“New CASSH” – What is it and why are people talking about it?

Updated: March 16, 2012 at 8:21 am PST


Recently, you may have heard of the term, “New CASSH”. No, it’s not referring to the Lil’ Wayne song. New CASSH is an acronym which stands for New Zealand, Canada, Australia, Switzerland, Singapore, and Hong Kong. The acronym was invented by John Burbank, who is known as the “hot dog billionaire,” which references his previous occupation as a hot dog vendor. Tired of peddling hot dogs, he turned to managing money and founded the global investment firm, Passport Capital. After starting the company in 2000 with $800,000, today he has $3.2 billion of assets. Specifically, New CASSH refers to the currency of the countries it stands for.

Burbank’s theory on New CASSH is simple. He realized that the Western world is dealing with its financial problems by printing even more money. Burbank explains that printing money leads to inflation. He says you want to have assets that profit from inflation. This is where the countries defined by the acronym come in:

New Zealand: New Zealand has a developed market and a relaxed style of government. It’s the least corrupt country in the world. It has a great deal of agriculture, which performs well in an environment where the dollar is weak.

Canada: Canada is also prepared to tackle financial crisis. It has many oil and gas reserves and its banking system is very strong.

Australia: Australia is rich with resources such as coal and iron ore. It also produces oil, gas, and grain. It’s close to Asia and can benefit from Asia’s need of resources.

Switzerland: The biggest thing Switzerland has going for it is the franc and its likelihood of rising in value as the value of the dollar declines. The franc is known as a safe-haven currency and has almost no inflation.

Singapore: Singapore is sometimes seen as the Switzerland of Asia. It has high growth and low debt. The Singapore dollar is reaching higher than the US dollar.

Hong Kong: Hong Kong’s currency matches the US dollar. So, this means that with a cheap US dollar resulting in a cheap Hong Kong dollar, Hong Kong could be sent into massive growth. It’s a good place for investors seeking high risk.

If the financial crisis continues, it will be important to monitor New CASSH and see how these countries benefit.