Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
US$ and other currencies - travel now
Old 07-10-2007, 02:09 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
US$ and other currencies - travel now

The US$ is getting weaker vs most currencies - check out the euro at 1.37+
Forex Street. The Foreign Exchange Market

And the Fed hasn't even started to lower rates as expected. Other countries are starting to raise interest rates.

When the Fed does start to lower rates the US$ should weaker further.

Have you looked at the UK pound recently? 2.01+
I wonder what a pint of beer costs there now?


RTTNews - Currency Trading, Currency Market Update, Trading Opportunities, US Market Update ....
__________________

__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-10-2007, 02:22 PM   #2
Administrator
Andy R's Avatar
 
Join Date: Jan 2007
Location: Dallas, Tx
Posts: 1,184
I saw the dollar drop 17% during my trips to Brazil since January 2006. Add inflation and the overall cost to live there went up nearly 25%.

The currency I find most interesting is the Norwegian Kroner. They have an amazing economy (driven by oil reserves), a small population to take care of, low corruption and huge surpluses of cash.
__________________

__________________
Andy R is offline   Reply With Quote
Old 07-10-2007, 02:32 PM   #3
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
The Canadian dollar is close to par with the US dollar. I used to love to go to Thunder Bay, Ontario to shop for clothes. Not anymore! Pretty soon it will be Canadians shopping here instead.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 07-10-2007, 02:39 PM   #4
Administrator
Andy R's Avatar
 
Join Date: Jan 2007
Location: Dallas, Tx
Posts: 1,184
I am currently in Argentina and the Dollar is still strong here (has not lost ground over the last few years) because Argentina has been just as bad as the US with fiscal responsibility. Inflation has been out of control though. I can see prices go up on a monthly basis.

Excuse me for my ignorance but is there any kind of investment instrument that helps reduce the effects of currency exchange rates while also providing some fixed returns like a CD. I am thinking of something like a fund that has invested in what they consider to be CD in the top 5 currencies. I hope that makes sense...
__________________
Andy R is offline   Reply With Quote
Old 07-10-2007, 02:47 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by Andy R View Post
I am currently in Argentina and the Dollar is still strong here (has not lost ground over the last few years) because Argentina has been just as bad as the US with fiscal responsibility. Inflation has been out of control though. I can see prices go up on a monthly basis.

Excuse me for my ignorance but is there any kind of investment instrument that helps reduce the effects of currency exchange rates while also providing some fixed returns like a CD. I am thinking of something like a fund that has invested in what they consider to be CD in the top 5 currencies. I hope that makes sense...
Andy I would guess there are. I would also think that non USA banks would have them.

Check out E*trade. I think they are doing some international trading.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 07-10-2007, 02:50 PM   #6
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,401
Quote:
Originally Posted by Andy R View Post
I am currently in Argentina and the Dollar is still strong here (has not lost ground over the last few years) because Argentina has been just as bad as the US with fiscal responsibility. Inflation has been out of control though. I can see prices go up on a monthly basis.

Excuse me for my ignorance but is there any kind of investment instrument that helps reduce the effects of currency exchange rates while also providing some fixed returns like a CD. I am thinking of something like a fund that has invested in what they consider to be CD in the top 5 currencies. I hope that makes sense...

If you're just trying to hedge currency exchange rates, you in theory could buy currency swaps. I don't think they sell those to individual investors. Another possibility is just having your investments in whatever currencies you want. For example, if you're planning to return to the US soon, leave most of your money in US denominated accounts and just have a small amount in Argentinian currency.

If you want CD rates, just buy CD's, either US ones, or Argentinian ones, as the case may be after considering your currency hedging proclivities.

