Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
China's Grand Plan to Take Over the World - 19th Nov 19
Interest Rates Heading Zero or Negative to Prop Up Debt Bubble - 19th Nov 19
Plethora of Potential Financial Crisis Triggers - 19th Nov 19
Trade News Still Relevant? - 19th Nov 19
Comments on Catena Media Q3 Report 2019 - 19th Nov 19
Venezuela’s Hyperinflation Drags On For A Near Record—36 Months - 18th Nov 19
Intellectual Property as the New Guild System - 18th Nov 19
Gold Mining Stocks Q3’ 2019 Fundamentals - 18th Nov 19
The Best Way To Play The Coming Gold Boom - 18th Nov 19
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19

Market Oracle FREE Newsletter

$4 Billion Golden Oppoerunity

How to Buy Silver at 10% Off

Commodities / Gold and Silver 2011 May 20, 2011 - 03:22 PM GMT

By: Casey_Research

Commodities

Best Financial Markets Analysis ArticleKevin Brekke, Casey Research writes: Inflation has certainly been all over the headlines lately. As the cost of basic materials and commodities has pretty much risen across the board, it was just a matter of time until this rise made its appearance on store shelves at a retailer near you. With prices at the pump squeezing motorists as well, the drive to the supermarket is as painful as watching your groceries being scanned at checkout.


The tide of rising prices has consumers looking for ways to stretch their purchasing power – coupon clipping and cents back on gasoline via certain credit cards is one way to fight back.

Metals investors like us are also alert to any opportunity to add to our precious metal holdings at the cheapest price. And there is good news for those of you who listened to our advice and converted some of your U.S. dollar-denominated wealth into select non-dollar-denominated assets and foreign currencies. The so-called “commodity currencies” have certainly put in a good performance against the dollar.

However, I want to highlight another currency that has been flying under many analysts’ radar: the Swiss franc. The franc has gained more than 20% against the dollar over the past year and now sits about 11% past parity against the US$. Here’s a one-year chart:

An investor who bought Swiss francs a year ago can today buy an ounce of silver for 30 francs and change. As shown in the next chart, the nominal gap in silver pricing now exceeds 10%:

Admittedly, my 10% off claim assumes that parity between the currencies somehow represents a “fair” exchange. Since the exchange rate between the dollar and the franc floats, it is the free market, as it should be, that determines the number of units of one currency needed to buy another.

In the end, I use parity between the two currencies as a random reference to illustrate a point: diversifying some of your wealth outside the dollar is a necessary tactic. Not only will this strategy protect your purchasing power, but it is a way to leverage the value of your precious metals holdings.

Holding precious metal outside the U.S. allows you to not only capture the metal’s price advance, but when the value of the metal is converted back to dollars, an additional gain on the currency conversion will likely be captured as well. The dollar has crashed 50% against the Swiss franc since 2001. It could easily repeat this feat over the next ten years, adding rocket fuel to your precious metals gains.

And there’s an added bonus. When it comes time to sell some of your metal, and you choose not to repatriate the funds back to the U.S., you’ll have the means to take a nice vacation without the budget-busting effects of converting an ever-decaying dollar into the local currency.

[If you don’t own enough gold and silver yet, you still have a chance to load up on the dips. Read the current BIG GOLD edition to learn how to take full advantage of a correction in the precious metals – try BIG GOLD today for only $79 per year, plus 3-month money-back guarantee.]

© 2011 Copyright Casey Research - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Mick
23 May 11, 07:58
you can't be serious

The results are the same but with additional costs of currency conversion.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules