|
Money matters: Currency Management Strategy Part 2
Graham Macdonald
MBMG International Ltd.
As for economic fundamentals, the euro-zone is now in a
tightening phase as the ECB is moving to raise interest rates and central bank
liquidity has been tight for some months. The ECB also has a tougher inflation
target than the Federal Reserve and GDP prospects look decidedly better over the
next 12 months. We continue to favour the Euro over the US dollar in the short
term but remain cognizant of the facts that the EU constitution remains fragile
and that European growth is likely to falter at any point.
The US current account deficit is nearly US$800bn and the Bush Government budget
deficit gets no smaller. Enough said when combined with a potential GDP growth
slowdown and negative interest rate carry.
The Bank of Japan (BOJ) has signalled that the days of
quantitative easing are over and that the zero interest rate policy (ZIRP) is
near. As domestic growth and demand improves the BOJ becomes increasingly
confident that deflation is over and that the economy will continue to improve.
There is no doubt that the Japanese economy has turned the corner and with
recent liquidity being reduced from the Japanese system, the Yen is our favoured
currency on a short/medium term basis. To also help explain recent equity market
turmoil an investor need look no further than the Japanese net liquidity being
drained by the BOJ from the system, monetary base growth has turned sharply
negative.
The British pound has traded in a narrow range with the Euro over recent times.
The UK housing market appears to have stabilized and with high real interest
rates and an inverted yield curve, has positive interest rate carry momentum in
the short term. However, the large current account deficit and high consumer
debt levels give longer term concerns.
China is the new kid on the major currency cross-radar. The Renminbi has been
pegged against the US Dollar until recently and is very slowly being allowed to
appreciate over the past 12 months. When the currency peg was in place you could
have argued that the US/China deficit/surplus negated each other but now the
Chinese may “touch” the monetary brakes temporarily to cool off credit and slow
growth slightly, but with the 2008 Olympics and 2010 Shanghai World Trade Fair
looming, it will be short lived. Given the massive geo-political risks at
present, what are the short term trends?
The weakness of the dollar index this year from the 200 week moving average
levels reconfirms the longer term trend of dollar weakness as we head to 80 on
the DXY. The US Dollar went into freefall in early April after breaking an up
trend line of a bearish head & shoulders pattern. However, it’s possible that
the US Dollar might actually be forming into a bullish inverse head & shoulders
pattern with the left shoulder in early 2004, the head in early 2005, and the
right shoulder currently forming. If this is the correct pattern, then the US
Dollar could soon find support and rally all the way up to the 100 level.
The above comments from our technical research team confirm the big picture view
that for the US dollar index are key and a bounce back towards 100 would break
the 200 week moving average. This would be the end of the long term trend. To
break the 20-30 year range on the US Dollar index will require a significant
monetary or geo-political event such as a breakdown of the dollar standard,
avian flu epidemic or Mahmoud Ahmadinejad, the Iranian president attempting to
carry out his threat of having Israel wiped from the face of the earth. The
rally in the gold price shows demand for the precious metal that far outstrips
commercial supply and demand. The gold price has also decoupled completely from
the US Dollar recently as a “major threat” premium is built into the price of
the oldest store of wealth vs almost all flat currencies in the past 12 months.
In conclusion, in the long term we may be near the turning point for the US
dollar and breaking 80 on the DXY is a seismic event. In the short term US
dollar based investors need to have significant non-dollar (preferably Euro and
Yen) assets unhedged in their portfolios whilst investors who wish to buy assets
in US Dollar should hedge out the currency and hold cash in Euro and Yen. Much
the same as Mahmoud Ahmadinejad, and before him Saddam Hussein, wish to do with
their OIL proceeds!
|
The above data and research was compiled from sources believed to be
reliable. However, neither MBMG International Ltd nor its officers can accept
any liability for any errors or omissions in the above article nor bear any
responsibility for any losses achieved as a result of any actions taken or not
taken as a consequence of reading the above article. For more information please
contact Graham Macdonald on [email protected]
|
Snap Shots: Seven Days
in the Kingdom
by Harry Flashman
There is a book that was published almost 20 years ago called Thailand
Seven Days in the Kingdom (ISBN 0-920691-37-4, Times Editions,
Singapore). During the period March 2-9, 1987, 50 renowned photographers
shot Thailand, as they saw it, and their work (85,000 shots) was
compiled into a very large coffee table book. I am lucky enough to have
one of these books, given to me by the Thai photographer Tom Chuawiwat.
 Luca
Invernizzi Tettoni
However, this is not a ‘for sale’ advertisement, this book is far too
valuable to let out of my sight, let alone part with forever. But what
this book does show is that all of us who own cameras have a wonderful
photographic subject to shoot. Thailand. In all its enormous diversity.
Take a look at the photograph with this article. Taken by famous
photographer Luca Invernizzi Tettoni, this is a wonderful shot. And it
is a shot that we can all learn from, if we open our eyes to it, and
other opportunities.
Taken in the Dusit Maha Prasat, this is described as a bronze figure
holding the sword of a past King. Look at the lack of detail in the
background which means that the photographer probably used an aperture
of around 2.8. There are also no signs of artificial lighting, so I have
to presume that the shot was taken under natural light. There is no
distortion anywhere, so it wasn’t a wide angle lens, in fact it looks as
though it was probably a standard 50 mm lens. That being the case, there
is no reason why you and I cannot also take this shot, is there? Walk in
close, set the aperture on 2.8 and let Aperture Priority find the
correct shutter speed and you have it.
However, I am not advocating that you high-tail it to Dusit Maha Prasat
and slavishly copy this image, but what I am saying is that ‘similar’
shots such as this one of Luca Invernizzi Tettoni’s are completely
possible for you, an amateur. All it needs is for you to open your eyes
to the endless photographic subjects that are in Thailand, right there
in front of you.
So a few pointers. First, do not be afraid to walk in close. In fact,
walk in several meters closer. Take a look at Luca’s photo again - he is
so close he has cropped out the spire on the hat, but the image does not
lose its power. In fact, it is even stronger. I repeat, walk in several
meters closer!
The book Thailand Seven Days in the Kingdom was really a maxi-project
with the 50 photographers snapping away for a week, and this can again
give you a tip towards your own picture taking. Rather than a week, I
suggest that you spend an afternoon on one subject. Choose the concept
and then go and shoot it. The book had five main topics, Institutions,
Religions, Rural Life, City Life and finally one called A Heritage of
Beauty which was a study of the ‘old Thailand’ still with us today.
So what could you shoot? Well here’s a few (and teachers may even like
to give some of them to their classes as a project) starting with
Transportation. What scope you have here from city transport, right the
way through to pedi-cabs. Just remember to make the subject the “hero”
and move in close!
Another subject could be the marketplace. Again there are so many items
of interest in any market, from the ‘on the spot’ butchering, live eels
on display, to BBQ grills with smoke belching out of them, to the
carousel for the children while mother shops. A complete afternoon (and
more) is there for you. Just give yourself a project and go and shoot
it.
I have written before about your local temple. The wat offers you an
incredible array of subjects, and you can take these without getting in
the way of the followers of the religion. For example, close-ups of the
filigree work on the columns and the details in the murals will keep you
going for many days, to cover the subject completely.
Give yourself a project, and walk several meters closer!
Modern Medicine: Liver, ethanol and health foods
by Dr. Iain Corness, Consultant
Ask any man which is his most important organ and he will
undoubtedly point to his bladder’s siphon hose. Perhaps the magic symbol of
masculinity, but it is certainly not the be all and end all. (Though
indiscriminate use can end all!)
The liver is one of the more important organs you possess. Without it you
will die, whereas you can get by without a kidney, or a lung or a thyroid,
or even Willy the wonder wand for example (most women do)! Yes, I’d rate my
liver above my thyroid any day.
Think of your liver as a filtering and detoxifying device. Chemicals are
taken up by the liver, to be broken down into non-toxic chemicals, all to
protect your system. Clever organ your liver, to know what’s good for you
and what isn’t.
The most well known liver toxin is our old friend ethanol, more usually
referred to as booze. There is “common wisdom” that says certain types of
booze are more damaging than others, but that just isn’t so. Irrespective of
the color or shape of the bottle it came in, ethanol is ethanol, is ethanol.
It is the percentage of alcohol that is the important factor. That alcohol
affects the liver is generally accepted, with the end result being called
cirrhosis, a fibrous hardening of the liver which then becomes unable to
carry out its job correctly. Toxins build up. You feel unwell and it’s all
downhill from there.
Some proprietary or prescription drugs can produce an inflammation of the
liver tissues too. Or worse, produce a breakdown of the liver tissue itself.
Amongst these is the headache medication paracetamol (the ubiquitous “Sara”
tablets, for example), but before you throw them out of your bathroom
cabinet, it requires some heavy and very frequent dosage of paracetamol to
do this.
Other prescription items that may produce liver problems include Methyldopa,
several penicillins, Simvastatin (the cholesterol lowering drug), Diclofenac
(a non-steroidal anti-inflammatory) and Ketoconazole (anti-fungal).
Prescription drugs can be dangerous (even though you can get most of them
over the counter in Thailand), but that’s why they have a PI (patient
information) leaflet inside the box (the bit you throw away and don’t read).
Probably if you read it, you wouldn’t take it!
However, what about “Health food” preparations? The purveyors of these all
cite the fact that the ingredients are “natural” so everyone assumes that
this means “safe”. Not so, I’m afraid. Lead, for example, is a naturally
occurring compound, and not much good for young kidneys. However, since we
are talking about liver problems, hands up all those of you who have heard
of Echinacea? Supposedly fixes everything from falling hair to fallen arches
– but is it “safe”? Well, Echinacea, along with Kombucha Tea are two of the
commonest compounds showing a well documented history of being toxic to the
liver. So if you’re sipping Kombucha tea because you’ve drunk too much
alcohol last night, I would suggest that you change to water!
Others for sale in the Health Food shops with known toxic effects on the
liver include Evening primrose oil, Valerian, Chaparral, Japanese
Daisaiko-to (for dyspepsia), Chinese Jin-bu-huan and several forms of herbal
teas such as those from Heliotroprium, Senecio crotalaria and Symphytum.
Makes you think that the shops that sell them may be incorrectly named,
doesn’t it!
But while the column this week seems to be spreading doom, gloom and
disaster, it’s not quite that bad. The liver is a very powerful organ and is
capable of regenerating itself quite quickly, so in most cases of toxicity
following ingestion of chemical compounds (including alcohol), by stopping
taking it the liver recovers and the patient feels well again.
So remember that if you are taking anything regularly and you feel unwell,
it may be the liver – but tell your doctor everything you have been taking!
And no thanks, I’ll give the herbal tea a miss today.
 Heart to Heart with Hillary
Dear Hillary,
I have been reading your column for many moons on the internet and it always
brings a smile. Been there done that caught that been cured. Now that I’m
finally living in Thailand, I read it in hardprint! Anyhow, I wished to
update you regarding activities at the Chicken Pluckers Arms as you didn’t
seem to have the full picture. On any given evening at the Pluckers, there
are literally dozens of older pot bellied partakers in coloured beverages
that are only too willing to buy a new Trumpy for any of the delectable
young bar-ladies serving them their elixir. Unfortunately though, there is
no “I go with you sexy man” attitude. So instead, they will down about 15
pints a night to enhance their sexy image when they come for their yearly
two week trip to Pattaya. As they are fitness minded individuals, they will
also forego the pleasures of chocolate and only partake in the odd serving
dish of chips in order to input the required sustenance. I hope this
clarifies the situation at Pluckers for you.
Tiger
Dear Tiger,
So I take it that sales of Trumpy’s are down over and up there in the UK,
which might explain why Triumph have opened up a factory in Thailand, my
Petal. If the British bar girls were to get in and pull their weight like
the Thai girls do, then the entire economy and other things in the British
Isles would be on the up and up it seems. And a Trumpy in every bedroom!
Thank you for the explanations of the British mating and drinking habits. No
wonder the poor old codgers come out here, even if it is only to buy a
Yamaha step-through! It’s probably a bit late for them to throw a leg over a
Trumpy by now anyway.
Dear Hillary,
Love your column every week, and agree with the guy who wrote that he wants
it more than just once a week. Have you ever thought about putting it all
together as a book, Petal? Think of it as a retirement benefit plan, sitting
back with all the royalties pouring in. You’ll be creaming them, Hills,
creaming them!
The Avid Reader
Dear Avid Reader,
Oh if only it were that easy. JK Rowlings and Harry Potter move over, here
comes Hillary with tall tales and true from the magical country of Thailand!
Read how wicked witches can place a spell over 70 year old men which changes
their credit cards into molten plastic. Watch as bank funds magically
transfer themselves from one man’s bank overseas to an uneducated Thai
girl’s account in Isaan! Wonder as superannuation plans turn themselves into
funds for maintaining herds of buffalo way up-country! Learn why gold shops
like foreigners, especially when they have a Thai girl on their arms and
learn the ‘buy back’ secret involving bar girls, motorcycles and their
salesmen. Find out why pharmacy assistants have blue thumbs after counting
diamond shaped pills all day, and learn about the disappearing willies from
the ‘girls’ on Beach Road. Yes, Avid Reader, I think these little known
secrets should be made public, and Hillary is just the girl to do it. Thank
you for the idea, and I’ll let you know when they are in the shops, so you
can be the first to buy one. It should be a best seller. I’ll even offer to
autograph copies for a nominal fee, like a box of Belgian chocolates and
some French champagne!
By the way, when you say that you want it more than just once a week, I do
presume you are referring to the column and not anything else (or any other
column-like appendages)! You can’t be too careful these days, I tell you,
Petal!
Dear Hillary,
The other night at a party I met a lovely buxom lady from Morocco who is
over here for a conference and then holidaying for three months. Before
making any further moves which could embarrass me, do I have to be
circumscribed (sic) to date a Moroccan? I thought I would take her for a run
in the countryside and show her a bit of Thailand first, but I do not want
to spend too much time on the project if I will still get nowhere.
Enquiring and intact
Dear Enquiring and intact,
You certainly don’t hang around, do you Petal? What sort of a hot date did
you have in mind? A fact finding mission to see what Buxom Moroccans wear
under a caftan? I also presume you really meant “circumcised” rather than
“circumscribed” (laying down the limits) or were you just being circumspect
(a trifle wary)? Whatever, yours is this week’s silliest question. I am sure
the lady in question is more interested in what sort of person you are, and
where you are taking her, rather than whether you’ve had one centimeter
lopped off the end of your exhaust pipe. By the way, what “bit” of Thailand
did you have in mind? And the item about getting nowhere? Depends whether
you take a map with you, my Petal, so you should know where you’re going,
doesn’t it?
A Female Perspective: A female’s friends
with Sharona Watson
I must say I feel I’m lucky. Whilst I have had my fair share of misfortune
in friendship, my female friends now are just about as close to sisters as
you can get. They are generous, loyal and kind; some of them are gentle,
some are ferocious and all of them are honest. They are there to support me
when I need it and they are always, always available, day or night, wherever
in the world they happen to be. No matter how small or big the issue is,
they never fail to listen, to talk and to laugh or cry with me. I can only
hope that they feel I’m as good a friend to them as they are to me.
I can only hope that my friends feel I’m as good a friend to them as they are
to me.
Over the years I have come to know who my friends really are because they
have stayed with me, through thick and thin. My misfortune has been with
people whom I once thought were friends, who then duped or cheated me. One
person even pretended to be a friend. She would come around to my house and
have tea with me, but just so (as I discovered) she could pass on
information about whether I was staying in Thailand or not, to people who
hoped I would leave. Incredible but true and frankly, pathetic. I think the
expression in English is ‘fair weather friend’ which to me, means not a
friend at all. Only rarely have I been in the position where a friend lost
has been recovered. I am naturally a little bit suspicious of people who
have wronged me and then come back and ask for forgiveness. But what can you
do in these circumstances, if not give someone a second chance?
Once, I thought that my good opinion once lost, was lost forever. Now I am
not so sure. Perhaps it’s because when we were younger, at school for
example, we went through a stage of ‘bitchiness’ which seemed to involve
falling out with people and then making up the next day. Your worst enemy
would suddenly be your best friend. It’s funny to look back at all that now;
actually I feel a bit embarrassed sometimes when I think about the kind of
quarrels we used to have but on the other hand, maybe it was all part of
learning about friendship. We got used to bringing things out in the open
and talking things through. It seems to me that females are better at
dealing with that sort of thing than men.
As far as I can tell, men are a little more reluctant to talk about things
with their friends, especially personal things. With women, anything goes.
For example (any men reading this might not get much further than this
sentence) we talk about our periods. (although not all the time!) The thing
is, with women it’s ok to talk about that sort of thing. I can’t imagine
(and I have never overheard) men talking about anything as personal as this.
It doesn’t seem to be a ‘male thing’. They prefer to imagine, I think, that
biological problems either don’t affect them or don’t exist, which is kind
of funny (and sad) when you think about it. You’ve got all these guys
wandering around together with similar problems and none of them is brave
enough to bring a subject up with another. When they do break down this
barrier, it seems like they make really deep and lasting friendships.
Take baldness, for example. Men seem to be very self-conscious about this
condition, especially when they are younger (my husband might be an
exception – he just laughs at himself). I can understand this, but do male
friends point out to one another, in a sympathetic way, when one of their
mates looks like they’re losing hair? I don’t think so! If they are really
good friends, they might make a joke about it, but otherwise the poor
balding guy is left to camouflage his affliction! Sometimes with the
‘comb-over’, maybe sometimes with a wig. I’m left thinking to myself,
“You’re his friend! Tell him he’s going bald! He’s only kidding himself, you
know!”
On the other hand, good female friends are likely to point out to you when
you’re looking fatter, or your hair isn’t as thick, or your clothes don’t
look good. Then they’ll give you some advice on how to look better. They are
happy to give you the benefit of their experience. Because when you look
better, you feel better about yourself. Men seem to have such big egos that
they can’t stand being told either that they look terrible, or that they
should do something about it. Especially when it comes from another man.
Whereas, (perhaps strangely) if a woman points something out to a man about
his appearance, watch how quickly he does something about it!
Another big difference as far as I can see (and please put me right if you
think I’m wrong!) is that male friends all seem to have more or less the
same view about something. For example, whilst they might support different
football teams, you can expect them to agree on the essentials like ‘support
your local team’ and things like that. Whereas amongst female friends, I
feel that when I put forward differing ideas, we can argue about many things
with great passion, but the only thing it will do to our friendship is
strengthen it.
Of course, in friendships male and female, there has to be a connection with
another person; a kind of chemistry. I love the fact that my friends come
from so many different countries and cultures but we nonetheless have
something in common. It’s very difficult to explain what it is. It’s
something beyond the independent streak and sense of humour that many of us
(but by no means all of us) share. I think it’s something to do with sharing
female experiences. We have a pride in being women which only others like us
can truly understand.
Next week: Ferocious women
[email protected]
Learn to Live to Learn: Compassion
by Andrew Watson
 What
is this quality that sets an enlightened civilisation, or indeed person,
apart from another? The OED is reassuringly simple; “Compassion: Pity
inclining one to be merciful”. I look around the world and it seems to me
that this is a quality too often lacking in humanity; something elusive yet
obvious, a simple answer to a difficult question.
People spend so much time looking outside themselves for solutions to their
problems, when this answer is within them all the time. But who amongst us
has developed the capacity to put ourselves in another’s place? Who has
cultivated compassion and learned to bestow it? When I was at junior school,
I remember very well one of the key messages; “be quick to praise and slow
to chide”. Mercy was a big deal, recognised as a great strength. Indeed,
‘strength with mercy’ comes close to my definition of beauty. It is a
beautiful thing to be able to show compassion and it’s one of the most
powerful antidotes to hatred, jealousy, ignorance and greed. I find it
difficult to view compassion as optional. I think of life as a privilege and
someone who has either not yet learned the art of compassion, or resists the
opportunities to confer it, is in my view, abusing the privilege.
During a hiatus in the otherwise pretty persistent barrage of Katyusha
rockets landing at random around me in northern Israel during the recent
conflict, it occurred to me that wars often bring out the worst in people;
and rarely the best in people. After four weeks of conflict, emotions had
become festering sores of bile. Language became more extreme and tempers
became shorter. It was interesting to note how some ‘leaders’ attempted to
excite emotions, whilst others sought to soothe and restore. One day, in the
‘bubble’ of Tel Aviv, where life had continued largely ‘as normal’, I
happened to be watching a Sky news flash concerning a rocket attack which
had smashed into a Synagogue in a kibbutz, killing twelve reservist
soldiers. By coincidence (he would probably have had the temerity to call it
‘providence’) Sky had chosen this moment to interview a British member of
parliament, George Galloway.
Galloway is notorious for his brazen, outspoken criticism of apparently
everything but himself. He reminds me of unruly members of classrooms and
staffrooms, who whinge and moan on the basis of their myopia, one sided
Cyclops listing badly to one political side or other, carrying an agenda.
Dangerous people. Some would say dangerously stupid people. He’d probably
respond that ‘in the land of the blind the one-eyed man is king’, missing
the point of course. One thing I recognised immediately during his interview
is that he subscribes to my model of the consummate bully, using abuse as a
weapon, patronizing to humiliate, roaring with male angst at a cowering
female from a distance (brave man!), and utterly bereft of any compassion.
Ironically, he was elected to parliament as a member of his self-styled
‘Respect’ party, which on the evidence I witnessed, makes him either a
walking, talking oxymoron or an opportunist cynic, playing on youth
culture’s latest ‘in-word’ in order to garner support.
Invited to offer his comments on the Israeli/Lebanese conflict, Galloway
launched into a tirade so perverse and personal that it seemed to me that it
must have been pre-meditated. His gratuitous insults towards the Sky anchor
Anna Botting, were a galling combination of the aggressive, the patronising
and the sexist. Playing on popular misconceptions of Sky female anchors as
‘Bimbos’ and ‘Barbies’ he’d refer to his interlocutor as ‘Anna’ in one
breath and ‘stupid girl’ the next. His ire was aimed (in no particular
order) at her, Sky, Murdoch and the Israelis, who he seemed keen to group as
one, promoting the idea of Zionist conspiracy in his subtext whilst
relishing Israeli deaths, shown on the split screen to his right, with
incendiary words. I found it extraordinary that an individual in public
office could perform in such a manner, pandering to the lowest common
denominator. ‘Class war’ vandals must have been loving it. Anna Botting
attempted to rebuke him for his apparent joy at Israeli casualties, which
only provoked further personal abuse. Sitting in the comfort of Sky’s London
studio, he was utterly removed from the reality of the situation he
professed to understand. “Come and spend some time in a bunker,” I thought,
“and we’ll talk some…” Then Galloway revealed his true colours,
demonstrating the true level of ‘respect’ he holds for humanity. In stealing
the late Bernie Grant’s words, he seemed pleased with himself as he claimed
that, “The Israelis are getting a bloody good hiding,” whilst live pictures
of their dead bodies were on screen alongside him. (Grant appeared delighted
that the police had received such a ‘hiding’ during the Tottenham riots of
the eighties when an officer was killed) Galloway and his smirk had revealed
not only his lack of originality, but his startling level of inhumanity. If
I felt sorry for Anna Botting, I felt derision bordering on contempt for
Galloway. (Where was my compassion?) I felt that through his bias and
invective, he had obscured any points of potential interest and relevance
and abused the privileges of public position, of office and most of all, the
privilege of humanity.
Nonetheless, it struck me that Galloway might have inadvertently provided
something of value; if there’s one thing that the protagonists of war have
in common, surely it is their utter lack of compassion. It doesn’t really
matter in this sense whether it’s Nasrallah, Olmert, Galloway, Bush or
anybody else. The fact that unnecessary death was being caused on a daily
basis by two armies is an indictment which is difficult to escape and
pitiful to try and justify. Obscuring the sanctity of human life for any
reason appears perverse. Celebrating the end of another life seems to me to
be an expression of evil. Instead of ‘looking in the mirror’ for a solution
to hatred and violence, it’s easier (certainly in Galloway’s case) to look
outside and blame somebody else. Purveyors of extremist sentiment have a lot
to answer for. To young people, I teach the three ‘R’s; Respect for self,
Respect for others and Responsibility for one’s actions. This necessarily
involves recognition of the need to demonstrate compassion. It appears to me
to be a lesson that people like Galloway have never learned.
Next week: Back in the Swing of Things
|
