Morning Brief – US Dollar

US Dollar

 

Longer term and by that I mean in the 6 to 12 month time horizon it is looking increasingly likely that USD will weaken substantially due to two key factors: firstly, domestic savings are falling faster and the savings ratio is lower than at any time in the past 70 years, and secondly, the current account deficit is increasing as that savings gap for investment in the economy is financed from outside the U.S.A. The default tendency is to assume that USD will continue irrespective of the above as the world’s reserve currency. However there is a strong argument for questioning that implicit assumption. The question is in what alternative currencies or stores of value should one deploy assets and the alternatives being talked about are EUR, Crypto and Gold. Leaving aside the last two which we do write about regularly, it is time to adjust our thinking and entertain the possibility that conceivably EUR could trade as high as USD 1.60 by Q4 2021.

 

South African Wine

 

South African winegrowers are reeling from two major setbacks in 2020: the first was the South African Government’s decision to postpone the harvest as one of their lockdown measures- the snag with that is that ripe grapes do not respect government decrees and carry on maturing; the second was to ban the sale of alcohol in a bid to stop people socialising. That measure prevented wineries generating wine sales to fund themselves. Despite heroic efforts by international fans of South African wine to help out by quaffing wine in past months, the South African wine industry needs further help-and fast- and there are plenty of great wines to choose from many of which are being offered at keen prices: if you haven’t already, do try Vergelegen Reserve Chardonnay from Vinum at GBP 15.45 or Mulderbosch Sauvignon Blanc from Winebuyers at GBP 12.95 or Sutherland Cabernet Sauvignon Elgin ( made by the excellent Thelema winery) at a bargain GBP14 from the Wine Society. Let us know what you think!

 

Medical and Dental Tourism

 

New health warning for this trend which while reduced due to Covid travel restrictions is still popular with many nationalities taking advantage of Rumanian dentists, Polish cosmetic surgeons etc etc. Tragedy in Turkey for 3 friends who journeyed to Bodrun for teeth whitening and left 1 dead and 2 in comas. It may sound like a first world problem but with the soaring costs of medical treatment in Europe and the USA and the USD/TRL at a new low of 7.78 and EUR/TRL at 9.16, the temptation is too much for some to save money, have a holiday and never mind the risks.

 

Mario Lanza

 

Tenor, Mario Lanza’s voice is still well known despite the fact that he departed this world in 1959 at the age of 38. At the time he was attending a weight loss clinic in Rome, Italy to address his ballooning weight- clearly he should have checked in earlier as he tragically died in the clinic from a pulmonary embolism. His song Because You’re Mine sold a million copies for the romantic crooner with the big smile:

 

Because you’re mine the brightest star I see looks down
My love, and envies me because you’re mine
Because you’re mine because you’re mine
The breeze that hurries by becomes a melody
And why, because you’re mine, because you’re mine
I only know for as long as I may live
I’ll only live for the kiss that you alone may give me
And when we kiss that isn’t thunder dear
It’s only my poor heart you hear, and it’s applause
Because you’re mine! because you’re mine!

 

Because you’re mine the brightest star I see looks down
My love, and envies me because you’re mine
Because you’re mine because you’re mine
The breeze that hurries by becomes a melody
And why, because you’re mine, because you’re mine
I only know for as long as I may live
I’ll only live for the kiss that you alone may give me
And when we kiss that isn’t thunder dear
It’s only my poor heart you hear, and it’s applause

Because you’re mine! Because you’re mine!

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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