"Getting out of dollars"

[gateley]

We've heard that in reference to Warren Buffett and others who are savvy in the ways of the economy.

What does that mean, exactly - do you know?

And how does that affect my best friend who has his life savings in a money market which is coming up for renewal. Should he take that "out of dollars"?

To explain how little we understand it, we were wondering if he exchanged his dollars for Euros (or some other stronger currency than the dollar), locked them in a safe deposit box, would he come out ahead in a year's time even with no interest? That it's possible to "earn" money on the currency just by the fact that it's increasing in value?

Conversely, is it possible that if he just re-ups his money market account, his $10 today WITH INTEREST might buy less when it matures because of the devaluation of the dollar?

:crazy:

Thank you for any enlightenment and education! And please keep it SIMPLE! :hi:

EDIT: typos o'plenty

[Warpy]

1. That won't save them in the long run

unless by some miracle we get leadership in both the Executive and Legislative branches who are smart enough to take the unpopular steps necessary to stave off a Depression.

Even then, I doubt anyone has the ability to do that. The funny money market that most financial institutions are counting as their main asset pool is overdue for collapse, and I'm talking about hundreds of trillions of dollars evaporating into thin air.

When it happens, it will be worldwide. There will be no place to hide, although Mr. Buffett is likely to have enough to sell and barter to get through it quite nicely.

[gateley]

2. Sigh. Screwn. I'm trying not to accept that fact. Thanks for your response. nt

[bbinacan]

3. Stay in a dollar money market.

The NAV is stable. You get a good rate. And you're not subject to currency fluctuations that could wipe out the return.

[gateley]

4. Thanks! nt

[nightrider767]

5. If things go bad, even oil and gold won't be safe...

I was looking for an out too. But if things go to "hell in a hand basket", demand will drop for gold and oil. So I don't think there is a recession proof investment, especially considering, as others have mentioned, it will be an international event.

Now that being said, on the upside, I'm looking to recover my losses by re-investing in the stock market after it bottoms. I think the stock market will lead us into the recession and then will lead us out.

When that will happen is anyones guess.....

[pa28]

6. Well, there's this . . .

http://www.everbank.com/001WorldCurrency.aspx?referid=11568&PerfsourceID=M_86120950

You can open a CD denominated in the currency of your choice earning interest and currency appreciation if you manage to guess right.

[idealista]

7. I've been "getting out of dollars" for 3 years

and I've learned alot in the process. I had an Everbank account and that's fine if you feel confident about the banking system (I don't) and don't mind paying 3/4% fee to convert into other currency, and the same to convert back. I would favor Swiss Francs and Canadian dollars.

If a lot of banks, or more than one large bank, fails, I think the FDIC will be hard-pressed to honor the insurance. So I do not take that $100,000 insurance as rock-solid.

One suggestion is to open an account with a discount brokerage - like Fidelity for instance - and invest in non-dollar and commodity and precious-metals related mutual funds such as: Prudent Global Income Fund (PSAFX) or Merck Hard Currency Fund; Toqueville Gold Fund (TGLDX) or USA Precious Metals (USAGX); energy funds such as Icon Energy (ICENX). You can invest in gold and silver by buying Central Fund of Canada, which is a closed end fund that trades like a stock (ticker symbol CEF) and holds gold and silver bullion in audited vaults in Canada.

You can also buy gold and silver from a local coin shop or various reputable dealers such as CNI ("golddealer.com" on the internet)- and you can check prices there to see if your local dealer is priced right. They have advice on their site about the best forms to buy gold and silver bullion in, which is well-written, and I'm sure you can find other advice if you google. Of course, storing it is a concern. But you could fit a fortune in gold in a safe deposit box! In a financial crisis, where confidence in unbacked paper money is eroded, gold and silver should protect you and may do explosively well. Many experts think silver will outperform gold in percentage terms - there is very little above ground.

I am not a broker or financial adviser, and this is just what I have learned for myself - each person must reasearch and reach their own conclusions.

[Celebration]

8. a question--

How does a money market "come up for renewal"? The very definition of a money market is that you can get in and out of it whenever you want.