These are the Norwegian Krone, Swedish Krona, and New Zealand Kiwi.
Well, when these guys are speculating in some small and obscure nation's money, you start to realize just how unstable the monetary systems are with the world's major players. It's equivalent to stock markets being overvalued and "analysts" recommending micro companies nobody ever knew existed. And like these micro companies, the currencies these "professionals" are so excited about, have the same overall flaws and certain specific risks all their own.
The overall flaw is that, like micro companies, they are dependent on the bigger players in the world economy. Obviously this means the United States, but also it includes Western Europe and the major Asian economies. Norway, Sweden, and New Zealand can not prosper unless these other nations are also prospering. And if countries aren't prospering, their governments tend to be caviler about their currency values.
As for specific problems, New Zealand is heavily dependent on the Australian economy. Which means, like the Aussies, it is dependent on the commodity markets. < In addition, a large part of New Zealand's trade is also in commodities. > Right now, the actual demand for commodities is not good. Their actual prices, however, have moved up dramatically from the lows of six months ago. This is almost entirely due to speculation. Needless to say, this speculation won't last forever. When it ends, and assuming demand does not improve < which is less likely with prices high >, commodity prices will fall < collapse? > significantly. And the NZ Kiwi will also decline when this happens.
The same can be said for Norway. To a significant extent its' Krone is dependent on the price of oil. West Texas Intermediate Crude has almost doubled in price. Recently it has declined. If you think oil prices are coming down, then the Krone will also fall in value. Of course, if like some, you think oil prices are going to soon double, then the Krone's a nice place to have your cash. But in that case why not just bet on the price of oil doubling. I can guarantee you that if this unlikely scenario occurs, the Norwegian Krone will not be doubling in price.
As for Sweden, their financial system has "heavy exposure" to Eastern Europe. That area of the globe will be on the verge of collapse for a long time, even if the rest of the world doesn't fall into a depression < which actually seems more likely as each day passes >. Earlier in the year the Baltic states were about to financially implode, before the IMF came to the rescue. Besides saving these countries, this rescue also enabled the Swedish Krona to recover from its' yearly lows. When another financial emergency occurs in Eastern Europe < and this is almost certain >, the Krona will again fall.
The main premise "currency traders" give for liking these currencies, is that they think that these are the countries that will be the first to raise interest rates. And interest rates will rise, they guess, because growth will be returning to the world economy and everything will be fine just like it was a few years ago. But if you believe that, then why not just literally throw your money away in the stock markets.
The world is not going to get better economically. Just look at the most recently available hard data, rather than listening to some idiot like Jim Cramer. At best, and I mean at best, one can only hope that it will stabilize for a long time at this semi depressed level. This also looks less likely as each day passes.
Governments will continue to devalue their currencies, no matter how big or small they are, if their economies are shrinking. The only safe "monetary" store of value at this time is gold. And that's why the price of gold is so high. As I've said before, its' price is a reflection of what a disaster Central Banks have made of the monetary system.
Gold is a lousy, silly investment. But right now, it's one of the safer places to put your money. And, again as I've said before, judge by this the condition of the times.
< This article is for information purposes only. It is not to be construed as investment advice or in any other way a recommendation. >
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