World's Most Stable Currency Besides $

[zzcn69]

It has occurred to me that we might have inflation in our future so it might be a good idea to have some money in a foreign currency as a hedge against inflation. From a quick read on Google, it appears Swiss currency is a good bet. Any thoughts on this, please?

 

[Passepartout]

I think that if I was worried about stability, inflation and stashing a little something to get me by, I'd purchase some gold coins. It's lost a little luster in the last couple of months, but one can look on that as a buying opportunity. Historically, gold has been the favored hedge against inflation and it has tripled in value against the USD in the last 10 years. Using another currency is sort of a crap-shoot. Which will be better than the USD, the Euro, the Pound Sterling, Yen, Baht, Deutchmark, Swiss Franc? Your guess is as good as anybody's. One thing is sure...whenever you need to convert them, you can buy whatever currency you want with the gold.

Jim Ricks

 

[UWSurfer]

RCI points of course! :rofl:

 

[ausman]

Jim seems to have covered the subject, so nothing more to add, except to agree.

 

[mecllap]

Of course, in the long run, gold and diamonds merely have significant value because they have a long-standing cultural assignation of value. They do have some limited "real" value for industrial use, but they are only valuable as currency because centuries of people have decided they will be valuable as a means of exchange (yams and beads [and salt] went out of favor). I should expect they will continue to be valued in our lifetime, however. Most of the world's economy seems to run on electrons and paper (and "good faith") these days. Stability is an illusion. (Actually that may be why I recently bought some DVC points -- the money was disappearing from my mutual fund anyway).

 

[ausman]

Of course, in the long run, we will all be dead.

The question seemed legitimate, and worthy of a considered answer.

While if the US economy holds up, and that means in reality, if the world economies hold up, then DVC may be a safe haven.

I'd still prefer the gold option.

 

[Passepartout]

There are lots of ways to hedge. Some religions advocate stashing food. There are those who barricade and arm themselves. The OP asked for an opinion on currency. I don't know enough about Swiss Francs to recognize one, and one reason I'd opt for gold over any national currency is that it has recognized value worldwide. I think it would be difficult, no matter how stable Swiss Francs or even Yen or Euros are, to exchange them for a week's groceries anywhere near our small town. But I betcha I could negotiate a cash value of recognized gold coins in half a dozen places hereabouts. I do have a few, and hope their monetary value never becomes necessary, but with the printing presses churning out paper currency, it gives one pause to think of the consequences.

Jim Ricks

 

[Keitht]

My only question is when did the US$ become the worlds most stable currency??

 

[Passepartout]

My only question is when did the US$ become the worlds most stable currency??

Keith, It's a subjective matter, and may change, but so far Saudi princes, Colombian drug producers and Somali pirates all want payment in US dollars regardless of where they do 'business'. Seems to me that they are in a position to ask for any currency they want. As to 'when', I can't say I know. I suspect it was in the first half of the last century when markets became truly global and electronic means became available to transmit funds around the world.

Jim Ricks

 

[Keitht]

As with most currencies, there have been times when the $ has slid against others and times when it has strengthened. There have also been periods when it has strengthened against some whilst at the same time weakening against others.
The bottom line really is that there was/is a need to have one currency as a baseline and, as the US is still probably the major world market, it makes sense to use it as that baseline. That doesn't in itself make the currency the 'most stable'.

 

[bogey21]

If you don't like the US Dollar, buy a foreign currency ETF. They sell just like stocks. Foreign currence appreciates, ETF goes up. Foreign currency depreciates, ETF goes down.

George

 

[Keitht]

What's an ETF?? I'm not familiar with the term.

 

[ausman]

Exchange Traded Funds.

Do a google and you will learn all you want.

George is referring to one particular aspect of them, quoted from a google and the resulting wikipedia:

" Currency ETFs

In 2005, Rydex Investments launched the first ever currency ETF called the Euro Currency Trust (NYSE: FXE) in New York. Since then Rydex has launched a series of funds tracking all major currencies under their brand CurrencyShares. In 2007 Deutsche Bank's db x-trackers launched EONIA Total Return Index ETF in Frankfurt tracking the euro, and later in 2008 the Sterling Money Market ETF (LSE: XGBP) and US Dollar Money Market ETF (LSE: XUSD) in London."

Since the references are to 2005, 2007 and 2008 there are likely many more now.