans in Congress likely to agree if it becomes necessary to levy extra taxes to cover liabilities for guaranteeing bank deposits?

<i>The end of the game is very close. Be prepared, buy gold, silver real assets, if you're still able to get some.</i>

What's real about shiny metals that people place a somewhat arbitrary (certainly above "real") value on?

Perhaps we need to stock up grain and furs . . .

Hi X,

>the euro is under $1.35, sterling is under $1.55 and both the Canadian and Australian dollars which had been running as high as $1.07. are not well under par at about 97¢ US.<

The Euro should be $1.18. The Canadian dollar should be $0.75

((I))

PS
The Swiss Franc, which should be about $0.80, is $1.10

I always found it somewhat funny, that people put their trust in small pieces of paper.
The Franc is pegged to the €.
xyz123, what if your insurance is out of "money" just like everybody else or the money is worth nothing when you get it back. There isn't even the slightest chance that the whole monetary system won't bust. Once you realize that, there aren't too many alternatives.

just relax and enjoy. i agree with Ira's assessment of where the currencies should be. when we were in Paris in Feb. '85, the FF shot up to over 10 to the dollar from 5. every time we went to the bank we got more and more money. that was sort of scary. needless to say, we never took the metro and ate a lot of wonderful meals. we should have bought an apt. Shoulds, woulda, coulda. ENJOY !!

I would agree with Bedar on this one. Relax and enjoy.

Who knows what will happen. You can spend your time fretting about saving money, carrying around cash, buying gold etc and in the end it may come to naught. Freaking out isn't going to help you, that's for sure. If things get as bad as logos' imagination, you're toast anyway.

History tells us that there have been times when there have been regime changes. Sure, that sucks but unless you're the top dog, what are you going to do? If you are the top dog then you'd better get a steel collar to protect your neck.

Travel if you can because you'll have memories.