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Sell Gold on the Account of a Rising Dollar?

gold and usd

As it becomes increasingly likely that the US Federal reserve will raise rates as early as December (and yes, you might be reading this after the December meeting, but it still applies), gold is under pressure. The market logic is that, with a rate increase indicating that the US economy is getting stronger, the US dollar, in turn, grows stronger relative to other major currencies.

Since investors perceive the US economy as both stable and strong, they usually have their wealth stored in dollars, hence, the reason why the dollars is a reserve currency. However, once there’s panic around the US economy, which invariably threatens the value of the dollar, investors would understandably start looking for ways to secure their wealth, which would involve storing their wealth in anything other than the US dollar. Here’s where gold comes in to play, since it’s viewed as a preserver of wealth. Continue reading

A Quick Recap of the Rise and Fall of Major Global Currencies

A review of the history books will tell you about the rise and fall of kingdoms, empires, and civilizations. Celebrated economist and social scientist, Mancur Olson has written extensively on why economies rise and fall in his book; The Rise and Decline of Nations. In the more recent history of the last 100 years, a number of economies have had their glory days and they are now a shadow of their former selves.

Nothing lasts forever and the only constant force that you can count on in the geopolitical landscape is change. That is why kingdoms rise, thrive, and decline. Change is the reason empires rise and fall. Change is the reason governments are loved and hated. Change is the reason economies rise, thrive, stutter, and eventually die. This post seeks to provide a quick recap of the rise and fall of some major global currencies. The article also attempts to provide the discerning investor with information about the next emerging global currency.

Meet the Almighty dollar

The almighty dollar, U.S. Dollar (USD) also known as the Greenback is in no doubt the major currency of the world right now. The USD is regarded as the unofficial world reserve currency by virtue of the fact that it is the currency of the world’s largest economy. In fact, the dollarization of other economies and the use of the U.S. dollar in triangular transactions also attest to the esteemed position of the greenback in the global economic landscape.

Nonetheless, the fact remains that the U.S. dollar is weak and it has already peaked out in its rise as the world’s reserve currency. The importance of the USD in the global economic landscape has started to plateau and it’s only a matter of time before the decline sets in. For one, inflation is eroding the value of the U.S. dollar and savers are finding out that their cash hoards are not keeping up with inflationary trends.

Who could have thought that the Euro won’t dominate the world

When the European Union (EU) was formed by a coalition of countries in Europe in 1993, many people believed that the EU was on track to become the next world superpower. The fact that EU member nations agreed of free trade, unhindered travel among member nations, and a common currency also gave the global investors high hopes for the Euro.

However, 14 years later (the Euro became a legal tender in 2002) the Euro is still yet to live up to expectations as a global reserve currency. In fact, Forex traders believe that the Euro is a slower currency in relation to other currencies such as the Australian Dollar. The fact that the EU is made of a coalition of strong and weak economies (Greece and Cyprus among others) also makes it hard for the Euro to live up to expectations.

The Yuan can’t seem to fly high enough


The Chinese Yuan is another major currency that has the potential to become a global currency but it hasn’t lived up to expectations.  On October 1 2016, the Chinese Yuan was accepted into IMF’s Special Drawing Right Basket as one of the five global reserve currencies. The Yuan now has the third-largest weighting at 10.92% behind the Euro (30.93%) and the U.S. Dollar (41.73%).

Nonetheless, the Chinese economy is no longer as healthy as it used to be and the future of the Yuan as a world reserve currency is uncertain.  More so, not many people use the Yuan as means of exchange in the global markets. In fact, many international buyers who want to do buy stuff from China often change their home currencies to the U.S. instead of using the Yuan directly to facilitate the trade. The IMF notes that the total Chinese exports and imports is valued at $4.0T but the Yuan is only used 1.8% of the time.

Bitcoin is the new gold

Gold used to the unofficial world reserve currency because of the factors that make it a better alternative to fiat currencies. Gold is a store of wealth and its value tends to increase in times of geopolitical and economic uncertainty. Hence, many investors often seek refuge and stability in the tallow metal.

However, gold is gradually losing its shine as governments and monetary policymakers make tacit moves to undermine the appeal of the bullion. In the last one year, the price of gold is up 12.97% but its price is down 20.99% in the last five years.

However, investors don’t need to be stuck with a feeling of helplessness in finding trustworthy world reserve currencies. Bitcoin is set to become the new gold because of its decentralized nature and the fact that no government or financial institution can control or influence the Bitcoin network.

Explosive Growth in Chinese Blogging Community is a Good Sign For Token Sale

DECENT readies itself for token launch on September 10th

DECENT, the decentralized content platform developed for digital publishing is looking forward to successful launch two days from now on September 10th. Backed by a stronger community than ever in China, evidenced by their recent partnership with (Global Alexa: 50,137), one of the more popular, if not most popular bitcoin sites in China, but the Founder of Microsoft Slovakia, Mr.Tibor Tarábek, recently gave his endorsement having this to say:

“I’ve heard a lot about Blockchain based projects in the recent months, but DECENT is the one that has caught my attention. Thanks to the comprehensive solution and variety of usage opdecent_chinaportunities it has the potential to become the next big thing within data distribution processes worldwide.”

