How can I hedge against a collapsing USD?

[uncletiger]

I am currently working on a project that is specified in USD, and I don't expect payment until around September.  The amount is around $25K USD. I am concerned the USD will not survive that long. By "not survive" I mean lose 80% of its value or more vs. the Thai Baht. I'm not asking anyone to agree with me, and I don't believe this is a certainty by any stretch, but I think the chance of this happening in today's environment is high enough that I need to take it seriously. My question:

 

What options are there, from Thailand and only using Thai financial instruments, to hedge $25K for 6-9 months?

 

I do have a derivatives account with a brokerage here in Thailand that I use for gold futures. But hedging against a falling USD is well beyond my limited financial experience. In particular, I've always gone long on things. I've never been in a position where I wanted to short anything in my life, but it seems like that is what I need to do now. Can anyone recommend the best and cheapest way to lock in today's exchange rate on USD that I don't expect to receive for at least another 6 months? 

 

Assuming derivatives are the answer, the kind of information I am looking for is what products I should be interested in trading, what those symbols are, what is the minimum value and margin of the contracts, do I need to do anything like set up stop losses and if so how, etc. I know that going long on a future is as simple as typing in a symbol and pressing "buy". What is involved in the opposite process? Do I simply type in a symbol and press sell for something that isn't in my portfolio? Please phrase your responses as if you are speaking to someone who is not stupid but is inexperienced and somewhat naive about the details. Also please remember my ultimate goal. I'm not trying to get rich through high risk activities. The goal is merely to lock in today's exchange rate and no longer worry about fluctuations. You may assume for the sake of this discussion that it is certain I will receive this money before the end of the year, and I am OK if the USD appreciates against the THB and I wind up losing out on the value of any appreciation vs. today's exchange rate.

 

Thank you for any information .

 

 

[Neeranam]

Only hedge I can see is gold and Bitcoin, most of my wealth is in the latter. 

 

Both are easy to buy in Thailand.

[HuskerDo2]

Not sure what you're reading (or smoking) that makes you believe the US dollar would lose 80% against the baht. It wouldn't lose amount or anywhere close to it against ANY other currency. The dollar is NOT collapsing against the baht. It ran up quite a bit in the last 18 months due to the Fed raising rates. It's now still higher than it was before the big run up. 

 

Relax. The USD will hang around current levels for many months. It's at times like this, when people like you, get nervous that they make a foolish decision with their money. You'll be fine and your $25k will not erode like you are afraid of. 

 

Hang in there and relax. Things will be fine.

[Neeranam]

3 minutes ago, HuskerDo2 said:

Not sure what you're reading (or smoking) that makes you believe the US dollar would lose 80% against the baht. It wouldn't lose amount or anywhere close to it against ANY other currency. The dollar is NOT collapsing against the baht. It ran up quite a bit in the last 18 months due to the Fed raising rates. It's now still higher than it was before the big run up. 

 

Relax. The USD will hang around current levels for many months. It's at times like this, when people like you, get nervous that they make a foolish decision with their money. You'll be fine and your $25k will not erode like you are afraid of. 

 

Hang in there and relax. Things will be fine.

USD has been losing 10% +for years. Don't you know how much they are printing?

[kwonitoy]

28 minutes ago, HuskerDo2 said:

Not sure what you're reading (or smoking) that makes you believe the US dollar would lose 80% against the baht. It wouldn't lose amount or anywhere close to it against ANY other currency. The dollar is NOT collapsing against the baht. It ran up quite a bit in the last 18 months due to the Fed raising rates. It's now still higher than it was before the big run up. 

 

Relax. The USD will hang around current levels for many months. It's at times like this, when people like you, get nervous that they make a foolish decision with their money. You'll be fine and your $25k will not erode like you are afraid of. 

 

Hang in there and relax. Things will be fine.

This is the answer.

 

USD isn't going to collapse despite what the alarmist's say

Edited April 6, 2023 by kwonitoy

[HuskerDo2]

Just now, Neeranam said:

USD has been losing 10% +for years. Don't you know how much they are printing?

"USD has been losing 10% +for years".... that's not a true statement. Yes, they are printing a lot of money but so are other countries. The global financial system and the amount of debt many countries carry is indeed insane but it is what it is thanks to the corrupt politicians everywhere. 

[Neeranam]

8 minutes ago, HuskerDo2 said:

"USD has been losing 10% +for years".... that's not a true statement. Yes, they are printing a lot of money but so are other countries. The global financial system and the amount of debt many countries carry is indeed insane but it is what it is thanks to the corrupt politicians everywhere. 

