How can I hedge against a collapsing USD?

[uncletiger]

15 hours ago, Neeranam said:

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

 

Both are easy to buy in Thailand.

Hi Neeranam. Thank you for your suggestion. I actually have sufficient exposure to both Bitcoin and XAU at this point in my portfolio. At this point, I am really looking to hedge my exposure to a USD collapse without increasing exposure to other assets. I view Bitcoin and gold for long term wealth preservation. What I am trying to do now is protect future cashflow.

[save the frogs]

2 hours ago, gamb00ler said:

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

That's funny.

Just watched a video with Neil DeGrasse Tyson.

A bunch of physicists had a conference in Vegas and none of them gambled because they're too good at math.

 

[spidermike007]

13 hours 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. 

People, forget Cheney got that resolution passed, that allowed the entire Iraq and Afghan campaign to be waged "off the books". So, that entire amount was never added to the deficit. Who knows how much that was. 7 trillion? 11 trillion? And who knows how much the accumulated deficit really is. $40 trillion? More? 

 

The US is in trouble, no doubt. An enormous crash is coming. Not a question of if, just when. The Dow dropping to 5,200? US housing prices dropping by 60%. Unemployment at 32%. It could happen. 

 

Where that leaves the baht, and Asia in general, is anyone's guess. 

 

The most striking fact about the cost of the war in Iraq has been the extent to which it has been kept "off the books" of the government's ledgers and hidden from the American people. This was done by design. A fundamental assumption of the Bush administration's approach to the war was that it was only politically sustainable if it was portrayed as near-costless to the American public and to key constituencies in Washington.

 

https://archive.globalpolicy.org/pmscs/52336-how-the-us-public-was-defrauded-by-the-hidden-costs-of-the-iraq-war.html%3Fitemid=id.html

 

 

Edited April 7, 2023 by spidermike007

[Neeranam]

12 hours ago, HuskerDo2 said:

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.

I don't tout bitcoin at all. I just said it is what the wise are buying as a hedge to the collapsing US $. 

Why did I sell? So I could buy more during the bear market, like last October/Nov, I bought Bitcoin. You obviously have no idea of bitcoin cycles/halvening.

I don't like being called a liar and therefore will never see any more of your posts.

[FarAngMoh]

You have a receivable of USD 25,000 coming in 6 months and want to guarantee you’ll end up with THB 850,000 in the end (at the current exchange rate of 34).
 

The way to do this is to take out a 6 month USD 25,000 loan, convert it to THB 850,000 and put it into a 6 month time deposit. Then, 6 months later when you receive the USD 25,000, you pay off the loan and use the interest earned on the time deposit to help defray the cost of borrowing. Hedging is not without some cost, but this is exactly how to do what the OP is asking.

[Pink Mist]

Troll posts and off topic posts have been removed.  Please discuss the OP Topic and stop trolling other posters.

[Neeranam]

42 minutes ago, uncletiger said:

Hi Neeranam. Thank you for your suggestion. I actually have sufficient exposure to both Bitcoin and XAU at this point in my portfolio. At this point, I am really looking to hedge my exposure to a USD collapse without increasing exposure to other assets. I view Bitcoin and gold for long term wealth preservation. What I am trying to do now is protect future cashflow.

You're welcome, good luck. For the last 7 years all my liquid assets are in cryptocurrency, not usually Bitcoin but others. Recently, Bitcoin has proved itself and is starting to do what it was invented for.  There are lots of Luddites here that are scared of blockchain tech and know nothing about it. Just putting a small percentage of your assets into something like Bitcoin has proved better than any other asset over the years. I put all my salary into Bitcoin now and currently using my crypto.com credit card in the UK for nearly everything. There is volatility but a bit of research shows how to handle it best. 

[Neeranam]

Cryptocurrency is an asset class, the first new one for hundreds of years.

Do you realise how silly your question sounds? It's like saying 'are you in the equities sales?' if you talk about Samsung stock.  

 

[Neeranam]

4 hours ago, gamb00ler said:

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

 

I am not talking about the value of the US $ against other fiat currencies.

 

The US $ loses over 10% of it's buying power every year, it would be stupid keeping $US anywhere unless you are getting 15% or so interest.You can't get this in banks, the only way I know is through digital currencies. For example, I get 15% interest on PolkaDot on Kraken, which is a US bank. 

