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Diversification in world curriencies
Old 11-07-2004, 06:49 AM   #1
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Diversification in world curriencies

Elaborating on some previous posts regarding international securites, foreign bonds and CD's in other than USD:

Does anyone have suggestions on how to hold assets in foreign currencies and which ones are best. (Asset or country of origin).

I am especially interested in CD's held in various curriences as a hedge vs the dollar. Where is the best place to get these and is the exchange rate high?
Bank accounts in another currency would be a good idea but I do not know if those can be obtained in the US.

Anyone have any experience with banks that deal these.

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Re: Diversification in world curriencies
Old 11-07-2004, 07:08 AM   #2
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Re: Diversification in world curriencies

I have been looking around. The problem I experience is the US Dollar is so low now that it is demoralizing to convert to almost ANY good stable currency. Euro, Pound Sterling, Canadian Dollar. The US Dollar used to be one of these but no more. Also we may have missed the big boat as the US dollar has lost between 30 - 40% against these major currencies, This is a BIG chunk. What I cannot understand is how and why the US Government allowed the currency to deteriorate so badly in such a short time. Pundits say it will go even lower. This tends to be a Pendemic, The lower it goes the least likely foreigners want to hold it, The lower it goes. Unless interest rates soar, or Bush stops spending, I am at a loss to determin when and if it will ever rise again. In my lifetime at least.

Just as an example. If you were to go on vacation to Europe now versus 2 years ago, and you assign a budget of say $5k it will now cost you approx $6.3k! Now THAT is inflation. I take this as a stab at ERS right where it hurts as we like to travel in our retirement. At least I do.

SWR
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Re: Diversification in world curriencies
Old 11-07-2004, 07:34 AM   #3
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Re: Diversification in world curriencies

Recency - Remember 1971 - how about the 1985 peak - and some of the nineties and so on. I worked with a lot Brit engineers over the last thirty years and they as a group were much more atuned to world currency\market investing internationally than us 'provencial yanks'. The Terhorst solution was to change countries(Argentina) and stay invested in America. I just finished rereading Bogle's take in Common Sense on Mutual Funds - ie stick with USA - I think I can survive the ride - stagflation and all.

Now - if I were an ex pat - I would strongly reresearch my 1980's version of slice and dice.

Swiss Franc's anyone?

P.S. - What is the status of Warren Buffett's 8 billion bet against the dollar.
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Warren's raised the stakes a little...
Old 11-07-2004, 08:48 AM   #4
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Warren's raised the stakes a little...

It's a $20B bet now, and I think the dollar set new record lows this week.

He's also sitting on $38B cash.

Take a look at the top of page 21 in BRK's quarterly report-- http://www.berkshirehathaway.com/qtrly/3rdqtr04.pdf .
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Re: Diversification in world curriencies
Old 11-07-2004, 08:28 PM   #5
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Re: Diversification in world curriencies

This is a reply to Shockwaves post more so than to the original poster(Everbank to answer your ? GTM,i have no experience with them).Several times ive re written this post to send,shifting my focus,but i just cant keep it concise,so how bout this.Take what you know(hugenormous debt),and listen to the news and parse out current and near future plans/agenda's.Does it sound like this debt is going up or down?
Theres only 3 ways out,deflate away the debt by way of currency devaluation or the mother of all econ booms,or slow politically painfull addressing of the issue.I prefer 2 assets as a hedge against the unlikely(foreign CD's would be another,there may be more).Foreign bond exposure and commodity exposure,since by default both(to a certain extent) will rise in terms of the dollar since it is/may fall further.Realize that since your definitely not close to the top of this trend that there will be some volatility.Ideally your equity side of the equation is/will take care of this to a certain extent at this time considering the rally underway.Hope this helps some,its very hard to get real econ data without some agenda or straight line farcicle(sp?) projection.So i spose thats a good reason to use the shotgun diversification method,its the %'s that may take a bit of dialing in.Which ill leave up to you engineer typesl.Cheers all---ak
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Re: Diversification in world curriencies
Old 11-08-2004, 05:10 AM   #6
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Re: Diversification in world curriencies

? Second opinions. Try Raddr's Early Retirement Board. They have a number of x pat posters who have to deal with these issues.
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Re: Diversification in world curriencies
Old 11-15-2004, 03:11 PM   #7
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Re: Diversification in world curriencies

Look at Interactive Brokers
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