Russia Goes Loonie

The holidays are here! Food, family, fun – and football! Before I get on with today’s message, I want to wish all Daily Profit readers a wonderful – and safe – Thanksgiving holiday. I’m sure we’ve all been working very hard during these challenging times. A few days off to spend with family and friends, a time to reflect on the blessings in our lives, that’s just what the doctor ordered.
And speaking of thanks, I want to thank you for reading and thank you for your insightful questions and comments that keep making Daily Profit such a success. As a token of my gratitude, I’m offering Daily Profit readers a Black Friday special for my SmallCapInvestor PROadvisory. You can get 50% off the list price of $199 for an annual subscription. That’s 12 months of top-performing stock recommendations for just $99. This offer will be good till Friday, November 27 at 10 pm. If you’re interested, click HERE.
*****Economic news this morning is pretty good. New home sales grew 6.2% in October. Sales were up 5.1% year over year, and the median price was essentially even with last October.
That’s pretty good, though it should be noted that many of October’s contracts were signed before Congress extended that home-buyer tax credit. It could be that buyers were trying to get in before the deadline, which would lead to some slack numbers over the next few months.
The report also noted that new housing inventory is at its lowest level in 40 years. That’s also good news, but don’t forget there’s still a potential tidal wave of inventory from foreclosures.
*****New unemployment claims also came in better than expected. At 466,000, that’s the best number we’ve seen since January. Of course, it’s too soon to get excited about a recovery for employment. The jobless rate is still rising. But any signs of improvement is good news.
******Black Friday is two days away. This is the big day for retail as we head into the holiday shopping season. As you know, I’ve been somewhat bullish on specific stores holiday retail sales – I think consumers will be in a mood to shop for good values. It’s been a tough year, but things are looking better. And I won’t be surprised if consumers show their gratitude and optimism by spending some money.
*****On another note, Russia is going, well, loonie. Bloomberg reports today that Russia will start diversifying its foreign currency holdings by buying Canadian dollars, affectionately known as loonies. 
As you may know, Canadian dollars are among the world’s strongest currencies right now. It would appear to me that Russia doesn’t get the whole "buy low, sell high" thing, but that’s their problem. In fact, this move is, once again, a superficial gesture from Russia.
The Treasury Department reports that Russia has the world’s third largest foreign currency reserves, 47% of which is in U.S. dollars. Russia keeps 41% in euros and 10% in British pounds and 2% in yen.
And Russia’s insistence that it will stop buying T-bills?  Pure bluster. Russian bought $200 million of T-bills in September. It now holds $121.8 billion in T-bills and has increased its holdings more than 22 percent since September 2008.  
The US dollar is, and will remain, the world’s reserve currency. Don’t believe the fear mongers who say otherwise.

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