What currencies are best protected against inflation?

[dcollins]

It seems I'm unable to invest in shares or market trackers or the like because of my current residency status.

 

I can switch the cash I'm holding to a different currency / currencies though, with my existing facilities. I already have some in CHF, the rest is GBP.

 

I wasn't keeping an eye on it but it looks like USD has really strengthened over the last couple of months. Is it still worth switching?

 

What about other currencies that are tied to oil?

 

Just looking to minimize the devaluation - any suggestions welcome and I can then look into them.

Edited May 11, 2022 by dcollins

[1FinickyOne]

what you need to consider w/markets is that they are markets.. where buyers meet sellers - so, at any given sale point or moment in time, the current valuation is the consensus of what people think.. the buyer thinks the currency will go up and the seller thinks it will go down - for the most part. There are other factors involved too. 

 

You can try and follow or guess at trends, but this is difficult... 

 

If you are not an expert trader, you might consider diversifying... 

 

good luck. 

[Tom H]

Inflation in US over 7%. 

Good luck to protect money with a currency:).

 

Buy Gold and wait 10 years.

7 y ago 1 Baht Gold 18000

 Baht

today 1 Baht Gold 29000 Baht.

 

Or buy a Condo in Bkk by exchange USD to Baht when 35 and rent it out by 10% tax.

 

Bitcoin when under 15000.

 

Invest in things you would like to have now:).

 

Buy Goldmine shares like Newmont or Barrick Gold.

 

Invest in Ballard Power and wait 5 years:) if you can wait…

 

And so on….

 

 

Edited May 11, 2022 by Tom H

[timendres]

Currencies, by definition, are devalued by inflation. Always and forever.

As suggested by @1FinickyOne diversification is important.
I believe that over the next 10 years, hard assets will provide the best "security".

That means quality real estate, gold, silver, energy, commodities, etc.

Commodities are difficult for the average investor to "hold", as is energy.

Real estate is illiquid, very regional and has a high "carry" cost.

Gold and silver are easy to purchase and hold physically.

Many will point to Bitcoin. My only issue with BC is the volatility.

 

If you really need to hold cash, then you need to consider your currencies.

I am a US citizen with US bank accounts. And I live in Thailand, hopefully permanently.

So, I keep money in my US bank accounts, and in Thai bank accounts.

With the USD's recent strength, I have moved a considerable portion of my USD to THB.

I will convert some of that THB into Baht gold.

When the USD is weak, I let money pile up there (rental income).

I rarely move THB (earned by working here) to USD.

Mostly because my salary here is cr@p, and barely covers expenses. 555

 

Because the Fed is expected to tighten monetary conditions further, and due to global events, I do expect the USD to remain strong for a while. Not sure how much higher it can go from here. However, once the US drops into recession, which it will, and the Fed eases monetary conditions, which it will, USD will weaken. By how much is anyone's guess. I would not hold Euros, as the EU is about to get hurt economically, and likewise GBP is likely to suffer. Sadly, if Russia continues to peg the Rouble to gold, that may be one of the best performing currencies over the next couple of years, but I consider it very risky. 

[dj230]

Gold is your best bet for a store of value, in terms of currencies the US dollar is what everyone will flee to if there is a global recession, thus driving it up.

 

If you could somehow buy bonds those may hold up well also. 

 

This is just my opinion of course. 

Edited May 11, 2022 by dj230

[mvdf]

XAU is the safest of safe havens. Predicate currencies (those pegged to historically stable fiat and metals) are not immune to devaluation and inflationary fluctuations.

 

If it must be fiat, CHF has been historically and traditionally the planet's refuge currency.

 

If you want a second opinion, ask someone innately conservative with money.  

Edited May 11, 2022 by mvdf

[Stocky]

9 hours ago, Tom H said:

Buy Gold and wait 10 years.

7 y ago 1 Baht Gold 18000

 Baht

today 1 Baht Gold 29000 Baht.

???? I bought gold at USD600 in 1980, it promptly fell and didn't see 600 again for 27 years. 

[Tubulat]

14 minutes ago, Stocky said:

???? I bought gold at USD600 in 1980, it promptly fell and didn't see 600 again for 27 years. 

Yes, I remember that, I lost a lot of money with gold that time, and then you sell it and it goes up again.

Never forget.

