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  1. #1

    Rese.rve Currency

    What action should investors(I a Vanguard fund investor) take now if it is correct that the U.S. dollar is no longer going to be the world's reserve currency which some suggest will happen soon based on trends?

  2. #2
    It may be much later than "soon". Replacement isn't in place. Euro doesn't have the needed confidence. Yuan is still a controlled currency, not freely traded. Yen? Hardly. SDRs? Forget it.
    So worry over other stuff. If you own overseas funds that are unhedged, you are diversified in currencies.

  3. #3
    Only somewhat related but of interest, Monday's sharp drop due to Russian troops entering the Cramea saw a rush to the usual safe havens. They were gold, US treasuries, and (surprise) the Japanese Yen (FXY). The dollar (UUP) sold off.

  4. #4
    The conditions for the US to loose global currency status would be for China or the EU to become a more trusted government with a more stable economy.
    If that happens in the near future, you will want to have Gold, Guns, Ammo and Farmland. You will need the guns and ammo to keep hold of your gold and farmland.
    A more peaceful transition is decades away.

  5. #5
    As non-USA persons and global investors We'd like to see a basket of currencies as "the reserve currency".
    We have a global equity ETF = VT. ER = 0.18%. Vanguard needs to lower the ER to < 0.1% to get us interested vs using 50% VTI + 50% VXUS.
    We need a global bond index (x% BND + y% BNDX = ???) and a global currency index.


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