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Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

Kevin Barker's Comments on Currencies

Cheap money in North America (its getting cheaper by they day) has lead to an increased focus on emerging markets. Investors are starting to speculate on countries instead of companies.

Kevin Barker writes The Barker Letter, one of the more entertaining newsletters that cross my inbox. I enjoyed his comments on currencies today.

Yes, I've heard all the prognostications about how fiat currencies are crap and we all need to back to the gold standard, but that's nonsense. Free floating currencies allow sovereign nations to price themselves based on demand (relative to their interest rates) and their macro economic numbers, in order to enhance commerce with their trading partners. It's not only sensible from an economic perspective, it's also fair. If you see a yen, a buck, or a Euro as a 'share' in that country or economic region, then it's strength or weakness should be directly related to that country's economic solvency.