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Currency Predictions Come True II
You heard it here first folks. Back on Sunday, September 23rd, 2007 I raised concerns about Dollar-Swiss Franc parity. Just like with the Canadian Dollar. It is now a reality.
The Australian Dollar is very close to parity at about 1.065AU for $1USD. Friends of mine in Europe are constantly told the Euro will soar to $2.00. Apparently, Billionaire George Soros & I agree that the Euro is inherently flawed.
More likely than $2.00 per Euro will be Dollar for Dollar Parity with the New Zealand & Singapore Dollars.
New Zealand is a commodity laden economy and Singapore is a commerce based economy. Both sectors will remain strong. Longer term New Zealand will need to lower rates to stay competitive. Singapore’s quasi-authoritarian form of government will become a liability.
The Chilean Peso is one of my favorite “exotic” currencies. Because the Chilean Republic has low taxes, almost no national debt, and a somewhat “private” social security program. The Chilean Peso if they ween themselves off of the Dollar will probably appreciate toward the 300-1 mark from the present 456+.
Oh, and they have lots of natural resources. The Uruguayan Peso & the Paraguayan Guarani could also be interesting plays. Costa Rica’s Colon still has a lot of work to do. The problem Latin American governments face is lack of credibility. International investors aren’t accustom to thinking of local currencies as “safe.”
Back to reality for a moment. The Australian, New Zealand and Singapore Dollars will hit parity this summer or right before the November election. The Latin boom is highly contingent upon whether the Americas embrace the new American President in November or Hugo Chavez.
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