Charvo's blog

I say this because the VND has stayed stable throughout this global financial market mess. Korean won has got its ass kicked.

China sells a lot of stuff to Vietnam. Japan sells a lot of stuff to Vietnam. Japan just signed a major trade agreement with Vietnam. Maybe this is why China and Japan want Vietnam to have a stable currency. South Korea buys stuff from noone. It's really an isolationist economy. The Korean won is just getting thrashed. I don't see China or Japan doing anything for those guys.

Maybe it's good that Vietnamese like to buy stuff made outside Vietnam.

My decision to keep money in dong deposits is not looking too hot now with gold skyrocketing and the dong getting hit for around 200 dong per dollar. The dong has stayed relatively stable through this financial mess, but investors might be thinking otherwise. Long bond yields are still stable which is important. I think this is a temporary blip, but it could cascade into something more if the government allows it.

I expect the dong and gold to be strong going into Lunar New Year, but I don't expect the 2008 highs to be breached for either of them.

I have my money in dong deposits getting some good interest now. I am moving up my time schedule in cashing out into dollars though. I think this dollar rally will kill the dong next year. I fully expect a 2009 revisit to the 20000 level that was reached this summer.

I see South Korea, one of the biggest investors in Vietnam, is in some hurt now. Asian currencies are still doing better than their non-Asian counterparts. I foresee some big crap coming for everything starting after Lunar New Year next year. VND is still strong relative to the crap happening everywhere else, and I only see this dollar surge last for a few more weeks. If the Vietnamese government keeps its strong dong policy, I am happy with keeping my money in VND deposits. I will haul ass when they start to reverse the policies or Lunar New Year, whichever comes first.

Gold is screwed.

current gold price per ounce is 787
import tax is 1%
free market rate for VND/USD is around 16700
tael to ounce is 1.20337

That comes out to around 16 million while the banks are selling for 17.1 million now.

After looking at numerous charts, I think gold is going down further. I would hope Vietnamese panic and start selling. I want to see the premium go down, so it will be a better buy when I do make a purchase.

I think having dong deposits right now is much safer than gold or even dollars because of governmental policies put into place. However, I am cashing out all my dong in a few months. I don't trust the government to administer this tough love for a long time.

VND is going to plummet next year against the USD.