 

[uncletiger]

16 minutes ago, FarAngMoh said:

You have a receivable of USD 25,000 coming in 6 months and want to guarantee you’ll end up with THB 850,000 in the end (at the current exchange rate of 34).
 

The way to do this is to take out a 6 month USD 25,000 loan, convert it to THB 850,000 and put it into a 6 month time deposit. Then, 6 months later when you receive the USD 25,000, you pay off the loan and use the interest earned on the time deposit to help defray the cost of borrowing. Hedging is not without some cost, but this is exactly how to do what the OP is asking.

Hi ForAngMoh. Thank you for that suggestion. I have considered that approach, but I am unaware of any Thai financial institutions that will write USD loans. Are you aware of a financial service provider in Thailand that could offer such an instrument in USD?

 

 

[stoner]

13 hours ago, HuskerDo2 said:

2 shares. At today's closing the price was $478,005

2 shares of brk a are worth 478k ? for real ? wow.

[nigelforbes]

The OP needs to enter the options and futures market, see a broker and buy an option to buy X THB at whatever rate gives you the 25k USD. If you don't make the strike price, walk away from the deal whereas buying a future will commit you to complete the transaction.

[TimeMachine]

Sorry, not sure, but sure would like to be a part of the power groups that are in control of the distribution of wealth. What a magical Harry Potter world it would be. Shall we print money today Harry? Sure, I need a new hat.

[FarAngMoh]

51 minutes ago, uncletiger said:

Hi ForAngMoh. Thank you for that suggestion. I have considered that approach, but I am unaware of any Thai financial institutions that will write USD loans. Are you aware of a financial service provider in Thailand that could offer such an instrument in USD?

 

 

How about an unsecured line of credit back in your home country?

 

Another alternative (if you really want to make a bet against the USD) is to buy a short dollar ETF like UDN that increases when the value of the USD decreases. If you have an account with Interactive Brokers for example, you could buy such an ETF on margin. Just be careful, as this kind of thing can be very risky.

[kwonitoy]

17 hours 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. 

But when you sold bitcoin what spendable currency did you buy? US dollars?

 

Government debt is not meant to be paid off, it's not like a mortgage payment. The economy grows and expands and the debt in a percentage term is reduced

[Neeranam]

45 minutes ago, kwonitoy said:

But when you sold bitcoin what spendable currency did you buy? US dollars?

 

Government debt is not meant to be paid off, it's not like a mortgage payment. The economy grows and expands and the debt in a percentage term is reduced

I sell Bitcoin for Thai baht mostly, as I'm in Thailand, although I top up my crypto card also with UK pounds. 

Although it wouldn't be a bad idea just to go long on Btc, if you understand the cycles, it can be more profitable selling for fiat and buying lower. 

Last October, I sold my house and put everything in Bitcoin and decided to rent for the moment. 

 

I see about the debt, but I would have thought there will be consequences some time. 

Edited April 7, 2023 by Neeranam

[Furioso]

I could see the USD losing 10% vs. the baht, maybe in an extreme case even 20%. But 80% is not even remotely possible. The U.S. has problems but nothing like the vast majority of the rest of the world. 

 

Thailand is a very corrupt country, it's NOT a land of smiles. There's a very small, elite class..and everybody else is screwed. 

[FarAngMoh]

11 hours ago, nigelforbes said:

The OP needs to enter the options and futures market, see a broker and buy an option to buy X THB at whatever rate gives you the 25k USD. If you don't make the strike price, walk away from the deal whereas buying a future will commit you to complete the transaction.

I am not sure why your message did not elicit any response, but I agree that this is another legitimate way to  hedge currency, provided such options or futures contracts are available, and for that kind of dollar amount. However, I believe only forward contracts commit you to complete the transaction, futures contracts are more flexible. There is a cost associated with buying any such contracts, so have to weigh that against the potential savings in the event the USD dives. I really doubt buying this kind of “insurance” will pay off, but that is a separate question from how can it be done.

[nigelforbes]

2 minutes ago, FarAngMoh said:

I am not sure why your message did not elicit any response, but I agree that this is another legitimate way to  hedge currency, provided such options or futures contracts are available, and for that kind of dollar amount. However, I believe only forward contracts commit you to complete the transaction, futures contracts are more flexible. There is a cost associated with buying any such contracts, so have to weigh that against the potential savings in the event the USD dives. I really doubt buying this kind of “insurance” will pay off, but that is a separate question from how can it be done.

