With the potential for higher U.S. budget deficits and
debt risking dollar strength, central banks around the globe could be motivated to increase their gold holdings, says Credit Suisse.
Not exact matches
The rupiah's heightened volatility
risks also come at a time when many companies usually pay their offshore
debts and transfer dividends abroad, pushing
dollar demand higher, he said.
Staley told CNBC that given the high level of
debt across the world, in particular among emerging markets where
dollar - denominated
debt has grown dramatically, many economies could be at
risk if there were sudden changes in financial conditions.
With lower external
debt than other regions, Asian economies have been less vulnerable to a strengthening U.S.
dollar, which remains one of the main
risks to our outlook for emerging markets.
This eliminates direct currency
risk for US investors, but raises the possibility that a strengthening
dollar or weakening local currency could make the
debt harder to service, increasing credit
risk.
Risks associated with the Consumer Discretionary sector include, among others, apparel price deflation due to low - cost entries, high inventory levels and pressure from e-commerce players; reduction in traditional advertising
dollars; increasing household
debt levels that could limit consumer appetite for discretionary purchases; declining consumer acceptance of new product introductions; and geopolitical uncertainty that could impact consumer sentiment.
Simply put, if the Fed continues to conjure trillions of
dollars out of thin air to feed the government's insatiable appetite for
debt, they're
risking a major currency crisis at a minimum.
Based on BlackRock's long - term assumptions, some of the better return - to -
risk ratios are in high yield bonds, EM
dollar - denominated
debt and bank loans.
Investors should monitor current events, as well as the ratio of national
debt to gross domestic product, Treasury yields, credit ratings, and the weaknesses of the
dollar for signs that default
risk may be rising.
See, for example, Kofanova S, A Walker and E Hatzvi (2015), «US
Dollar Debt of Emerging Market Firms», RBA Bulletin, December, pp 59 — 69 and Windsor C (2016), «Currency
Risk at Emerging Market Firms», RBA Bulletin, June, pp 49 — 57.
The PBO identified four key downside
risks to the private sector forecast: global growth, especially in the U.S. could be slower than anticipated; the appreciation of the Canadian
dollar could adversely affect exports; sovereign
debt issues in Europe could restrain recovery there and put upward pressure on global interest rates; and the high level of household
debt in Canada could restrain domestic demand.
The post-2008
dollar debt binge also taught emerging markets corporate finance managers a stern lesson in the
risks of currency mismatches, especially when borrowing in a currency that seems weak.
Tags: 10 - year Italian bond, bond bears, CAD / Yen, Christine Lagarde,
Debt,
Dollar, Euro, Europe, Fed, French, Gold, Greece, IMF,
risk - on /
risk - off, Sarkozy, SPS Posted in Equity, unemployment 3 Comments»
If you're buying a French bond (payable in Francs, for example) remember that you're subjecting yourself to both «country
risk» (the
risk that the country of France decides not to pay off their
debts) as well as currency
risk (the
risk that the Franc loses some value compared to the
dollar).
Within the broad EM
debt asset class, U.S. investors looking for EM bond exposure without explicit currency
risk may want to consider
dollar - denominated sovereign bonds like the iShares J. P. Morgan USD Emerging Markets Bond ETF (EMB).
If few or no areas offer adequate compensation for
risk, I invest in foreign
debts, because it is a statement that the US
Dollar itself is overvalued.
Meaning the Federal Government has more than $ 1 Trillion
dollars in issued student loans without any
risk evaluation being done, and all this
debt that so many American's have affects them in other ways, primary in their credit score.
With lower external
debt than other regions, Asian economies have been less vulnerable to a strengthening U.S.
dollar, which remains one of the main
risks to our outlook for emerging markets.
The fund invests in high - quality, U.S.
dollar - denominated, short - term
debt securities of domestic and foreign issuers that have been determined to present minimal credit
risk and comply with strict Securities and Exchange Commission (SEC) guidelines applicable to money market funds.
Because borrowers with better credit scores and
debt - to - income ratios tend to be lower
risk, they are offered the lowest interest rates — currently about 4 % for a 30 - year fixed rate mortgage — which can save tens of thousands of
dollars over the life of loan.
My credit score is above average, though I have $ 19,000 in
debt to credit card companies and make $ 50,000 a year, for some reason (maybe a $ 1,200
dollar a month payment for my home mortgage and my house going down 20 % in value since i bought it — seems to make me out to be a
risk?
They then delve into the Hong Kong
dollar peg and perspective on China's
debt and related
risks.
Paying down your
debt is a signal that you are better prepared to take on other types of credit, and the fact that you are less of a
risk entitles you to a lower interest — and the thousands of
dollars in potential savings that can come with that lower interest rate.
* Five - year laddered portfolio with the IncomeClub medium
risk rating: This tested portfolio was built on BofA Merrill Lynch Indexes, which are tracking the performance of the U.S.
dollar - denominated corporate
debts of various
risk ratings publicly issued in the US domestic market.
Two decades ago, emerging - market
debt was often denominated in U.S.
dollars, so investors didn't have to worry about currency
risk.
Maintaining a healthy weight, blood pressure and cholesterol levels can save tens of thousands of
dollars in healthcare costs over your lifetime and reduce the
risk of going into
debt to cover out - of - pocket costs.
This merger will saddle Maryland ratepayers with
risk of serious harm, including the billions of
dollars in added
debt that Exelon will take on to buyout PHI stockholders.
The accumulating
debt increases the
risk of a flight from the
dollar or major increases in interest rates.
The federal government needed to raise the $ 14.3 trillion
debt ceiling by an Aug. 2 deadline or
risk defaulting on its
debts, which would send interest rates soaring — and continuing to soar since a higher
debt ceiling could devalue the U.S.
dollar, analysts have said.