A Case for holding US Dollars?

Discussion in 'Currencies' started by fishduck, Dec 15, 2019.

  1. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    No crash turns on a dime. A Crash takes months sometimes years

    Think of it this way

    if Stockmarket dropped 10% in month the chances are it will/could drop another 20% over the year or years if the news is bad and everything is in panic mode, if not it’s just a blip

    Eventually stock will stabilise (could be years) wait until you see 10% movement up and get on for the ride up
    Same with gold, stocks currency property.

    Similar to if you collected Star Wars memorabilia this is the time to sell to newbies who will buy not realising there are no more trilogies and the shine fade

    in regards to your question at a I would buy usd at heartbeat if I thought Aussie peso will go to 50c.
     
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  2. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    I've got a small emergency stash of AUD for when the power/internet goes and only cash is accepted, we've got some AUD in an offset account which we use in our business, but we don't save cash in AUD because we don't need it. Our "cash" savings are in the form of TUSD and we get 8% for our troubles and it's on call instantly so having only TUSD isn't a problem. It's an AUD hedge and as all of our other assets can be liquidated for AUD we don't feel the need to expose ourselves to holding even more AUD than is necessary apart from what we require for daily financial transactions. And I think this is applicable to any non-US resident.

    I'm of the opinion you don't need to have a backup of savings in your native currency before saving in USD in these modern times, it's probably good to diversify but it's not a pre-requisite unless you're getting a good return on your native currency savings or you need to build a bank balance say to get a mortgage. It just comes down to preference and what objectives you have. I'll probably look to increase my AUD holdings in our offset account if we sell our our business as well as increase our TUSD holdings. Then of course there's shares, super, life/TPD/income protection insurance, PMs etc etc.

    Balance it according to your financial goals and budget. You could allocate 10% of your assets to cash, from there you decide how much will be in USD and how much in your own currency or maybe another.

    GBP?
     
  3. SilverDJ

    SilverDJ Well-Known Member

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    Unless TrueUSD crpto goes tits-up.
     
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  4. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    That’s right.

    It’s a risk, I’m banking on the strength of their auditing practices in the US.
     
  5. leo25

    leo25 Well-Known Member Silver Stacker

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    :D thanks for the laugh.
     
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  6. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    https://www.cryptoglobe.com/latest/2019/04/trueusd-third-party-audit-reveals-full-us-dollar-backing/
     
  7. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    I'm holding my USD in paypal and local bank. Both give lousy rates for conversion to SGD. Paypal also regularly changes rules and can freeze accounts. I'm looking forward to Facebook's USD wallet.
     
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  8. leo25

    leo25 Well-Known Member Silver Stacker

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    Most audits are completely useless. It's very well known that companies just borrow money (or something alike) to balance the books while a audit is being conducted. Most audits will not investigate deep and will just ok it after a quick look over.

    TrueUSD is way too new and way too small to trust with my savings. Better off buying something like Perth Mint Gold Token if you want the novelty of blockchain.
     
    Last edited: Dec 17, 2019
  9. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    The OP was interested in opinions and strategies regarding the value of buying USD as opposed to his native currency. I shared my strategy and the rationale behind it, it won't suit everyone naturally.

    Now you're being condescending.
     
    Last edited: Dec 17, 2019
  10. leo25

    leo25 Well-Known Member Silver Stacker

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    You're allowed to share your opinion, i have no issue with anything you said. I'm just sharing my opinion, you don't have to get defensive. And i wasn't trying to be condescending.
     
  11. fishduck

    fishduck Active Member Silver Stacker

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    So no one here would hold physical USD? I thought the whole point was to get out of the banking system?
    And no one here is concerned of counter party risk??
    I thought the whole point of getting into physical PM and even USD was for security rather than gains.
    If you wanted gains, I thought it would be better to have paper PMs as you don't have a storage and a premium issue.
    And using that logic why be invested in PM at all as its currently not in favour?
     
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  12. leo25

    leo25 Well-Known Member Silver Stacker

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    I think it's a good idea and so does most of the world. If i had a lot of disposable income i would definitely consider putting some into USD. I see minimal risk short to medium term.
     
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  13. SilverDJ

    SilverDJ Well-Known Member

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    And what are you going to do with USD physical cash in Australia?
    Good luck trying to buy anything, and good luck trying to exchange it at a reasonable rate.
     
  14. fishduck

    fishduck Active Member Silver Stacker

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    In some South American countries, people who did exactly that would have managed to save themselves from the local currency devaluating and from the banks either closing or holding your money.
    Australia is not at that point but if you don't want to hold cash in the bank and you think the AUD will depreciate, would holding physical USD be a viable option?
     
  15. leo25

    leo25 Well-Known Member Silver Stacker

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    You could say the same with bullion. You can't buy anything with it and the spread between buy and sell is not great. (unless dealing in small amounts with people on the forum)
     
  16. leo25

    leo25 Well-Known Member Silver Stacker

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    It would have been an extremely viable options if you converted AUD to USD between 2010 - 2014 :)
     
  17. fishduck

    fishduck Active Member Silver Stacker

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    Which is why I'm asking others if they would go straight to bullion or diversify into USD and if they did, their reason in doing so. Once again, in some Asian and South American countries, the USD is still seen as a haven asset when it shouldn't be.
     
  18. fishduck

    fishduck Active Member Silver Stacker

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    I guess the problem comes to, would you be more concerned if the bank took your money in form of a bail in or would you be more concerned with the government taking away your purchasing power?
     
  19. SilverDJ

    SilverDJ Well-Known Member

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    It's viable, but not the best option economically. There are better ways to hold USD outside the traditional banking system. PayPal, online currency trading houses etc.
    Converting physical cash into USD and then back into AUD through the banks or shop front currency dealers is horrendously expensive, like 5%+ each way. A good currency house does it at a fraction of that value.
    Also depends on how you receive your money too. If you get paid in USD through PayPal for things then it's best to just leave it in there until required.
     
  20. SilverDJ

    SilverDJ Well-Known Member

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    Physical gold is about half the buy/sell spread of of bank and currency house conversion rates.
    But yeah, still not great, which is why I have most of mine in an unallocated account. Zero storage fee, and much lower buy/sell spreads.
     

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