I recently received an email about a proposal to stop remitting dollars to the Philippines on November 1 to 5(not sure). The intent is to see if the Peso would drop in value with respect to the dollar during that period. And maybe eventually force the hand of the government to devalue the Peso.
Here is my take on this issue:
The Peso is going up because the Dollar is actually going down. The dollar is weakening. All the world's currencies are going strong with respect to the dollar, it is not only confined to the Peso.
The OFW remittances are strengthening the Peso. Even though we will stop sending money for a few days, we still have to send it again some other time. This continued inflow of dollars into our country is propping up the Peso.
Devaluing the Peso could cause lead to more volatility in our currency because forex trader could come in and bring the currency back to parity. It just like the time when George Soros almost broke the Bank of England because the UK was artificially holding up the Pound when it should have been lower in value. It was done before, there is no stopping traders from doing it now on the Peso.
My suggested course of action for this situation is to sit it out. Don't stop sending money. Do not let your relatives in the Philippines suffer from late remittances. Just let the market play it out. My theory is when the United States starts to pull out from Iraq, that is the time when the dollar will start rising again.
It has been a while since I last posted on this blog. Somehow I got disenchanted of the forex market because I had a sustained loosing streak. As in very sustained. I intend to start publishing how much I have in my account right now and I only have $170 left. I am down and out. In my mind I only have two more losses to take before I declare that I am flat out.
Anyway back to my recent trade. I am betting half of my capital on this one. I am short USDJPY. Its not that I am trading on tips but I really believe in this guy. I read on the news that the famous Jim Rogers is short the dollar and long the yen, yuan and the swiss francs. Here is the Reuters article:
http://www.reuters.com/article/businessNews/idUSL2474133320071024?feedType=RSS&feedName=businessNews&rpc=23&sp=true
I believe that Jim Rogers also profited big time during the recent subprime loans rout. I read also a long time ago even before this debacle exploded that he declared that this would happen and now it did happen.
I have a new investment idol now, it is Jim Rogers. I wish I could have his mind. I could know how he thinks and sees these things.