A Case for holding US Dollars?

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

  1. fishduck

    fishduck Active Member

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    A few things about that.
    Paypal: I'm sure some people here experienced their accounts being frozen or unable to withdraw their funds due to a change in an AML provision that you somehow triggered unintentionally and have to go through leaps and bounds to get it restored. So would you be comfortable putting your money in Paypal in that situation where there is a crisis?
    Also, how would you access your funds in a banking crisis as Paypal is tied to the banking system?
    And this is just assuming that the crisis will be contained in Australia. How would this work if there was a crisis in the US?

    Currency houses: If were talking about something like Transferwise, there would be a strong case to do it. Once again, how do we access our funds in a banking crisis, which seems to be what the Australian government is doing everything to prevent?

    So how far does one follow the stacker concept "If you don't hold it, you don't own it"?

    Once again, I'm looking for opinion to broaden my strategy. So far, everyones input has been most valuable.
     
  2. SilverDJ

    SilverDJ Well-Known Member

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    Any "crisis" that takes down the banking system long enough means you should have had AUD cash stacked and not USD. Your USD will be fairly useless in Australia in any sort of banking/cash crisis, just like your physical gold and silver will be useless. Local cash is the only thing that will save you.
    Banks generally don't go into "crisis" just because the currency drops.
    PayPal operates under the Australian banking act and is regulated by both ASIC and APRA, they can't just steal your money. But yes, hiccups can happen.

    Basically you are talking about SHTF scenario's, and that's an entirely different discussion to just preserving your wealth if your currency drops.

    In countries like Australia local cash will be the only safe haven in any sort of SHTF scenario excepting a WWIII Mad Max style event.
    IMO everyone should have say a month's worth of cash stacked away readily available.
     
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  3. alor

    alor Well-Known Member Silver Stacker

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    its depends on each person need
    Tranferwise is rather convenient, keep some balance there, go for a tour and meet up with stackers and buying silver etc , buddy mates can help to withdraw from ATM
    transfer fees is just few dollars
     
  4. fishduck

    fishduck Active Member

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    Now this is what I wanted to check on. The same can't be said for some South American countries where some would prefer to take USD over their local currency. Some large chinese firms have debt denominated in US Dollars and are scrambling to get US Dollars.
    I'm hearing stories of some high net worth people in some Asian countries hoarding physically US Dollars and keeping them in a private safe.

    This article was from another post in the forum of whats going on in Lebanon
    https://www.zerohedge.com/economics...ting-back-bank-cards-vendors-demand-cash-only

    “Some restaurants and bars have stopped taking credit cards, instead requiring cash to pay vendors. Other eateries have limited their menus, unable to pay for imported goods in dollars.”

    In this case, having physical dollars would make sense, same with PMs as there is always demand for PMs that could be exchanged in USD should need be.
    What I wanted to know was how relevant the US Dollar would be in Australia and if it would become more relevant should problems in the AUD develop before the USD.
     
  5. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Trump can't wait to devalue the dollar. I rather have gold than dollar, but still waiting for the $1400 or $1360 gold...
     
  6. SilverDJ

    SilverDJ Well-Known Member

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    For sure.
    It's just very different here in oz. I guess of a combination of a relatively historically strong economy (only country to avoid the GFC) and our geographical isolation.
    I don't know a single local person or company that would take USD for anything, never seen it, never heard of it happening.
    Even in the drug bust photos you see the police show, it's wads of AUD, not USD.

    We are just so used to the aussie dollar dropping and going up, and to Joe Average it doesn't matter much, almost invisible really.
    We had a big sudden crash during the GFC, from 95c to 65c, and life went on. It got down the 50c at one point, was business as usual.
    It would have to be something hugely dramatic change for anyone to care about USD.
     
    Last edited: Dec 18, 2019
  7. mmm....shiney!

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

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    It probably wouldn’t be relevant.

    Most people in Australia don’t want USD now and they’re not likely to want them if the Oz economy tanks. They won’t want gold either mind you. All they’ll want is more government issued credit vouchers in the form of AUD.

    Stack gold as a currency hedge, stack USD as a gold/AUD hedge, stack shares, stack property, stack learning about things, stack cryptos, stack advice.
     
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  8. SilverDJ

    SilverDJ Well-Known Member

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    Yes, this.
     
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  9. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Dollar falling like rock past 3 days. I swapped for SGD a couple months back. Maybe should have swapped all of it?
     
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  10. madaw1

    madaw1 Well-Known Member

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    I would go with US shares like Facebook for example-there is risk involved,but if it's a crash AUD will go down faster than FB.
     
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  11. mmm....shiney!

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

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    I may have to revisit my holdings of USD.
     
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  12. Silver260

    Silver260 Well-Known Member Silver Stacker

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    Yea, about a month ago, I was looking at converting some AUD to USD. Sort of glad I spent this long researching it.... Lol.

    I'm currently questioning myself, regarding my next move.

    Looking at historical information, for example, we initially went from 0.95 to 0.65 in 2008, before bouncing back to above parity. Since then our dollar has devalued ( relatively ) in lock step with our interest rate reductions.

    So I'm asking, who will lower their interest rates first?. And by what degree ( relatively )?

    Also, If there is another major shock / crisis will the superior role of the US economy work for , or against, its relative dollar strength?

    Edit : And the Chinese economy will play a massive role in the above outcome. Another variable....

    As a result I'm a little bearish on buying at the moment. If it hit parity again, I'd jump in without a doubt.

    Screenshot_20191231_135836_com.android.chrome.jpg
     
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  13. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    SGD usually tracks the USD so it won’t fluctuate much (within 5% range) so the decision won’t be the same as AUD.
     
    Last edited: Dec 31, 2019
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  14. Silver260

    Silver260 Well-Known Member Silver Stacker

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    We've seen a roughly 4% appreciation since mid September ( now, basically break even over 12 months ). Not huge, but enough to suck the fun out of the position :)
     
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  15. mmm....shiney!

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

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    I’m still more bullish on the USD than the AUD but I may just end up reducing my exposure. Actually, I really have no idea what I’ll do so I’ll probably do nothing. Lol. It’s my gold hedge so I’ll let it do it’s job.
     
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  16. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    The various positions offset each other, falling usd, rising gold and vice versa, not easy to time it well. The only mistake is too much caution towards gold and silver. I was waiting for $1400+ gold so didn’t buy as much as I would like to last months.
     
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  17. Silver260

    Silver260 Well-Known Member Silver Stacker

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    Tell me about it :)

    PMs appear to be putting in a strong finish, to the year. Will be interesting to see what happens overnight ( Australian time ).

    Screenshot_20191231_175342_com.huawei.android.launcher.jpg
     
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  18. mmm....shiney!

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

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    ^ screenshot of a totally absorbed stacker :p
     
  19. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    There had been some reports recently speculating a lower USD once QE begins but nothing goes in a straight line so there might be rebounds along the way.
     
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  20. mmm....shiney!

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

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    I traded out a portion of my TUSD for CRO.

    USD should now begin appreciate against the AUD again. :rolleyes:
     
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