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Updated about 17 years ago, 10/16/2007
US Dollar - are you moving to other currencies?
I use my aero sidebar that shows me how our dollar is depreciating every damn day. I'm going to start moving extra money I don't need into Euros on my paypal account and start looking into Euro CDs. Anyone else out there watching our dollar? And what are you doing, if anything?[/i]
What is the point of buying Euros? Are you speculating on currency movements or expecting future expenses that will be in Euros?
IMHO...
Most RE investors should stick to what they know best. If all of your bills are in USD then buying other currencies is not required. It is mostly about diverting your attention from where you make your money.
John Corey
PS. I mostly hold Sterling and sometimes have Euros from my travels. I also have USD. I use the currency to pay bills and I am not taking a view on the direction of the currencies.
Hey there Fren,
Can you be a little more detailed as to what your going to do and what exactly it is that you think will be benefical! Cause correct me if I am wrong: But you said that you were going to purchase euros right! But the euro is $1.45 compared to the dollar right, so you would have to spend a dollar forty-five in order to get one dollar in euro! So what would be the point in doing that unless euros dramaticly increase well the dollar decreases and you trade back in the future to get more on you dollar than you began with! Please explain I am very interested as to what insight you may have on this subject, thank you for your time and have a wonderful biggerpockets day!!
If you were looking to do something like that i would recommend either latin america, china, Japan of India. The Euro is, probably going to catch up with the GBP but at the moment i feel that you'd be better off in getting a CD in one or all of the above countries, hell maybe even somewhere in the middle east like syria, or Iraq if you feel like speculating.
We have some money in Canada and the CN dollar took a dump and was trading at 65-70 cents US. It is now at par and it looks like a good time to move back to the US.
Stay with what you know because if you start to play in the money markets you can get burned.
By the way John you are over in Europe what is going on with some of the Swiss hedge funds. I heard that they are having some trouble because they invested in US mortgage backed securties.
Originally posted by "Ohio Realtor":
Stay with what you know because if you start to play in the money markets you can get burned.
By the way John you are over in Europe what is going on with some of the Swiss hedge funds. I heard that they are having some trouble because they invested in US mortgage backed securities.
I believe you are talking about a US hedge fund called Dillon Reed that was owned by UBS (largest Swiss bank). The fund was closed a few months ago after problems. The fund was under 2 years old and it looks like it was badly run. It is not clear why UBS set it up other than to try and old on to some people from the fixed income business who were looking to leave UBS. The CEO of UBS was kicked out as part of the exercise to close down the fund. UBS reported losses this past Monday as part of their financial reporting (public disclosure of the numbers including the DR fund closure charges).
John Corey
PS. I used to work for Swiss Bank Corp where some of the people who run UBS came from. UBS and SBC merged. UBS was the bigger bank but needed SBC's management so more like a reverse take-over in 1999.
Everbank has a website where you can open accounts in different currencies. I think it is a good idea considering the sharp drop of the dollar the last five years. This trend will probably continue because of the imbalance in the trade and budget deficit.
Speaking of banks...
Citi has a program with 20 or 22 currencies. You can move money between any two currencies (switching from one savings account to another). All the normal assumptions about fees or exchange rate margins.
I still do not think most people should even worry about currencies. Best to focus on having the exposure that matches your anticipated future needs. If you do not expect any bills in another currency then you have no need for the other currency. You would be holding a trading position. Rather than try and outguess the market for FX focus on doing better RE deals.
Notice when you buy currency you are paying spot prices. No room to do short sales, get a deep discount for cash, leverage up your investment, etc. Hence a lot less room to use what you know to make for a better deal. No tax advantages either.
RE is really the way to go. Make some much in USD that the other currencies are not an issue. You just buy some when you need to travel.
John Corey