Wednesday, September 29, 2010

Reply: Keeping multiple currencies in cash‏ and Hyperinflation


In regards to your post about currencies and cash.  I think it's fair to assume that gold is demonstrating the erosion in buying power in currencies, and as gold's value goes up, currencies are going down.  With that in mind, I recommend viewing this blog post: http://jessescrossroadscafe.blogspot.com/2010/09/is-gold-us-dollar-phenomenon.html
We are witnessing a change in world economies and it's happening globally.  Stuffing loads of cash (even in multiple currencies) into a mattress is a losing proposition long term.  It's probably a good idea to have a little cash stuffed away, but know that it's eroding in value every day/month/year.  Right now, gold and silver is by far the best alternate currency to keep your money in as witnessed over the last 20 years.  Gold and silver are currencies just as Swiss Francs and US Dollars with the important distinction that there's no government that can produce it at will.  That is why, at this moment, it is the currency of choice.  A word of caution: Don't be married to a gold position either.  There will come a day when gold as a  currency should be cashed in and exchanged for something else, but that day, unfortunately, seems pretty far off right now. 


"Black Six"

Anonymous said...If the USD goes down it will quickly pull the Euro and the Pound down with it. I agree that Asian currencies, especially the Yen, may be a better bet. I don't trust China to act rationally when it comes to the Yuan, so I'd stay away from it.

The Euro has too many problems to be a go to currency in case of a USD collapse. The British Pound was at one point worth more than the Euro in relation to USD (L2=$1) but I think the financial system of the UK is too closely linked with America and the PIIGS.

I think that the Euro has become the counterbalance of the USD, at least that's what I think based on these last few years where the Euro has gone up as the USD went down. Granted, its not some satelite country so the "Euros only" signs arent likely to show up in US. Yet who knows? On the other hand precious metals are an even safer bet since you know that no matter what if everything goes to hell they will not only retain its value but probably go up a lot.

Did you guys read the link I posted?
LINK on how will Hyperinfaltion look like in USA

This guy makes a lot of good poitns and talks about silver reaching 100 bucks per ounce if SHTF and then USD goes down. I think its a good, down to earth estiamtions of an event that could occur in the a year or two. 
Another good piece from that link, a quote by Baron de Rothschild: “Buy when there’s blood on the streets.”
 The author of the linked article mentions a person making a fortune after the socioeconomic collapse in Chile, buying USD 3.000 worth of blue-chip company stocks. It made him a millionaire when it rebounded.

This may be your case when it comes to real estate, so keep an eye for those dirt cheap properties if the economy collapses.
Another quote from him:
Even in the midst of Apocalypse, things will get better. “
I’ve said that several times, life just goes on. It is not the end of the world, so if you prepare for the world to end, it will end indeed… For you! You will be mentally convinced that the world is always about to end, and on the physical world the decisions you will make will cause you financial ruin, planning for a reality that will never take place!

Again, read the article. The economic collapse of Argentina had a similar behavior, so write this down somewhere:
When the Argentine economy collapsed, and the stock market went down, some people bought. It kept going down. People some bought, others sold. Then the economy collapsed, we defaulted and the president freaking resigns!! Then the next president resigns in the next couple days. Hell REALLY breaks loose in the country, looting, etc. Even the most optimistic speculator sells when this happens sure that there world, at least when it comes to Argentine economy, ended. This is when you SHOULD have bought. People that bought then, at the worst moment when everything was a mess, those guys multiplied their investment by 12x. Not crazy profit but this is Argentina. In USA I’m sure you could make some ridiculous high profit buying stocks after the economy collapses.
Now guys, remember this is high risk investment. Don’t come back crying if the particular company you bought disappears from the face of the Earth. Yet opportunities abound, and usually this is how rich people get even more rich; buying stocks and real estate when the economy goes to hell.
Take care folks.



Anonymous said...

I am so sad to hear about the constant cop bashing. Here in San Jose, Calif we have a great force. They have masters degrees many of them. They are highly selective of whom they choose to be on the force. These people risk their lives daily. They show restraint daily. Yes, there are occasional uses of force. But put yourself in their shoes? Someone comes at you with a gun or knife and will not stop? They have videos on their cars that record them. They know they can be fired. You can't compare our San Jose cops with the international version in Argentina where they shake you down for money. If a San Jose cop did that, it would be all over the newspapers. Overall, they are brave men and increasingly, women, who risk their lives daily. Be grateful that we have what we have. The vast majority are honest hard working people. Is there a l% that you may not like? yes in any field, but do not tar the whole group. The newspapers have to yell about the cops as they need to sell newspapers! JMHO

Anonymous said...

The issue of where to hold ones savings is important. If one has the basics covered yet can't afford a tropical island hideaway, then they need the liquid means to take advantage of opportunities in their backyard.
Cash or Precious Metals.... that's about what it comes down to.

Now with both the US and the EU deliberately destroying the value of their currency...that leaves Gold as the last credible one standing.

So please inform us Ferfal... what is the status of the buying & selling of gold and silver in Argentina? Did/does the government tax it heavily or otherwise restrict it? Are there dealers or other means of transacting precious metals? Is there a market? If Argentina has onerous laws... is it possible/feasible to cross the border to Uruguay and get a far better deal there.

FerFAL said...

I use it mostly when traveling, briefcases in airports and horels are more grayman that the latest tactical looking maxpedition versipack.
There's a lot of leather goods produced locally too so its common to see people with leather messenger bags around here. Leather jackets too.
Around town I mostly use a canvas mussette bag but ocasionally use this bag too if I need to carry more stuff.