Does anyone here have a Swiss bank account as a hedge against exchange risk? If so, I’d like to learn how you set it up. What is your confidence in the system?
Also, I’m considering putting some money in gold for the long haul. I know about the ETF’s and the mail order gold suppliers. Does anyone have any gold in rented storage? Who did you use and why? Any help will be appreciated.
JP
The “switzerland” of South America, Uruguay offers a government bond that is adjusted for inflation. It pays whatever rate (3-4%?) plus the rate of inflation, which I believe is 12% right now. So they pay 15%, 16%?
You can bank in Uruguayan pesos, Argentinian pesos, Brazilian reales, Euros, or USA dollars. You have to specify which currency, though.
I’d be really happy to hear how a Swiss bank account protects against exchange rate risk. Thanks.
I should have said that a Swiss bank account may protect you from the exchange rate risk of a falling dollar. In the account one can hold Swiss Franc’s, Euro’s or other currencies.
JP
Ah, yes. That makes sense.
My personal opinion is that the best way to protect against the falling value of the dollar is to own real estate. And look: it’s a great time to buy. Prices are artificially low right now in many communities.
Again, just my personal opinion, but it seems to me that the Euro is pretty shaky, too. Swiss francs, I don’t know much about, but I think that historically, they have been sound.
Swiss banking laws have been changed and you might find that your deposit is now reported to Uncle Sam. It’s getting harder to hide money. It’s anti-drug trafficing and anti-terrorism laws, and the international community coopperating on both.
You do know that people in other countries are switching their shaky currency into dollars? They have more faith in the dollar than you do, JP.
Yes, the Euro is on shaky ground as well. It, like the dollar is being printed at an accelerated rate. Incidentally, to muddy the waters the M3 metric (the broad-based total $ in the US economy) stopped being reported by the Fed in 2006. The dollar is being printed to prop up the prices of underlying assets ie. real estate. I wonder how many homes would have sold if there wasn’t an $8000 tax credit? I don’t think that real estate prices are artificially low yet. I think the best deals for real estate will be in the next few years. At some point the excessive printing of the dollar will tip this deflationary recession into an inflationary one.
What I’m concerned about is the US dollar remaining the worlds reserve currency. China and the OPEC nations have voiced their concerns about the stability of the dollar and are asking for the dollar to be replaced as the reserve currency. Iran has boycotted the dollar and will only do non-dollar currency transactions with its buyers. They have defaulted to the Euro and the Yen. IF, and it’s a big IF, the other OPEC nations follow suit, the dollar is toast.
JP
I agree with tater, RE seems to be the best investment. If you truly believe hyperinflation is coming, if you finance the property, you’ll end up paying back less than you borrowed.
I bought VDMIX a few years ago because I thought it would be good hedge against the dollar. But VDMIX tanked just like the American stocks.
I think if you’re going to buy foreign currencies you really have to know what you’re doing. The time for that is probably gone now. Once the masses start thinking of the idea, it’s usually too late.
I bought gold about two years ago, at $870/ounce, I believe. I’ve done pretty well (compared to the stock market over the same time period, anyway). But ever during this run, it’s had it’s ups and downs. As I’m sure you know gold is volatile. It may have already peaked. If you’re going to buy it, I wouldn’t buy a lot. Dollar cost average in to be safe.
JP,
I think the OPEC countries and China are just making noise. Neither are prepared to move off the dollar anytime soon, if at all.
I’m also wondering if this $8K credit is causing an artificial bounce. Maybe it will get extended into 2010?
I think the whole world is truly affected by the global crisis. As for me I still prefer silver over gold. I don’t own too much gold but I have lots of silver. I know that hard times at present is creating all this chaos, let’s just hope for the best.
I have a long memory and I can remember that during the hyper-inflation of the 70’s, German annuities in Deutsch Marks were a very good way to shelter funds. Does Germany still use marks? Or just Euros? It must still be possible to purchase German annuities. It might be worth a quick look to see what’s on offer and how sound they look.
The Germans converted fully to Euros in 1999 but guaranteed conversion of DMs indefinately…
Keith