[quote author="PANDA" date=1214041945][quote author="Nude" date=1214035685]I can't speak for awgee, but fiat money is just toilet paper when the government backing it has no way to support it. So, no... I don;t think any currency will be immune to a global recession and some will suffer far more than others. In a world where currency is traded on open markets, what a dollar worth is relative to other currencies. There may come a day when $1000 in gold is only worth 325 euros rather than the ~750 it is today or it could be worth 1500 euros next year. I know that is not very helpful, but there is only so much you can do to protect the buying power of your capital. But let me offer this word of advice: if you are buying precious metals to protect yourself in case of all hell breaking loose and fiat money becoming worthless, then don't rely on some ETF or electronic vault. If worse does come to worse, the only way to truly be positive that you have something worth trading for guns, seeds, butter, and booze is to take physical possession of whatever PM you own. I like Canadian Maple Leafs and US Buffalos although there is a smal premium over the spot prices.
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Nude, I was afraid of this. I wonder what Awgee's opinion is. I agree with you that the Gold ETF route is not the safe way to go. I assure you that when things get bad the government will interfere by trying to confiscate our gold, or try to put some crazy tax to the gains, or make it illegal for Americans to hold gold assets. Several years ago, I opened up my Swiss Bank account and already stocked up on Gold Bullion/Coins/Bars. If you have your assets in foreign soil, the U.S. government can't touch it.
Nude and Awgee, I current hold a good chunk of my cash in Canadian Dollars and Euros. Do you guys recommend that I convert all of this into Gold. Foreign Cash just seems like a safer investment to me as the price does not fluctuate so much like Gold and Silver. Again, I can be completely wrong.
What's your opinion in carrying silver?
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Before we go any further, let's examine the underlying issues. Either you have so much money saved up that a rapid change in relative valuation of either the dollar, the euro, or the loonie is going to drastically change your net worth or you are trying to provide yourself something to use as money when the world economy collapses.
If the kind of price swings that occur in the currency exchange markets are really going to make a difference in your bottom line, then you need to get your money back into whatever currency you use where you live because you don't make enough money to be playing in that arena. If the loonie goes back to the exchange rate of 2004, you are going to lose a lot of cash. Same with the Euro. If a rapid change won't make a difference then quit worrying about it. Split up your cash equally among countries you might like to spend a few years visiting if things get wierd at home and keep it there until we get past all of this drama.
If you are trying to horde some metal to survive a sudden financial meltdown, you had better be able to fly your own plan to Geneva if you want to get your gold because you won't be able to pay for an airline ticket with funny money. If it's just a hedge against inflation, fine. But if you really think the government is going to outlaw gold ownership again then you had better have a plan to get to it, already in place and already paid for because credit cards and portraits of dead presidents may not be enough. Not to Godwin the thread, but look back at all the Swiss accounts held by German Jews prior to Hitler invading Poland; thousands of them went unclaimed because the owners COULD NOT GET to them. My gold and cash is in a safe hidden in my house with a nasty alarm and some other nearly fatal surprises for those who snoop for it. If it gets to the point that gold becomes the only money, the government won't have a chance to confiscate it because neither it nor I will be here. Call me paranoid, sure, but what good is a back-up plan when you can't execute it?
If you are just trying to avoid inflation eating away at your money, buy some TIPS from the Treasury. We have some of them, and some other investments that keep us from worrying too much. There is only so much you can prepare for, only so much you can worry about, and the truth is that if we do get to that point, we have far more important things to worry about than how rich we are. For example, when was the last time you butchered a cow, harvested corn, refined crude oil, tended to an orchard, or built a windmill? We, as a country, are so dependent on grocery stores, gas stations, electricity, and indoor plumbing that we, as human beings, are going to be in a world of hurt if that all goes away.
I can't recommend an investment strategy because I'm always wrong and I don't want my ineptitude to hurt anyone. I recommend that you write out your needs, find ways to ensure continued access to them, and then follow through with preparation so that you can execute the plan when the time comes. Visualize each step and look for possible problems and solutions to those problems. Then double check everything and hope for the best.