Young Research & Publishing Inc.

Investment Research Since 1978

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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. 

The World’s Most Profitable Currency

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Can you guess which of the world’s currencies has appreciated the most this year? If you guessed the Paraguayan guarani, you’re right. A close second was the kina. Which country uses the kina? Why, Papua New Guinea, of course! If you would have trouble spotting either of these countries on a map, you aren’t alone. Like most sane investors, you probably limit your currency investing to developed countries and some of the larger emerging markets. Which major currency has performed the best this year? The Swiss franc. Just this year, the franc has gained 11.5% on the dollar. That crushes the … [Read more...]

Dow in Dollars and Gold

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This week the Dow Jones Industrial Average surged to 12,700, about where it was three years ago. You’re back to even, right? Not really. Over the same period Gold has risen 68%. It’s true the Dow in dollar terms is about the same over the last three years but when comparing it to the Dow in terms of gold — or real purchasing power — it’s another story. Based on this chart it would appear the Fed is a little late in protecting your dollar, wouldn’t you say? … [Read more...]

Dollar Crashes to Record Low

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Scott Pelley: “You have what degree of confidence in your ability to control [inflation]?” Ben Bernanke: “100%” – 60 Minutes 12/5/2010 The U.S. dollar took another beating this week. The greenback fell 1% vis-à-vis the euro, 1.1% against the Swiss franc, and 1.7% against the Australian dollar. The Federal Reserve’s continued ultraloose monetary policy in the face of both emerging global inflation threats and a more hawkish tone from almost all of the world’s other major central banks has contributed to the slide.  On an inflation-adjusted basis, the broad trade-weighted dollar index is … [Read more...]

The Fed vs. the ECB

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I wouldn’t trade the U.S. dollar for the structurally flawed euro, at least not yet, but I would gladly trade Ben Bernanke for the more vigilant European Central Bank (ECB) President Jean-Claude Trichet. Take a look at the contrasting views on inflation in the statements below. It should be clear after reading this post which central banker would make a better custodian of the value of the dollar. The first is from Bernanke’s prepared remarks in the Fed’s semi-annual monetary policy report to Congress. Emphasis is mine. The rate of pass-through from commodity price increases to broad … [Read more...]

Is the Dollar Losing its Safe-Haven Status?

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In times of geopolitical upheaval, investors traditionally flee to perceived safe-haven assets. Historically, the dollar has been considered a safe-haven. You can see this trend in my chart below. The chart compares the VIX Index (a.k.a the Fear Index), which is a measure of investor risk aversion in equity markets, to the dollar index. Over recent years, increases in the Fear Index have been highly directionally correlated with the dollar index. But the most recent spike in the Fear Index has been accompanied by a falling dollar index. The fear index hasn’t yet spiked to levels comparable to … [Read more...]

Christmas Price Inflation

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Inflation risks are greatly overstated, says Ben Bernanke. We should be worried about debilitating deflation, not inflation. Ben B., of course, focuses on core inflation as his guide to price stability. Core inflation excludes food and energy. So as long as you don’t mind starving in the freezing cold with the lights off, core inflation is what you should focus on. However, if you are like the other 308 million of us who prefer to eat with the lights on in a warm house, core inflation is not at all useful. The headline Consumer Price Index (CPI), which includes food and energy, is a better … [Read more...]

The Phony Stock Market Rally

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The S&P 500 has been on a tear since the Fed first started floating the idea of quantitative easing 2.0. Since August 31, the S&P is up more than 11%. The gains are of course nice to see, but the rally is a phony. Stock prices are not rising on improving fundamentals or cheap valuations. Stocks are rising simply because investors are anticipating that the Fed will print more money. For proof that the rally is a phony take a look at the performance of the S&P 500 in terms of a hard currency such as the Swiss Franc. My chart shows that in Swiss franc terms, the S&P 500 still … [Read more...]

Vital Intelligence for Investment Success

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If you read The Wall Street Journal or the Financial Times, you have likely heard about the “risk trade.” It’s a term journalists have been using with increasing frequency to explain the behavior of financial markets. You see, since the financial crisis struck, risky assets have either been rising together or falling together. There has been much less distinction among the returns of risky assets. You have days where either bonds are up or stocks, commodities, and risky currencies are up—it’s risk on or risk off. This recent phenomenon can be explained by an increase in the correlation among … [Read more...]

The Record High Price of Gold: A Currency Story

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Gold reached a record high on Tuesday, closing at $1,271.70 per troy ounce. It is up over 15% this year. That’s great for gold investors, but what does it mean for the currency in which it’s being quoted, the U.S. dollar? Relative to gold, the dollar, as shown in the chart below, is worth only two-thirds what it was worth at the beginning of 2008, just after the start of the market crash. The euro has maintained 60% of its value compared to gold, and the Swiss franc has retained a more impressive 75% of its value. Gold has had a tremendous run relative to all three currencies. This is not … [Read more...]