[RastaMan]

I am surprised that the interest rates for 1 month time deposit rates for NZ$ and South Africa $ are 5.6% and 5.87% respectively, while for HK$ it is 2.85%. The NZ$ and South Africa $ seem to be stable currencies. Why such high interest rates? Are they good investments?

[freeier]

its a matter of perception whether to invest in such currencies or not. u can also try AUS$ that gives close to 6% interest rate, or indonesian rupee that prob gives like 8~10%... 8-P

no one can tell whether if the currency will depreciates versus USD over long term. if you have very strong view that it will or it will go up instead, then by all means invest in it.

in strict textbook finance the interest gain shld be offset by the lost in value of the currency. and at the end of 1 year u shld be evenly off. but nothing is ever text book

[RastaMan]

Thanks. Actually the South Africa Rand seems to be one of the best opctions right now, at least if one just looks (ONLY) at the chart of the exchange rate over the last 5 years. It's now (almost) at the minimum it has been during the last 3 years, and it fluctuates relatively little. I don't actually think in terms of US$.

The US$ is such a bad currency to invest in. For the last 40 years it has been steadily depreciating, and no doubt it will continue depreciate, with US people spending more than they earn. The Euro seems better but right now it seems grossly overvalued.

But then, I know 0 about investments...

[nivantj]

>> I don't actually think in terms of US$

You have to.. especially when all other currencies follow it as a benchmark and sitting on the other side of see-saw

[RastaMan]

No lah. I think in terms of the currency of my home country. Why should I care what the US dollar does? I don't use US dollars to buy stuff.

Also, the EU is replacing the US dollar as the benchmark.

[freeier]

EU replacing dollar as the benchmark ? not for another decade i'd say..
anyway do you know that dollar used to be gold tagged. each dollar entitled you to 0.0xxx ounce of gold, until someone decided the peg is silly and it sent dollar inflation spiraling up infinitely since then --> look at it the other way, if dollar is still pegged to gold the treasury department would sink into the ground for teh amount of gold collateral they have to keep for redemption. 8-)

[RastaMan]

Yes, I knew that the dollar was pegged to the gold, and then they 'unpegged' it because the US didn't have anough gold.

Yes, maybe the Euro won't be the benchmark for another decade, but the (very very slow) process has started.

[KnowItAll]

Are diamonds (De Beers for example) and oil traded in EU?

As far as I know both of them are paid for in USD...

[RastaMan]

Originally Posted by KnowItAll

Are diamonds (De Beers for example) and oil traded in EU?

I was going to mention this. One of the reasons put forward for the US to invade Iraq was that Saddam started charging Euros for Iraqi oil. Of course he did this to annoy the US. If the other middle eastern countries had followed suit, this would have given an enormous push to the Euro becoming the benchmark.

So when the Euro will become the benchmark will depend on a large number of factors. It could be in 2 or 3 years time, but I very much doubt it. I think it isn't actually in the interests of all these countries (including China) that have a huge reserve of US dollars. And of course their actions will be the most important factor on whether the Euro will become the benchmark. We might have several decades of 2 currencies acting as the benchmark.

I have no idea for these silly pieces of glass, often called diamonds.