The appreciation of the New Taiwan Dollar is beneficial for imports and consumption in the short term
But it poses challenges for Taiwan's export-oriented economy
I find it hard to believe that just five days ago it was 1:32.3 and now it's 30.6
The appreciation of the New Taiwan Dollar indicates a surge of foreign capital into Taiwan's capital market
And in the short term, it may bring about a wave of increases
Furthermore, it promotes domestic demand and the consumption market
Because the New Taiwan Dollar has become more powerful in terms of purchasing
But what really worries me is the negative net worth issue related to the Ruentex Group's Nanshan Life Insurance back in the day
Taiwan's life insurance companies are one of the major buyers of U.S. Treasuries globally
With the New Taiwan Dollar appreciating
The investment returns on U.S. Treasuries will face pressure from 'exchange rate losses'
U.S. Treasuries are denominated in U.S. dollars
If the New Taiwan Dollar appreciates, converting it back to New Taiwan Dollars will result in book losses
The net worth and return rates of the life insurance industry face challenges
But it seems the appreciation is just the beginning; how will it proceed afterwards?
Will it continue to appreciate?
The market changes caused by capital in the short term
Will they long-term affect the foundation of this export-oriented country?
This is what I need to observe
Currently, expectations might lead to a large purchase of overseas emerging assets before interest rate cuts and the outflow of funds
Then slowly burst the bubbles overseas and guide the funds back to the U.S. dollar
To be honest, U.S. Treasuries
Have already become a 'risk factor that cannot be ignored' for the life insurance industry.
