Is this a scenario that can possibly play out? If the Australian/International markets falter could money come pouring out of AUSD (5th most traded currency atm I believe) resulting in simultaneous increases in USDAUSD and PM price rises in USD? Ultimately meaning a two way spike for AUSD denominated PM holders. Has this been covered on the boards before and is it fanciful dreaming or a legitimate chance of occurring if recent situations continue to spiral out of control? (Hopefully this rambling is decipherable!)
If the aussie dollar drops like a rock for some reason. Yep we will all be in the money. On the other hand pretty much everything we import will then cost that much more The aussie dollar is so high at the moment because we are pretty much the only western country with interest rates above 0%. So everyone is parking their cash here until their own interest rates go up. So yeah if the other economies magically pick up pace and start jacking up interest rates we may see a drop in the AUD, but i dont see that happening for some time.
This is a good reminder that gold and silver are real currencies, and another reason to encourage Australians to purchase precious metals; the natural hedging ability of PMs 'locks in' the currently high AUD value - and will be 'expressed' as a price increase in the event of a drop in the AUD. For Australian's, the gold price action has been 'relatively' mild for the past 6 months or so, because our currency's rise has 'reduced' the effect of gold's rise. (Nothing can hide silver's rise!) But conversely, I believe the AUD will rise to around USD $1.20 later this year, and when that occurs your gold will overall seem to 'lose' some value proportionally. Some people resent this, but this is simply gold doing what it always does - maintaining a steady value. A strong AUD means EVERYTHING you own has become more valuable 'internationally'. Having a strong local currency is actually a very good thing for most people... I can easily prove this: Ben Bernanke totally disagrees with me. QED! (Yes, a strong AUD does hurt mining exporters, but they also benefit in the form of cheaper mining inputs such as cheaper fuel and imported equipment.)
benjamind2010 been a bit quiet lately. It's ok mr benjamind2010, its all in good fun. Anyway, I have a family member who works as an investment advisor in a bank. I mentioned how I had bought silver, to which she raised eyebrows. I explained my reasons, but she was not convinced. It must have started her thinking though, because the next day it was suggested that maybe I should look at investing in other currencies. Well, hello.
Your relative knows that gold and silver have their own ISO Currency Codes (XAU and XAG) and have their prices listed on the currency markets, right?
Your scenario has a good chance of happening. AUD is favoured at the moment, so yep when China crashes AUD/USD will drop but PM prices could hold. In that case than $$$
During the Asian crisis in the late 90s, I was earning US dollars and the AUDs arse dropped out and went to .50c so I cashed out all my USD earnings into AUD, basically a 30% bonus on what I'd earned. I reckon well see at least .65 in the not to distant future. Gold and silver should be a nice little earner.
If the AUD tanks you can be pretty sure commodities will be tanking too. The Aust Dollar is often a FOREX traders "play" on commodities. So if commodities take a dive with the dollar will Gold, Silver, Plat etc tank too? There's the question.
Sure, our coal and iron would tank, but if the major commodities like that were tanking, I think gold and silver would hold up better. We play a massive part in iron ore in global terms so it would cane us, dropping the AUD faster than the price of silver and gold. Not to mention, I think the asians would flock to precious metals in times of crises now that a lot more of them have money to protect. Fifteen years ago, nowhere near the amount of Chinese had the sort of money they have now, same in India.
That's precisely my situation at the minute, plus I hold unallocated gold and silver with the Perth mint, and am not living in Australia. Hence my asking of the question.
Some gold up, AUD/USD down $$$ moments: Date USD AU Ex Rate AUD Au 07/01/09 869.02 0.7211 1,205.22 24/02/09 996.66 0.6447 1,545.84 +14.6% -10.6% +28.2% 15/10/07 757.51 0.9046 837.41 10/10/08 926.23 0.6620 1,399.20 +22.2% -26.8% +67% Hindsight is a wonderful thing.
