With this global meltdown, the basic advice now is “Cash is King”. If you can get out get out now and hang onto your dollars as it’s gonna be a rough and tumble ride from here on out, at least until 2010.
But if you follow Warren Buffet’s advice, being bullish when everyone’s bearish is exactly the right moment when one can get rich fast, if you’re willing to take risks and gamble.
The US economy is in shambles the whole world knows that. However, the whole world is invested in the US economy and the US dollar. China and Japan are now buying over more and more US debt and people are buying back more US dollars for various reasons including trying prop back up the greenback. Now this itself is a potential bubble waiting to burst.
Conversely look south and you see the ANZ markets crashing in line with the US meltdown but rest assured no one will be coming to ANZ’s rescue. Since the sub-prime debacle hit the worlds’ markets, the Australian dollar has fallen by as much as 32c to the Singapore Dollar and is now resting in the S$1.02-$1.05 region. The New Zealand dollar has already fallen below par. Will the ANZ market fall even lower? Possibly. The NZ was once 50c and the Aus below par back in the 2000-2001 days just after the Asian Financial Crisis.
What does this all suggest? If you have greenbacks parked somewhere, sell them now or soon. Once sold, hang onto your money if you want. If you want to follow Warren Buffet’s advice, pour that back into Australian. You might see up to 5-10c drops from here on out, but expect the Aussie to bounce back by 2010 and go back to S$1.15-$1.20 days real soon.
