Keeping physical overseas is a hedge against something really nasty happening to your own country's stability, and that would affect the currency exchange rate. Can someone explain the details of the various scenarios that might play out?
I would suppose that under those circumstances, you would either emigrate and convert your gold into the local currency, or liquidate your gold to pay expenses in your own country under a hyperinflation scenario (after your PP cash has become worthless) ?
I'm wondering if gold always will have a high value for purposes of exchange into a local currency when the local country is in trouble.
Overseas physical & exchange rates when you need it ?
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Bongleur
Re: Overseas physical & exchange rates when you need it ?
What does soap have to do with the benefits of keeping physical overseas?
Re: Overseas physical & exchange rates when you need it ?
It's hard to say what will happen. There have been recent examples in Argentina where the currency collapsed and silver/gold trading vendors popped up over night. Barter markets opened as well, but soon failed. It is too hard to trade one guy for eggs when he wants beans and you don't have beans, but have propane and the bean vendor really wants cooking oil. Etc. Gold and silver worked as a universal form of money.Bongleur wrote: Keeping physical overseas is a hedge against something really nasty happening to your own country's stability, and that would affect the currency exchange rate. Can someone explain the details of the various scenarios that might play out?
I would suppose that under those circumstances, you would either emigrate and convert your gold into the local currency, or liquidate your gold to pay expenses in your own country under a hyperinflation scenario (after your PP cash has become worthless) ?
I'm wondering if gold always will have a high value for purposes of exchange into a local currency when the local country is in trouble.
How would it help having overseas? Well sure I guess you could leave. But realistically what will probably happen is you miss the initial shock by not having money easily grabbed and then convert the asset as needed to cover expenses where you live.
Re: Overseas physical & exchange rates when you need it ?
It seems to me that when political arrangements become strained it first becomes tempting to impose capital controls to attempt to prevent capital flight.
At some point later in the process of political deterioration, it might begin to seem appealing to impose travel restrictions to prevent unpatriotic people from leaving.
I think the idea with geographic diversification is to prevent yourself from being caught up in capital controls while giving yourself time to make travel arrangements if that became necessary.
It's very unpleasant thinking about this sort of thing, but it's really no different than the thought process that goes into buying life insurance.
The fact is that political institutions come and go all of the time. I don't think it is unreasonable to acknowledge the transitory nature of all political authorities throughout history, and to simply make allowances for the idea that current institutions might also ultimately be of a transitory nature.
At some point later in the process of political deterioration, it might begin to seem appealing to impose travel restrictions to prevent unpatriotic people from leaving.
I think the idea with geographic diversification is to prevent yourself from being caught up in capital controls while giving yourself time to make travel arrangements if that became necessary.
It's very unpleasant thinking about this sort of thing, but it's really no different than the thought process that goes into buying life insurance.
The fact is that political institutions come and go all of the time. I don't think it is unreasonable to acknowledge the transitory nature of all political authorities throughout history, and to simply make allowances for the idea that current institutions might also ultimately be of a transitory nature.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: Overseas physical & exchange rates when you need it ?
MediumTex wrote: It seems to me that when political arrangements become strained it first becomes tempting to impose capital controls to attempt to prevent capital flight.
At some point later in the process of political deterioration, it might begin to seem appealing to impose travel restrictions to prevent unpatriotic people from leaving.
I think the idea with geographic diversification is to prevent yourself from being caught up in capital controls while giving yourself time to make travel arrangements if that became necessary.
It's very unpleasant thinking about this sort of thing, but it's really no different than the thought process that goes into buying life insurance.
The fact is that political institutions come and go all of the time. I don't think it is unreasonable to acknowledge the transitory nature of all political authorities throughout history, and to simply make allowances for the idea that current institutions might also ultimately be of a transitory nature.
In layman's terms:
Shit Happens.
Re: Overseas physical & exchange rates when you need it ?
craigr wrote:In layman's terms:MediumTex wrote: It seems to me that when political arrangements become strained it first becomes tempting to impose capital controls to attempt to prevent capital flight.
At some point later in the process of political deterioration, it might begin to seem appealing to impose travel restrictions to prevent unpatriotic people from leaving.
I think the idea with geographic diversification is to prevent yourself from being caught up in capital controls while giving yourself time to make travel arrangements if that became necessary.
It's very unpleasant thinking about this sort of thing, but it's really no different than the thought process that goes into buying life insurance.
The fact is that political institutions come and go all of the time. I don't think it is unreasonable to acknowledge the transitory nature of all political authorities throughout history, and to simply make allowances for the idea that current institutions might also ultimately be of a transitory nature.
Shit Happens.
The reports you have heard of shit happening are untrue lies spread to undermine your faith in our wise leaders. Do not let these lies dilute your devotion to the noble cause of our great nation.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: Overseas physical & exchange rates when you need it ?
http://www.knology.net/~bilrum/gold_hoa ... s_1933.jpg
"Secretary of the Treasury William H. Woodin declared tonight emphatically that the United States had not gone off the gold standard on account of the proclamation of the President. He was supported in this view by other high officials of the administration, both in the executive and legislative branches. Among them Senator Key Pittman, chairman of the Committee on Foreign Relations. Secretary Woodin said: 'It is ridiculous and misleading to say that we have gone off the gold standard, any more than we have gone off the currency standard. We are definitely on the gold standard. Gold merely cannot be obtained for several days." - New York Times March 6, 1933
Re: Overseas physical & exchange rates when you need it ?
If instead of "several days" he had said "40 years" he would have been about right.craigr wrote: http://www.knology.net/~bilrum/gold_hoa ... s_1933.jpg
"Secretary of the Treasury William H. Woodin declared tonight emphatically that the United States had not gone off the gold standard on account of the proclamation of the President. He was supported in this view by other high officials of the administration, both in the executive and legislative branches. Among them Senator Key Pittman, chairman of the Committee on Foreign Relations. Secretary Woodin said: 'It is ridiculous and misleading to say that we have gone off the gold standard, any more than we have gone off the currency standard. We are definitely on the gold standard. Gold merely cannot be obtained for several days." - New York Times March 6, 1933
In Nixon's "gold window" speech he said that the convertibility of the U.S. dollar was going to be suspended "temporarily", and only to prevent the "speculators" from profiting unfairly. That was about 40 years ago. I wonder if the speculators have learned their lesson yet.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: Overseas physical & exchange rates when you need it ?
I think about backdoor capital controls. When the USA convinced Switzerland to amend their laws such that bank accounts for Americans would be so onerous in terms of reporting requirements and liability that it's best to refuse doing business with American customers, then a mild form of capital control is in effect versus Switzerland.MediumTex wrote: It seems to me that when political arrangements become strained it first becomes tempting to impose capital controls to attempt to prevent capital flight.
Worldwide there are at most 50 or so countries that Americans with money might feel it safe to keep their life's work. A good number of those are in the European Union. So the USA only has to convince 20 to 30 countries (actually 19 to 29; it already happened with Switzerland) to change their laws and regulations to make dealing with Americans too much of a pain, and voila! Capital controls negotiated by the treasury and state departments without involving the incompetent Congress.
Starting a war every now and then helps, too. It convinces other countries, don't mess with the USA.
Last edited by smurff on Mon Feb 20, 2012 12:32 am, edited 1 time in total.