[FoRK] Euro Bonds etc.

Adam L Beberg beberg at mithral.com
Mon Jan 16 22:34:23 PST 2006


Bill Humphries wrote on 1/16/2006 2:02 PM:
> 
> On Jan 16, 2006, at 1:43 PM, Lucas Gonze wrote:
> 
>> What's March 20th?
> 
> 1. Google newsing around, it's the start of the Islamic Republic of 
> Iran's budget year.
> 2. Third anniversary of the invasion of Iraq.

March 20 the Petroeuro if born, when Iran starts selling oil for Euros. 
The dollar becomes completely irrelevant and thus worthless to anyone in
Europe/Africa/Asia. You'd have to want to buy something made in America
to want dollars. Right now everyone needs dollars to buy oil, people
want oil. The only things I own made in America are the things I've made 
myself. Much of my food is from South America, even most of the labor 
around here is Mexican not American.

China, Japan, and everyone else are having to issue almost daily denials
that they are dumping dollars, because you just cannot hide transactions
that big. Buffett and all the other billionaires are already out of the
dollar or are fully hedged.

The only other option is a full scale war with Iran, which King Bush
cannot even start without forcing gas to $10/gallon, and cannot win
without using nukes to glassify the entire middle east.

Both have just about the same effect on the dollar. Complete meltdown as
Bush prints money 24/7. Not that GM, the boomers, and other factors
won't bring this about on their own. Our economy doesn't have one 
problem, it has ALL the problems.

To what others said about returns, this isn't a long-term investment
it's to get most assets out of the dollar for use later. Ideally,
an E*trade type account where I can do most things
stock/option/bonds/CDs, but in Euros.

The problem with "just but the euro funds" here is that one of the first
things governments in currency "situations" do is seize all assets in
other currencies for their own use, and prevent you from making any new
conversion out of the junk currency. i.e. all those funds will be taken
from you. If you buy gold for example, you need to actually HAVE the
gold in your possession, buy it with cash from many brokers, etc.

Albert S. wrote on 1/16/2006 3:47 PM:
> One problem with Eurobonds is that interest rates in
> Europe are very low. 

Yea, but if you adjust for the dollar, they do very well. And soon, that
10%/day net interest while holding Euros will seem good.

> Of course, the very best hedge against the Iran
> situation is oil and oil stocks. Americans can buy
> those in a basket through XLE.

*chuckles* don't bet on that one. Most of the world wants the American
oil companies to get the hell out, and they are running out of people
foolish enough to work for them and get shot at and blown up. China has
neither problem - oh, and they just depegged their currency frmo the
dollar in preparation for the dollars comeuppance.

Good thing that guy Gore didn't get elected, oh wait...

-- 
Adam L. Beberg
http://www.mithral.com/~beberg/




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