Results 1 to 9 of 9

Thread: Currency as an indicator of Country Risk in Ukraine Crisis

  1. #1

    Default Currency as an indicator of Country Risk in Ukraine Crisis

    Last 30 Days - using Gold as a base ( taken off Kitco as of today)

    Country Loss against Gold

    Brazil -4.73%
    Australia -5.88%
    China -8.63%
    Swiss -8.97%
    Japan -9.17%
    US -9.33%
    Canada -9.78%
    South Africa -10.30%
    Mexico -11.45%
    India -11.92%
    British -12.25%
    Euro -14.46%
    Swedish -18.62%
    Russia -50.15%

    Very interesting chart of currency moves in last 30 days.

    Lots of things go into a currency valuation but it is very interesting to note:
    What country would you think is the least likely to suffer negative consequences from the various sanctions , potential armed conflict and nuclear war and downwind effects?
    Also, is relatively self sufficient in food and energy and resources.
    My guess would be Brazil, followed by Australia ( possible limited strike but no other countries around to get drift from)
    Who would be most affected. Of course those closest to the contest - Russia, Sweden, Europe and Britain.

    Again , other things to consider, but amazingly accurate, at least in my opinion. I only used these 14 countries as these were the only ones listed on Kitco.
    Perhaps a coincidence, perhaps not. Perhaps a very rough gauge of betting odds of various scenarios playing out.

  2. #2

    Default

    you forgot turkey, https://www.lietaer.com/2022/03/will...per-inflation/
    The Turkish lira lost **44% of its value in 2021, the largest decline ever recorded, as a result of a refusal by the president – who controls the central bank’s levers – to raise interest rates.

    ** i assumed that's the offical rate, i'm sure in the black market, lira worth even less when trading for USD or euro

  3. #3

    Default

    The Turkish Lira is only off 12.8% from Gold price in last 30 days. Very similar to British pound and not much different then the Euro.

    In case you missed the point, I only used the 14 currencies listed on Kitco, and the whole post was limited to 30 days to
    more appropriately compare the effect that the Ukrainian situation was having on different currencies.
    The Turkish Lira has had a completely different problem, from before this, ( as you point out), but it seems to have settled into a pattern somewhat similar to many of its NATO
    partners, at least for last 30 days.

  4. #4

    Default

    Quote Originally Posted by brutus2 View Post
    The Turkish Lira is only off 12.8% from Gold price in last 30 days. Very similar to British pound and not much different then the Euro.

    In case you missed the point, I only used the 14 currencies listed on Kitco, and the whole post was limited to 30 days to
    more appropriately compare the effect that the Ukrainian situation was having on different currencies.
    The Turkish Lira has had a completely different problem, from before this, ( as you point out), but it seems to have settled into a pattern somewhat similar to many of its NATO
    partners, at least for last 30 days.
    i guess every currecny has its turn. Turkey lira devaluation started earlier and yes less severe on the last 30 day basis.

  5. #5

    Default 1 year currency performance against Gold

    Seems to me all I hear is how the Russian currency has been destroyed and is almost worthless.
    You also hear how strong the US currency has been.

    Here are the facts as per Kitco today - Gold as a base

    Brazil - only currency listed that has beat gold in last year + 6.17%

    Countries with worse performance than Russian Ruble ( from just those listed)

    Japan - 26.83%
    Sweden -21.59%
    Euro -20.37%
    Then Russia -20.20%
    Then GBP -19.53%

    Countries better than US$ ( other than Brazil above)

    China -10.18%
    Mexico -10.58%
    South Africa -10.90%
    Swiss - 12.46%
    Canada -12.72%
    Then US -13.88%
    Then Australia --15.21%

    I do believe that China, Mexico and Canada trade a lot with the US, so I would hardly say that the US $ is ripping
    and if Japan and Sweden and the Euroland currencies are doing worse than Russia`s in the last year with Great Britain very similar,
    than you can hardly signal out only the Ruble for a currency collapse.

    Just interesting observations

  6. #6

    Default

    The DXY is up. It's hovering right on the edge of 100, which is about as high as it has gotten since 2003. This would suggest that the death of dollar hegemony has been exaggerated, at least in terms of the other currencies in that comparative basket. Of course, certain other forms of monetary remuneration do lie outside of that group, so the comparison is of limited value.

