Almost every day lately I am reading more and more news about the downward spiral of the US dollar and financial problems in other sectors such as the housing market etc. Now the problems have spread to Europe, Korea and China. Many "experts" are predicting a major recession coming very soon. More and more of the financial news I am reading is saying that to protect ones investments it is best to temporarily move out of the US dollar and go to the euro. In the USA Today, there is yet another story that the euro is becoming the "it" currency.
So that brings me to my question for the financial gurus here that may help all DTR members. As a hedge against inflation, further devaluation of the US dollar, possible major recession etc, would it be advisable to move all savings and investments out of the dollar and into the euro?
This is a every serious question, so please do not turn this into a political issue.

 

I always believe everything the media prints without question. It's not as if they have an agenda or try to be controversial to sell their product.

 

Do I detect a note of sarcasm here? I DO NOT believe everything the mainstream media print so check out non-mainstream news every day. Financial reports from major companies around the world are all saying the same thing. Airbus for example has record orders but is in serious financial trouble because it cannot make a profit due to the falling dollar. For every .10 cents of value relative to the euro, Airbus mother-company EADS loses €1 billion.
Wall Street is taking huge hits daily. Here is just one quote that puts things in perspective: "These coming resets are akin to a tropical storm off the coast," says Jack Ablin, chief investment officer at Harris Private Bank. "Everyone is trying to figure out the magnitude of the losses. They don't know if it will remain a tropical storm or turn into a Category 5 hurricane. Right now, we're pricing for a hurricane."
So to put my question in another way: There is a storm coming, so should we all plan on just a tropical storm or head for the bunkers and prepare for a cat 5 hurricane?

 

If I believed the dollar would never recover I would get out of it. If you decide it will come back I'd load up on it.

I forget what financial guru said this but I remember the quote -" I get nervous when other people get greedy, and greedy when other people get nervous"

 

Yeah sarcasm, meant to be a little humorous, though you did only mention a USA Today article. I'm anxious to see China start a recession due to inferior products and haveing to add costly production methods to get their standards up. Then, maybe we'll have a chance at them finally. Plus, their oppinions on consumer confidence might budge a little after this weekends turn out at the malls? Funny how fuel dropped a few cents before the shopping was to start.

 

I understand that the euro is not that great either, I read that one of the countries want out of it. I believe it's Germany. Everything is cyclic and I have been diversifying in my investments, US and overseas. Keep in mind the "experts" have predicted 9 out of the last 5 recessions . The US economy will have some corrective moves but will always correct itself after a while, as long as the government stays out of the way. Hearing the last recession predictions reminds me of the great Japan take over years back. The dollar was falling and the Japanese were buying everything in the US. The US was going into recession and the whole word economy was going too ( sound familular) (sp). Currently I am reading " Basic Economics" by Thomas Sowell, very interesting uses examples in the explanations. Nice to brush up on stuff I have forgotten .

 

best hint of what is to come?

Senators and Congressmen are not into euros. stocks are going to futures and oil (wonder why? LOL) development. land purchases in third world countries for development (Brazil, small countries in Africa)....

I would rest easy friend.....

Heidi in NY

 

Think about the US $ just a stock certificate in a company traded on the NYSE, NASDAQ, etc...

The $ is at a low versus almost all other curreny, meaning if you sell out your dollars to invest in the Euro, or any other foriegn currency you will be losing quite a bit of value...Goes along to the basic buy low sell high montra.

If you are worried about the stability of the US $, and you have no need to be, you could always invest in metals. Just make sure you invest in the actual metal, not the paper or certificates.

 

If you are worried about the US Dollar, and wanted to have other options, there is always Gold, or Diamonds. Easy to carry, and hold their value.
The Euro, Swiss Franc are another currency, the Swiss Franc is listed as CH francs on the currency markets. Japan' yen can be strong. Just things to think about. Don't put all your eggs in one basket.

 

I really don't think any fiat currency will be in good shape if things go worldwide as some are predicting. Try this link http://telegraph.co.uk/business/ambr...ge-control.htm It discusses the Euro and what's seen in it's future.

Understanding the WHOLE picture is a really tough scenario to wrap one self around. try this link, it's a long winded bunch of stuff but the sheer volume of information and the way it is presented gives a better understanding of the whole. http://www.financialsense.com/Expert...2007/1123.html The people contributing to this link DO have a lot to say, they are Dr Leanne Baker, Dr Keith Barron, John Doody, Eric and David Coffin. ALL of them are tops in their field. You sould have spent tons of money attending seminars to get this information and they are puting it out for free so people will understand better about what's happening in totality.

Hope that helps with many of your questions. I have put a little here and there, PM's are always a good investment when you cannot make up your mind what to do or what's more stable. The last two crunches (70's & 80's) I went the PM route until things had settled down some, got excellent returns.

CD

 

I know the leaders of Iran and Venezuela want Opec to trade in Euros instead of the Dollar. I believe them wanting to look out after the Good of Opec.
Right now I am staying put with my investments and will ride this down cycle out.

 

If you wanted Euros you probably should have bought them 5 years ago .


This reminds me of the 80's-90's when everyone thought Japan was going to own the US by 2000.

What we need is the recent tax cuts need to be made into law.. which brings me to Europe.. It's almost impossible to run a business there because of regulations and taxes... Leads to lower growth.


But anyway, I'm taking a beating in the market.

I'm a financial analyst and got a finance degree from a top tier business school and this stuff confuses even me. But I know one thing buy low sell high , I'd stay away from the euro.

 

Then there is the BASKET OF CURRENCY concept on the table with OPEC, that could prove to be inteesting, only take money from the one that's the highest in value????

CD