What is the most stable currency in the next 20 years?

[FixieHartmann]

Here is a though experiment that I spent some time pondering about.

Say you have €1M in cash which you want to invest in one or more currencies with the goal of maximizing stability (not necessarily profit) for the next 20 years.
Which currencies would you choose with which share and why?

Conditions are:
- you can choose up to 4 currencies
- you have to do the initial investment this year
- you won't be able to re-balance or generally change anything about the investment for at least 20 years
- you can only buy fiat currencies, no other investments like Crypto, Stocks etc.

I think for me personally I'd go with something like:
- USD (40%)
- CHF (30%)
- RMB (20%)
- AUD (10%)

I'd love to hear your opinions!

 

[void]

a bit silly idea but interesting exercise... I'd go USD all in

 

[Nicholas Van Orton]

Anyone who claims to have an answer to that question is either︀ lying to you or a clairvoyant, in which case I'd ask for the Euro-millions or︁ whatever big jackpot lottery numbers combination. Jokes (or not) aside, the current monetary (lol), or︂ rather, debt-based economic system is based on USD-denominated debt slavery. That's a fact, regardless of︃ whether you like it, don't think it will hold for much longer, etc. As of︄ today, the USD and its shadow Eurodollar (USD offshore) system are king. Thus, to answer︅ your question as much an educated guess as possible, I'd say: 40% USD, 25% CHF,︆ 15% GBP, 10% SGD and 10% AMD (armenian dram). May increase in USD and CHF︇ and lower the others, but that should be your ballpark figures. I would avoid the︈ Euro (unless needed for daily expenses).

Finally, avoid AUD like the plague. You'll thank me︉ when it is at 0.4 vs the USD. And regarding the BRICS talk and the︊ new multi-polar world, I stopped speculating on rumours a long time ago (never served me︋ well), and I'd rather adapt to changes as I see them coming.

NVO

 

[JohnnyDoe]

So inflation no longer exists? doh948""

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[Nicholas Van Orton]

You asking me?

 

[JohnnyDoe]

Nicholas Van Orton said:
You asking me?
Click to expand...

No, it's a generic question. It doesn't matter which currency you choose, if you don't do nothing with it its value will invariably decline over time.

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[Martin Everson]

Interesting challenge. I love currency speculation. I would go with SDR basket weightings smi(&%. Or‌ the new updated weighting changes that take place from 1st August.

Currency	Weights determined in‍ the 2015 Review	Fixed Number of Units of Currency for a 5-year period Starting Oct⁠ 1, 2016
U.S. Dollar	41.73	0.58252
Euro	30.93	0.38671
Chinese Yuan	10.92	1.0174
Japanese Yen⁤	8.33	11.900
Pound Sterling	8.09	0.085946

 

[khinkali]

- USD (80%)
- RUB (20%)

Western currencies will tend to go down compared to USD (dollar milkshake?) and RUB is a‍ hedge because they are more about gold and commodities than "least worst fiat".

You said⁠ fiat but if I could cheat, I'd have gone for XCP 30%, SPY 30%, XAU⁤ 15%, USD 15%, RUB 10%

Oh that really changes things!
- USD (20%)
- RUB (10%)
- RMB (70%)

I kept a little USD as a hedge just in case the zero covid policy really⁢ does blow up the Chinese political system. I doubt it will and expect the CCP︀ to retain its power, so USD will head towards zero (like the last 100 years,︁ but much faster) while the 85% of the world outside OECD realigns to the new︂ order.

 

[FixieHartmann]

Well, of course you’re right in terms of inflation, but for this experiment we⁠ will have to ignore it, also because AFAICT it would affect any fiat currency anyway.⁤

Interesting! You are the only one so far who wouldn’t diversify, mind sharing⁣ your line of thinking? 🙂

 

[JohnnyDoe]

FixieHartmann said:
Well, of course you're right in terms of inflation, but for this experiment we will have to ignore it, also because AFAICT it would affect any fiat currency anyway.
Click to expand...

exactly! No fiat currency is immune from it, so in practical terms it is not a smart exercise.
In terms of compared performance (one currency against the other) you are attempting to predict the future 😀 If you find someone who can do that, not for the next 20 years, just for tomorrow, please let me know.

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[FixieHartmann]

Well, would you say that predicting the trends in currencies is the same as⁣ predicting trends in stocks? Because from a gut feeling I had the impression that there⁢ are definitely currencies that seem more stable than others. However you are probably right, this︀ knowledge is already priced into the exchange rate so trying to predict if a currency︁ is more or less stable in the future is indeed like betting on stocks (where︂ also the entire knowledge of the market is baked into the current price).

 

[JohnnyDoe]

FixieHartmann said:
Well, would you say that predicting the trends in currencies is the same as predicting trends in stocks? Because from a gut feeling I had the impression that there are definitely currencies that seem more stable than others. However you are probably right, this knowledge is already priced into the exchange rate so trying to predict if a currency is more or less stable in the future is indeed like betting on stocks (where also the entire knowledge of the market is baked into the current price).
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Wise words.
Contrary to the stock market, where the base long term trend is (must be) bullish, we don't really know anything about the future of currencies, apart from their inflationary nature. So we can't even say that we should follow the market, as we do with stocks, instead of trying to outsmart it.
In short: better to stay out of the Fx market, for the average investor.

We actually know one sure thing about fiat money, and it was said by George Washington on 9 January 1787:

“Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.”

Last edited: Aug 1, 2022
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[Rick Ross 305]

Your analysis might work in the short-term but I'm afraid they are fundamentally flawed imho..‌ to answer that, in the long-run, you should look primarily to the Debt-to-GDP ratios of‍ the underlying nations, that will completely change your perspective, you will eventually find out that⁠ even some EM ccys might be a much safe harbor than some large developed countries.⁤

 

[diatessaron]

Within the next 20 years all global economy will crash and a new currency will‌ be used to create the new system. Buy Lithium.

 

[369]

AUD
CAD

till the new monetary system based on gold

USD is the worst bet‌ anyone can do
Once Yen is implemented into the world reserve currency it autmaticly means‍ 40-50% of USD's value are gone.

There are some easy bets but thats is longterm⁠ and information i can't share on public

 

[JimBeam]

If you have EUR right now the best advice is not to touch them as‌ EUR is so weak that you'll loose so much money just exchanging it for USD,‍ CHF or any other currency.

After (or if) things are back to normal, better just⁠ invest all that into SP500.
The money will lose it's value holding it so long.⁤ You need to find a proper use for it to generate more money and preserve⁣ it's value.

 

[369]

EUR us dead.......good luck to the fools thinking eitherweise

https://markets.businessinsider.com...rouble-yuan-brics-reserve-currency-imf-2022-6
So much to USD

 

[void]

I have no strong opinion on this,‌ I tend to agree with you but...
I'm right now looking at currency forward rate‍ offered to me yesterday and 2 year forward (!!!) EUR->USD is 1.058 and 1 year⁠ rate is 1.049
it seems that at least short-term "big boys" believe ECB will do⁤ something and it will hold and strengthen

 

[369]

you are comparing the 2 most weak major currencies.....

 

[void]

I don't know man... wet dreams of BRICS countries about over taking the world order via‌ their new reserve currency is surely thrilling but I'd be surprised if they can do‍ it in 20 years (if ever) - US (and USD) is now stronger than ever⁠ and the war is a blessing for them

but I can be wrong of course,⁤ in the end I care about myself and not silly games of mafias