Dollar Going To ######, What Should I Do?

[Harmonica]

Back to base!  Yangpuss, have you done anything to your CD holdings based on what has transpired here?

Have your questions been answered, or is there more confusion than before?

Foreigners and foreign banks -- where do you stand on this now?

Harmonica,

I'm still just listening and waiting. For a reason too complicated to go into, I haven't been able to do anything with my money in the last month even if I had figured out what to do. I appreciate these discussions very much. I think you may very well be right, Harmonica. Though I don't think you're right that the dollar will "skyrocket," I think that's almost inconceivable. But it may well go up a bit, and that will be the opportunity to move out of the dollar into some other stable currency that isn't going to put me through all this anxiety. But exactly which currency(ies) to move into...this I still haven't decided, although I feel strongly that it should be a pegged currency.

I think you are correct about Gates and Buffett and the pseudo-experts. I would tend to believe the opposite of what they say about the future of the dollar. I mean, how can they say things like that, knowing the impact that their statements will have on the market and people's perceptions. Perhaps they are trying to drive the dollar down so they can feast on the wildebeast, as you say.

Right now, I'm planning on going to Vietnam very soon and hopefully will want to stay there. So I'm trying to find out if I could open a VN bank account and if my money would be safe there. Have only just started to research this. Maybe that would be a good idea, maybe not.

Very pleased to hear that you did not panic and divest your investment CDs -- as you may well have noticed, the USD Index has rallied from the December 29th bottom. Whether this bottom is significant, we are yet to find out; but the rally has at least afforded you some respite and that's a good thing to have. Some space to think!

Why not open that account with HSBC in Singapore (physically, as opposed to a pseudo-Sing account in LOS)? Its easy to do -- via mail actually! Hold the currency of your choice -- check out the website. This way you dispense with a plethora of liabilities that plague the foreigner living in this region.

Best of luck

Harmonica, what's special about HSBC in Singapore? Why is it better to open an account there instead of HSBC in Bangkok or Ho Chi Minh?

Its almost like holding a gun -- only much more powerful when compared with having an account in either LOS or Nam -- or for that matter, anywhere else in SE Asia. Very professional and progressively cognizant of infinitesmal changes in technology and customer service standards -- restrictions, if any, are clearly stated, in English, I might add and don't just simply change on a whim and leave the foreigner kicking himself in the ass -- fees for outbound transfers can be stiff, but, last time I checked, LOS has similar stiff penance for outbound moolah.

Singapore is America's first-born and will always be faithful to Big Daddy; a US passport there goes a loooong way ... at least until China/US relations take a turn for dire straits -- not expected for yet some time to come.

With the above as a backdrop, add the harrowing thought that if and when things sour in LOS or Nam or (fill in the blanks) and currency regulations are changed, fiddled with or fudged -- and enforced overnight -- you will sleep soundly for you will have dispensed with this liability by not being in the loop.

To not be in the loop .... entirely -- one must exercise restraint and NOT open that account at any of the HSBC offices located physically in LOS -- be thoroughly independent of LOS by opening the account fully and ONLY on Sing soil! That's the ticket, amigos!

Keep Sing as your ace-in-the-hole!

Then have a Negra Modelo on me!

[chuchok]

last time I looked,China had 2.5 million...Christ,thats more than half the population of NZ

<{POST_SNAPBACK}>

It's not the size of the gun, it's the power of the shot!

<{POST_SNAPBACK}>

Yep I agree,but you need an &lt;deleted&gt; load of shot......

[Braccobaldo]

... I remind you to the title of this thread...actually dollar trend is up...1,283...(vs.Euro)...heading for 1,2 or it will be back soon to 1,3+...

...yours forecasts are welcome....

[HumbleFlyer]

Just bring more....

[toastwars]

The US is paying for its mistakes over the last ten years. If a country continually focuses on keeping inflation down(even if there was no sign of any serious rise) by cutting back on government spending and a decade of rabid deregulation it will cause a massive trade deficit problrm that the US is now experiencing. I cannot predict how long this downslide will cotinue, but the bush administration with its contiued thinking along these lines has done nothing to address these problems so I think untill the dollar slides to unprecidented lows, nothing will be done. US currency holders will contnue to suffer these losses, get rid ASAP

[Harmonica]

Depending then on how the USA and China reacts... how things are handled on both sides... the dollar will move up, or down. Up if the USA shows strength and Down if it does not. As soon as any conflict begins... buy Gold.

Rav,

My apologies if this offends you -- nothing personal

"experts" are always laying this kind of BS on the public -- and getting away with it!!

>>>>>the dollar will move up, or down. Up if the USA shows strength and Down if it does not.>>>>>>

Your statement above is what I'm referencing and for your edification I am presenting a chart history of the USD Index and the Dow Jones -- side by side and both to the same Logarithmic scale -- no tricks, no gimmicks, just the actual Price history since 1970 approx.

I created this superimposition in Metastock, a technical analysis software made by Equis International (now Reuters).

As is readily observeable, there is no DIRECT correlation or relationship between the two -- the Dow Jones or S&P500 could be used -- same result.

Example 1985-1992 -- dollar was crashing while Dow and Economy were accelerating upwards.

From 1970-1980 -- dollar going down while Dow flatlining.

From 1995-2000 -- they went up together.

And since Oct 2002 you know that they've been moving in opposite directions.

This is a commonly misunderstood and misrepresented DATUM and causes investors untold sorrow as it is severely flawed -- but, would any EXPERT bother to clear this up? &lt;deleted&gt; no!

Again, no hard feelings, amigo.

[LaoPo]

Bush Aministration plans to cut 10% of the Deficit...**

By cutting down on:

*Social Securities

*Education

*Environment Protection

*Agriculture

only exception:

*Defense budget: to be raised by 4.8%...