    This leads me to wonder, is now a time to trade dollars for a more depressed currency, in hopes that the other currency will rebound? Will the entire set of currencies sink, meaning that it is now time to place your wealth elsewhere? What options exist outside that basket of fiat? Real Estate? Gold? Commodities? Bonds? Overpriced equities? A new car? A case of beer/wine/scotch? Camping gear?

    The events in the Ukraine seem to have run parallel with a rising USD, a rising RUB, sharply rising petro prices, & a continuation of rising price inflation.

    What will tomorrow bring?
    “The Federal Reserve is not currently forecasting a recession.”
    Fed Chairman Ben Bernanke, January 2008
    This is no longer posted in the Fed Minutes of January 2008, but still quoted here - https://www.nbcnews.com/id/wbna22592939. The FOMC minutes still quote MR. Reifschneider. as stating the same thing.

  7. #7

    Default

    Quote Originally Posted by brutus2 View Post
    Seems to me all I hear is how the Russian currency has been destroyed and is almost worthless.
    You also hear how strong the US currency has been.

    Here are the facts as per Kitco today - Gold as a base

    Brazil - only currency listed that has beat gold in last year + 6.17%

    Countries with worse performance than Russian Ruble ( from just those listed)

    Japan - 26.83%
    Sweden -21.59%
    Euro -20.37%
    Then Russia -20.20%
    Then GBP -19.53%

    Countries better than US$ ( other than Brazil above)

    China -10.18%
    Mexico -10.58%
    South Africa -10.90%
    Swiss - 12.46%
    Canada -12.72%
    Then US -13.88%
    Then Australia --15.21%

    I do believe that China, Mexico and Canada trade a lot with the US, so I would hardly say that the US $ is ripping
    and if Japan and Sweden and the Euroland currencies are doing worse than Russia`s in the last year with Great Britain very similar,
    than you can hardly signal out only the Ruble for a currency collapse.

    Just interesting observations
    It is funny when the media claims how strong the Us dollar is.
    Perhaps they should say how weak the losers comprising the bulk of the dollar index are.

    The Euro, Yen, Pound and the Krona make up 87.3% of the idex
    They are down 15%, 19%,12% and 19% respectively against the US $ over past 12 months.
    The DXY index shows the US $ up about 13% over that time period ( difference is the stronger Canadian and Swiss component of index)

    Now take just the biggest 3 trade partners with the US which do about 2 trillion of trade ( Canada,Mexico and China) compared to
    the 1 trillion or so of trade with Euro countries( includes Sweden) Japan and UK.

    The US $ is only up 2.7% against the 3 vs an average of 16.25% against the 4 that make up the 87,3% of DXY index

    Strangely enough China, Canada and Mexico do almost identical trade with US ( exports and imports together)
    The Euro area does about 15% more than the above 3 than a very large drop to Japan and even more to the other 2.


    So the only goods that you should see getting cheaper, if you are American, are European or Japanese.( for the most part)

    Russia on the other hand has amazingly gained 3% against the US dollar in the past year, but Brazil is still leading at 5% gain
    ( of the Kitco ones I looked at)

  8. #8

    Default

    We are getting near end of 2022 and lets see how gold has done against the major currencies ( ones listed on Kitco)

    The following is against gold for a 1 year period ending today.

    Russia + 17%
    Brazil + 6%
    Mexico +6%
    US 0
    Swiss -2%
    Australia -7%
    Canada -8%
    Britain -8%
    Euro -8%
    India -9%
    South Africa -9%
    China -10%
    Sweden -15%
    Japan -20%

  9. #9

    Default

    Silver palm your question is why the FED is having a hard time getting rid of Inflation. We are all wondering the same thing and folks are buying things they may or may not need to get rid of their devaluing currency. This is what makes inflation a bit of a trap.
    Outside of PM's there really isn't much that you can store at home that will hold and possibly increase in value. There are some high quality knives that are known to both hold and go up in value. Check out Busse combat knives. During the COVID era these were selling on Ebay for way more than the original purchase price.
    Rare sports card market has crashed post COVID. Cards that were going for $500 can now be had for $50. Might not be a bad idea to grab a few in case of another speculative wave when the FED is forced to pivot.
    I would like to know what others have had success in as well.
    The air is coming out of a lot of speculative markets that were propped up by QE and stimulus. When the FED has to pivot the games should begin again. Of course, some of these markets may never be what they once were. It may be a very long time before we see the sort of speculation that happened over the last decade though. Especially, the last couple of years.

    The very wealthy have shifted their focus to buying up farmland.
    Last edited by jjmcwill; 12-08-2022 at 10:00 AM.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •