15. July 2009 by Dan Walkow, CFA, CMT.

We are witnessing a seismic shift in the world financial markets that is coming at us faster than anyone thought was possible. It is is rise of the Chinese renminbi as a world reserve currency.

According to HSBC China will overtake Japan and Germany as the world’s second largest economy in the next few years.

Why should you care? Right now about 65% of world currency reserves are held in US dollars. If China is successful in becoming a world reserve currency, which I believe is a done deal, then the demand for US dollars is going to decline and not just a little bit.

From an investment viewpoint, it is absolutely critical that diversification of investment assets away from total US dollar exposure is a must do. Simple logic dictates that a rise in the use of the renminbi as a world reserve currency ensures further US dollar devaluation.

American investors who wish to preserve their standard of living and prevent a debasement of their wealth need to take action asap. There are many investment strategies that can be used to mitigate a US dollar devaluation both on the fixed income and the equity markets. As an American investor have a plan and execute as the Chinese “freight train” is moving along quickly and delays could be costly.

For more go here.

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15. July 2009 by Dan Walkow, CFA, CMT.

Contrary to the devastation, and continuing dim outlook for real estate in the USA Canada is a relative bastion of stability. Why? Two major reasons are low interest rates and the non-deductibility of mortgage debt. Canadian’s tend to be much more conservative than their American cousins when it comes to real estate financing and the excessive leverage seen in US markets is not as prevalent in Canada.

Read a recent update here.

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