Added to my TODO list for next week: figure out ways to move some of my cash savings, such as they are, out of USD
Blowing into the wind, I’m sure. But. https://masto.ai/@Nonilex/115879305258736619
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Discussion
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@inthehands Be sure you talk to a tax advisor when you're working on figuring it out, as I gather there may be US federal tax implications of substantial holdings and/or gains in foreign currencies.
@inthehands uggggh I needed to do this anyway for other reasons but have been putting it off >.<
@inthehands So "how" is easy. Wise. (You can sign up at wise.com, or if it amuses you, use my referral link at https://wise.com/invite/dic/robertn535). They do a fantastic job IMO of helping me manage international accounts.
But do note you'll take a pretty big hit on interest rates. (US savings interest rates are much better than € or £.) And I'm not sure that political manipulation of the Fed will have any near-term impact on the US$ *exchange rate.* The Fed isn't the Treasury.
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@cocoaphony
Thanks, you’re the second person to recommend Wise, and it looks good.
Re Fed vs Treasury: wouldn’t the Fed taking an inflationary path to juice the economy hurt exchange rates and/or lead to flight away from USD? (My understanding of this is pretty dim, so please forgive the cluelessness of the question!)
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@inthehands Maybe, but only indirectly. You're assuming that the Fed setting rates very low will trigger inflation. But rates were even lower than they are today a few years ago with even lower inflation. Lowering interest rates is inflationary only because it causes businesses to borrow and invest more. But other moves, like tariffs (and particularly unknowable tariffs), discourage investment, so they can fight, even as tariffs raise prices. And inflation doesn't by itself drive exchange rates.
The global financial system would I’m sure be •extremely• reluctant to abandon the USD as the world’s reserve currency — reluctant even well past some hypothetical point where it became clear that the Fed has become politicized and is engaging in currency manipulation to politically favor Trump. The market can stay irrational for a very long time.
But if that abandonment did happen, well…that would be a pretty hard genie to stuff back in the bottle, and I can’t even begin to imagine the fallout.
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@inthehands yep. I’ve been thinking a ton about that this year. And from what I can tell, most of the finance world is not. Like, they’re still talking about covering international diversification through funds in USD. Yeah no, that won’t work.
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@lkanies @inthehands My experience with the finance world so far has consisted entirely of insiders explaining to me that the world is not run by responsible adults. 🙃
@inthehands I don’t disagree but the basic problem is that there’s really no plausible replacement as a reserve currency. China and Russia are strictly worse for political control, and the Euro doesn’t want the job.