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  #21  
Old 17.01.2015, 16:56
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Re: Gold fluctuation post-SNB ruling. Can I export?

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I think the gold-scales are falling from my eyes at last. So even though I'm getting less in CHFs here, the higher value of the CHF means that if I converted it to UKP, the result should be equal to the different price movements in gold price between the 2 countries in recent days. Got it. Thanks, that's made my life simpler.
Correct
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  #22  
Old 18.01.2015, 11:52
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Re: How to maximize 1000 CHF in the current situation?

I disagree that the worst advisor is rush i.e. if somebody would have been able to get of the swiss stock market within 1h of the SNB announcement, you may be out with -3, -4% whereas now it is -13 -14% (assuming that it was obvious the CH market will drop in ratio of USD/CHF - EUR/CHF depreciation, which happened within minutes in the FX market and took 2 days for the stock market)
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  #23  
Old 18.01.2015, 16:28
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Re: How to maximize 1000 CHF in the current situation?

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Just leave it.

Not worth pissing around with the currency markets for 1000. The options (buy real estate????) really do depend on how much you're playing with.
...indeed, but if you fancy a little flutter then wait until this Thursday when Signor Draghi announces a massive QE program for the Euroraum and then the brown stuff will really hit the whirly thing...not out of the question that you will get up to as much as 2 of the funny money euros for each franc.
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Old 18.01.2015, 16:54
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...indeed, but if you fancy a little flutter then wait until this Thursday when Signor Draghi announces a massive QE program for the Euroraum and then the brown stuff will really hit the whirly thing...not out of the question that you will get up to as much as 2 of the funny money euros for each franc.
Well, in that case the good thing to do is to take the massive loan in EUR; then exhcange EUR -> CHF now. Then wait until the end of the next week and exchange CHF -> EUR. Pay the loan in full in a week, and have a big win. Would you do it?

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Take a few trips into Germany or France and buy things.

I do that for several years already.

Last edited by 3Wishes; 18.01.2015 at 17:00. Reason: merging successive posts
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Old 18.01.2015, 17:05
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Risks of buying Euros now?

Hi guys,

I'm a German citizen, living + working in Switzerland since 2012 and expected to live + work here for another 2-3 years.

With the recent rise of the CHF I'm wondering if there is any good reason why I should not move some disposable Swiss francs to my EUR bank account in Germany. I will eventually return to Germany and need Euros anyways. Inflation is not an issue at the moment, and the EUR would mostly be invested in ETFs.

What I'm struggling with is to understand the actual risks for my EUR savings. What's the worst case scenario? What would happen in case of an, however unlikely, collapse of the EUR currency?

-- Chris
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  #26  
Old 18.01.2015, 17:16
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Re: How to maximize 1000 CHF in the current situation?

'Meeyat'

I said a flutter not a reckless gamble...that is akin to having a punt on a 10/1 shot on the National..

1000chf is my limit and if my hunch pays off I will be buying cheap euros at the end of the week.
Ladbrokes are giving me 2/1 that Draghi will announce QE on Thursday which indicates a risk worth taking.

Last edited by confiseur; 18.01.2015 at 17:21. Reason: Wrong quote
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Old 18.01.2015, 17:34
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Get a mortgage / credit an invest in Euros?

So, since last Thursday I've been thinking...

If your scenario is that there will be a European QE, and that the franc will even get a bit stronger (say 1 CHF = 0.90 EUR, for example), and that this situation will last maybe 2-3 years, and then the franc will lose part of its value (say 1 CHF = 1.10 EUR in 3 years, for example)...

Wouldn't it be a good idea to get a mortgage / credit in CHF, and invest them in EUR-denominated assets? Say for example you get a mortgage / credit for buying a couple of apartments in Spain/France to rent, and get some interesting sum as well to invest in mutual funds / ETFs in Euros.

This would imply getting a credit that you can always pay back with your own salary: don't count with the returns of your investments to be able to pay back the debt, just reinvest all your gains.

