Canadian Dollar Hits Parity With US Dollar
Today the Loonie achieved parity with the US dollar for the first time in 30 years. Five years ago, 65 cents could buy you 1 Canadian Dollar. Since then the Dollar has devalued 50% against the CAD and nearly 100% against Gold. This has been partly due to a massive increase in the number of Dollars floating around, and partly because of the low interest rates which no longer attract much foreign interest.
The 50 basis point cut in the Federal Funds rate isn’t going to save us from recession. What it definitely did do is weaken the dollar further against all major currencies.
How are you going to Hedge against a weakening dollar?
I been a strong advocate of investing in Gold and Silver for 2 years. Today Gold hit $735 after trading around around the $665 mark for the past year.
I realized that the Feds were going to drop the rate last week and put in an order to buy FXA. FXA is the CurrencyShares Australian Dollar Trust, an ETF that tracks the price of the Australian Dollar. Immediately after the Fed rate cut it jumped 3% and is up 4% for the week. It also pays an annual yield of approximately 5% on a monthly basis.
As the Dollar continues to weaken, I expect FXA to keep on appreciating. The question is how low do you think the Dollar will go?
If you found this post helpful, consider donating to my coffee fund!-
The Sun Sets On Dollar Supremacy According to a quote in the Telegraph, HSBC has issued a new report stating that the Federal Reserve's ultra-loose monetary policy is forcing China and other emerging countries to create a new global currency "order". According to David Bloom, HSBC's currency chief, the dollar looks like the sterling did after...... - And The Winner Is Inflation! As I mentioned in a previous post about Exxon being the new whipping boy, I'm trying to find out whether the US economy is more likely to head into an inflationary period or slip into recession.Based on several sources, I feel we will see inflation. According to Financial Sense,the U.S.......
-
Counter Argument to China's Threat To Dumping US Dollars/Treasuries/ A few days ago,China threatened to offload its Billions of US Treasuries in retaliation to any US imposed trade tariffs.One of the newsletters I read regularly is from John Mauldin who doesn't think its likely that China will follow through with their threat.China has an estimated $900 billion in US......
Related Websites
- Is Obtaining A Gold Credit Card A Good Idea? Many people are refraining from obtaining a gold credit card this year because they are unsure of what the credit card market is going to do. Many experts have different opinions about obtaining a credit card this year, but only by knowing the correct information about obtaining a credit card......
- Historical Highs and Lows of the Canadian Dollar Against the US Dollar With the US dollar in a general bear market decline since about 2001, more and more speculation and trading is beginning to reflect lower expectations for the greenback as a result of the US Fed's unprecedented levels of "quantitative easing" and fiscal stimulus. This has Canadians enjoying the resulting higher......
- Buying Expiring Domains and Parking/Selling This is a off the topic of Prosper, but since I am going to send the proceeds to my Prosper account I think it works. :) I read an article in a leading national magazine on buying domains for use as AdSense sites (arbitrage between the cheap misspelled AdWords and......
[All content is copyright of Living Off Dividends & Passive Income]






![[Image of Ben Bernanke Action Figure and included Helicopter]](http://bp1.blogger.com/_E09Nv_jsQcQ/RvLTJbvIYBI/AAAAAAAAAGw/JyxyUyonFfA/s320/helicopterben.bmp)
Leave a Reply