The message also states that the low Dollar is due to the immense deficit..and thus can be lowered by taking these steps

Poor America...Poor World...Sleep Well

**Deficit, according to this message, will be lowered (1 year) from 427 Billion down to 390 Billion US $

LaoPo

Edited February 8, 2005 by LaoPo

[Harmonica]

The experts said the U.S. trade deficit was behind the dollar's decline, which was nonsense.

The fellow in the street says the same -- or has he learned this from the experts?

Fact is, albeit logical, there is NO correlation between the USD and the Deficit!!

[Harmonica]

"He's whittling on a piece of wood and when he stops whittling, something is going to happen!"

Something is soy-tenly happening -- he's made up the entire loss since Jan 3, 2004 -- but counting from the 2004 TOP he's captured 40% of the loss!

My premise was that this is the turning point of the century -- it may very well be -- but why take chances?... why play foolishly when there is a smarter way?

Here's what I mean:

Trending markets go up in waves with definite crests and troughs -- it is highly likely that USD will crest (i.e. 1st crest) at the pink line or the green line (shown in chart and pointed to by red arrows. The green is the 200-day MA and the pink is a trendline. Both resistances are strong enough to repel the champ .. for the time being anyway.

Somewhere in this region then, I will take PROFIT and wait patiently for him to retrace (go lower, recharge?, reload, and then re-attempt a blast thru' of the 200-day).

If then, at the next retrace, the momentum picture has not been violated, I will play with a bigger chunk of capital --- and so on after the next retrace.

God do I love it so!

[jerry921]

Wow -- I read the first couple of pages and then went into scan mode and even wore that out by page 10 -- so I didn't read all the above and may agree with some previous posters by repeating what they said.

To OP, my 16 cents. And I'm not an economist, but I read it ("The Economist")

Gold: forgetaboutit. Its gambling. Gold has a really good year about once every 20 years. 2004 was its first good year since ... I forget, about 20 years ago. 2004 was the year the pros made money in gold, 2005 is the year they have to unload it on the punters.

Diversification is good. Right now all your assets are in US$, so you're not diversified. There's risk in that. But if you converted all of it right now to one other currency you'd be no more diversified than you were before, and you'd be taking a huge timing risk on top of that. So if you're going to diversify out of all US$, then you need to own several currencies, and that's going to be a hassle. I liked the posts suggesting pounds & euros.

Look at your overall situation. This includes the fact that you've got an unknown future payable coming in from social security. You can't diversify that out of dollars, so if you wanted to go into thirds with pounds and euros you'd have to move more than 2/3 of your CD's overseas.

To help you think unemotionally, try to guestimate what your future SS benefit will be. You can get a report from them for free and I think it will tell you what your benefit will be assuming no program changes. Then you can figure "what's the chance of that happening?". Well, not great. But what's the chance you'll get nothing? They can't just kill it totally, there'd be a revolution. (Well, maybe just mass impeachments). Why don't you take 3/4 of what they say you'll get and plan on that? You can't do anything to control it, but you can plan for it.

I agree with "don't cash all your CD's now" both for the reasons above and because if you make a move out of dollars you should do it gradually. You're not interested in trying to time the FOREX top or bottom or local-peak or local-trough. You just want to CYA. So instead of going for "optimal", attempt to hit "average". You do this by trading regular amounts at regular intervals over a long time. You can fudge that by projecting when each CD is going to come due and dividing up the amount into equal chucks based on the number of months until the CD after that comes due. Then you move money regularly, on the first of each month, or the 15th, or whatever your lucky number is, it doesn't matter in the long run. You want to do what's called "dollar cost averaging". Its a very powerful risk reducer if done faithfully.

It sounds to me as if you are among the most conservative of investors in terms of your money management. Its really hard to find someone more conservative than "all cash". Investing in risky stuff will tear you up, you won't be able to sleep at night, you'll worry yourself to death and pull out the instant the weather changes. Its not worth it. You're not like those guys trying to make a small fortune out of a large one, you shouldn't take their advice or even fret over it.

To everyone:

They say its a rule of economics that a country can fix (control) either its exchange rate or its interest rate, but never both (except maybe for a short time). The US is and, IMHO, will continue to prefer to control interest rates when they have to choose. FOREX will be the dog's tail. This is because high interest rates would hurt our economy much more than a cheap dollar would. Some people argue a cheap dollar will help the US economy, others say its really hard. US interest rates are clearly headed up, but no one knows how fast or how far. Greenspan & co want to adjust at a "measured" pace. A weaker dollar won't be a disaster for people in the US, especially if we can achieve it gradually. So I think the Treasury and Fed are trying to talk a strong dollar (because if they didn't there would be panic) while they let market forces slowly bring it down. This might not work forever, and we could get a shock, but then again, it might keep working for a good while. For one thing, all the forces that are going to cause the predicted dollar crash are not all going to get turned on at once. What if China decided to suddenly dump all its T-bills? The dollar would crash and China would lose a huge bundle of money. So they likely wont do that. I think Bush knows enough economics to know we've (I'm american) got these foreigners who took our paper by their nuts. They will cooperate for their own best interests in avoiding a crash. They will have to free their pegs, or else they wont be able to control their own domestic interest rates, but of course they will do it gradually, because a big shock is in no ones interest (except Soros).

Now the Baht seems to me to be tied to the dollar, pretty much. This doesn't really make sense for Thailand, since it does not a huge percent of its foreign exchange with the US. I saw a chart once... I think the biggest trading partner for Thailand was China. If that's true, and if the Baht is loosly tied to the dollar, as the fluctuations seem to indicate, then when the dollar moves vs the yuan, the baht will move with it, unless Thailand wants to lose control of its interest rates. They won't want that, so the baht seems likely to go up a bit vs the dollar and down a bit vs the yuan. But all this is medium-term (next 5-10 years). OP has to worry about the long term (15 years to retirement, maybe 30 years in all). I don't think Bush will have time to turn the dollar into the Lira, and I don't think future presidents want to. Somebody will run on an austerity platform and get elected and pull the pendulum back towards the middle. US forex and budget imbalances are not out of control yet. True, they might get out of control, but it looks very much like Bush is, in his second term, going to tack back towards prudence. We are at war, it makes sense to run a deficit during war, but we won't be at war forever, the people wont put up with it. Bush won by only a few % of the vote. If Kerry had won he'd already have declared victory and started to bring the troops home quickly before it was obvious he was quitting (rather than winning) the war.

