lanceskinner616's Blog

Oct 20, 2011 4:30 AM
Investors of all sizes are looking for profits from outside the US markets. In particular the FOREX market has been calling many to make outright purchases of Euro Dollars, Pound Sterling, Yen and many other currencies, but always as a straight trading play and often the "volatility" of these markets is just to brutal for even high-net-worth investors to take the pain of staying in a successful trade. Well, I am here to show you that there are easy and safe ways to invest in other currencies and sleep easy every night!

There are a great many reasons for investors to be nervous about every investment sector today. Muni Bonds are facing daunting credit risks. US Treasury issues are facing the double whammy of both declining prices ( increasing yield) and a negative long-term outlook for the US Dollar. Stocks are judged by many professional observers to be "overvalued" by 30% or more. So what is safe and how can we buy a high yield investment that has security? Are you ready? It's simple.

For starters, most investors have a large fixed income portfolio or at least a large percentage of fixed income notes and bonds. But lets face it, you have to be crazy to even think about buying any "corporate debt" even if it is of short duration. The idea of buying long term corporate bonds is just "nuts". The second problem is that you have to find a currency that has a long term positive outlook or proven trend of appreciation against the US Dollar. Well for many months we have been suggesting this golden investment opportunity. To find out more check which has a wealth of useful Forex trading information.

You can invest in a secure 10 year fixed income bond that is backed by the full faith of what I see as one of the strongest economies in the world. And you will get the benefits of a currency that is appreciating against the US Dollar in a very clear and strong historical basis. What are we talking about.... The Australian 10 yr Treasury Bonds!

Yep, you heard me right, The yield on the 10 year "Auzzie" Treasury Bond is today at a yield of 5.84% Wow that is over 200 basis points higher yield what the US 10yr Treasury issue yields today (a skinny 3.74%.) That is a killer deal just in terms of the spread to the same maturity given that we are talking fixed income. The Auzzie 10yr is a 4.50% Coupon that matures in 4/15/ 20 and is trading at a discount !! As of the close of today's trading it can be purchased at 89.987 per million. Now like all treasury issues you can buy in smaller amounts, but the yield will be different as that is an odd lot.

But here is the real kicker, you will now be invested in the Australian Dollar and it is appreciating against the USD and I have published on my website that my proprietary trading system sees the AUD going past "parity" to the US Dollar very soon. We have been long the AUD for a very long time.

As "The Shadow", I started "shorting" the AUD back in July of 2008 when the AUD failed through the 95 level. Then I helped make sure our international currency clients stayed short until late October and the AUD got down below 63 !! But the "Shadow" system generated a new long term Buy or Long signal the week of Dec 2, 2008 !

So the next and most important "buy signal" came during the March 10, 2009 window when the AUD put in a confirmation bottom and closed above 64.25. SO if you have been a one of my many thousands of readers at "" then you know that we offered another "late entry" buy signal for AUD in early February 2009 on a final stage of a classic A-B-C correction from the challenge of the 93.75-93.875 in Nov. 2009. So we have been telling everyone we know that the best and most secure opportunity for getting money out of US Dollars that are in low risk debt issues of National, State, and City issues is the Australian Treasury's.

So the Australian economy is not having any other problems that Europe or the USA is having. Which is also why Australia is in the process of opening a second stock exchange !! Now the funny thing is the it took almost 2 years before Bill Gross of PIMCO managed to see the benefits of this investment opportunity, but now is using this channel to move money out of USD into a safer currency and get a higher yield. His comments on investing in "South Pacific Rim" sovereign debt was very clear and strong.

Another reason to make the move into the best FOREX instrument for fixed income is that you can get a much higher yield than even Canadian Treasury issues that are 10 year duration. Canadian 10 yr Treasury today yields a 3.71 - almost identical to the US 10-year Issue. Even if you extend your investment out to the US 30 Bond, you only get a 4.61%

So you have a duration that is 20 years shorter and you get currency appreciation that will see a realistic move of at least 7% to as much as 20% over the next 10 years !

By the way, take a look at Stocks today with all the great earnings reports and yet the SP500 traded down. That is not the sign of a healthy stock market. (I use the S&P because The DOW is and always has been a marketing tool designed to sell stocks.) Also look at the funds rates for the USA at .25 and the Funds rate for Australia is now 4.25. No European debt can be safe from both credit problems and also currency problems. You can contact almost any Australian Bank or even Canadian bank that will be able to sell these treasury issues and if you do "safe keeping" with those banks in the U.S. and not in Australia you will not pay any Australian taxes! Your tax liability will be U.S. Also like all treasury issues you get a semi annual coupon payment! So again it is in Australian dollars and you can reinvest or hold in that currency.
Posted by lanceskinner616 | Oct 20, 2011 4:30 AM | Add a comment
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