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Concerns about hyperinflation coming
Old 05-24-2011, 05:31 PM   #1
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Concerns about hyperinflation coming

I live in Washington and my retirement is Washington PERS. Planning on retiring in 2023 or just before? My question is related to concerns of hyperinflation in the US and what that will do to my retirement.
Can I convert my retirement Stocks/ US dollars into another currency to protect my retirement investment?
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Old 05-24-2011, 05:35 PM   #2
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Old 05-24-2011, 05:42 PM   #3
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Can I convert my retirement Stocks/ US dollars into another currency to protect my retirement investment?
You can convert but not necessarily protect.

I too am concerned that painfully saved retirement dollars may have much less purchasing power in the future, but there's no easy answer to finding a way to protect yourself. I don't think you'll find too many recommendations on this board for investing in a non-dollar currency as an inflation hedge.
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Old 05-24-2011, 05:45 PM   #4
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A reasonable way to partially hedge fear of a weaker dollar is to by foreign stocks etfs like Vanguards VEU. Alternatively you can purchase foreign bond ETFs.
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Old 05-24-2011, 06:13 PM   #5
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I don't think you'll find too many recommendations on this board for investing in a non-dollar currency as an inflation hedge.
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A reasonable way to partially hedge fear of a weaker dollar is to by foreign stocks etfs like Vanguards VEU. Alternatively you can purchase foreign bond ETFs.
This is my plan to deal with the possibility of runaway inflation and/or dollar devaluation in the USA. Half my portfolio is invested in foreign stocks denominated in foreign currencies. This can be done easily at vanguard or elsewhere for 0.2% in annual expenses.

I don't profess to know what will happen over the next 70 years with US investments, inflation or currency valuations, but looking back at the previous century, lots of countries experienced hyperinflation, currency devaluation, political collapse and/or turmoil. I would hate to have all my assets in one basket, so I spread it around the world. Worst case, the dollar outperforms all other currencies of the world and I have a slight drag on my portfolio over the long term. Then again, I can take my expensive dollars and travel or live abroad for much cheaper.
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Old 05-24-2011, 06:14 PM   #6
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While inflation is a worry to be sure, I really don't think economists are worried about hyperinflation in USA. I wouldn't lose that much sleep over it.

I suppose anything is possible. That Harold Camping guy could be correct on his new prediction. Rapture is coming Oct 21! Sell everything!
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Old 05-24-2011, 07:45 PM   #7
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Well, that's the 64 billion dollar (adjusted for inflation) question, innit?

I can think of lots of scenarios, including the US switching to the Euro, an Amero currency, hyperinflation, deflation, plain ol' inflation... We have a portion of our taxable in Vanguard's FTSE all-world ex US fund and our target retirement IRAs have a bit of a foreign mix as well. Plus, we have a lot of 'foreign' exposure through owning large-cap US-based multi-nationals.

I know that's not the same as owning in foreign-currency denominated trading, but it's the most effort I'm willing to expend.
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Old 05-24-2011, 07:49 PM   #8
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As a fellow Washingtonian, I suggest that your biggest worry is that the State will decide that your pension is too high rather than hyperinflation. Some of the WA state pension funds are not fully funded.
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Old 05-25-2011, 09:40 AM   #9
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I have heard that you could buy an annuity in Swiss francs.

You can buy mutual funds that carry only stocks outside the US: Europe, emerging markets, Asia, India.

I am personally diversified 50/50 US/international (non-US) in mutual funds. I know nothing about international currencies, so I am not even tempted to try that. (My income for about the past ten years has been in foreign currencies, so I am effectively betting against the dollar, but only by chance. I just go where the work is.)
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