With an active developer community hosting meetups around the world and rooted in p2p and blockchain technology, DECENT is building a platform, that if successful, will be nothing short of a digital revolution. The founders’ vision is to create a fully integrated & trustworthy system of content distribution for the internet. This global platform will be secured and timestamped by a blockchain mechanism.

DECENT adoption and token Sale

A fully functional prototype will be launched during or soon after the token sale, otherwise known as an ICO or Intial Coin Offering. Though there are many other ICO’s that bitcoin investor’s have access to, we think DECENT, with it’s solid mission and active community is an ICO that shouldn’t be missed.

The DECENT Token (DCT) and it will be used for publishing and buying on the DECENT Platform. It will allow for individuals and organizations to buy, sell & share digital content without restrictions. A key feature of the token is that it also serves as anti-spam protection via a reward for miners (or publishers in this case publishers).

DECENT: Decentralized Open Source Content Distribution Platform

decent_whitepaperTrue innovation is rare, especially in the world of media. More difficult is to determine which aspect of media thrives for development most. Majority of mainstream media do not truly innovate as they are happy with their current business models. Most of the incumbents do not provide as many benefits to the content consumers as they could because of lack of incentives. Moreover, having the obligation to pass through a third party to access digital content is unnecessary.

Traditional media companies as Medium, New York Times or Daily Mail choose what they publish and which authors they allow to distribute their content through their fully controlled centralized for-profit platforms. Similarly, many jurisdictions do not provide freedom of speech; people are prosecuted for expressing their thoughts.

Source: DECENT Whitepaper

More about DECENT

The New Bitcoin Portfolio Diversification Strategy

Successful investing, like many endeavors, is often discussed simplistically, as though it were an either/or activity.   Either you store your nest egg in an FDI-insured bank account and let it gradually accumulate a return at a paltry rate of interest.  Or you do something highly speculative with your cash — like play the futures market or slap money down on momentum stocks – with an eye towards a quick and luxurious return on your investment.

There’s something to be said for both extremes.  It certainly makes sense to keep cash on hand in case of an emergency.  Having enough cash available to cover six months’ worth of your basic expenses is a good rule of thumb.  But keeping the bulk of your portfolio in cash, especially at current reduced rates of interest, is foolhardy.  A portfolio consisting solely of cash in the bank can never grow enough to fund you in your retirement years.

Still, highly aggressive investments in vehicles like momentum stocks or the futures markets can wipe out an unseasoned investor in months or even weeks.  But a diverse portfolio that allows for ample protection as well as a bit of rapid growth is a good way to go.

Towards this end, a portfolio consisting principally of gold – physical gold – and a moderate quantity of bitcoin can work very well for a lay investor.   Here’s why. Gold has been around for thousands of years.  As former U.S. Mint Director, Ed Moy, has observed, “Gold is the undisputed king of longevity for being in use since the dawn of civilization.”

What’s more, gold is a tangible asset that routinely serves as a safe haven for investors fleeing the negative effects of equities markets and a declining dollar.  Central banks store physical gold to hedge their inventory of world-reserve currency (dollars) and the devaluation of their home currencies.  Because of gold’s limited above-ground supplies, investors can feel reasonably confident their own stash of physical gold will hold its value and stabilize their portfolios.

If gold represents a balanced portfolio’s stabilizer, bitcoin can serve as its primary growth additive.  The new electronic currency, bitcoin, has ranged in value (in dollars) from zero to $1,230.00 and is currently around $416.00.   Target, Subway, Paypal, Amazon, Victoria’s Secret and Zappos are just a few of the many businesses that now accept bitcoin.  The cryptocurrency stands only to grow in value as its circulation base expands.  As such, it represents a splendid opportunity for robust growth in a balanced portfolio.

The question remains why invest in bitcoin, and why not invest in momentum stocks or even value stocks for rapid growth?  There are several reasons – mainly having to do with the current challenges of publicly owned stocks.

According to a recent poll by FactSet, analysts anticipate first-quarter earnings per share in the S&P 500 will decline by 8.7 %.   If they’re right, this will be the fourth consecutive quarter of a decline in earnings.  This decline would also mark the first such four-in-a-row series of declines since the 2008-2009 financial crisis.

Clearly, if S&P stocks are this vulnerable to decline, momentum stocks – smaller speculative stocks – will be even more vulnerable.

Also, many of the stock purchases we’re now seeing are originating from company stock buybacks. This kind of stock purchase, if handled in sufficient quantity, can reduce the number of outstanding shares and make a stock appear more attractive to outside investors.

If you happen to know someone in a company and have intimate knowledge of its markets, as an investor, you might have a leg up.   But lacking such knowledge, you’d best steer clear of a momentum – or so-called “hot stock” – in the current market environment.

For an alternative approach to a balanced portfolio, then, you might want to consider a mix of bitcoin and physical gold.  Bitcoin represents a new form of investment.  So be sure to use your own tolerance for risk and your available resources as guidelines to the respective percentages of gold vs. bitcoin you choose to invest.