Exchanging USD into a foreign currency

[PA_Robert]

Originally Posted by MIL-DOT

What are you, five years old ? You don't have to fly to another country to acquire or liquidate foreign currencies.

Sorry, didn't realize some people do not have a sense of humor.

My point is....you exchange your USD for a foreign currency (with an exchange fee). If SHTF and our currency goes to hell, you then want to exchange it back (with another exchange fee) into USD, as you're implying?

Isn't this kind of circular illogic?

I don't know about you, but not many stores near me take foreign currency. And if you're in a large urban area with exchange booths, In a SHTF scenerio you have more to worry about than FIAT currency.

[sierra skier]

Originally Posted by PA_Robert

Sorry, didn't realize some people do not have a sense of humor.

My point is....you exchange your USD for a foreign currency (with an exchange fee). If SHTF and our currency goes to hell, you then want to exchange it back (with another exchange fee) into USD, as you're implying?

Isn't this kind of circular illogic?

I don't know about you, but not many stores near me take foreign currency. And if you're in a large urban area with exchange booths, In a SHTF scenerio you have more to worry about than FIAT currency.

If we wish to express sarcasm or another state of mind we can show that by hitting the add reply button instead of the quick reply box and on the side there are emoticons to show that feeling or state of mind.

There are plenty of folks here who appreciate humor and sarcasm, but it hard to see it when in print and there is no voice inflection. Hitting the sarcasm button or 'big grin' button might have helped express that statement in better context.

MIL-DOT is one who can appreciate the humor when expressed well.

[America's Patriot]

Having multiple currencies could help you diversify, but the problem is... which ones?

[merlinfire]

Originally Posted by Synical1

With China quickly catching up to the US as the single largest economy, I wouldn't rule them out - especially when you consider the fact that several other countries have already sided with them to replace the US dollar as "THE" reserve currency in which all others are based.
If you are dead set against the yuan, you may want to consider a currency from one of the other BRIC countries - Brazil, Russia, India...

http://en.wikipedia.org/wiki/BRIC

As long as China continues to manipulate their currency, I wouldn't consider that safe.

[spameggsbaconandspam]

$, €, £ and ¥ is what I would be holding in addition to Au and Ag. I cannot imagine it would make too much sense to keep a major % of your net worth in these various forms of cash though. It might be a good idea to look into opening up banking or brokerage accounts in one or more of these countries. You should talk to an attorney if you plan to head that route.

[Old_Mil]

Originally Posted by dreiwhit

I've been giving serious though to exchanging some of the USD I have in savings into a foreign currency. I've ruled out the Yuan, Yen and Euro, since I don't belive they are going to be stable, and i'm leaning to the Swiss Franc or Austrailian dollar.

I suspect what you are doing is a wise thing. Our fiscal policy is pathologically bad, our montary policy the same. Our society is circling the drain. The "strength of the US dollar" is largely a myth bought into by foreigners who just don't quite understand how bad the boots on the ground situation has gotten in the United States.

I'm seriously considering pulling my IRA, paying the taxes and penalties, and doing exactly the same thing before Dec 31st.

The key is identifying the right country and right currency. The Euro is not the right pick. Doubt the Yen is given the demographic realities of Japan.

My plan is to split three ways for now: Canadian Dollar/Aussie Dollar/Swiss Franc.

[spameggsbaconandspam]

Originally Posted by Old_Mil

My plan is to split three ways for now: Canadian Dollar/Aussie Dollar/Swiss Franc.

Those are all great choices.

[sierra skier]

Originally Posted by Old_Mil

I suspect what you are doing is a wise thing. Our fiscal policy is pathologically bad, our montary policy the same. Our society is circling the drain. The "strength of the US dollar" is largely a myth bought into by foreigners who just don't quite understand how bad the boots on the ground situation has gotten in the United States.

I'm seriously considering pulling my IRA, paying the taxes and penalties, and doing exactly the same thing before Dec 31st.

The key is identifying the right country and right currency. The Euro is not the right pick. Doubt the Yen is given the demographic realities of Japan.

My plan is to split three ways for now: Canadian Dollar/Aussie Dollar/Swiss Franc.

You may wish to find out how long it takes to get your check from the company who manages your IRA. In my beliefs it takes a while to take possession of the cash and you may have passed the point of no return to claim the money this year. You still have 2 weeks to go, but if your distribution comes after the first of the year that may be counted as 2013 income and taxed at the higher rate.

