Have you divested yourself of US dollars?
March 15, 2008
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27 comments:
No way! I'll wait for the March 18th Bernanke Show to see whether to stop accumulating them - but I'm not participating in the "buy Euro" frenzy!
What I did was to convert some of the excessively "strong" roubles and euros into a "depersonalized metallic account" in silver (is that known as a "pool account" in the US?) with a major bank. It would cost 18% VAT to obtain the physical metal (which the bank clearly doesn't own at present), should there be any suspicion of things turning sour.
You want to buy gold then as no VAT on gold. As to the pool account, IMO not worth the paper it's printed on. Seriously!!
This is pretty impossible for most of us (Our 401K has limited fund unexposed choices).
If the dollar goes, everything goes except gold and oil. About 50% of my portfolio is in oil stocks and 50% in short term munis.
The dollar is bound to rebound - especially vs the Euro. The Euro has worse long term fundamentals than the dollar because the poor people in Europe vote.
If the $750 Trillion unregulated derivatives market/web gets untangled and falls apart, which I seriously believe is what Bernake and Paulson are most terrified of, then we're all so screwed it won't matter one way or another. I wouldn't put it past the US gov't to be confiscating assets like gold and oil companies (for the national good).
Last May I saw the writing on the wall and went into PMs. I also went into FXA, an Aussie dollar index.
Damn Andrew, 18% VAT?? I guess every country has their own BS huh???
Have any of you tried to wipe your ass with a dollar bill?I am going to invent a new technique that helps with overwipe problems.
"The Euro has worse long term fundamentals than the dollar because the poor people in Europe vote. "
That is the best excuse for a while.
1.00 - "Well, that won't last for long"
1.10 - "Temporary blib, will crash soon"
1.20 - "Way way overbought, will soon crash"
1.30 - "Long term prospects of euro zone are much worse than that of US"
1.40 - "Euro zone will soon break apart because of strong euro. Will soon crash anyway."
1.50 - "Dollar will rise any day now!"
1.55 - "Dollar will rise because poor people in Europe vote!"
You should be buying are many dollars as you can, selling useless Gold and selling your commodity stocks as fast as you can.
the central banks will soon be getting together to manipulate the currency markets
Its is not in the interests of Europe, Japan,China and India to have strong currencies.
Although Boeing benefits from a weak dollar, a weaker dollar means that their is less and less reason for exporting countries to go along with Americas war polices.
Yes. Fu*k America.
"client # 69 said...Have any of you tried to wipe your ass with a dollar bill?"
My wife discovered that if you leave them in your pants, wash/dry the pants, and THEN wipe your ass, it is much more pleasant.
We use a leaf blower to move them around the house and herd them into the bathroom.
Believe it or not, they also make good mulch!!!
Tim73,
the fundamentals of Europe ARE FAR WORSE than America's. The difference between America's spending problems and Europe's is that Europe spends much less of it's revenues on military and more on social services. It's much easier to cut military expenditures than social services.
Also, Europe's population is aging faster than we are.
Europe's unions are stronger than the UAW because over there the majority of people believe in them. The welfare state in Europe is growing stronger every day.
If Trichet wasn't holding onto a 4% funds rate, the Euro would fall quickly. Bernake's influence on the dollar is a short term blip. Over time, deficits, trade imbalances, and real growth of output count far more than short term interest rates.
And by the way, Europe's housing mess is about 6-12 months behind ours.
And Europe is fundamentally less entreprenerial than the US.
And the fact that poor people in Europe vote means that the government will continue to allocate more resources inefficiently and will continue to prop up the lazy, entitled culture of the 10% of the population that believes that 33 hours a week is an unreasonable amount of time to spend working when they could just as easily be sleeping and living off the government.
May savings are out of the dollar and into gold, silver, platinum, palladium, oil, uranium, precious and base metals mines, oil wells, wheat, soybeans, coffee, sugar, corn, farms, alternative energy companies, and foreign companies.
Unfortunately, my future earning stream net present value is 4 times my current savings value, and is dollars. In other words, I am saving everything I can now, because my future paychecks won't buy much at all.
Yeah. It's kind of shocking to me to review my portfolio now, but I like all my positions. Holding bear funds that move inversely with the S and P (BEARX), and inversely x2 with the dollar (RYWJX). Long positions in a gold fund, a hard assets fund, and some foreign bond and value stock funds. Last year, I took your advice on CFC and IMB puts and absolutely cleaned up wholesale, Uncle Sam just now swooped in to take ~37% of my winnings and make it disappear into nothingness. Our government is doing all it can to make sure I can't save any money, but so far I'm finding ways. Screw you Bernanke! We should use Bernanke as a weapon - ship him off to competing nations to manage their finances. Boy would we end up with a strong dollar.
This is pretty impossible for most of us (Our 401K has limited fund unexposed choices).
I remember 15 years ago having my accountant explain to me why I should set up a 401k. Before she had even finished, I rejected the idea for this very reason.
That one, and the fact that congress can cancel that tax-deferred status and more, at the stroke of a pen, the minute China and the Arabs decide not to fund our government debt.
I bought some gold and silver, as "Bernake Insurance"
I bought some gold and silver, as "Bernake Insurance"
I'm still a student, but I bought three one-ounce gold coins several years ago for $450 each, along with a few troy pounds of silver.
I wonder if I'll be able to pay off my student loans (I only accepted subsidized loans with 0% interest -- meaning, given inflation, NEGATIVE interest) with them in a couple of years.
