Basics of Investing

Archive for March, 2006

Question: I have some rather large investments to make. Should I go for Euros or American dollars?

Answer: The scope of your question is so vague I can only guess at what you mean. I’m assuming you mean that you’d like to participate directly in currency positions, going long either the dollar or the Euro. And further, that you want to know which is going up from here. Along those lines there is an interesting mutual fund with the symbol MERKX. It is a hard currency fund which invests in the money market funds of countries “pursuing healthy monetary policy.” It pays about 5% interest and is basically moves inversely to the dollar. Gold is another inverse dollar play. There are a couple of gold ETFs– IAU and GLD. The Euro currency ETF is symbol FXE.

Keep in mind that you may very well see a bounce in the dollar once these fearful times start to pass. When fear reigns people put more money than usual in money market funds which in effect, increases the money supply. As assets are allocated out of money market funds and other cash like investments- CDs for instance- the dollar will probably rise. I don’t see this happening until after the November elections.

Dollar Collapse – America, A Country Living On IOU’s – Peter Schiff – Part 2 – America Is Finished