The pillars of support preventing the overvalued euro from depreciating versus the U.S. dollar are quickly crumbling. On a purchasing power parity basis, our favored approach to estimating long-term currency values, the euro is deeply overvalued and has been for some time (Chart 1). The euro has been supported by a positive and rising interest rate differential between euro interest rates and U.S. interest rates. Chart 2 shows the interest rate differential between 2-year government bonds in the Euro-Zone and the U.S. The widening interest rate differential was caused by … [Read more...]
Gold, Silver, and Currencies
Young Research & Publishing has been providing research and insights on precious metals and currency markets to institutional investors, corporate financial officers, business owners, and individual investors for over four decades. Richard C. Young started Young Research & Publishing in the 70s to publish the authoritative Young's World Money Forecast, a 50-page monthly investment report on the precious metals and currency markets. Today, our research on gold, silver, and currencies is geared toward investors in or nearing retirement who are looking to preserve and protect wealth.