fxmatters

• 27 Feb 1867 – Irving Fisher, the creator of the “quantity theory of money” is born. He also made and lost a fortune and is famous for having said 9 days before the 1929 crash “stock prices have reached what looks like a permanently high plateau”.
• 1 Mar 1947 – International Monetary Fund begins.
• 1 Mar 1976 – First National City Bank of New York changes its name to Citibank.

The NZ Super Fund is large. It invests heavily offshore. It hedges some currency risk, but not all. It has performed well. There are some lessons here to learn for all of us … Read Time to invest offshore

• 20 Feb 1989 – largest 2-day NZD/AUD rally completed, up 4.2c.
• 21 Feb 1825 – Thomas Jefferson’s advice “never buy what you do not want, because it is cheap; it will be dear to you” applies in fx markets as well.
• 25 Feb 1957 – US Admiral Arthur Radford’s “a decision is the action an executive must take when he has information so incomplete that the answer does not suggest itself” is also true of fx.

History says that picking exchange rates is difficult. Hence a systematic approach to hedging fx risk is required … Read Taking Measured Bets

• 12 Feb 1294—Kublai Khan dies, having used paper money to create stability and economic prosperity, only to have too much money (inflation) lead to downfall.
• 12 Feb 1989 – a Texas banker says “doing business with Alan Bond is like wrestling with a pig—you both get sprayed with mud and the pig loves it” (not fx but a great quote).
• 16 Feb 1971 – the shilling goes as Britain adopts metric currency.

The G7 meeting saw it as business as usual in Japan: the economy is growing but the BOJ will set policy on the basis of local forces and the markets will determine exchange rates. So why do I still feel nervous? … Read Still awaiting the BOJ decision

• 6 Feb 1659 – Earliest known cheque is written, on a British bank.
• 7 Feb 1935 – The game played by every budding young capitalist—Monopoly—was mass marketed for the first time.
• 11 Feb 1974 – J Paul Getty, 81 and mega-rich, says “I’ve never seen the day where I could say I felt rich. Generally you have to worry about paying the bills”.

The threat of a higher NZ cash rate suggests a higher NZ dollar. The technical indicators suggest the opposite. Who will win out? … Read Looking for the patterns