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  #41  
Old 18.01.2015, 20:56
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Re: Risks of buying Euros now?

Go buy stuff that you really need in Germany. Food, furniture, household supplies. That is real wealth.

Money is just paper, a symbol of wealth, not wealth in its own right. You can't eat money.
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  #42  
Old 18.01.2015, 21:12
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Re: Risks of buying Euros now?

Many Germans remember the Weimar Republic and the hyperinflation after World War I (1923). Though very scary this is not likely to happen again and if the euro is to fail (and it will be challenged coming 6 months) Germany would actually benefit from a collapse of the euro (in the short term). In the mid- and longer term economic growth in Europe will significantly slow down so a collapsing euro is a bad thing and will be defended. So exchange rates have become very very political and have less and less to do with the performance of the economy in the country that issues the currency.

Here is a stamp from Weimar of 5 bilion (that is Miljarden) DMark as pictures speak louder than words...
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  #43  
Old 18.01.2015, 21:26
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Re: Risks of buying Euros now?

Actually regarding hyper inflation, I am curious about what happened to stock prices of companies that were "tradeable" at the time...

At least the Frankfurt "borse" was around before the 20th century and I think there were other German ones already as well.

I found this one showing that the German stocks fared reasonably well, even if denominated in USD
http://www.businessinsider.com/heres...n-2011-11?IR=T
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  #44  
Old 18.01.2015, 21:55
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Re: Risks of buying Euros now?

what you describe is exactly what hyperinflation is...
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  #45  
Old 18.01.2015, 22:01
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Re: Risks of buying Euros now?

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what you describe is exactly what hyperinflation is...
I thought it was "defined" (if there is a rigorous definition) in terms of regular product prices like food etc., and that most stocks just followed suit because of that.

Possibly the best definition is in terms of the currency against a foreign one?

I didn't think it is defined in terms of stocks / aggregate, I imagine some companies are negatively affected by hyperinflation and their stock would go down (if not when measured in the own currency, when measured in terms of a foreign one). This is why I wanted to see what happened, as it is often said that being invested in stocks will protect you from hyperinflation - in that case it mostly did and I don't think anyone that had stocks from the start that time was complaining, but there was still a sizable negative spike in the end portion there, if measured in USD.
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  #46  
Old 18.01.2015, 22:17
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Re: Risks of buying Euros now?

Does anybody recommend some good oil stocks?
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  #47  
Old 18.01.2015, 22:23
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Re: Risks of buying Euros now?

price inflation is indeed described in terms of regular prices for food, energy etc. The word inflation is also used for other things. Price inflation is often communicated and important for political decisions but at the same time a lot of what we buy is not calculated in that inflation figure. For example housing has massively inflated (higher price for same value) while the interest and inflation was low. If you stick with the official figures you miss out on a big scale.

We expected high inflation after the credit crisis in 2008 but that never happened. We are now afraid of deflation which is worse as it it will lead to people stopping to consume (because tomorrow everything will be cheaper). Best hedge against inflation after the crisis was said to be physical assets as commodities, real estate, oil and those are not counted in the official figures. So stocks may be a hedge but only if it is an asset of tangible things. These all went up and are coming down as we speak...

Wealth is evaporating in Europe. In some situations fast and some slow. But is is evaporating. forget economics, it is politics
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  #48  
Old 18.01.2015, 22:24
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Re: Risks of buying Euros now?

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Does anybody recommend some good oil stocks?
Just buy only extra virgin.
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  #49  
Old 18.01.2015, 22:25
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Re: Risks of buying Euros now?

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Does anybody recommend some good oil stocks?
why would that be interesting?
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  #50  
Old 18.01.2015, 22:50
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Re: Risks of buying Euros now?

if I were looking for a way to cash out some of the paper gain of last week and hedge against my CHF, I would buy USD rather than EUR.
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  #51  
Old 19.01.2015, 08:09
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Re: Get a mortgage / credit an invest in Euros?

Haha, I meant the other way around! I meant that the franc could get stronger, and could even get to 1 EUR = 0.90 CHF, and that maybe in some years, that franc could weaken a bit to, for example 1 EUR = 1.10 CHF.

