Posted on June 21, 2010.
As the cost of living and we Contintues Dollar to depreciate, the idea of the U.S. Prosper That the U.S. dollar and Japanese yen fall in value, many Japanese American citizens and feel relatively rich and prosperous.
I suggest a reality check is needed to open their eyes to the purchasing power of their currency debased. A reality check can often be provided by some travel abroad, particularly in Europe, but also in the Middle East or Asia developed. The reality is that the purchasing power of these two groups outside the United States and Japan fell more than 25% in recent years.
Increased costs LIFE
Food, shelter and basic necessities of life have gotten very expensive. Although they have not been noticed, the United States and the purchasing power of Japanese citizens has been eroded globally over the past four years. During these four years, the yen and U.S. dollar were approximately flat compared to the value to another. During the same period of the Euro, British pound, Swedish krona, Swiss franc, and during the last year or two, or even the Indian rupee and Chinese yuan, rose significantly against the dollar and the yen. U.S. investors based on the dollar and yen-based investors need to expose their portfolios of assets when prices are rising, or stocks in those geographical areas where the standard of living is rising. This theme is simple behind most of our investment opinions. Our strategy in simple terms, is to invest in countries and industries that are growing.
Gold and base metals are obvious EXAMPLES
The gold is in demand as a hedge against currency devaluation, and it is the application of retention and protect wealth, and as a store of value. As nations and individuals get richer, they hold more gold. This is particularly true in India, China and East Asia, where gold has long held a position as an alternative safe and secure paper money.
Base metals are in demand due to infrastructure construction taking place in developing countries worldwide. Economic growth is the model that these countries are, and sustainable economic growth is based on a stable and growing, including physical infrastructure, economic, educational, legal, financial and social.
Because this global trend towards the construction of infrastructure is unlikely to diminish in the near future, commodity prices remain high and the purchasing power of citizens in countries with slow growth will continue to erode.
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