Trends in FX
What Happens to Currencies If Social Security Gets Privatised? |
In the short run, privatising Social Security should create a tidal wave of demand for US equities as millions of employees will allocate part of their Social Security payments to invest into the stock market. The rise in equities should in turn create demand for US dollars as foreign investors will acquire the currency to participate in the US bull market. In the long run, the situation is far less certain. If US stocks suffer a serious setback due to some geo-political or economic event, the US government may be forced to rescue short-changed pensioners by guaranteeing minimum payouts. This policy would most likely trigger massive inflation, which would be extremely dollar bearish. Therefore, the impact of Social Security privatisation on the currencies is likely to change depending on the length of one's outlook.
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 What happens to currencies if oil goes to $60?
- The Canadian Dollar will rise
- The Canadian Dollar will fall
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What happens to currencies if Gold goes to $500?
- The Swiss Franc will rise
- The Swiss Franc will fall
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What happens to currencies if the 10-year bond goes to 6%?
- The US Dollar will rise
- The US Dollar will fall
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What happens to currencies if the stock market falls 10%?
- The US Dollar will rise
- The US Dollar will fall
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What happens to currencies if China Revalues?
- The Yen will rise
- The Yen will fall
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