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Which currencies are good for savings?
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duedue Offline
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Post: #1
Which currencies are good for savings?
I did a quick search of the forum but didn't find anything. What I mean is savings besides US dollars, for rainy days. Something that retains value. I have some savings in Danish Kroner.
01-12-2016 07:16 PM
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thoughtgypsy Offline
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RE: Which currencies are good for savings?
I'm not sure that currencies are really a good vehicle for savings. They appreciate and depreciate against each other and can be quite volatile.

You did alright with the Kroner, I remember when 7DKK/1USD was the norm 10 years ago. Keep in mind that it is loosely pegged to the Euro. The Swiss Franc has always been seen as a safe haven currency, but their central bank is doing some weird things like speculating with their reserves. The Ruble lost a lot of value against the Dollar in recent years, but I would think there's a lot of room for it to bounce back.

Gold and silver are pretty low right now, in my opinion. Silver is the more liquid asset.

I still think USD is probably the safest asset right now, though.
01-12-2016 07:46 PM
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topdog Offline
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RE: Which currencies are good for savings?
@thoughtgypsy: Do you mean gold/silver being low priced now is a good idea to buy it and sell it 5 years from now?
01-12-2016 08:11 PM
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jj90 Offline
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RE: Which currencies are good for savings?
(01-12-2016 07:46 PM)thoughtgypsy Wrote:  I'm not sure that currencies are really a good vehicle for savings. They appreciate and depreciate against each other and can be quite volatile.

That right there above. Understand this. If you are Danish, stick to the krone. Do not mismatch your liabilities and assets unless you know what you are doing. Pretty much every person and entity in the world has currency exposure, no way around it unless you want to hedge. That alone is a different beast.
01-13-2016 01:10 AM
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joost Offline
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RE: Which currencies are good for savings?
Something that retains value? Looking at history, the safest bet is gold. Get gold coins. Don't buy them at a much higher price than SPOT PRICE.

Holding government currency is a lousy way for savings. They'll dilute your money even if the economy is doing fine.

I would hold US dollars (great liquidity) so I could buy good beaten stocks (dividend aristocrats). World economy is in too much debt and a correction stronger than 2008 is about to happen.
01-14-2016 12:56 AM
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ksbms Offline
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RE: Which currencies are good for savings?
"Gold is a tangible asset which cannot be printed at will. As such, it protects against inflation and currency devaluations. For example, in 1971, a family in the US could buy a house with US$25,000. Today, US$25,000 is not enough for a mortgage deposit. By contrast, 700 ounces of gold (the equivalent of US$25,000 in the 1970s) can buy a US$1 million property today."

Why invest in gold

https://www.bullionvault.com/

[Image: Gold-Spot-Price-Chart5.jpg]
(This post was last modified: 01-14-2016 05:54 AM by ksbms.)
01-14-2016 05:29 AM
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blck Offline
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RE: Which currencies are good for savings?
(01-14-2016 05:29 AM)ksbms Wrote:  "Gold is a tangible asset which cannot be printed at will. As such, it protects against inflation and currency devaluations. For example, in 1971, a family in the US could buy a house with US$25,000. Today, US$25,000 is not enough for a mortgage deposit. By contrast, 700 ounces of gold (the equivalent of US$25,000 in the 1970s) can buy a US$1 million property today."

Why invest in gold

Be careful tho




Tell them too much, they wouldn't understand; tell them what they know, they would yawn.
They have to move up by responding to challenges, not too easy not too hard, until they paused at what they always think is the end of the road for all time instead of a momentary break in an endless upward spiral
01-14-2016 05:32 AM
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VolandoVengoVolandoVoy Offline
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RE: Which currencies are good for savings?
Physical currency and physical gold are not really ideal ways to protect and increase wealth in a normal economic/societal environment.

They only start to make some sense if you fear a collapse.

If you fear a collapse, a better investment than gold would be bullets and water purification tablets.

If we really get into the type of situation where the yen/dollar/euro collapse, and zombies roam the streets of Manhattan, bullets and water will be much more useful for getting what you need than pieces of shiny metal.

"Me llaman el desaparecido
Que cuando llega ya se ha ido
Volando vengo, volando voy
Deprisa deprisa a rumbo perdido"
(This post was last modified: 01-14-2016 05:35 AM by VolandoVengoVolandoVoy.)
01-14-2016 05:33 AM
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ksbms Offline
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RE: Which currencies are good for savings?
(01-14-2016 05:33 AM)VolandoVengoVolandoVoy Wrote:  Physical currency and physical gold are not really ideal ways to protect and increase wealth in a normal economic/societal environment.

They only start to make some sense if you fear a collapse.

If you fear a collapse, a better investment than gold would be bullets and water purification tablets.

If we really get into the type of situation where the yen/dollar/euro collapse, and zombies roam the streets of Manhattan, bullets and water will be much more useful for getting what you need than pieces of shiny metal.

With all due respect to your fears I think you've watched too many zombie films.
01-14-2016 05:48 AM
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ksbms Offline
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RE: Which currencies are good for savings?
(01-14-2016 05:32 AM)blck Wrote:  
(01-14-2016 05:29 AM)ksbms Wrote:  "Gold is a tangible asset which cannot be printed at will. As such, it protects against inflation and currency devaluations. For example, in 1971, a family in the US could buy a house with US$25,000. Today, US$25,000 is not enough for a mortgage deposit. By contrast, 700 ounces of gold (the equivalent of US$25,000 in the 1970s) can buy a US$1 million property today."

