Why is the Yen Like a Pirate's Booty?
Blimey! Seems President Trump's been throwin' around tariffs like a drunken sailor throws doubloons! And what happens when the seas get rough? Investors bless their cotton socks start lookin' for a safe port in a storm. And what do they find? The Japanese yen of course! Ebrahim Rahbari fella at Absolute Strategy Research reckons it's the best place to hide from all this trade bluster and a possible U.S. recession. Why you ask? Well it's cheap see? And the Americans might be lowerin' their interest rates which makes the yen look even shinier. Even though Japan's a big exporter they're not as reliant on trade as you might think. Savvy?
Swiss Franc: More Reliable Than a Compass?
Now the yen ain't the only treasure in these troubled waters. The Swiss franc is also lookin' pretty good. It's appreciated mind you against the U.S. dollar just like the yen. Matt Orton from Raymond James Investment Management thinks the Swiss franc is even better at blockin' the damage from Trump's tariffs than the yen considerin' the Bank of Japan's next moves are murkier than the waters around Tortuga!
Yen's Recession Reputation: Fact or Fiction?
Jeff Ng a sharp cookie at Sumitomo Mitsui Banking Corporation says the yen usually shines during global recessions or crises. 'Even if the world avoids a hard landin',' he says 'the yen might still do well if the Bank of Japan hikes rates.' But hold your horses! Japan's got its own troubles with these tariffs especially on cars and bits and bobs that go in 'em. And if Japan's economy slows down the Bank of Japan might just keep rates low keepin' the yen weaker than a rum soaked deckhand.
Exotic Hedges: More Fun Than a Barrel of Monkeys?
Now here's where things get interestin'. Rahbari wonders if there are any 'exotic' treasures to be found. He mentions the Brazilian real. 'It's cheap has high carry and isn't as exposed to global trade,' he says. Apparently it's been doin' rather well this year. Who knew?
Bonds and Gold: Worth More Than a Chest of Doubloons?
Of course no pirate worth his salt forgets the classics. Investors are pilin' into cash and low risk bonds like U.S. Treasurys. Bond yields are droppin' which means everyone wants 'em. Even Japan's bonds are lookin' attractive. And what about gold? Well it hit a record high after these tariff announcements. Even though it's dipped a bit it's still up there shinin' like a freshly plundered goblet! Seems like gold's got a lot of wind in its sails what with all the trade uncertainty and whatnot.
Gloomy Outlook: Perfect for Gold?
Adrian Ash from BullionVault says that weaker trade higher costs and shrinkin' margins are hurtin' the stock market and geopolitical mistrust is on the rise. 'Such a gloomy outlook for economic growth offers the perfect backdrop for further gains in gold,' he declares. JPMorgan reckons there's a 60% chance of a U.S. and global recession by the end of the year. Seems like there's a storm brewin' and everyone's headin' for the nearest safe harbor. Which might just be a pile of gold bars. Now where's my rum?
Comments
From Captain Jack Sparrow
Breaking News
All Rights Reserved © 2023
Aloha
Did you hear about the investor who put all his money in gold? He's golden!
azz86
This article is like trying to explain quantum physics to a parrot.
ericaavo
But you have heard of me.
1624Steve
Why is the rum always gone?
JACKI43
I'll take my chances with the Kraken!
swright
Bonds, huh? Sounds boring. Where's the adventure?
ben1994
Trade wars, huh? More like trade bores!
pyroteen3
Gold! Now you're talkin' my language!
MALIKUK
Why is it always rum gone?
faby2k
The yen is the safest haven? You are without a doubt the worst investor I've ever heard of.