US Dollar History can be described by an ancient Chinese saying goes like this. “First the man drinks the wine. Then the wine drinks the wine. Then the wine drinks the man.”
This is also the nature of institutions and the falling US dollar is an institution. Institutions begin by serving an idea that enhances mankind. Such as the idea behind the US dollar was a strong currency that resisted inflation. Yet in the end the institution ends up being served by man. The falling US dollar is a case in hand.
As the institution absorbs itself it loses the respect of those it was intended to serve. The falling US dollar has definitely lost respect and purchasing power!
To maintain itself the institution then reverts to trickery or force as the falling US dollar has.
So we see the Western monetary system, the falling US dollar and trickery. However the game can only be played for so long. First for 40 years the greenback fell to other major currencies. Now it is sinking versus the emerging countries.
A recent message outlined that the Colombia peso has risen 27% versus the dollar in the last three years. See Emerging Currencies Protect Wealth – Power of the Dollar Revaluation
This is not some one off event.
We have looked at Brazil’s currency in previous messages. Since 2003 it has risen against the falling US dollar even more than the Colombian peso. In early 2003 it took 27 US cents to buy a real. Now it takes 47 cents!
How bad can the falling US dollar get? How about the Uganda shilling? Last year the Uganda shilling began to hold steady against the dollar. It took 1,853 schillings to buy a dollar. Today it takes only 1,750 shillings to get a greenback.
The message here is this. In the past there was a three tier system with the US dollar in the middle. One could bet on industrialized currencies and expect them to rise versus the dollar. The dollar was the dollar and the third tier was emerging currencies. One could bet on these to always fall versus the dollar. No more! Every currency must be observed and great opportunity prevails all over the world.
Look at the dollar short portfolio we track with Jyske Bank. 32% of this portfolio is invested in emerging market currencies via borrowed US dollars
|Percent of Portfolio|
5,00% BK Nederlandse Gemeenten 16.07.10
12,50% Brazil rep. of 05.01.16
6,375% Rabobank Nederland 20.03.09
6,50% Hungary Gov. 12.08.08
9,50% Iceland 13.06.2008
9,00% Mexican Bonos 22.12.2011
6,00% KFW 15.07.2009
10,25% KFW 09.02.2008
6,25% Turanalem Finance BV 27.09.2011
4,75% Iss Global A/S 18.09.10
8,625% NXPBV 15.10.2015
JI Favourite Fund
JI German Equity Fund
JI High Yield Corporate Bond Fund
JI Japanese Equity Fund
JI European Equity Fund
JI Emerging Markets Bond Fund EUR
This portfolio has risen 23.54% in the five and a half months since we created and have tracked it. A big part of that growth is from the US dollar’s fall.
Merri and I are preparing to fly back to the US for a couple of months, get our lettuce, corn, beans, peas, pumpkins and squash planted, plus give our hound dog a chance to roam the farm.
This freedom to live in places we love that we choose is so wonderful. The sun always shines somewhere, in opportunity, in weather and in sweetness of people.
So to stay in touch during our travels north, I have written a series looking at freedom of all types. We began yesterday with the soil defense syndrome.
Tomorrow’s message looks at a series freedom that the medical establishment is trying to take away from us right now. Do not miss this.
Learn how to track these portfolios with us at International investments in multi currencies. International Investments Course with Multi Currency Investments and Portfolios
At our upcoming IBEZ in N.C., we will update our latest multi currency portfolios and much more. Join us May 25 – 27, 2007 at the International Business and Investing Course in North Carolina. Thomas Fischer joins me to update global economics there. International Investments and International Business Course, West Jefferson, North Carolina, May 25-26-27, 2007
Take advantage of the current low fares to Ecuador!
Join Steve, our man in Ecuador, June 6 – 10, 2007 Weds. – Sun. for a Condensed Super Thinking + Spanish Course. Ecuador Spanish Course through Super Thinking + Super Memory
June 13 –15, 2007 Weds. – Fri. Andes Extension & Real Estate Tour in Ecuador. Ecuador Real Estate
June 19 – 21, 2007 Tues. Thurs. Shamanic Mingo. See Ecuador Shaman Mingo Tour
Attend all three courses and tours. Save up to $398! See Ecuador Tours – June 2007
We have created www.EcuadorLiving and have launched our Ecuador internet research service to the public. We just finished the last of five courses in a row and Steve, our man in Ecuador, will soon begin traveling this part of Ecuador to sniff out special opportunities that we will share with our EcuadorLiving.com subscribers. You can subscribe at Ecuador Travel and Living Service