Gee I wrote too much. Oh well.

[Braccobaldo]

...lllong and interesting opinion, Jerry...

...US economy is doing better than the past..proof of that is that Greenspan was able to raise rates many times...good sign to me...oil is on the downside (same gold,I think)...international situation is quite better than some months before...

...absolutely NO PROBLEM at the moment!!!!!

If nothing happen, this year will be good for stocks and for the dollar....

regarding the Bath...when(and if)China will revalue the yuan, the Bath will follow closely like all others asian currency.

Bush administration are making strong pressure on China about the revaluation of the yuan...this will help (in their opinion) US economy.....????

the yuan is the real question for this year....a move there can open many differents scenarios..my hope is...better they wait more...so that we can take profit from this 2005 for the moment.....GOOD LUCK TRADERS!!!!!!!!!!

P.S.

Harmonica got reason...US deficit and US dollar..two separate worlds

[Harmonica]

So much talk here about the Dollar and Gold -- and interesting it is for sure -- but do you fellows have any idea about how these 2 entities have related to, struggled against, each other ? .. and, since antediluvian times, I might add!

[Harmonica]

Deep into the desert and bereft of vigor at point 1 and seeing only his own footsteps in the sand, USD sent up his final distress call -- at point 2, partially invigorated by a sudden appearance of inner strength, but still not having received an answer from God, he moaned, "Lord why have you forsaken me?" .... At point 3, the miraculous intervention that was sought, answered in a soft voice, "those were my footsteps son, when I had to carry you!"

With that he rose and dealt a deadly blow to his nemesis, Gold. From that point on, for 7 years he never looked back.

Will point 5 be similar to point 4 or will it surpass it in duration and extent?

[Yangpuss]

Thanks for explaining to me why it's better to bank in Singapore, fellas. Now I would have thought that HSBC in one country would be the same as HSBC in another country. But what I hear you saying is that HSBC in each country has different regulations it must follow, depending on the government. And that if a government had an idea about taxing your interest income or something, they couldn't do it if your money was in another country, is that correct?

I guess Singapore is okay if i can open an account by mail, but I don't want to have to go there. I expect to be living in Northern Vietnam. Might an HSBC in Hong Kong be just as good for me as one in Singapore?

I guess you all have positive feelings about HSBC. Is it better than other international banks, like Citibank?

I wonder if it would be a better choice than Everbank in the US. Would my money be guaranteed against bank failure at HSBC?

I just checked their website. Well, they have foreign currency accounts but don't give the rates--insist you must telephone them (in the UK) to get the rates! That's out of the question. I will need them to be available via email or secure bank mail. Have had enough hassles with banks in the US that don't allow you to contact them over the net.

Or is there a way?

[Yangpuss]

Wow -- I read the first couple of pages and then went into scan mode and even wore that out by page 10 -- so I didn't read all the above and may agree with some previous posters by repeating what they said.

To OP, my 16 cents.  And I'm not an economist, but I read it ("The Economist") 

Gold: forgetaboutit.  Its gambling.  Gold has a really good year about once every 20 years.  2004 was its first good year since ... I forget, about 20 years ago.  2004 was the year the pros made money in gold, 2005 is the year they have to unload it on the punters.

Diversification is good.  Right now all your assets are in US$, so you're not diversified.  There's risk in that.  But if you converted all of it right now to one other currency you'd be no more diversified than you were before, and you'd be taking a huge timing risk on top of that.  So if you're going to diversify out of all US$, then you need to own several currencies, and that's going to be a hassle.  I liked the posts suggesting pounds & euros. 

Look at your overall situation.  This includes the fact that you've got an unknown future payable coming in from social security.  You can't diversify that out of dollars, so if you wanted to go into thirds with pounds and euros you'd have to move more than 2/3 of your CD's overseas. 

To help you think unemotionally, try to guestimate what your future SS benefit will be.  You can get a report from them for free and I think it will tell you what your benefit will be assuming no program changes.  Then you can figure "what's the chance of that happening?".  Well, not great.  But what's the chance you'll get nothing? They can't just kill it totally, there'd be a revolution.  (Well, maybe just mass impeachments).  Why don't you take 3/4 of what they say you'll get and plan on that?  You can't do anything to control it, but you can plan for it.

I agree with "don't cash all your CD's now" both for the reasons above and because if you make a move out of dollars you should do it gradually.  You're not interested in trying to time the FOREX top or bottom or local-peak or local-trough.  You just want to CYA.  So instead of going for "optimal", attempt to hit "average".  You do this by trading regular amounts at regular intervals over a long time.  You can fudge that by projecting when each CD is going to come due and dividing up the amount into equal chucks based on the number of months until the CD after that comes due.  Then you move money regularly, on the first of each month, or the 15th, or whatever your lucky number is, it doesn't matter in the long run.  You want to do what's called "dollar cost averaging".  Its a very powerful risk reducer if done faithfully.

It sounds to me as if you are among the most conservative of investors in terms of your money management.  Its really hard to find someone more conservative than "all cash".  Investing in risky stuff will tear you up, you won't be able to sleep at night, you'll worry yourself to death and pull out the instant the weather changes.  Its not worth it.  You're not like those guys trying to make a small fortune out of a large one, you shouldn't take their advice or even fret over it.

To everyone:

They say its a rule of economics that a country can fix (control) either its exchange rate or its interest rate, but never both (except maybe for a short time).  The US is and, IMHO, will continue to prefer to control interest rates when they have to choose.  FOREX will be the dog's tail. This is because high interest rates would hurt our economy much more than a cheap dollar would. Some people argue a cheap dollar will help the US economy, others say its really hard. US interest rates are clearly headed up, but no one knows how fast or how far.  Greenspan & co want to adjust at a "measured" pace.  A weaker dollar won't be a disaster for people in the US, especially if we can achieve it gradually.  So I think the Treasury and Fed are trying to talk a strong dollar (because if they didn't there would be panic) while they let market forces slowly bring it down.  This might not work forever, and we could get a shock, but then again, it might keep working for a good while.  For one thing, all the forces that are going to cause the predicted dollar crash are not all going to get turned on at once.  What if China decided to suddenly dump all its T-bills?  The dollar would crash and China would lose a huge bundle of money.  So they likely wont do that.  I think Bush knows enough economics to know we've (I'm american) got these foreigners who took our paper by their nuts.  They will cooperate for their own best interests in avoiding a crash.  They will have to free their pegs, or else they wont be able to control their own domestic interest rates, but of course they will do it gradually, because a big shock is in no ones interest (except Soros). 

Now the Baht seems to me to be tied to the dollar, pretty much.  This doesn't really make sense for Thailand, since it does not a huge percent of its foreign exchange with the US.  I saw a chart once...  I think the biggest trading partner for Thailand was China.  If that's true, and if the Baht is loosly tied to the dollar, as the fluctuations seem to indicate, then when the dollar moves vs the yuan, the baht will move with it, unless Thailand wants to lose control of its interest rates.  They won't want that, so the baht seems likely to go up a bit vs the dollar and down a bit vs the yuan.  But all this is medium-term (next 5-10 years).  OP has to worry about the long term (15 years to retirement, maybe 30 years in all).  I don't think Bush will have time to turn the dollar into the Lira, and I don't think future presidents want to.  Somebody will run on an austerity platform and get elected and pull the pendulum back towards the middle.  US forex and budget imbalances are not out of control yet.  True, they might get out of control, but it looks very much like Bush is, in his second term, going to tack back towards prudence.  We are at war, it makes sense to run a deficit during war, but we won't be at war forever, the people wont put up with it.  Bush won by only a few % of the vote.  If Kerry had won he'd already have declared victory and started to bring the troops home quickly before it was obvious he was quitting (rather than winning) the war.

Gee I wrote too much.  Oh well.

<{POST_SNAPBACK}>

Great post, Jerry. You're right, I'm a very conservative investor, and since Bush came in I feel like I'm playing the stock market with the constant ups and downs (mostly downs). He has been an absolute disaster for me. Not just with the weak dollar, but with the low interest rates that absolutely decimated my savings income. Now, I guess this is my fault for not sitting down and planning for the future when he came into office. It wasn't that hard to figure out what his agenda was.

I've never been a methodical enough person to move money at regular intervals the way you describe. I hate tending to finances, have other things I'd rather be doing. So I tend to just do what seems like the smart thing at the intervals when I'm paying attention, giving it as much thought as I can but then wanting to forget about it. That's really what I seek, just to have my money someplace where I don't have to think about it, and it's safe and providing an income.

I think that one mistake that people make when analyzing economic/political situations, is that they assume that leaders of countries will do what's right for their people. I don't buy that. All world leaders are corrupt, they're all puppets of powerful rich interests behind the scenes. They don't worry about losing elections; if the plutocrats are behind them, they can very easily rig any election (as, there is a great deal of evidence, Bush's men did this past November). Furthermore, the parties in the US aren't really antagonists, they're both indebted to big business, just one party a little more so. There really isn't that much difference between them. Bush is one of history's great war criminals, but then so is Clinton, IMO.

The only thing that keeps them from stealing all the peoples' money is the possibility of revolution, which would put their own hides on the line. It's not morality, it's not "doing the right thing" or "the common good," it's just, "what can I get away with?"

The elitists and their lapdogs in the media have been "softening up" the American people to accept "necessary" cuts in Social Security benefits for well over a decade. They've been getting them used to the idea, so that it won't come as a shock, and they will accept it. But most of the arguments why social security has to be cut have counter arguments that don't get any air time in the media. In fact, if there were political will, there wouldn't need to be any cuts at all, could even be increases. But the elitists who run the politicians simply want to steal the Social Security money, get it diverted to themselves, via government contracts for counter productive projects (i.e., anything military-related), tax breaks, stock commissions and other means.

Nevertheless, I have written to SS and know what my projected benefit is, and, as you say, I don't expect to get all of it.

Also, if you're right, and the dollar will slowly slide, it doesn't really make sense to move out of it slowly, does it?

Okay, I apologize for ranting a bit!

[LaoPo]

Thanks for explaining to me why it's better to bank in Singapore, fellas. Now I would have thought that HSBC in one country would be the same as HSBC in another country. But what I hear you saying is that HSBC in each country has different regulations it must follow, depending on the government. And that if a government had an idea about taxing your interest income or something, they couldn't do it if your money was in another country, is that correct?

I guess Singapore is okay if i can open an account by mail, but I don't want to have to go there. I expect to be living in Northern Vietnam. Might an HSBC in Hong Kong be just as good for me as one in Singapore?

I guess you all have positive feelings about HSBC. Is it better than other international banks, like Citibank?

I wonder if it would be a better choice than Everbank in the US. Would my money be guaranteed against bank failure at HSBC?

I just checked their website. Well, they have foreign currency accounts but don't give the rates--insist you must telephone them (in the UK) to get the rates! That's out of the question. I will need them to be available via email or secure bank mail. Have had enough hassles with banks in the US that don't allow you to contact them over the net.

Or is there a way?

<{POST_SNAPBACK}>

1. You are right; all banks have to follow, more-or-less, the domestic country-rules; but I wouldn't worry too much about that.

