Another question?

[blindguy]

It has been suggested that we should all keep some currency on hand to pay for things in a pinch or tough times. I agree with that. I do not keep it in the bank in case they close. So my question is what currency do you suggest?  Many years ago I played with currency, I had German marks, French franks, Italian lira and others. Those are now worthless. I am wondering if the Euro will have the same fate. After last years mess with the Indian rupee I do not trust them. I am of course keeping some U.S. dollar, even though it has lost 97% of its value in the last 100 years. What about the Swiss currency or British pound? Or would you go with the Yuan? What about SDRs? What would be your pick of currency?

[HawkHybrid]

11 minutes ago, blindguy said:

even though it has lost 97% of its value in the last 100 years.

 

this is an exaggeration of the truth. many who keep

dollars have it in a bank account that pays a small

amount of interest. the insurance that the dollars

gives you is much more important than the meagre

inflation of the currency over time.

also emergency reserves should be a combination

of local currency, gold, silver etc. a basket of reserves

help keep the insurance flexible for all situations,

including the vast majority of time when it is not yet

called upon and should try it's best to keep up despite

the inflation of any one individual component.

 

HH

[KitboyE17]

GB£ and US$

Nothing else

[JunkBond]

Just GB£ for me. I do sometimes wonder how much to hold though and whether more should be allocated to gold. 🤔

[Xander]

It will be safe as long as you hide it from the wife.🤑

[universalcurrency]

GB£ and Euros, I dont see myself travelling to any country (other than the US) that would except US$. 

[blindguy]

Being legally blind I can not hide much from the wife! She works and I do not.

[matrawr]

Being from the UK I would stock up on GB£.......wait until it recovers from this mess currently ongoing (Brexit) and eventually it'll strengthen and once it becomes strong against most of the other currencies then swap it for those weaker currencies.

[sixgun]

1 hour ago, HawkHybrid said:

Blindguy said "....the USD has lost 97% of its value in the last 100 years."

HH said this is an exaggeration of the truth.

Come on this is not an exaggeration. The situation of Sterling is even worse. In 1931 you could swap £1 for a sovereign. Now the gold content of a sovereign is worth £263. So the 2019 £1 is worth 1/263th of the 1931 £1. That's 0.37% of the 1931 value - it has lost 99.62% of its value since 1931. Now i can accept the 1931 value was inflated - the currency should not have gone back onto the gold standard at its pre WWI value - but we can pretty much say Sterling has lost over 99.5% of its value in the last 100 years. The numbers do not lie. The original £1 might have been invested and turned into £10 million or put on a treble at the races and made £263 and you would be all square - that has no bearing on the purchasing power of the pound. 

[sixgun]

8 minutes ago, matrawr said:

Being from the UK I would stock up on GB£.......wait until it recovers from this mess currently ongoing (Brexit) and eventually it'll strengthen and once it becomes strong against most of the other currencies then swap it for those weaker currencies.

i would stock up on gold sovereigns and then sell them on the forum. All the currencies are going down the tubes. They are designed to do that.

[matrawr]

7 minutes ago, sixgun said:

i would stock up on gold sovereigns and then sell them on the forum. All the currencies are going down the tubes. They are designed to do that.

I was just giving an idea on what to do with paper currency....not commodities as that was what the topic author was asking.......although yes your idea is another option 👍

[HawkHybrid]

3 minutes ago, sixgun said:

Come on this is not an exaggeration. The situation of Sterling is even worse. In 1931 you could swap £1 for a sovereign. Now the gold content of a sovereign is worth £263. So the 2019 £1 is worth 1/263th of the 1931 £1. That's 0.37% of the 1931 value - it has lost 99.62% of its value since 1931. Now i can accept the 1931 value was inflated - the currency should not have gone back onto the gold standard at its pre WWI value - but we can pretty say Sterling has lost over 99.5% of its value in the last 100 years. The numbers do not lie. The original £1 might have been invested and turned into £10 million or put on a treble at the races and made £263 and you would be all square - that has no bearing on the purchasing power of the pound. 

 

numbers do not lie. it's the way you calculate the

numbers that is misleading.

nobody worth their salt holds only currency that

is not in the bank for decades on end.

(I'm talking nobody as in % of population, as

opposed to the individual crazy, stupid, ignorant

etc.)

so why use it as a practical example? if not only

to exaggerate the numbers for scaremongering?

 

a more realistic representation of the facts is

that minor amounts of currency that have been

hidden in mattresses have lost 97% of their

purchasing power over the last 100 years.

but then lets not let facts get in the way of a

good story.

 

the purpose is to make a mountain out of a

mole hill in order to push forward an agenda?

 

HH

[sixgun]

Sterling is worth 0.37% of its 1931 value. You cannot value a currency on the basis of what you might or might not have done with that currency in the intervening time.

According to your logic

Fred invested his 1931 £1 and he managed to get £100 - so his £1 is worth 100/263 x 100% = 38% of the 1931 £1

Jack invested his 1931 £1 and he managed to get £300 - so his £1 is worth 300/263 x 100% = 114% of the 1931 £1

Jill left her £1 in a drawer and it lost 99.63% of its value alongside real money.

You cannot assess the deteriorating value of a currency by factoring in interest rates, bond rates, phases of the Moon or anything else. If you do factor it is what you are assessing is the value of £1 PLUS the interest or PLUS the dividends or profits - this is not the actual value of £1.

£1 in 1931 was a sovereign -  £1 in 1931 was an actual sovereign - the gold in a sovereign is worth £263 today. £1 is worth £1.

[HawkHybrid]

30 minutes ago, sixgun said:

You cannot assess the loss in deteriorating value of a currency by factoring interest rates

 

we all know the mechanics of inflation eroding

the base value of currency.

thing is we are never dealing with base value of

currency.

it's not practical. a practical scenario would be if

you left £1 in the bank earning interest

compounded every year for 100 years how much

purchasing power would you have lost?

my guess is significantly less than the headline

figure of 97%.

at 3% interest that would reduce the figure to

~57% of purchasing power. but then only losing

43% purchasing power and taking 100 years to

do it doesn't have the same kick to it. (about 4%

interest rates are considered to be at the lower

end when averaging over longer periods of time.)

 

HH