Here is the summary of the above video:
- Since March, the USD has been dropping
- This is because of the excess USD supply due to the bail out by the FEDs
- The central bank has been buying 3 times more EURO than USD, implying the switching to EUROs as the reserve currency
- Since March, USD has slide 70% compared to the Euro/Aussie and 46% to the pound
- FEDs should not be raising their interest rates for the timing being because this will increase the borrowing cost by corporations, limiting their growth
- Gold to go up higher, because its a safe asset
Things that I would like to add:
- In my opinion, commodities like gold are trending up, because of 2 main reasons.
- The basic supply and demand. Meaning if more people wants gold, the price will go up.
- Gold is usually denominated in USD. So if the USD depreciates, the price will go up. (Imagine that you have a 1kg gold bar, bought with 100USD. If in 1 year's time, USD's depreciates, you need more USD to buy the same 1 kg of gold bar. Hence the price of the gold bar effectively increases, though its worth is the same.)
- I'm actually still optimistic about the stock market. The market is still trading sideways, but if you realized, its gradually trending up. So I feel that it is actually a good time to invest, while everyone's still quite uncertain.
- Personally, if the government have been revising our growth upwards, Singapore should be expected to do relatively well in the coming months. It is not that I am bias towards the Singapore government, but we have to admit that they do have above average foresight.
- Actually a depreciating currency is good for people to borrow. For example, you borrow USD100 to buy gold. Assuming gold does not drop in value, with a depreciation of the USD, in 1 year time, your gold will be worth say for example USD110. So you can sell your gold, return the USD100 and whatever interest to the bank, and pocket the profit!