Edited May 12, 2022 by Tubulat

[userabcd]

11 minutes ago, Tubulat said:

Yes, I remember that, I lost a lot of money with gold that time, and then you sell it and it goes up again.

Never forget.

Sounds like my luck as well.

[Pedrogaz]

Not all currencies can go down at the same time. This is not a time to speculate but to try to preserve the purchasing power off your money. The way to do this is to hold multiple major currencies, perhaps 7 or so, 

[ozimoron]

Here is a complete list of assets to hold right now. High inflation also means high interest rates.

 

1. USD.

Edited May 12, 2022 by ozimoron

[Lacessit]

The Swiss franc usually appreciates in times of crisis. However, currency speculation is a lottery.

Gold has always been a safe haven. Governments resort to the printing presses far too easily nowadays.

Property is usually an appreciating asset, but it's a young person's game. It sometimes takes decades for property to really rise in value.

[Thingamabob]

Gold. Always was, and always will be. 

[Mac Mickmanus]

8 minutes ago, Thingamabob said:

Gold. Always was, and always will be. 

Although the price of gold is currently lower than it was 40 years ago and about the same price as it was ten years ago 

[lkn]

14 hours ago, dcollins said:

Just looking to minimize the devaluation - any suggestions welcome and I can then look into them.

I suggest you keep your money in the currency which you have expenses.

 

You want to take on risk that it sounds like you do not understand in order to avoid a “devaluation” that you probably also do not understand. While we do currently have high inflation (in most countries) this will go down again, and markets are currently extremely volatile, so better suffer 1-2 years of known inflation than bet it all on markets you cannot predict and do not understand.

 

Also keep in mind that while U.S. inflation may be announced as 8.3% that includes housing, gas, etc., where gas is very likely to go down again and housing is irrelevant if you are not in the market for a new house.

 

All that said, if you have a small fortune that is not going to be used for the next 5+ years then yes, you should hedge against inflation, but not by picking another currency or commodities (like gold), instead you need productive assets.

[Tom H]

4 hours ago, Stocky said:

???? I bought gold at USD600 in 1980, it promptly fell and didn't see 600 again for 27 years

Edited May 12, 2022 by Tom H
text

[Tom H]

2 minutes ago, Tom H said:

Then you did not follow up the Gold prize for 27 years:).

Edited May 12, 2022 by Tom H

[spidermike007]

Silver is an infinitely better bet than gold right now. But the primary issues are that it is nearly impossible to buy here, in any desirable form, it takes up alot of space, and there is a $5 plus premium on bullion in the US right now, due to high demand. I still think it is a good bet, if you are able to order it, and store it.

 

Silver is historically (very long term) at a 1 to 15 ratio to gold. It is now at a small fraction of that. 

 

The gold silver ratio represents the number of silver ounces it takes to buy a single ounce of gold. Historically speaking, the gold silver ratio has rested somewhere between 15 and 10 to 1, reflecting the average supply of each metal. There were times throughout the history of money where the ratio was even lower — China once had a 4 to 1 ratio and the ancient Egyptians even had a 1 to 1 ratio at one point.

 

https://www.longtermtrends.net/gold-silver-ratio/

Edited May 12, 2022 by spidermike007

[allanos]

National inflation numbers are massaged or manipulated.

 

Anyone who believes government-published inflation figures is living in a fool's paradise.

Regular trips to the grocery store tell you all you need to know.

 

Individually, our personal inflation rates are highly skewed one way or the other from

those produced by governments.  What if you don't own a car? No gas/ petrol, maintenance

costs. What if you live in a home which has been fully paid for? No rent to pay, etc.

 

ACTUAL inflation numbers, those in the REAL WORLD, are 1.5 to 2 times what governments are telling you.

 

Lastly, keeping your money in the bank is not a smart move. Simplistically, if inflation is running at 10% and the bank is paying you

2% interest annually, it is costing you 8% each year to keep your money in the bank. After around 6 years, the TRUE value of your money is around a half of that you had when you started.

 

Edited May 12, 2022 by allanos
typo

[lkn]

19 minutes ago, allanos said:

Anyone who believes government-published inflation figures is living in a fool's paradise.

Have you actually looked at them?

 

There are several numbers, with and without energi, food, etc., there is the consumer price index, where government employees actually call up supermarkets regularly to get the prices, and all their raw data is available for your inspection, if you think they are lying about the price of milk.

 

[Stocky]

 

2 hours ago, Tom H said:

Then you did not follow up the Gold prize for 27 years:).