2Cor521

P.S. -- Thanks for being more solicitous of the board members' opinions lately. I've noticed.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 07-10-2007, 03:00 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by Andy R View Post
Excuse me for my ignorance but is there any kind of investment instrument that helps reduce the effects of currency exchange rates while also providing some fixed returns like a CD. I am thinking of something like a fund that has invested in what they consider to be CD in the top 5 currencies. I hope that makes sense...
www.everbank.com should do the trick.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-10-2007, 06:39 PM   #8
Recycles dryer sheets
 
Join Date: Jun 2007
Posts: 84
Quote:
Originally Posted by brewer12345 View Post
www.everbank.com should do the trick.
Everbank is good for CD's in the major foreign currencies.

Buying CD's in Latin American currencies may be a good idea.
Anyone know how?
__________________
Florida is offline   Reply With Quote
Old 07-10-2007, 07:20 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Nov 2005
Location: North of Montana
Posts: 2,753
Quote:
Originally Posted by Martha View Post
The Canadian dollar is close to par with the US dollar. I used to love to go to Thunder Bay, Ontario to shop for clothes. Not anymore! Pretty soon it will be Canadians shopping here instead.
Sorry to dissapoint (how should I spell that word?) you Martha but the Canadian & US economies have always been intertwined. Most companies are North American based and price their stuff (from) China etc. in local dollars. Being Canadian, I hate to admit that everything here other than restaurant food and motels is still more expensive than US prices.

Canadians are flocking to the US to buy cars since the manufacturers don't seem to know the exchange rates: reportonbusiness.com: globeinvestor.com - Loonie has Canucks eyeing U.S. for cars

Please come, but don't expect a bargain.
__________________
There are two kinds of people in the world: those who can extrapolate conclusions from insufficient data and ..
kumquat is offline   Reply With Quote
Old 07-11-2007, 02:41 PM   #10
Full time employment: Posting here.
 
Join Date: Sep 2006
Posts: 608
Quote:
Originally Posted by Florida View Post
Everbank is good for CD's in the major foreign currencies.
Wow 11-12% return in Iceland. What's a good source of
conventional wisdom about what currency of various countries
is doing relative to US$ ?
__________________
JohnEyles is offline   Reply With Quote
Old 07-11-2007, 02:57 PM   #11
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
JohnEyles:

regarding the Iceland currency play, this thread might be enlightening...

Everbank Icelandic CD 8.24%
__________________
MasterBlaster is offline   Reply With Quote
Old 07-11-2007, 03:03 PM   #12
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
NPR did a piece this morning on an economist who is promoting a global currency. Says it will eliminate all the manipulative political games (e.g. China) involved with currency.

He pointed out that until Nixon unlocked the dollar from gold, this was the way it was (other than having different nominal currency names and denominations, everyone was linked to gold).
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 07-11-2007, 03:03 PM   #13
Full time employment: Posting here.
 
Join Date: Sep 2006
Posts: 608
Quote:
Originally Posted by MasterBlaster View Post
JohnEyles:

regarding the Iceland currency play, this thread might be enlightening...

Everbank Icelandic CD 8.24%
Thanks for the link !

Someone there talks about a 6.7% rate on Treasury I-Bond.
That doesn't sound right.
__________________
JohnEyles is offline   Reply With Quote
Old 07-11-2007, 03:09 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
It is worth noting that you can also buy bond funds that invest in non-USD government debt. BEGBX does this with a good track record. GIM is also good, but I would not buy it unless it goes to a discount to NAV. One of the ETF providers was rumored to be setting up a non-USD bond ETF, but I don't know if it ever happened.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-11-2007, 03:10 PM   #15
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Quote:
Originally Posted by Rich_in_Tampa View Post
NPR did a piece this morning on an economist who is promoting a global currency. Says it will eliminate all the manipulative political games (e.g. China) involved with currency.

He pointed out that until Nixon unlocked the dollar from gold, this was the way it was (other than having different nominal currency names and denominations, everyone was linked to gold).
here are some of the reasons why a gold standard was rejected...

1) the dollar is only as good as the government's credibility to stick with the standard. If a government can go on a gold standard, it can go off, and historically countries have done exactly that all the time. The fact that speculators know this means that any currency adhering to a gold standard (or, in more modern times, a fixed exchange rate) may be subject to a speculative attack.

