Today, Iâ€™d been to a session where I was educated about the importance of hedging against the Dollar falling again against the Rupee. The gist was this, â€œyou buy Futures the bankâ€™s gonna profit through margin money. You buy Options, the bankâ€™ll debit your feesâ€. â€œYou may lose some money but itâ€™s all about minimizing risk, honey!!â€ â€œHedging is not about another way to increase your profit, but a way to minimize your lossesâ€.
Well! not exactly their words, but they meant it.
If itâ€™s so risky, WTF are we using Dollars to trade then ? â€œThen, Uncle (Sam) had heap many dollars. Now, Uncle borrows heap many dollars to pay usâ€. If this newsâ€™ anything to go by, itâ€™s a matter of time, countries switched to saner alternatives.
Now, what are the alternatives ?
Why not bill in Rupees ? Will the rupee hold ? Wonâ€™t it fall if the boom is not sustenable ?
How â€™bout the Euro ? Who says the Euro will not go the dollar way ?
Hmm. How â€™bout gold ? Ha! Ha!! How are you going to bill ? One gold bar per hour
So, the alternatives suck. And we need to hedge against the Dollar falling yet again. Or rising up!!
Whatever happens, the bank makes money!! Why not close shop and help others hedge as well ?
In Over the Hedge, RJ says:
RJ: Now, the traps are set here, here, here, here, here, here, here, here, here, here, and here. Here, here, here, here, big one here, here, and maybe a few over here.
Stella: Gee, itâ€™s that all?
RJ: No. Thereâ€™s bunch of red lights all over here. You OK, Verne? Look a little green.
Verne: I blacked out for a second there, butâ€¦ I get the idea: thereâ€™s lights, traps and I might need to change my shell.