The USD has lost 99.88 % of its value against Bitcoin over the past 10 years.

 

https://uk.investing.com/news/cryptocurrency-news/michael-saylor-says-dollar-lost-9988-of-purchasing-power-to-bitcoin-over-last-decade--dogecoin-creator-reacts-2957351

 

[HuskerDo2]

Just now, Neeranam said:

The USD has lost 99.88 % of its value against Bitcoin over the past 10 years.

 

https://uk.investing.com/news/cryptocurrency-news/michael-saylor-says-dollar-lost-9988-of-purchasing-power-to-bitcoin-over-last-decade--dogecoin-creator-reacts-2957351

 

Bitcoin.... HAHAHAHAHA!!! Monopoly money. Show me where the USD lost 10% + for years as you previously stated and I mean against REAL currency and REAL countries. You can't.

[nigelforbes]

3 minutes ago, Neeranam said:

The USD has lost 99.88 % of its value against Bitcoin over the past 10 years.

 

https://uk.investing.com/news/cryptocurrency-news/michael-saylor-says-dollar-lost-9988-of-purchasing-power-to-bitcoin-over-last-decade--dogecoin-creator-reacts-2957351

 

Anyone can say whatever they want and then get it quoted in print, it doesn't mean it's true or mean anything at all. It's nonsense, read the article, it says absolutely nothing.

[Chicksaw]

Sell dollars and buy bitcoins to hedge against the dollar falling 80%? Hmm, I see a GoFundMe campaign coming: Family asking help as Dad loses all in hare-brained scheme.

 

Seriously, dude, don't do stupid things for $25k. That's pisspot money. Millions? Maybe.

 

And the dollar isn't going anywhere anytime soon. Sure a lot of international trade is dedollarized. But is the demand for the dollar decreasing? Is China divesting its $ bond, treasuries holdings? Is India? Is Thailand? Because they don't want to lose money any more than you do? When this starts to happen is when to start thinking. Zero signs as of now.

Edited April 6, 2023 by Chicksaw

[Clarkey611]

Get your previous incumbent re-elected. The current incumbent just prints dollars and devalues the whole financial sector.

[Neeranam]

40 minutes ago, HuskerDo2 said:

Bitcoin.... HAHAHAHAHA!!! Monopoly money. Show me where the USD lost 10% + for years as you previously stated and I mean against REAL currency and REAL countries. You can't.

People laughed when I bought bitcoin at $1500 in 2016. They weren't laughing when I sold at 18K less than 2 years later, and $55k 5 years later. 

I mean the USD is losing value due to inflation and money printing, this is obvious and if you think otherwise, fool you. 

The US Dollar is finished, due to a corrupt government and $30 trillion in debt, which they will never be able to pay off. 

[Neeranam]

4 minutes ago, Clarkey611 said:

Get your previous incumbent re-elected. The current incumbent just prints dollars and devalues the whole financial sector.

Trump certainly did better for the US economy than those before and after, partly as he wouldn't start wars thousands of miles away. 

Dear oite his wisdom, he was fighting a losing battle due to Obamas incompetence. 

[sqwakvfr]

The USD will collapse when the $100 dollar bill is no longer the means to complete other than the legal transactions.  I have seen the $100 dollar in some of the most remote places in the world.  

[sidjameson]

I'll sign a legally binding contract to exchange your dollars at only a 10% loss against today's value. ????

[save the frogs]

My (vague) understanding of bitcoin is that is a competitor for government central bank digital currencies, which many govts are preparing to roll out. 

So govts will cause the value of bitcoin to collapse?

At least that's one theory out there.

 

https://futurism.com/harvard-professor-in-the-long-run-the-price-of-bitcoin-will-collapse

Bitcoin's price bubble will burst under govt pressure.

 

"It is folly to think that bitcoin will ever be allowed to supplant central-bank-issued money," 

[HuskerDo2]

Just now, Neeranam said:

People laughed when I bought bitcoin at $1500 in 2016. They weren't laughing when I sold at 18K less than 2 years later, and $55k 5 years later. 

I mean the USD is losing value due to inflation and money printing, this is obvious and if you think otherwise, fool you. 

The US Dollar is finished, due to a corrupt government and $30 trillion in debt, which they will never be able to pay off. 

You don't know much about the financial world do you? The US doesn't need to pay off the debt. They just need enough to pay the interest on it. Yes, they do need to lower it and hopefully that will happen when the Dems are no longer in the White House.