2. I would choose HSBC-HK instead of S'pore, in your case; it's much closer and more handy if you would live in Northern Vietnam. HSBC is much more Far East oriented than Citibank but if you prefer them, why not?

3. Failure of HSBC: they belong to the (I think) top-50 largest banks in the World...

4. I would send the Managing Director of 'a' Bank a personal email, asking them to contact YOU...of course this depends to the amount you 'bring' to them.

PS: HAVE A LOOK HERE ALSO:

http://www.eagletraders.com/advice/loans_top_banks.htm

Good luck

LaoPo

Edited February 8, 2005 by LaoPo

[Digger]

Thanks for explaining to me why it's better to bank in Singapore, fellas. Now I would have thought that HSBC in one country would be the same as HSBC in another country. But what I hear you saying is that HSBC in each country has different regulations it must follow, depending on the government. And that if a government had an idea about taxing your interest income or something, they couldn't do it if your money was in another country, is that correct?

I guess Singapore is okay if i can open an account by mail, but I don't want to have to go there. I expect to be living in Northern Vietnam. Might an HSBC in Hong Kong be just as good for me as one in Singapore?

I guess you all have positive feelings about HSBC. Is it better than other international banks, like Citibank?

I wonder if it would be a better choice than Everbank in the US. Would my money be guaranteed against bank failure at HSBC?

I just checked their website. Well, they have foreign currency accounts but don't give the rates--insist you must telephone them (in the UK) to get the rates! That's out of the question. I will need them to be available via email or secure bank mail. Have had enough hassles with banks in the US that don't allow you to contact them over the net.

Or is there a way?

<{POST_SNAPBACK}>

My personal experience is that HSBC is a far better bank in Asia than Citibank, however both are as financially secure as you can get in a bank. You might find though that HSBC in Singapore are more foreigner friendly than in Kong Kong - in HKG HSBC is a HUGE bank looking after hundreds of thousands of accounts. In Singapore they are smaller and have a restricted licence in terms of number of branches they can have. End result is that they have to try harder to win clients than say they would in Hong Kong. Also in Singapore, they handle lot of accounts for non residents of Singapore e.g people living in Indonesia, Malaysia, Thailand, Vietnam etc who dont want to keep their money in their respective home country.

Either centre is very secure for banking

[thaiaan]

Thanks for explaining to me why it's better to bank in Singapore, fellas. Now I would have thought that HSBC in one country would be the same as HSBC in another country. But what I hear you saying is that HSBC in each country has different regulations it must follow, depending on the government. And that if a government had an idea about taxing your interest income or something, they couldn't do it if your money was in another country, is that correct?

I guess Singapore is okay if i can open an account by mail, but I don't want to have to go there. I expect to be living in Northern Vietnam. Might an HSBC in Hong Kong be just as good for me as one in Singapore?

I guess you all have positive feelings about HSBC. Is it better than other international banks, like Citibank?

I wonder if it would be a better choice than Everbank in the US. Would my money be guaranteed against bank failure at HSBC?

I just checked their website. Well, they have foreign currency accounts but don't give the rates--insist you must telephone them (in the UK) to get the rates! That's out of the question. I will need them to be available via email or secure bank mail. Have had enough hassles with banks in the US that don't allow you to contact them over the net.

Or is there a way?

<{POST_SNAPBACK}>

1. You are right; all banks have to follow, more-or-less, the domestic country-rules; but I wouldn't worry too much about that.

2. I would choose HSBC-HK instead of S'pore, in your case; it's much closer and more handy if you would live in Northern Vietnam. HSBC is much more Far East oriented than Citibank but if you prefer them, why not?

3. Failure of HSBC: they belong to the (I think) top-50 largest banks in the World...

4. I would send the Managing Director of 'a' Bank a personal email, asking them to contact YOU...of course this depends to the amount you 'bring' to them.

PS: HAVE A LOOK HERE ALSO:

http://www.eagletraders.com/advice/loans_top_banks.htm

Good luck

LaoPo

<{POST_SNAPBACK}>

I would go with HSBC over Citibank because it not an American bank.Also the top bank listings are all Japanese or European with only 1 American bank in the top ten and Citibank down at number 25.I remember what happened to the Argentine banks when their peso and economy collapsed.Avoid American banks!

[Harmonica]

Thanks for explaining to me why it's better to bank in Singapore, fellas. Now I would have thought that HSBC in one country would be the same as HSBC in another country. But what I hear you saying is that HSBC in each country has different regulations it must follow, depending on the government. And that if a government had an idea about taxing your interest income or something, they couldn't do it if your money was in another country, is that correct?

I guess Singapore is okay if i can open an account by mail, but I don't want to have to go there. I expect to be living in Northern Vietnam. Might an HSBC in Hong Kong be just as good for me as one in Singapore?

I guess you all have positive feelings about HSBC. Is it better than other international banks, like Citibank?

I wonder if it would be a better choice than Everbank in the US. Would my money be guaranteed against bank failure at HSBC?

I just checked their website. Well, they have foreign currency accounts but don't give the rates--insist you must telephone them (in the UK) to get the rates! That's out of the question. I will need them to be available via email or secure bank mail. Have had enough hassles with banks in the US that don't allow you to contact them over the net.

Or is there a way?

1. You are right; all banks have to follow, more-or-less, the domestic country-rules; but I wouldn't worry too much about that.

2. I would choose HSBC-HK instead of S'pore, in your case; it's much closer and more handy if you would live in Northern Vietnam. HSBC is much more Far East oriented than Citibank but if you prefer them, why not?

3. Failure of HSBC: they belong to the (I think) top-50 largest banks in the World...

4. I would send the Managing Director of 'a' Bank a personal email, asking them to contact YOU...of course this depends to the amount you 'bring' to them.