[Old_Mil]

Originally Posted by sierra skier

You may wish to find out how long it takes to get your check from the company who manages your IRA. In my beliefs it takes a while to take possession of the cash and you may have passed the point of no return to claim the money this year. You still have 2 weeks to go, but if your distribution comes after the first of the year that may be counted as 2013 income and taxed at the higher rate.

I did it online, it gave you the option of a "date of distribution" or "on settlement". Even let me choose the % to withhold for taxes (I withheld the % + the 10% penalty). I chose Dec 28th as the date of distribution, the last Friday of the year. I already sold everything off 2 weeks ago so it's just been sitting in cash.

Oh, I did definitively find out that you DO NOT owe medicare or social security taxes on this sort of distribution, only your marginal federal rate and any state taxes you might owe.

[sierra skier]

Originally Posted by Old_Mil

I did it online, it gave you the option of a "date of distribution" or "on settlement". Even let me choose the % to withhold for taxes (I withheld the % + the 10% penalty). I chose Dec 28th as the date of distribution, the last Friday of the year. I already sold everything off 2 weeks ago so it's just been sitting in cash.

Oh, I did definitively find out that you DO NOT owe medicare or social security taxes on this sort of distribution, only your marginal federal rate and any state taxes you might owe.

Glad you are on top of it and it is apparently working our well for you. I can't say I blame you for bailing out, we did about 6 years ago and are pleased with the results.

[MikeV1234]

I've actually thought the best currencies to buy are:

Canadian & Pesos

Although I do the Yuan is good to but I would rather buy food or Gold than currency.

[dreiwhit]

I thought about swapping USD in savings for foreign currency after reading the book Fritz: The World War I Memoir of a German Lieutenant again. It had been years since I read this book, and in the last chapter, the author talks about life in Bremen after he came home from World War I and before he emmigrated to the US.

One of the bits of information that stuck with me is how they managed to survive in post World War 1 Bremen. His wife was an English woman, and her mother was retired and living in Germany. His mother-in-law received a pension in Pounds Sterling, which was extremly valuable for them when Marks were worthless.

Y'all have given me good information. Thanks!

[d2spr]

What about gold, time has proven it is the only true form of money.

[andrew8]

Originally Posted by dreiwhit

My big fear is future high inflation, which will reduce the value of my savings down to pocket money.
Can anyone provide any pros or cons to what i'm thinking about doing?

I "make money" by trading foreign exchange short-term (hours or days).

NO CURRENCY is a protection against "future high inflation". All currencies are backed by NOTHING.

The Australian dollar is doing well now, but that is because the country has been lucky to make a lot of money the last decade from the Chinese boom; but government policy in that time has resulted in a worsening "entitlement" mentality similar (but not as worse as) the US. So the Aussie will go down at some point. (I am Australian so have seen this evolve over the last 25 years.)

Look to other alternatives, such as physical gold/silver or "hard assets" which produce income.

[theotherryan]

The real problem is that you would need an alternative currency that is safe from the economic shenanigans and also readily usable. To be usable folks have to want to which means they must be able to A) recognize it and B) spend it somewhere else.

Before about 2010 the Euro would have been a good bet. However relatively few fols in the US recognize it and thus will not accept it. Every try to get a working class German or Frenchman to accept a good ole $20 US bill? It is an uphill battle.

If you are close to Canada maybe change a few bucks into Canadian dollars and if down by Mexico maybe do the same with Peso's. Otherwise from a survivalist perspective I do not see a benefit to alternative currencies.

[Old_Mil]

While all fiat currencies are backed by nothing not all fiat currencies are he victims of equally bad fiscal and monetary policy. For all the criticism of Canada, we have spent the past five years sprinting and are further down the road of bad fiscal and monetary policy than they are. If you only buy gold or silver that opens you up to market manipilations and unforeseen world events that affect one asset class and not another...

[midquinn]

The aussie dollar is a good bet but dont forget the New Zealand dollar which I saw mentioned earlier in the post. the government is taking a relitivly sensible aproach with finances at the moment. I know that when one of the minor partys suggested quantitative easing they were immediatly dismised. (helps when the prime minister used to be one of the best currency traders in the country)

[kwstoller]

+1 on the New Zealand dollar... They are a country that is shifting from an Agriculture based society into more of a production hub and they have a Free Trade Agreement with China so if your bet that China is going to be the new/one of the main powerhouse(s) then New Zealand could be a good place to have some currency in since they are going to be a store for raw materials / Natural Resources for China in the future. Australia is also a good bet.