 

What is it that the dollar is losing 10% each year to as you stated? You can't answer that because it's NOT losing that much ground to anything and never will. ALL currencies lose money to inflation the dollar is no exception and as I mentioned before all countries are printing more and more money.

 

You tout Bitcoin yet you sold it. Why? If it's so great why didn't you hold it? Your stated buy/sells are words only and unproven so I'll call your comments a lie for now as you have such little knowledge of the financial world.

 

My grandfather bought all his grandchildren 2 shares of BRK-A (at the time there was only BRK). He met Warren Buffett before he was famous at a business meeting and said he was genius so he bought us all 2 shares. At today's closing the price was $478,005. I will never sell these shares as I don't need the money. I'd have to say grandpa's investment in BRK squashes your bitcoin nonsense.

 

 

 

 

 

 

 

 

[nigelforbes]

1 minute ago, save the frogs said:

My (vague) understanding of bitcoin is that is a competitor for government central bank digital currencies, which many govts are preparing to roll out. 

So govts will cause the value of bitcoin to collapse?

At least that's one theory out there.

 

https://futurism.com/harvard-professor-in-the-long-run-the-price-of-bitcoin-will-collapse

Bitcoin's price bubble will burst under govt pressure.

 

"It is folly to think that bitcoin will ever be allowed to supplant central-bank-issued money," 

It's one thing for individual countries/Central Banks to issue digital currencies that replace their own currency, but it's something else entirely to have a single global digital currency. Individual digital currencies would be valued on the economy of that country, much in the same way that individual currencies are at present, instead of the FOREX we might have something like the DIGIEX. Currently, USD sits at the top of the FOREX, all other currencies are valued or calculated based on USD. But how would DIGIEX work, what would sit at the top of the DIGIEX tree?

 

Again, currently, the value of USD is measured using the value of six other currencies, YEN, EURO, Pound, CAD. Swedish Krona and Swiss Franc. If we were to replace USD with that basket of economies (not basket of currencies) and add others to it such as YUAN, that could be the unit of measure against which DIGIEX uses to calculate the value of individual digital currencies. So one THAI-DIGIEX might be worth 0.40 UK-DIGIEX for example, and so on. But really, all that's happened in that scenario is that digital money has replaced paper money,, using the same system, except reliance on USD has been eliminated.

 

Tryin to equalize all of those individual DIGIEX's so that one THAI DIGIEX equals 1 UK-DIGIEX is impossible because the relative value of the respective economies is different, that's why a global BITCOIN wont work. Mostly it wont work because it's not based on anything, apart from air and trendy demand.

 

 

 

[Lacessit]

Best hedge against currency of any kind is precious metals. Gold, silver ( both going gangbusters ) platinum, palladium.

I've made and lost money on shares and property investment. I have never ever lost money on precious metals.

Bitcoin? Something I can't see, hear, feel or touch? It has all the characteristics of a religion, and we all know how leaders of religions fare compared to their followers. Google the net wealth of David Miscavige, Brian Houston, and Jerry Falwell.

Edited April 6, 2023 by Lacessit

[save the frogs]

16 minutes ago, nigelforbes said:

single global digital currency.

not sure the article mentions single global digital currency.

i think countries that roll out digital currencies don't want bitcoin interfering.

but your knowledge of finance is greater than mine.

 

there's another concept that i came across ... not sure if it's off topic ..

this guy was a top financial guy in Greece.

sounds like they want to put everyone's money in a central digital bank and then everyone gets a digital wallet connected to the digital bank. but not sure if that affects the USD. 

 

Yanis Varoufakis on why we should let the banks burn

https://www.youtube.com/watch?v=lbji8utP6dU&t=1297s

 

[nigelforbes]

3 minutes ago, save the frogs said:

not sure the article mentions single global digital currency.

i think countries that roll out digital currencies don't want bitcoin interfering.

but your knowledge of finance is greater than mine.

 

there's another concept that i came across ... not sure if it's off topic ..

this guy was a top financial guy in Greece.

sounds like they want to put everyone's money in a central digital bank and then everyone gets a digital wallet connected to the digital bank. but not sure if that affects the USD. 

 

Yanis Varoufakis on why we should let the banks burn

https://www.youtube.com/watch?v=lbji8utP6dU&t=1297s

 

Sure, I merely extrapolated what I thought would be the ultimate scenario in the minds of many people.