Why invest in gold

Be careful tho




Human greed...

I reckon best bet is to buy gold directly from the mint. Any other suggestions where is it safe to buy gold?
01-14-2016 05:57 AM
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zatara Offline
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RE: Which currencies are good for savings?
(01-14-2016 05:29 AM)ksbms Wrote:  "Gold is a tangible asset which cannot be printed at will. As such, it protects against inflation and currency devaluations. For example, in 1971, a family in the US could buy a house with US$25,000. Today, US$25,000 is not enough for a mortgage deposit. By contrast, 700 ounces of gold (the equivalent of US$25,000 in the 1970s) can buy a US$1 million property today."

Why invest in gold

https://www.bullionvault.com/

[Image: Gold-Spot-Price-Chart5.jpg]

Showing a chart where the pricing begins at a trough point is slightly misleading. This provides a more accurate picture, the inflation adjusted price of gold going back 100 years:

[Image: lj8FeR5.jpg]

Notice the massive peaks and troughs - if you invest at the wrong cyclical moment you're going to get burnt, badly. Gold does not intrinsically rise in value, despite what a lot of goldbugs would like to believe.

For comparative purposes, here's the S&P 500 Index over the last 70 years (the maximum available):

[Image: CQeNUSO.jpg]

In general investing in either commodities or stocks in the immediate future (next 90 days) may however be a very bad idea, depending on how pessimistic you are about the impending crash certain institutions are now being rather bear-ish about (RBS, Goldman Sachs etc).

OP how much are you saving? If its a relatively small amount (under $20k) its not really worth trying to engage in currency arbitrage without any market knowledge. If you don't outright lose money on the gamble, you'll likely lose any gains you do make by paying transfer/conversion fees.

If you're looking to safeguard a large amount of money your best bet would be investing in a basket of developed world currencies. This will reduce your exposure to potential devaluation of any one currency. And won't be half as risky as investing in gold.
(This post was last modified: 01-14-2016 06:33 AM by zatara.)
01-14-2016 06:28 AM
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thoughtgypsy Offline
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RE: Which currencies are good for savings?
VVVV makes a fair point. Gold is good for holding an asset that is likely to appreciate in the midst of currency devaluation. In the event of a major collapse, it wouldn't be that useful. I'm not even talking zombie-level. Think Bosnia in the 90s, or Argentina in the early 00s. You can't eat gold, and it's not likely it would be worth as much as actual food or immediately useful goods.
01-14-2016 08:01 AM
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Going strong Offline
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RE: Which currencies are good for savings?
(01-14-2016 05:48 AM)ksbms Wrote:  
(01-14-2016 05:33 AM)VolandoVengoVolandoVoy Wrote:  Physical currency and physical gold are not really ideal ways to protect and increase wealth in a normal economic/societal environment.

They only start to make some sense if you fear a collapse.

If you fear a collapse, a better investment than gold would be bullets and water purification tablets.

If we really get into the type of situation where the yen/dollar/euro collapse, and zombies roam the streets of Manhattan, bullets and water will be much more useful for getting what you need than pieces of shiny metal.

With all due respect to your fears I think you've watched too many zombie films.

In such a zombie-apocalypse scenario, forget about gold: silver actually would become useful!

[Image: silverbullet3.jpg]
(This post was last modified: 01-14-2016 08:19 AM by Going strong.)
01-14-2016 08:17 AM
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The Beast1 Offline
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RE: Which currencies are good for savings?
I personally would keep my savings in USD. The current FX flows according to Martin Armstrong have capital fleeing Europe and Asia into the dollar.

Capital is voting with its feet even though the US has its own issues, my money is on those who have the most guns (the US) who will fair the best.

I would also hold a small amount of real gold coins however just for the heck of it. If there is a hyperinflationary event you can rely on your gold coins to barter with others for goods and services.

However at that point, you'll have a lot more to worry about than whether your dollars will be worth something.
01-14-2016 09:17 AM
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joost Offline
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RE: Which currencies are good for savings?
A good way to avoid fake gold is to buy coins. They have a standard format and size. A fake coin will be likely bigger to maintain weight due to less density. If the fake coin has the same size, it will be lighter. Easily to spot with a Fisch.

The Fisch:





The Ringer is useful to avoid fakes using Tungsten which has a density similar to gold. Size will be almost identical in some coins but won't pass the Ringer test:
https://www.thefisch.com/shownews/id/1411222857

The Ringer:





As for gold losing value, when you see the graphs above, it's actually the dollar appreciating against everything. During a crisis, people need liquidity and end up selling stuff they have (for cheap) to cover debts. Gold went from 1500 to 1000 (-33%) but if you compare what you could buy with a $1000 today is quite likely the $1500 few years ago.
I prefer stocks but have a lot of respect for gold. I would recommend people to have at least 5% of their portfolio in physical gold. If you don't have a lot of money, buy at least a single coin.

As I said in a previous post. I would hold dollars and wait to go shopping for good deals on stocks who pay nice dividends (Dividends Aristocrats).
01-14-2016 10:13 AM
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