Hopefully by now, every regular reader knows that change always holds hidden opportunity. Sometimes the smallest and seemingly most inconsequential changes can spell big opportunity to those who are paying attention! And even the biggest seemingly negative changes hold positive opportunity for those who are tenacious enough to find it! Today’s post is intended to stretch your peripheral awareness of international events and their impact on your local world. So, what little obscure change or changes might we be talking about, that could spell big opportunity at this time in history?
For one, the Chinese currency is being included for the first time in the IMF (International Monetary Fund) SDR (special drawing rights) currency basket. And two, Germany's Deutsche Bank which is one of the worlds largest derivative dealers appears to be in big liquidity trouble. What does this mean for the non-financial nerd?
Well the SDR's are very much like a stock index such as the Dow Jones industrial average only this index is for currencies. If your company is added to the Dow Jones industrial index you are one of the elite 30 companies that are considered the bellwethers of American industry. Likewise if your currency is included in the SDR's it means your currency is one of the five most elite International trading currencies. On October first the Chinese Yuan will make up 10.9% of the SDR basket of currencies which means investors worldwide are much more likely to use the Yuan for trade, for foreign investment or to store their wealth, which in turn strengthens Yuan even more. Even though the US dollar gave up less than 1% of its position in the basket to make this possible, this little change could be the beginning of a new long term trend in declining Dollar power and rising Yuan power.
And as for Germany’s Deutsche Bank derivative problems we know all too well what the collapse of Lehman Brothers did to international liquidity in 2008. Is there an opportunity for those who are prepared for tighter lending standards or reductions in credit lines? What would happen to asset prices in real estate and stocks and commodities? Even the UN is predicting an imminent financial crisis. So it might be prudent to look for the opportunities in some of these possible upcoming changes!!
Remember we stand ready, at Innovation Growth Systems Inc., to help you innovate with change!
By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291
For one, the Chinese currency is being included for the first time in the IMF (International Monetary Fund) SDR (special drawing rights) currency basket. And two, Germany's Deutsche Bank which is one of the worlds largest derivative dealers appears to be in big liquidity trouble. What does this mean for the non-financial nerd?
Well the SDR's are very much like a stock index such as the Dow Jones industrial average only this index is for currencies. If your company is added to the Dow Jones industrial index you are one of the elite 30 companies that are considered the bellwethers of American industry. Likewise if your currency is included in the SDR's it means your currency is one of the five most elite International trading currencies. On October first the Chinese Yuan will make up 10.9% of the SDR basket of currencies which means investors worldwide are much more likely to use the Yuan for trade, for foreign investment or to store their wealth, which in turn strengthens Yuan even more. Even though the US dollar gave up less than 1% of its position in the basket to make this possible, this little change could be the beginning of a new long term trend in declining Dollar power and rising Yuan power.
And as for Germany’s Deutsche Bank derivative problems we know all too well what the collapse of Lehman Brothers did to international liquidity in 2008. Is there an opportunity for those who are prepared for tighter lending standards or reductions in credit lines? What would happen to asset prices in real estate and stocks and commodities? Even the UN is predicting an imminent financial crisis. So it might be prudent to look for the opportunities in some of these possible upcoming changes!!
Remember we stand ready, at Innovation Growth Systems Inc., to help you innovate with change!
By: Kevin Minne
InnovationGrowthSystems.com
720-354-0291
RSS Feed