The biggest risk to Canadian investors may not be the default rate at all, but
rather currency moves.
Not exact matches
Lagarde also said that in countries with weak institutions and unstable national
currencies it may be preferable to
move to a digital
currency rather than adopting the
currency of another country such as the U.S. dollar.
Almost a decade after that exercise, critics of the Kufour regime have continued to criticize the
move saying it yielded no result, but was
rather politically motivated and intended to create the impression that Ghana's
currency was of a very high value.
China has now proposed that the world
move to a more symmetrical monetary system, in which nations peg their
currencies to a representative basket of others
rather than to the dollar alone.
Rather than trading a single
currency pair all the time, you can spread your risk across two pairs that
move the same way.
The major risk in such
Currency carried trade is that the exchange rate is
rather uncertain and very often
moves in a hostile direction, crushing the profit from the interest rate difference and sometimes a short motion in exchange rates can cause big or even huge damages, unless it is secured appropriately.
Life
moved on, and around mid 1996, I joined (or
rather rejoined, since an older version had been discontinued) an interesting market experiment, the Foresight Exchange which traded (via a reputation - based
currency) in future possibilities including some climate change - related predictions like sea level rise.
An extremely simple explanation of blockchain is that
rather than centralizing records in one ledger (database), such as a bank that can then
move data (representing
currency) to other parties, the ledger is replicated with all parties, such that everyone has a copy of the transactions, all digitally signed and encrypted.