So, getting a mortgage from a Swiss bank might only work for property in Switzerland. Then maybe another possibility would be not getting a mortgage, but a credit at a higher interest rate. Which actually might make it harder getting some interesting return, since you would need to get profits above that interest rate the bank is charging you.

Say, for example, you could expect to get maybe 5% - 6% from that money you're borrowing, since you don't want to have risky investments. That would make sense if you can get an interest rate of 2% from a mortgage... but if the bank charges you an interest rate of 5% for a normal credit, then there's not all that much to gain.
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  #52  
Old 19.01.2015, 09:00
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Re: Risks of buying Euros now?

If you are German and plan to return to Germany, why not look at buying euros and using those euro to buy a property in germany?
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  #53  
Old 19.01.2015, 09:14
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Re: Risks of buying Euros now?

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Many Germans remember the Weimar Republic and the hyperinflation after World War I (1923). .
That's over 90 years ago! Just how many Germans now alive actually experienced that?
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  #54  
Old 19.01.2015, 09:49
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Re: Risks of buying Euros now?

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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.
You really think that the CHF will become even stronger vs. the euro?
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  #55  
Old 19.01.2015, 10:39
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Re: Risks of buying Euros now?

I attended a conference back in Nov and one of the Ex SNB chief commented that the EUR in its current form will not be able to survive unless the ECB does something that is a game changer and I'm not just taking about QE. It has to be something more fundamental than that.
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  #56  
Old 19.01.2015, 11:01
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Re: Risks of buying Euros now?

And there is this one upcoming on Thursday:

http://www.forbes.com/sites/timworst...ght-well-fail/

http://www.telegraph.co.uk/finance/e...io-Draghi.html

I don't know how meaningful it is to buy Euros in this current situation, especially since you are not thinking of buying something in Germany; as some of the others have stated, you need to buy assets - money means nothing on its own.
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  #57  
Old 19.01.2015, 11:23
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Re: Risks of buying Euros now?

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I attended a conference back in Nov and one of the Ex SNB chief commented that the EUR in its current form will not be able to survive unless the ECB does something that is a game changer and I'm not just taking about QE. It has to be something more fundamental than that.
Yes, but you need a certain amount of money to buy assets. What if you have just, say, 20,000 CHF? Does it make sense to change that?
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Old 19.01.2015, 12:10
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Re: Risks of buying Euros now?

I hope I´m not wrong, but I just changed some CHFs into USDs. Now waiting to see what will happen Thursday and then (or shortly after) swap back to CHF.

Last edited by ChrisNeedsToKnow; 19.01.2015 at 12:21.
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Old 19.01.2015, 12:26
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Buy AUD now or wait for ECB announcement?

Wanting to buy a heap of AUD. Exchange rate is currently 1 CHF = 1.40 AUD.

Do you guys reckon its better to do it now, or wait for the ECB announcement? Is the ECB announcement likely to effect CHF, or have a flow on effect to the AUD?

Obviously the the ECB announcement is likely to effect people wanting to buy EUR, but what about those wanting to buy other currencies such as AUD or USD?

Thoughts?
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  #60  
Old 19.01.2015, 12:28
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Go buy stuff that you really need in Germany. Food, furniture, household supplies. That is real wealth.

Money is just paper, a symbol of wealth, not wealth in its own right. You can't eat money.


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Actually regarding hyper inflation, I am curious about what happened to stock prices of companies that were "tradeable" at the time...

At least the Frankfurt "borse" was around before the 20th century and I think there were other German ones already as well.

I found this one showing that the German stocks fared reasonably well, even if denominated in USD
http://www.businessinsider.com/heres...n-2011-11?IR=T
Property owners did pretty well too, in terms of real estate retaining its value despite the odds. People sold off the family silver and gold but didn't touch the real estate unless as a last resort.

A lot of people went over to growing vegetables in their own gardens and even raising poultry, pigs and things and either using them to feed their own families or trading them on the black market.

Last edited by 3Wishes; 20.01.2015 at 19:25. Reason: merging successive posts
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