2) some include the gold standard as one of the causes of the Great Depression - ...

< counting on a gold standard to enforce monetary and fiscal discipline in an environment in which speculators had great doubts about governments' ability to adhere to that discipline was a recipe for disaster. International capital flows became more erratic, not less, as doubts were raised about whether first the pound would be devalued and then the dollar. Britain gave in to the speculative attacks and abandoned gold in 1931, whereas the U.S. toughed it out by deliberately raising interest rates in 1931 at a time when the economy was already near free fall.
Because of this uncertainty, there was a big increase in demand for gold, the one safe asset in this setting, which meant the relative price of gold must rise. If everybody is trying to hoard more gold, you're going to have to pay more potatoes to get an ounce of gold. Since the U.S. insisted on holding the dollar price of gold fixed, this meant that the dollar price of potatoes had to fall. The longer a country stayed on the gold standard, the more overall deflation it experienced. Many of us are persuaded that this deflation greatly added to the economic difficulties of those countries that insisted on sticking with a fixed value of their currency in terms of gold.

A gold standard only works when everybody believes in the overall fiscal and monetary responsibility of the major world governments and the relative price of gold is fairly stable. And yet a lack of such faith was the precise reason the world returned to gold in the late 1920's and the reason many argue for a return to gold today. Saying you're on a gold standard does not suddenly make you credible. But it does set you up for some ferocious problems if people still doubt whether you've set your house in order. >

3) Some suggest that a gold standard retards the natural growth of an economy
__________________
MasterBlaster is offline   Reply With Quote
Old 07-11-2007, 03:24 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
No thank you on a gold standard. No room for the Fed to help nudge the economy out of a slump or back off from overheating. Considering the amount of debt out there, it would eventually be a disaster.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-11-2007, 04:25 PM   #17
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 75
An interesting currency play is the ETF, DVB , DB Commodity Services .

"The PowerShares DB G10 Currency Harvest Fund (Symbol: DBV) seeks to track the &nbspeutsche Bank G10 Currency Future Harvest IndexTM (Index). The Index is comprised of currency futures contracts on certain G10 currencies and is designed to exploit the trend that currencies associated with relatively high interest rates, on average, tend to rise in value relative to currencies associated with relatively low interest rates. DBV provides convenient access to the returns of the international currency markets by following a highly-developed index previously available only to very sophisticated investors."

Has a low correlation to the S$P and may be a good diversifier. They long 3 currencies and short 3. Not sure how it would react to a rising dollar.

Strategy



The investment seeks to track the performance, before fees and expenses, of the Deutsche Bank G10 Currency Future Harvest Index - Excess Return. The index is comprised of long futures positions on the three G10 currencies associated with the highest interest rates and short futures positions on the three currencies associated with the lowest interest rates. The G10 currency universe from which the index selects currently includes U.S. Dollars, Euros, Japanese Yen, Canadian Dollars, Swiss Francs, British Pounds, Australian Dollars, New Zealand Dollars, Norwegian Krone and Swedish Krona. The fund is nondiversified.
__________________
Chris24 is offline   Reply With Quote
Old 07-11-2007, 04:37 PM   #18
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
If you have the guts to really make a killing here, borrow money in Japan where interest rates are around 1 percent. Then take that borrowed money and invest in Icelandic Krona (or other currencies) that pay ~11 percent or so.

That's what the carry-traders do. And they have done very well so far.

You could start your own hedge fund and invest other peoples money too doing this while raking in big fees for youerself !

- What a concept
__________________
MasterBlaster is offline   Reply With Quote
Old 07-11-2007, 04:48 PM   #19
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 75
Hmm, the Finlandia/Sake Hedge Fund. Like the sound of that.
__________________
Chris24 is offline   Reply With Quote
Old 07-11-2007, 04:53 PM   #20
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
That Finlandia/Sake fund could be very lucrative.

For every billion you borrow you should be able to get almost 100 mill out of the deal every year.

The good life awaits
__________________

__________________
MasterBlaster is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 11:07 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.