PS: HAVE A LOOK HERE ALSO:

http://www.eagletraders.com/advice/loans_top_banks.htm

Good luck

LaoPo

I would go with HSBC over Citibank because it not an American bank.Also the top bank listings are all Japanese or European with only 1 American bank in the top ten and Citibank down at number 25.I remember what happened to the Argentine banks when their peso and economy collapsed.Avoid American banks!

Agree -- HSBC beter choice than Citi and -- avoid American Banks -- YES!

[LivinLOS]

The experts said the U.S. trade deficit was behind the dollar's decline, which was nonsense.

The fellow in the street says the same -- or has he learned this from the experts?

Fact is, albeit logical, there is NO correlation between the USD and the Deficit!!

 

<{POST_SNAPBACK}>

er.. How on earth does an fiscally educated person get this idea..

Deficit = printing money and or borrowing (in this current bubble they appear to be running the presses as fast as the ink will dry)... America is printing its money and handing it to the Chinese and other trading partners to hold. In effect this balance only continues for as long as the Chinese (and others) wish to keep taking them.. As they get more of them and they cant find things to buy from the US to balance the load more hit the 'market' or simply get stockpiled (in gold ?).. A very astute point was made in that its not who holds the assets its where its flowing.. If they keep accumulating more then need to make it 'flow' somewhere to be useful..

Quite simply common sense tells you when you make more of an item and flood the market the intrinsic value of that item goes down.

Look all through history.. Almost every time fiat money has not been backed by commodities it has been printed to worthlessness.. This is historical fact.

Read 'Financial Reckoning Day' (its funny) for examples dating right back to the earliest experiments with paper money to see this effect in action time and time again. Read up on John Law (one of the architects of paper money) and how he inflated himself to one of the richest men in Europe until they saw the emporer had no clothes and he ended life destitute.. Was it Pancho Villa (it was one Mexican bandito turned presidente and his name springs to mind) who created his own notes and then inflated himself to worthlessness (this is what a deficit does).. Look at the german post war cycle.. Look at every case of paper currency printing (even Alan 'bubbles' Greenspan says we are in a point in fiscal history we have never reached before)..

There is a real possibility of global financial meltdown due to this debt crisis.. I am not saying its a high probability but I am saying that those that protect thier assets with 'hard' currency would make out like bandits 'if' this event happens.. They will also do very very well if this event even becomes more likely (and it is doing).. Its simply another hedge..

[Harmonica]

The experts said the U.S. trade deficit was behind the dollar's decline, which was nonsense.

The fellow in the street says the same -- or has he learned this from the experts?

Fact is, albeit logical, there is NO correlation between the USD and the Deficit!!

 

er.. How on earth does an fiscally educated person get this idea..

Deficit = printing money and or borrowing (in this current bubble they appear to be running the presses as fast as the ink will dry)... America is printing its money and handing it to the Chinese and other trading partners to hold. In effect this balance only continues for as long as the Chinese (and others) wish to keep taking them.. As they get more of them and they cant find things to buy from the US to balance the load more hit the 'market' or simply get stockpiled (in gold ?).. A very astute point was made in that its not who holds the assets its where its flowing.. If they keep accumulating more then need to make it 'flow' somewhere to be useful..

Quite simply common sense tells you when you make more of an item and flood the market the intrinsic value of that item goes down.

Look all through history.. Almost every time fiat money has not been backed by commodities it has been printed to worthlessness.. This is historical fact.

Read 'Financial Reckoning Day' (its funny) for examples dating right back to the earliest experiments with paper money to see this effect in action time and time again. Read up on John Law (one of the architects of paper money) and how he inflated himself to one of the richest men in Europe until they saw the emporer had no clothes and he ended life destitute.. Was it Pancho Villa (it was one Mexican bandito turned presidente and his name springs to mind) who created his own notes and then inflated himself to worthlessness (this is what a deficit does).. Look at the german post war cycle.. Look at every case of paper currency printing (even Alan 'bubbles' Greenspan says we are in a point in fiscal history we have never reached before)..

There is a real possibility of global financial meltdown due to this debt crisis.. I am not saying its a high probability but I am saying that those that protect thier assets with 'hard' currency would make out like bandits 'if' this event happens.. They will also do very very well if this event even becomes more likely (and it is doing).. Its simply another hedge..

Agree with your reasoning, but technical data charted shows clearly that there is no definite correlation. Fundamental & technical reasoning disagree very often -- I stick with the technical aspect.

[LivinLOS]

Technical data ??

Everyone seems to forget that this current experiment with totally fiat currency has only been going on for a couple of decades.. In my lifetime in fact.. Compare that with the entire history of money !! Hows that for data !!

A very long eassy / piece detailing some of the history of money (and its conclusion comparing Kublai Kahns China and the destruction of the civilization echo's so closely current blinkered thinking its chilling) can be found here .

Remember these civilizations went for 100's of years before the populace realized that 'I promise to pay the bearer' only means something if the printer actually can do so.. We are now living in a 30 year old experiment in how long it takes a population to realize that this collective (un)consiousness is highly risky.. As with every debt bubble before, those that cash out to convertable assets prior to the population waking up are the lucky few..

[LivinLOS]

I was wrong.. Chinese society and its experiment with unbacked currency (as is the dollar since 1973) lasted only from 1264 (the very small scale start) until inflation took hold in 1287.. The currency devalued until 1310 when it suffered a reissue (remember this was in the day without modern communication and info load)..

One wonderful quote written on the subject

The best families in the empire were ruined, a new set of men came into the control of public affairs

..

This was the demise of the Mongol / Kahn dynasty and started the Ming (I think ?).. Yet this explosion of credit is earily familiar to the current explosion and credit bubble.. Civalizations have crumbled on this factor before and will do so again..

May we live in interesting times..

Edited February 10, 2005 by LivinLOS

[LivinLOS]

Thats the whole point right there.. 'Money' (gold or other commodity money) is then a fixed asset and not subject to infationary pressure (mining additions to global money supply excepted).. Countries are forced to balance thier books or borrow hard currency to do so..