Well, even you convert those francs into Euros at 0.90 and the franc still rises a bit more, it could still make sense.
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  #28  
Old 18.01.2015, 17:42
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Re: Get a mortgage / credit an invest in Euros?

I fear for your investment strategy if you think the CHF will "strengthen" to EUR 0.90, then "lose value" to EUR 1.10.

You need to understand the fundamentals before you can even hope to make money off forex.
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  #29  
Old 18.01.2015, 17:44
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Re: Risks of buying Euros now?

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What I'm struggling with is to understand the actual risks for my EUR savings.
- Inflation in the Euro area (triggered by currency devaluation / interest rates)
--> monetary policy risk

- Euro area collapses fully or partially - see Cyprus (this applies only if you move your money into a member state of the Euro area)
--> economic risk

- Euro collapses - monetary reform ensues
--> political risk

- Countries collapse - taxes on economic substance ("Substanzsteuer")
--> political risk

The analytic framework is relatively simple.

The extent? If I was able to predict, I would be(come) a successful foreign-exchange trader. Or a hyper-rich hedge fund manager. Assuming that money still exists

The world probably has seen all the worst-case effects:
- hyper-inflation in Germany, Brazil, Turkey, some African countries
- monetary reform like in Germany immediately following World War II - try to (re)start the financial system at zero
- taxing of substance (i.e. your financial assets or even your property - less mobile, you know); indirectly this happened in Cyprus

I, personally, have come to the conclusion that the only reliable safeguard is knowledge (competence) and social capital.
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  #30  
Old 18.01.2015, 17:49
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Re: Risks of buying Euros now?

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Hi guys,

I'm a German citizen, living + working in Switzerland since 2012 and expected to live + work here for another 2-3 years.

With the recent rise of the CHF I'm wondering if there is any good reason why I should not move some disposable Swiss francs to my EUR bank account in Germany. I will eventually return to Germany and need Euros anyways. Inflation is not an issue at the moment, and the EUR would mostly be invested in ETFs.

What I'm struggling with is to understand the actual risks for my EUR savings. What's the worst case scenario? What would happen in case of an, however unlikely, collapse of the EUR currency?

-- Chris
If the EUR were to collapse, you'd get more of them for your CHFs than you would today. But if you think that's unlikely, then sure, why not go ahead and buy EUR now. I'd suggest you do so in tranches to spread the risk if you don't think you know which way the EUR will go, and when -- e.g. buy euros in ten separate transactions spread over three months, or whatever.

Or am I misunderstanding you, and you're worrying about the euro collapsing altogether and becoming worthless? That won't happen.*




*I'm sure no-one said that about the Zimbabwean dollar, either. But that was a slightly different scenario.
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  #31  
Old 18.01.2015, 17:52
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Re: Risks of buying Euros now?

Definitely better than doing it this day last week
I have no idea what the future will hold but there is 2 things that I feel might have a influence in the short term future.

1) Greek elections .. A number of the Parties involved say they will push back on the EU. Could have a negative effect on the Euro/CHF rate
2) The ECB have said they may start a QE program. This may or may not be priced into the market but could also have an effect on the Euro/CHF rate

If one was to look at the long term trend it would be a no brainer to hold on.

But then I have absolutely no idea about the FX markets so this info is worth the paper it written on.
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  #32  
Old 18.01.2015, 17:54
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Re: Risks of buying Euros now?

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But then I have absolutely no idea about the FX markets so this info is worth the paper it written on.


Even truer when "written" on a paper-free computer/tablet/phone screen.
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Old 18.01.2015, 18:18
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Re: Get a mortgage / credit an invest in Euros?

Swiss banks will not give a credit in Euros.
Because you don' t earn money in europe(for Example France or Germany, the banks there will not give a credit either).
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Old 18.01.2015, 18:57
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Re: Get a mortgage / credit an invest in Euros?

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Swiss banks will not give a credit in Euros.
Because you don' t earn money in europe(for Example France or Germany, the banks there will not give a credit either).
Yep, my experience from early 2013 when I bought my place:
- UBS and Kantonalbank: credit in CHF only for own main residence area within commuting distance of Swiss workplace;
- two banks in Germany: choice between credit in euro or francs in Lörrach, only euro in Stuttgart. The credit in CHF was much more expensive.
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Old 18.01.2015, 19:03
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Re: Risks of buying Euros now?

