Sunday, October 3, 2010

Crazy, but calmer.

Matty Boy, Investment Advisor to the Stars*, is still keeping track of the financial situation despite the fact he does not have two nickels to rub together, and I'm not talking about the gold plated nickels seen at the lower part of this picture. I'm talking nickel plated nickels or pure nickel nickels or whatever alloy they are passing off as nickel nowadays.

For anyone who isn't sure who was in office when things went nuts and then crashed and burned, here's a quick rundown of what happened to gold, silver and oil in the past few years.

Gold +34.9%
Silver +17.4%
Crude Oil +74.8%

Gold +1.4%
Silver -30.0%
Crude Oil -61.8%

Gold +27.1%
Silver +49.8%
Crude Oil +57.1%

2010 (nine months)
Gold +20.3%
Silver +31.1%
Crude Oil +2.7%

There's a lot of talk about the people who sell gold to an unsuspecting public, but it's actually a pretty good investment, though not when you buy coins as the company Glenn Beck shills for recommends. If we have another 2008, and those who are given to praying should pray that we don't, gold tends not to crash and burn like other investments. Still, since the crash ended, silver has steadily outperformed gold. Before things went to hell, about 50 ounces of silver bought an ounces of gold. At the bottom of the investment crash, it took 80 ounces of silver to buy an ounce of gold. Now the ratio is 60 to 1 and improving in silver's favor as both commodities climb.

The "nice" part of the investment world right now is that crude oil is off the roller coaster. It's bounced around in a range from about $70 to $85 a barrel this year, which might seem high by the standards of the beginning of the century when people thought $50 a barrel was the end of the world, but it's nothing like the $140 a barrel nonsense from 2008 before the crash and it no longer shows much correlation to the gold and silver prices, thank Odin.

Metals are supposed to be the investment for speculators. The life blood of the world economy, not so much.

And then there's the other weird worldwide speculation market, currencies. The dollar was very, very strong at the end of last century, trading as the USD index at around 120 points. During the early part of the last decade, it began to plummet, and at its lowest the USD index was around 70. It rebounded to around 85 after the 2008 crash, but it's slipping again and is below 80.

The USD index measures the dollar again a mix of currencies. The strongest elements in that mix are the pound, the euro and the yen. A few years ago, the euro and the pound were beating up the dollar. Now, the greenback has rebounded against those big currencies. The big currency that is now beating up the dollar is the yen. Usually, a yen and a penny are about at an equal footing. Today, 84 yen buys a dollar. That's as strong as the yen has been in a very long time.

The yen is the big winner right now as a currency investment, but an odd mix of other currencies are doing well against the buck. The Aussies, Brazilians, Canadians and Swiss are all near ten year records against the greenback. The Chinese, who don't really believe in completely unrestricted capitalism, bless their little Commie hearts, often don't let the yuan float in value in the day to day currency market. For years, they set the price and a dollar bought 8.25 yuan. In late 2005, they let the yuan float and it became more expensive. In 2008, they decided that was enough fun and the price became stable at about 6.8 yuan for a dollar. It's starting to show downward movement again, currently at 6.68 yuan.

I hear you ask, Matty Boy, Investment Advisor to the Stars*! What can I do to profit in these uncertain times? When I hear this, I immediately know... you are new around here. Matty Boy's broke-assedness is not just because he has decided to work as a teacher when budgets are being slashed. The last good investment he pulled off was selling his Activision stock as soon as he could back in the 1980s, and that was done just because he wanted some extra walking around money.

Pretty much, you are on your own.

*Matty Boy, Investment Advisor to the Stars, knows no stars. Any star he might know in passing would not be stupid enough to ask him for investment advice. If Matty Boy says silver looks good, you should probably look at pork belly futures. His track record is only slightly better than the Chicago Cubs, who last won the World Series in 1908 and are already mathematically eliminated from contention in 2011, even though the season has not started yet.


Padre Mickey said...

I don't know, Lexie's kinda a stah, but he's probably a broke mofo like the resta us.

Great advice, Matty Boy!

ken said...

Nickels are 25% nickel, 75% copper, like they've been since Lincoln was president. They were, for a few years during WWII, a copper-silver-manganese alloy, but even in their present condition, teh metal's worth something over six cents.