Money should not (if the system is to survive long term) simply be printed to make more money.. You cannot increase real wealth simply by 'printing' it, it has to be worked for and earnt.. Printing money (as governements are doing) simply lowers the value of money out there in the mid to long term.

I fail to see what you mean by

If there were only 1,000 ounces of gold in the world and it was valued at $1 an ounce, then there can only be $1,000 in cash worldwide. Failing this it cannot work. More money can only printed if the value of gold goes up to the same degree.

Of course if there were only 1000 ounces it would not have a value of $1 its not a fixed value item but a floating value item, scarcity would increase costs until they balance or mining and reserves increase supply.

[jerry921]

The experts said the U.S. trade deficit was behind the dollar's decline, which was nonsense.

The fellow in the street says the same -- or has he learned this from the experts?

Fact is, albeit logical, there is NO correlation between the USD and the Deficit!!

 

<{POST_SNAPBACK}>

er.. How on earth does an fiscally educated person get this idea..

Deficit = printing money and or borrowing (in this current bubble they appear to be running the presses as fast as the ink will dry)... America is printing its money and handing it to the Chinese and other trading partners to hold. In effect this balance only continues for as long as the Chinese (and others) wish to keep taking them.. As they get more of them and they cant find things to buy from the US to balance the load more hit the 'market' or simply get stockpiled (in gold ?).. A very astute point was made in that its not who holds the assets its where its flowing.. If they keep accumulating more then need to make it 'flow' somewhere to be useful..

Quite simply common sense tells you when you make more of an item and flood the market the intrinsic value of that item goes down.

Look all through history.. Almost every time fiat money has not been backed by commodities it has been printed to worthlessness.. This is historical fact.

Read 'Financial Reckoning Day' (its funny) for examples dating right back to the earliest experiments with paper money to see this effect in action time and time again. Read up on John Law (one of the architects of paper money) and how he inflated himself to one of the richest men in Europe until they saw the emporer had no clothes and he ended life destitute.. Was it Pancho Villa (it was one Mexican bandito turned presidente and his name springs to mind) who created his own notes and then inflated himself to worthlessness (this is what a deficit does).. Look at the german post war cycle.. Look at every case of paper currency printing (even Alan 'bubbles' Greenspan says we are in a point in fiscal history we have never reached before)..

There is a real possibility of global financial meltdown due to this debt crisis.. I am not saying its a high probability but I am saying that those that protect thier assets with 'hard' currency would make out like bandits 'if' this event happens.. They will also do very very well if this event even becomes more likely (and it is doing).. Its simply another hedge..

<{POST_SNAPBACK}>

Based on those two I think harmonica was just stirring the worms or being sarcastic.

Don't forget the Chinese etc. have other options for their dollars besides buying US Govt Bonds. They could buy U.S. real-estate, like the Japanese did with their surplus trade dollars in the 80's, or buy US Companies, both public and private, or buy more raw materials from the US.

Does anyone know what raw materials or commodities the Chinese are short of and the US has lots of? Wheat or cotton maybe? Steel?

I've been expecting significantly increased inflation here in the US for better than a year, and I was too early. I'm beginning to think that even if this turns into a train wreck it will be a super-slo-mo train wreck. But mostly I think the train wreck has been so universally predicted that something else is bound to happen instead.

[dvk1951]

Perhaps this should be a new thread, moderator please advise

Does anyone have any experience with or knowledege about the money management/investement/advisor group called Sovereign Society.

I receive their weekly news letter which seems to have its finger on the current global financial and economic situation.

Knowledge is a powerful tool

[LivinLOS]

Does anyone know what raw materials or commodities the Chinese are short of and the US has lots of?  Wheat or cotton maybe?  Steel?

Oil... Copper... Also as micro electronic fabbing increases silver becomes important (one reason I am very interested in it lately)..

I've been expecting significantly increased inflation here in the US for better than a year, and I was too early.  I'm beginning to think that even if this turns into a train wreck it will be a super-slo-mo train wreck. But mostly I think the train wreck has been so universally predicted that something else is bound to happen instead.

<{POST_SNAPBACK}>

I dont think you are wrong or early.. I think the inflation numbers keep getting adjusted where they keep pulling oil and other important factors (medicare etc) out of the numbers.. Even so they are still starting to jump heavily.. Watch what happens if a China peg was broken and many Asian currencies rise (against the greenback) with the Yuan / Renimbi.. Up to now many manufacturers have held on to US market share by shrinking profits and bearing higher cost to profit ratios.. Of course these things balance out in the end..

I have to say I am enjoying this discussion.. Wish I had more time for it..

[LaoPo]

Does anyone know what raw materials or commodities the Chinese are short of and the US has lots of?  Wheat or cotton maybe?  Steel?

<{POST_SNAPBACK}>

China is short of: STEEL-STEEL-STEEL and Aluminium in huge quantities; that's also why steelprices rose lately. But I think even the US doesn't have enough supply for China to meet the demand. But there's Europe also. Steelfactories work 24 hours 7 days a week at full speed.

And OIL of course.

China recently lent 6 Billion US $ to Moscow to finance the Oil-merger in Russia in exchange for Oil...

LaoPo

[Yangpuss]

This may sound naive, but WHY is gold the standard of wealth? How did it become so? Is it just because it's pretty, and everyone likes to make jewelry from it?

Maybe I'm at a handicap here because I've never cared much about jewelry. It's nice, but I don't feel compelled to have any.

As I mentioned before, in a world financial catastrophe, people will find that gold has a big problem--you can't eat it.

So what's the big attraction of gold? Isn't its supposed value just an artifact of the fact that people like it?

[Bizz]

This may sound naive, but WHY is gold the standard of wealth? How did it become so? Is it just because it's pretty, and everyone likes to make jewelry from it?