Safe solution: Keep half your money in CHF and half your money in Euros at any time. The lost on one side will be compensated by the gain on the other side in any case.

There is no win-win solution, only risks, no way to make currency speculation full proof. Somehow, I am thankful for that.
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  #36  
Old 18.01.2015, 19:15
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Re: Get a mortgage / credit an invest in Euros?

Lots of folks have done this the last few years in certain EU countries the "logic" is the low interest rate on the CHF but ti seems to have turned out fairly badly

http://www.swissinfo.ch/eng/bloomber...odged/41218564
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  #37  
Old 18.01.2015, 19:30
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Re: Get a mortgage / credit an invest in Euros?

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So, since last Thursday I've been thinking...

If your scenario is that there will be a European QE, and that the franc will even get a bit stronger (say 1 CHF = 0.90 EUR, for example), and that this situation will last maybe 2-3 years, and then the franc will lose part of its value (say 1 CHF = 1.10 EUR in 3 years, for example)...

Wouldn't it be a good idea to get a mortgage / credit in CHF, and invest them in EUR-denominated assets? Say for example you get a mortgage / credit for buying a couple of apartments in Spain/France to rent, and get some interesting sum as well to invest in mutual funds / ETFs in Euros.

This would imply getting a credit that you can always pay back with your own salary: don't count with the returns of your investments to be able to pay back the debt, just reinvest all your gains.

Well, even you convert those francs into Euros at 0.90 and the franc still rises a bit more, it could still make sense.
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I fear for your investment strategy if you think the CHF will "strengthen" to EUR 0.90, then "lose value" to EUR 1.10.

You need to understand the fundamentals before you can even hope to make money off forex.
I'd like to apologise for my earlier post. To make amends, I'm offering you an attractive deal: I will sell you EUR 500,000 for 555,556 of your borrowed CHF, at the rate you hope the CHF will move to shortly (EUR 0.90 per CHF). No fees!

And to sweeten the deal even further, I will even lock in an exchange rate for two years down the road -- I will contract to buy the EUR 500,000 back from you in January 2017 at your wished-for rate of EUR 1.10/CHF. No risk to you! Pure arbitrage!

Deal?
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  #38  
Old 18.01.2015, 19:53
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Re: Risks of buying Euros now?

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Hi guys,

I'm a German citizen, living + working in Switzerland since 2012 and expected to live + work here for another 2-3 years.

With the recent rise of the CHF I'm wondering if there is any good reason why I should not move some disposable Swiss francs to my EUR bank account in Germany. I will eventually return to Germany and need Euros anyways. Inflation is not an issue at the moment, and the EUR would mostly be invested in ETFs.

What I'm struggling with is to understand the actual risks for my EUR savings. What's the worst case scenario? What would happen in case of an, however unlikely, collapse of the EUR currency?

-- Chris
I would expect that the CHF will appreciate far more than the EUR. It doesnt make sense to invest in EUR when you hold a far stronger currency right now.. This is the reason the SNB abandoned the peg... because they cannot stop the CHF rise against the EUR.

The best thing to do is take advantage of your increased purchasing power as best you can with regards to your expenses.
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  #39  
Old 18.01.2015, 20:08
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Re: Risks of buying Euros now?

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Safe solution: Keep half your money in CHF and half your money in Euros at any time. The lost on one side will be compensated by the gain on the other side in any case.

There is no win-win solution, only risks, no way to make currency speculation full proof. Somehow, I am thankful for that.
If you transfer only half the money across and leaving the other half behind you just halve your gains or losses in the exchange rate. That is all. This could be what you're looking for, or not.

Agree though that there's no foolproof way to do it!
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Old 18.01.2015, 20:16
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Re: Risks of buying Euros now?

A huge socialist tendencies of the eu state make it a no brainer to hold swiss francs or equities rather than buy euros.
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