Nick Checks IN ON Exchange Rates

Hi John,

How vulnerable is the import/exporter to loss of value of the dollar?  Do you recommend buying gold?

Thanks,

Nick

Currency fluctuations are a factor.  Since we trade in frequency, not in volume, we manage the risk.  If one small shipment gets hammered, we adjust prices on the next shipment...  I'd say gold is a good part of any diversified portfolio.  I have reason to be weighted into gold, but last year when I hedged the falling market with short-selling the govt outlawed it for the few weeks it would have mattered.  I suspect when gold matters, they will steal it as they did in the last economic crisis... 1934.

But, importers were allowed an exception to the ban on owning gold to settle international payments.

Our economic crisis is caused by a critical mass of money that is not backed by wealth.  We "printed" more money than there is warranted by goods and services and infrastructure, etc.  the only defense right now is to trade something.  Provide a value, make it tangible in goods and services, and trade it using the medium of exchange (money).  Repeat as necessary.

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