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ISSUES....
Inside, confidential and off the recordDollars
THE WORLD WANTS “DOLLARS” THIS MORNING, but not US dollars. Rather, the world wants, and has wanted, Canadian dollars. And it wants Australian dollars and it was New Zealand’s “Kiwi” dollar. The world wants the dollars of
those nation’s that export raw materials…commodities…and exports them readily, with fewproblems from the governments involved. The world wants “dollars” because capital is seeking a safer, more amenable safe harbor than it sought in the past during times of duress when it sought safety in New York and Washington. Now it seeks that same safety in Ottawa and Toronto and Vancouver, and Sydney and Perth and Wellington et al. It is a very simple lesson really, and the investment world has learned if very quickly.
Or perhaps more properly we should be saying that the world has learned this lesson quietly over time at the periphery of the capital markets and is only now learning this in broader, catholic terms, for it is clear that the trend has been
not just to a strong Canadian, or Australian or New Zealand dollar vs. the US dollar, but it has been even more clearly defined as the “dollars” of the Commonwealth nations rise in terms of the British Pound Sterling. Note then the chart at this page of the “cross” between Sterling and the Aussie dollar. One year ago, it took almost precisely 2.7 Aussie dollars to “buy” one Pound Sterling. Now it takes only 1.7815 Aussie dollars to do the same thing. In other words, Sterling has fallen nearly 35% vs. the Aussie dollar in the course of the past year. To put this in context, in the industrialised world, when one currency moves 10% relative to another in a single year that is material. 20% is enormous, and 30% is very nearly mindnumbing. For a 35% devaluation to occur… especially when it is between nations that are so strongly tied historically via the Commonwealth… this is obviously economic seriousness of the very first order.- Dennis Gartman/ The Gartman Letter / 10/ 07 / 09
- For more on interesting comments, you can subscribe to The Gartman Letter by contacting Dennis Garthman: Phone - Fax: 757 238 9546 or email : dennis@thegartmanletter
Petroleumworld News 10/07/09
ISSUES.... Inside, confidential and off the record
Is an independent journalist effort from Petroleumworld, on Inside, Confidential and Off The Record Information, its views are not necessarily those of Petroleumworld
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