Maybe I'm at a handicap here because I've never cared much about jewelry. It's nice, but I don't feel compelled to have any.

As I mentioned before, in a world financial catastrophe, people will find that gold has a big problem--you can't eat it.

So what's the big attraction of gold? Isn't its supposed value just an artifact of the fact that people like it?

<{POST_SNAPBACK}>

As with all matters of investment, everything is clear in hindsight. Had you bought gold mutual funds earlier this year, they might have appreciated more than 100 percent. Gold has risen $60 since March 2001 to the latest spot price of $326.

Why wasn’t it obvious? The Fed has been inflating the dollar as never before, driving interest rates down to absurdly low levels, even as the federal government has been pushing a mercantile trade policy, and New York City, the hub of the world economy, continues to be threatened by terrorism. The government is failing to prevent more successful attacks by not backing down from foreign policy disasters and by not allowing planes to arm themselves.

These are all conditions that make gold particularly attractive.

Or perhaps it is not so obvious why this is true. It’s been three decades since the dollar’s tie to gold was completely severed, to the hosannas of mainstream economists. There is no stash of gold held by the Fed or the Treasury that backs our currency system. The government owns gold but not as a monetary asset. It owns it the same way it owns national parks and fighter planes. It’s just another asset the government keeps to itself.

The dollar, and all our money, is nothing more and nothing less than what it looks like: a cut piece of linen paper with fancy printing on it. You can exchange it for other currency at a fixed rate and for any good or service at a flexible rate. But there is no established exchange rate between the dollar and gold, either at home or internationally.

The supply of money is not limited by the amount of gold. Gold is just another good for which the dollar can be exchanged, and in that sense is legally no different from a gallon of milk, a tank of gas, or an hour of babysitting services.

Why, then, do people turn to gold in times like these? What is gold used for? Yes, there are industrial uses and there are consumer uses in jewelry and the like. But recessions and inflations don’t cause people to want to wear more jewelry or stock up on industrial metal. The investor demand ultimately reflects consumer demand for gold. But that still leaves us with the question of why the consumer demand exists in the first place. Why gold and not sugar or wheat or something else?

There is no getting away from it: investor markets have memories of the days when gold was money. In fact, in the whole history of civilization, gold has served as the basic money of all people wherever it’s been available. Other precious metals have been valued and coined, but gold always emerged on top in the great competition for what constitutes the most valuable commodity of all.

There is nothing intrinsic about gold that makes it money. It has certain properties that lend itself to monetary use, like portability, divisibility, scarcity, durability, and uniformity. But these are just descriptors of certain qualities of the metal, not explanations as to why it became money. Gold became money for only one reason: because that’s what the markets chose.

Why isn’t gold money now? Because governments destroyed the gold standard. Why? Because they regarded it as too inflexible. To be sure, monetary inflexibility is the friend of free markets. Without the ability to create money out of nothing, governments tend to run tight financial ships. Banks are more careful about the lending when they can’t rely on a lender of last resort with access to a money-creation machine like the Fed.

A fixed money stock means that overall prices are generally more stable. The problems of inflation and business cycles disappear entirely. Under the gold standard, in fact, increased market productivity causes prices to generally decline over time as the purchasing power of money increases.

In 1967, Alan Greenspan once wrote an article called Gold and Economic Freedom. He wrote that:

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense – perhaps more clearly and subtly than many consistent defenders of laissez-faire – that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other… This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.

He was right. Gold and freedom go together. Gold money is both the result of freedom and its leading protector. When money is as good as gold, the government cannot manipulate the supply for its own purposes. Just as the rule of law puts limits on the despotic use of police power, a gold standard puts extreme limits on the government’s ability to spend, borrow, and otherwise create crazy unworkable programs. It is forced to raise its revenue through taxation, not inflation, and generally keep its house in order.

Without the gold standard, government is free to work with the Fed to inflate the currency without limit. Even in our own times, we’ve seen governments do that and thereby spread mass misery.

Now, all governments are stupid but not all are so stupid as to pull stunts like this. Most of the time, governments are pleased to inflate their currencies so long as they don’t have to pay the price in the form of mass bankruptcies, falling exchange rates, and inflation.

In the real world, of course, there is a lag time between cause and effect. The Fed has been inflating the currency at very high levels for longer than a year. The consequences of this disastrous policy are showing up only recently in the form of a falling dollar and higher gold prices. And so what does the Fed do? It is pulling back now. For the first time in nearly ten years, some measures of money (M2 and MZM) are showing a falling money stock, which is likely to prompt a second dip in the continuing recession.

Greenspan now finds himself on the horns of a very serious dilemma. If he continues to pull back on money, the economy could tip into a serious recession. This is especially a danger given rising protectionism, which mirrors the events of the early 1930s. On the other hand, a continuation of the loose policy he has pursued for a year endangers the value of the dollar overseas.

How much easier matters were when we didn’t have to rely on the wisdom of exalted monetary central planners like Greenspan. Under the gold standard, the supply of money regulated itself. The government kept within limits. Banks were more cautious. Savings were high because credit was tight and saving was rewarded. This approach to economics is the foundation of a sustainable prosperity.

We don’t have that system now for the country or the world, but individuals are showing their preferences once again. By driving up the price of gold, prompting gold producers to become profitable again, the people are expressing their lack of confidence in their leaders. They have decided to protect themselves and not trust the state. That is the hidden message behind the new luster of gold.

Is a gold standard feasible again? Of course. The dollar could be redefined in terms of gold. Interest rates would reflect the real supply and demand for credit. We could shut down the Fed and we would never need to worry again what the chairman of the Fed wanted. There was a time when Greenspan was nostalgic for such a system. Investors of the world have come to embrace this view even as Greenspan has completely abandoned it.

What keeps the gold standard from becoming a reality again is the love of big government and war. If we ever fall in love with freedom again, the gold standard will once more become a hot issue in public debate.

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