 

The issue for me in all of this is relative pricing, how/who/where is the value or worth of one Thai digital coin, compared to the value or worth of another country's coin? Right now, that relative worth or value is established directly or indirectly via USD and the FOREX, what will replace that? One person in Thailand says I'll buy a US widget from America that costs one USD digital coin, except the Thai buyer is only holding Thai digital coins, which have a different value. 

 

National digital currencies are not an issue, that's a straight replacement for paper money.....go for it. But the exchange rate/value issue is a biggee and I don't see anyone talking about that.

 

[save the frogs]

3 minutes ago, nigelforbes said:

National digital currencies are not an issue, that's a straight replacement for paper money.....go for it. But the exchange rate/value issue is a biggee and I don't see anyone talking about that.

sorry, no idea about exchange rates.

so any money sitting in bank accounts will be directly converted to digital currencies? 

ok, i'll take your word for it.

thanks.

[nigelforbes]

3 minutes ago, save the frogs said:

sorry, no idea about exchange rates.

so any money sitting in bank accounts will be directly converted to digital currencies? 

ok, i'll take your word for it.

thanks.

Hypothetically, it might be, we're doing a lot of futuristic surmising here.

 

I recall in the 1970's I was hold Deutschmarks in my bank account, one day the bank wrote to me and said, we've converted your DM's to Euro's....so why not.

 

 

[Drumbuie]

1 hour ago, Neeranam said:

People laughed when I bought bitcoin at $1500 in 2016. They weren't laughing when I sold at 18K less than 2 years later, and $55k 5 years later. 

I mean the USD is losing value due to inflation and money printing, this is obvious and if you think otherwise, fool you. 

The US Dollar is finished, due to a corrupt government and $30 trillion in debt, which they will never be able to pay off. 

Are you by any chance in the cryptocurrency sales business? 

[buick]

your thai broker should have something that allows you to make 'bets' on the exchange rate for THB/USD.  you made need to sign paperwork to get approval for foreign exchange trading.  talk to your broker.

[gamb00ler]

10 hours ago, Neeranam said:

USD has been losing 10% +for years. Don't you know how much they are printing?

Here's a chart of 35+ years of the US$ vs a basket of other major currencies.  Since pointing is a thing in Thailand, please point to the decline you're referencing.  

https://www.cnbc.com/quotes/.DXY

 

Edited April 7, 2023 by gamb00ler

[gamb00ler]

10 hours ago, Neeranam said:

The USD has lost 99.88 % of its value against Bitcoin over the past 10 years.

 

https://uk.investing.com/news/cryptocurrency-news/michael-saylor-says-dollar-lost-9988-of-purchasing-power-to-bitcoin-over-last-decade--dogecoin-creator-reacts-2957351

 

A lot of Las Vegas visitors leave with more than they started with.... but....

 

[ed strong]

So only poor people post on this forum then lol !?

 

You would be surprised at some the activities of millionaires, I know one who does Uber trips from time to time and others who spend all day on twitter and others juts get pissed in bars and eat at expensive restuarants. Even 'balling' as you put it can get boring if you do the same thing all the time.

Edited April 7, 2023 by Pink Mist
Deleted post removed from response

[uncletiger]

13 hours ago, HuskerDo2 said:

Not sure what you're reading (or smoking) that makes you believe the US dollar would lose 80% against the baht. It wouldn't lose amount or anywhere close to it against ANY other currency. The dollar is NOT collapsing against the baht. It ran up quite a bit in the last 18 months due to the Fed raising rates. It's now still higher than it was before the big run up. 

 

Relax. The USD will hang around current levels for many months. It's at times like this, when people like you, get nervous that they make a foolish decision with their money. You'll be fine and your $25k will not erode like you are afraid of. 

 

Hang in there and relax. Things will be fine.

Hi Husker. Thanks for your opinion. I don't buy insurance because I expect to have an accident though. I buy it in case there is a catastrophe. This is no different. I'm looking to protect myself in case the worst really does happen. The argument stands irrespective to the probability of it becoming reality. So I'm still looking to protect myself against this possibility.

 

[uncletiger]

10 hours ago, buick said:

your thai broker should have something that allows you to make 'bets' on the exchange rate for THB/USD.  you made need to sign paperwork to get approval for foreign exchange trading.  talk to your broker.

Hi Buick. Thank you for your reply. Yes, I do have a derivatives account from a broker here in Thailand that allows me to buy and sell USD futures. And if I was going to long the dollar I would understand how this works. I just don't have any experience at shorting an asset, and I am trying to understand the basic concept. Clicking on a button to buy is easy, but how do I short a TFEX symbol when it isn't in my portfolio?