Agreed, the  reason for wanting to consider this action isn't valid in my book, personally I would take the risk and do nothing.....but that's me.

[Pink Mist]

A post baiting another poster has been removed. Continue and you will be suspended.

[pomchop]

On 4/6/2023 at 11:55 AM, Clarkey611 said:

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

For all the doomsday about how horrible the US economy is under Biden it certainly appears to me that the vast majority of Americans are doing just fine, living in nice houses, driving nice cars, going on vacations, dining out often, house values at record highs, unemployment at record lows, wages creeping up, and on and on.  Sure there is inflation and that is a problem but I really don't observe the doom and gloom and the sky is falling.

 

Seems to me every bar and restaurant, every hotel and resort, every airplane seat, every concert, play, entertainment venue etc are all close to capacity as people spend a lot of discretionary  $$ on non essentials.  Who knows maybe it will all come tumbling down or maybe it will become the new normal.

 

As for printing $$ some might want to take a look at how the deficit did under the previous administration but of course that would involve having to admit that under the "fiscal responsible" republicans the deficit went to levels never contemplated under ANY previous administration. Oh and we are all still awaiting the long promised republican budget that will solve any and all problems with it's magical math.....IF they ever produce a budget to be inspected rather than throwing rocks at those that actually do produce budgets.  Easy to sit in the bleachers and boo the quarterback.  Not so easy when you ARE the quarterback.

 

 

[realfunster]

10 hours ago, Neeranam said:

I sell Bitcoin for Thai baht mostly, as I'm in Thailand, although I top up my crypto card also with UK pounds. 

Although it wouldn't be a bad idea just to go long on Btc, if you understand the cycles, it can be more profitable selling for fiat and buying lower. 

Last October, I sold my house and put everything in Bitcoin and decided to rent for the moment. 

 

I see about the debt, but I would have thought there will be consequences some time. 

Brave man. Really hope that works out well for you. 

[persimmon]

Some caution is needed when considering using short ETFs - most are only suitable for day trading or very short holding periods . Maybe compare the performance against the actual x rate and see if it matches .

Personally , I can`t see the $ rate changing by such a huge amount , but if I really thought that would happen , I would sell all my $ assets and buy ROTW stuff ( UK , EU etc ) .

[FritsSikkink]

On 4/7/2023 at 3:51 AM, Neeranam said:

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

Bitcoin lost 50 % + 

[FritsSikkink]

On 4/7/2023 at 4:08 AM, 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

 

Michael Saylor says, the man who lost hundreds of millions investing in Bitcoin. what an expert to quote.

[FritsSikkink]

On 4/7/2023 at 4:59 AM, 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. 

So how much money are you worth now? You post things about investments of 50 USD.

[FritsSikkink]

16 hours ago, Neeranam said:

I don't tout bitcoin at all.

90% of your post are about it.

[uncletiger]

16 hours ago, nigelforbes said:

The OP needs to enter the options and futures market, see a broker and buy an option to buy X THB at whatever rate gives you the 25k USD. If you don't make the strike price, walk away from the deal whereas buying a future will commit you to complete the transaction.

Hi nigelforbes, thank you for that suggestion. It's definitely worth considering, but the only futures market I know of here in Thailand is TFEX, and I was not aware they trade options on currency futures. Do you know of a symbol for options on THB futures? Is such an instrument available from a Thailand based financial service?

[nigelforbes]

9 minutes ago, uncletiger said:

Hi nigelforbes, thank you for that suggestion. It's definitely worth considering, but the only futures market I know of here in Thailand is TFEX, and I was not aware they trade options on currency futures. Do you know of a symbol for options on THB futures? Is such an instrument available from a Thailand based financial service?

You would need to ask a broker, whilst I don't know the details I am certain they exist. The central bank buys futures domestically in order to hedge USD, regularly. UOBAM or kasikorn securities may be able to advise, I'll also ask a couple of questions and will revert

[CBDC]

Kind of an on topic question - re importing silver coins like Canadian Maple Leaf 1 ounce or Aussie Kangaroo 1 ounce silver coins [legal tender]. There was quite a bit of info on this here years ago but not so much now. The info back then was that you could bring them in as long as it was not worth more than 40,000 baht at a time, or else you would have to pay import taxes. Does anyone know if that still applies?