Or heck... with just one of them.
When the SHTF Congress will pass a new windfall profit tax on short sellers and people who diversified away from USD and stocks.
I started to divest in 2002, when I was living in Paris and experienced first hand the dollar's nosedive trend. Told everyone at my B-School in the US, including my professor, to buy precious metals...lots of it.
It would cost 18% VAT to obtain the physical metal
Yep, the Europeans and Canadians love socialism, as they have to be taxed up the wazoo to subsidize all that imported poverty from Third World Countries, like the Muslims and Africans who hate them but love their subsidies. The Brits have to pay 38% direct from paycheck plus the VAT rip-off. That's why you see French people who actually work for a living, trying to leave France. Hve yo been to Paris? It's like being in some Muslim country...full of Muslims hanging out on the streets like they own the place. It's disgusting...hey, but you idiots like Hussein Obama, so the US will be going that way pretty soon.
Just finished my taxes today: only 4.5% of Effective Tax Rate. Once again, uninformed people who never took a basic class of Accounting (step forward Frank), what's important is the EFFECTIVE TAX RATE, not the total amount you pay. That's why millionaires pay much less taxes than you do. Look it up on wikipedia, if you don't know what's Effective Tax Rate, before you reply.
Yes! Anyone who is still holding dollars in any form is looney. I, in fact, just completed a $150K home equity loan against my previously paid-off property, at 4.99% (going lower every day) and will move that money into CD's and investments outside the country.
Hold nothing in US dollars except the loose cash in your wallet!
"And Europe is fundamentally less entreprenerial than the US. "
And still EU has 150 billion dollar trade surplus with so called "entreprenial" US. You are full of bullshit.
Tim73,
it's actually a $107BN deficit.
But if you're actually arguing that Europe is a more entreprenerial society than the US, then you need to get your head examined.
What percentage of Europeans work for the government?
How many times have you ever seen unemployed people in the US march in protest of the low government benefits?
How easy is it to fire someone in Europe?
How many hours a week does the average Euro work? Average French?
How popular is the communist party in Italy?
How many major US corporations are controlled by the US gov't? European corps?
If you want to argue that the Euros consume less and don't spend money foolishly on foreign policy, I agree with you all day. If you seriously are making the argument that Europe is more entreprenurial than the US, then you must be stoned.
"But if you're actually arguing that Europe is a more entreprenerial society than the US, then you need to get your head examined."
Europe is not one country, it is a collection of very different countries. Some have more dynamic than others. Even way more dynamic than US.
BTW, you still deal in the US with outdated checks, how friggin dynamic is that?! And where the hell you get your information, this is from 2007:
"The EU's trade surplus with the United States decreased to 38.4 billion euros in the first half of this year from 43.3 billion euros in the same period last year."
Yes, Europeans work less than Americans but that is because they do not live to work, but work to live. It is a matter of choice that Americans do not have since your unions are all fucked up.
How competitive is your economy really when with 50-60 percent of dollar devaluation since 2002 US manufacturing sectors STILL LOST 52000 JOBS like in February?! This has been going on for years now..
Tim,
I believe that the US is totally screwed because of horrible decisions our government has made concerning spending and equally bad decisions our population has made concerning personal consumption/lack of savings. That said, Europe (and by Europe I mean western Europe) has a much more socialistic structure that has bred even more complacency than America has. Both US and Europe are destined to fall under the weight of unrealistic promises made by their governments whereas Asia is up and coming.
Most of my information about Europe comes from having worked for 5 years at BNP-Paribas, a French bank that is essentially controlled by the French government - by far the largest shareholder. Even in the US, the French business culture ruled the day, and in my experience their atitude towards work was far less urgent than it is in the US. That said, I loved having 5 weeks vacation and I loved coming in at nine-ish and leaving at five-ish. I also loved the benefits (though the wages were less than stellar).
The truth is that both cultures have developed a sense of entitlement that is horrible for our long term competitiveness. In Asia there's no safety net and so they work harder and look for every possible angle to win - because losing means going hungry. We just don't want it as bad as they do and as a result our futures are predictable - both the Euro and the dollar will lose huge amounts of value relative to tangible assets in order to prop up our governments for as long as possible.
The one advantage that the US has over Europe (IMO) is that the US is a fundamentally more entrepreneurial culture. It just is. And innovation might postpone the inevitable.
And by the way, when the Euro was first priced vs the dollar (1998?) 1Euro cost $1.17. And then, thanks to the internet boom and the massive European investment in US tech stocks (along with the shrinking US deficits), the cost of a Euro fell to $0.85 to a dollar by 2000. That was a pretty dramatic swing as well.
And on a side note, I've been to Europe many times and I can tell you that the differences between the countries isn't that dramatic. In fact, I think that the difference between France and Germany is about as subtle as the difference between Minnesota and Wisconsin. I think it was Somerset Maugham who said that in France you can act however you want as long as you think exactly the same way as everyone else, whereas in Germany you can think whatever you want as long as you act exactly like everyone else. (I'm paraphrasing.) LOL
"In Asia there's no safety net and so they work harder and look for every possible angle to win - because losing means going hungry."
Asian countries are very hierarchical, de facto casting system is still unofficially used in many places. Corruption is widespread and business world..well, you should watch you back.
They are cheap and hard working but with adequate trade protection (like Asian nations are using against Western nations!) Americans and Europeans can be equal partners with them.
What Americans fucked up was back in 90's that they allowed Asians totally free access to US markets without the same kind of access to Asian markets.
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