Saturday, October 11, 2008

The US Currency - Its gonna go down!

The US public debt is increasing and now standing at 5.8 Trillions Dollars! What does this mean? Based on fundamental economic theory, it means they have to print more money to repay their debt, and when they print more money, slowly but SURELY..their currency is going to go down!

Now, what does this mean? You might think of buying US equities now and it might be a good idea. But take note that if you are buying foreign equities, you are not only exposed to stock market risk but exposing yourself to exchange rate risk. Also, do you know that if the US counter you are buying is incorporated in USA, you face a 30% withholding tax on your dividends...ouch!.

So, should i invest in US equities now or not, given the undeniable fact that the US currency is going down in the long run, if you believe your stock can still make a good return after netting off the loss in exchange rate....pls go ahead. See the video below with Jim Rogers

( I have something to say about him..but i will leave it for another time)




No comments:

Post a Comment

Note: Only a member of this blog may post a comment.