I still hold the gold I bought in 1980.

My point was that gold can go down as well as up. 

 

Edited May 12, 2022 by Stocky

[dcollins]

3 hours ago, lkn said:

All that said, if you have a small fortune that is not going to be used for the next 5+ years then yes, you should hedge against inflation, but not by picking another currency or commodities (like gold), instead you need productive assets.

I have no access to productive assets b/c I can't open a brokerage account. That's why I was asking about currencies. It looks like I can buy gold though. So my options are to leave the cash I have in GBP and CHF or move them to some other currency and/or gold. I will probably buy USD and gold. I would have thought CNY would be depressed at the moment and liable to spring back up in the next 2-3 years so I'll look at that too.

[GrandPapillon]

keep your money in CHF, not USD

 

why can't you open a broker account in Europe or the US?

[dcollins]

2 hours ago, spidermike007 said:

Silver is an infinitely better bet than gold right now. But the primary issues are that it is nearly impossible to buy here, in any desirable form, it takes up alot of space, and there is a $5 plus premium on bullion in the US right now, due to high demand. I still think it is a good bet, if you are able to order it, and store it.

 

Silver is historically (very long term) at a 1 to 15 ratio to gold. It is now at a small fraction of that. 

 

The gold silver ratio represents the number of silver ounces it takes to buy a single ounce of gold. Historically speaking, the gold silver ratio has rested somewhere between 15 and 10 to 1, reflecting the average supply of each metal. There were times throughout the history of money where the ratio was even lower — China once had a 4 to 1 ratio and the ancient Egyptians even had a 1 to 1 ratio at one point.

 

https://www.longtermtrends.net/gold-silver-ratio/

It looks like you can buy it with storage included e.g. in Zurich. Obviously you have to trust the seller and factor in storage costs. I guess there might be some kind of exit charge too. On the silver, it looks like the ratio is a little above the average for the last 25 years - so yes I guess it might return to the super long-term trend at some point, but I don't see any particular reason to think that will happen in the next couple of decades.

[dcollins]

1 hour ago, allanos said:

Lastly, keeping your money in the bank is not a smart move. Simplistically, if inflation is running at 10% and the bank is paying you

2% interest annually, it is costing you 8% each year to keep your money in the bank. After around 6 years, the TRUE value of your money is around a half of that you had when you started.

Yes that's the problem I'm trying to solve / mitigate here. The trouble is I only have access to currencies or maybe precious metals.

[dcollins]

5 minutes ago, GrandPapillon said:

keep your money in CHF, not USD

 

why can't you open a broker account in Europe or the US?

I could keep the CHF I have and switch some GBP to USD maybe.

 

I have been travelling and am not tax resident anywhere. The investment platforms all require you to give an address in a country where you are tax resident. It is not clear what happens if you turn out not to be tax resident in that country - possibly nothing at all - but I don't want to go there.

[GrandPapillon]

9 minutes ago, dcollins said:

Yes that's the problem I'm trying to solve / mitigate here. The trouble is I only have access to currencies or maybe precious metals.

that doesn't add up, why can't you open a bank account?

 

1 hour ago, allanos said:

Lastly, keeping your money in the bank is not a smart move. Simplistically, if inflation is running at 10% and the bank is paying you

2% interest annually, it is costing you 8% each year to keep your money in the bank. After around 6 years, the TRUE value of your money is around a half of that you had when you started.

actually it doesn't work that way for inflation, that's a very naive arithmetic approach

 

the true calculation is to multiply the inflation level with the interest, so 2% x 0.92 = 1.84%

 

the common misconception also is that the inflation rate is uniform and universal, it's simply an index or a benchmark "estimate", primarily used to adjust pricing for economic models and financial instrument models.

Edited May 12, 2022 by GrandPapillon

[The Hammer2021]

USA Dollar?

Swiss  Franc

[GrandPapillon]

2 minutes ago, dcollins said:

I could keep the CHF I have and switch some GBP to USD maybe.

 

I have been travelling and am not tax resident anywhere. The investment platforms all require you to give an address in a country where you are tax resident. It is not clear what happens if you turn out not to be tax resident in that country - possibly nothing at all - but I don't want to go there.

your tax residency is where you live officially, even if your income are overseas

 

I would suggest buying CHF instead of USD,

[The Hammer2021]

Would gold be an option or art?