Option Queen Letter By the Option Royals Jeanette Young , CFP ® , CFTe, CMT, M.S. and Jordan Young, CMT 4305 Pointe Gate Drive Livingston, New Jersey 07039 www.OptnQueen.com [email protected]September 11, 2016 Today is the 15 th anniversary of the tragic events at the Twin Towers, the Pentagon and a field in Pennsylvania. WE WILL NEVER FORGET and have learned not to be passive observers, but rather to help when help is needed. That day changed the lives of not only the victims of the terrorist attack but all Americans who learned we are vulnerable and are at risk. Brexit shopping bash! Money has been flowing into the US markets for the juicy yields on our bonds. How long can this last and when will see this migration of money stop? The flow of money will end soon because unless the yields appreciate (go higher), the cost of hedging that transaction back into the investing currency will negate the interest rate earned. That should slow down the flow of money into the US markets, unless interest rates go higher. The Bank of England devalued its currency by lowering their interest rates. The effect of doing that is to deflate the value of the currency. Here in the USA the FOMC seems to be itching to raise interest rates which, would make the US Dollar strong. A weak currency can be inflationary while a strong currency can be viewed as deflationary. Why, well because a strong currency can buy more stuff especially when buying from a weaker currency. For example should we want to buy real-estate in London with our strong US Dollars, it is much cheaper today with the pound at about 1.31 to the US Dollar than it was a couple of months ago when the pound was 1.53 to the US Dollar. Your London hotel room will be cheaper for foreign visitors and if you are from the USA and the tours will certainly be cheaper. English companies might be so cheap as to become the target for a takeover. Imports from England will also become cheap. Any wonder why tourism in England is now the hot destination. Brexit put England on sale not only for tourists but also a prime target for mergers and acquisitions of companies. If they were fairly valued before Brexit, they are downright cheap now.
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Option Queen Letter By the Option Royals
Jeanette Young, CFP®, CFTe, CMT, M.S. and Jordan Young, CMT