Safe Haven Trade
CIGA Eric
A lot of written commentaries elude to the safety of the U.S. dollar, and by extension U.S. longs bonds and other equity bond proxies such as utility stocks. These commentaries often portray gold as a risky investment. Please do not accept these assertions without question. Safe haven is a relative term. If the U.S. dollar, U.S. Long Bonds, and utility stocks were truly a safe during the worst financial crisis since the second Great Depression, they all would be superior performance to gold, the ultimate safe-haven currency, since onset of the third Great in 2000. This is simply not the case.
It reminds me of quote from the Matrix, 1998 where Morpheus says to Neo,
I can only show you the door. You’re the one that has to walk through it.
As long as spin remains unquestioned, in essence never walking through the door, no amount of charts and observations will reveal the trends.
Gold, London P.M. Fixed: 
Long-Term U.S. Government Bonds Total Return Index (LTGBTRI) to Gold Ratio: 
Dow Jones Utility Average (DJUA) to Gold Ratio: 
Jim,
It amazes me how the financial press can see paper as the only safe haven against other worthless paper. Aren’t they in for a surprise?
CIGA BJS
British Pound on track for breaking US$1.40 target
INTERNATIONAL. Sterling hit a new low for the year against the US Dollar of $1.49, now having fallen by more than 10% from a high of $1.68 just a few weeks ago.
The mainstream press has scrambled to explain the fall away as a consequence of the narrowing in opinion polls between Labour and the Conservatives that over the weekend showed the lead shrink to between 2% and 5% and therefore put the election into hung parliament territory (Labour has a in built 4% advantage over the Conservatives).
Sterling’s downtrend may have come as a sudden surprise to many in the press, however the trend for sterling was accurately mapped out in December 2009 (British Pound GBP Forecast 2010 Targets Drop to Below £/$1.40)- that expected sterling to weaken against a strong US Dollar to eventually target a rate of £/$1.37 on break below the trigger level of £/$1.57.
Jim,
Hong Kong’s exchange may list Yuan bonds and derivatives.
One more step toward the internationalization of China’s currency and away from the dollar.
Best Regards,
CIGA Christopher
CIGA Christopher,
When I hear the word derivative I shiver, however if it is a first derivative it is safer.
Jim
Hong Kong’s Exchange May List Yuan Bonds, Derivatives (Update1)
By Hanny Wan
March 5 (Bloomberg) — Hong Kong Exchanges & Clearing Ltd. will offer Chinese yuan-denominated products and plans to become a primary channel for investing by Chinese nationals overseas.
Asia’s third-largest exchange is studying yuan products, particularly in fixed income, exchange-traded funds and derivatives, according to a strategy document issued with earnings yesterday. It is seeking to capture opportunities from the “increasing internationalization” of China’s currency while fending off competition from global exchanges, Chief Executive Officer Charles Li said at a press conference.
“I particularly like the part about yuan products because for foreign investors, betting on yuan appreciation is a big theme,” said Jasmine Lai, an analyst at DBS Vickers Hong Kong Ltd. “This is Hong Kong Exchanges’ niche. There’s no harm to broaden the focus to the likes of Russia, but China unavoidably should be the focus with the biggest business potential.”
Li declined to give details on what will be offered or when. He said the products must pose little risk to the nation’s foreign exchange policy, maximize the flow of yuan, and have genuine market demand.
