POG tumbling
Why did POG fall? Here is one explanation. Investors sell their really valuable assets to cover their losses elsewhere. So gold is dumped to realize cash to cover for the losses in other investments.
Same thing with the USD going up in value when it should be going down. Americans sell their overseas assets to cover their debt in the USA. So they need to buy USD.
But surely you can see that all these movements are temporary. I see POG going up again because it can hold its value long term and the US government is printing USD which eventually will fall in value.
Am I too simplistic in my thoughts?
posted by Club Mulgoa @ 3:32 AM
3 Comments:
This one really gets me! My oldest is in Europe making his few dollars go as far as possible. He laughed when I suggested he buy Greece. The point is he needs to exchange some dollars for Euros. How is it that in the last week, there's been more bad news from Europe esp with French banks and from the US, but the Aussie dollar devalues a lot relative to both? His suspicions that I'm an idiot are now confirmed as I suggested he wait a few days with this news as the AUD would likely go up a bit more!!
Just as well I've got a day job.
AUD is commodity based and China based. And Europeans and Yankees have to repatriate their money back to cover their bad debts. And gold is sold off to realize cash.
If I were your son, I would go to China or India before they become even wealthier. Europe will become poorer... and cheaper.
With Australia's Anglo-Saxon background, it is very difficult to direct white Aussies to Asia for their real adventure. European culture is very similar to Australia's. And Europeans over-value themselves. Service is uniformly bad relative to Asia.
He's planning a few weeks in Vietnam on the way home - good idea.
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