Maurice Jackson: Joining us is Jayant Bhandari, the host of the highly acclaimed Capitalism & Morality seminar, and a prominent, sought-after advisor to institutional investors. Today we will discuss geopolitical events between the United States and third world nations.
Jayant, we’ve talking with you today so that you can share your insights on developments occurring with peripheral markets, specifically in third world nations. You and I were talking offline and you referenced a sequence of events that you see occurring with third world currencies rapidly depreciating. What currencies are being impacted, and why?
Jayant Bhandari: Maurice, it would be much nicer to ask which currencies are not being impacted. The reality is that just about every currency is getting depreciated, compared to the U.S. dollar right now. That is something that you can see across the third world countries. The Turkish lira has fallen drastically over the last few weeks. The Brazilian and Indian currencies keep falling. The Russian ruble keeps falling. In fact, you can randomly look at any of the third world countries, and the currencies are starting to fall. The people living in these countries want to buy U.S. dollars. American funds are taking their money out of these countries, and they are finding America a better place to invest.
But, not just the third world countries, even the developed country currencies are affected. For example, the euro has fallen in the last weeks. The depreciation of currencies outside the U.S. is actually quite an issue right now. This will result into a significant pain increasing in particularly the third world countries. These countries will implode politically and they will suffer hugely in terms of their economies.
Maurice Jackson: Now, are these short-term impacts caused by the Federal Reserve?