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Unless somebody wins with a decisive margin, both in raw votes and in the Electoral College, there is a probability that the political polarization in our country will lead to serious chaos after the election. Whoever loses, they or their supporters are not likely to accept it unless it is overwhelming, which it probably will not be. The recent string of riots may seem minor compared to what may be in front of us. Mail in voting may mean that decisive results may be delayed days if not weeks after election day, which will only feed the angst.
If it looks like our very system of governance is in doubt, then our economy may take a big hit. The stock market is one bellweather, but bonds and the value of the dollar in the foreign exchange market may also be hard hit.
A recent wargaming by a group composed of Democrat operatives and "Never Trump" Republicans forecast one possibility that Biden would refuse to concede if Trump won narrowly, followed by some Democrat governors attempting to substitute Biden electors for Trump electors who won narrowly in their state, a contested result at the Electoral College, followed by the House and Senate recognizing different people as president, the west coast states threatening to secede, and everyone looking to the military as the final source of settling the issue.
While that may well be an overblown scenario, even lesser divisions can have dire impacts on our economy and our investments, and the chaos may continue for weeks or months, with economic impact lingering even longer.
What to do? I am out of stocks totally, and by election day want to be out of dollars as much as possible. I am debating what to do about rental property, as property values may also be impacted. I am increasing my holding of precious metals, and looking at foreign currencies. I am looking at a mix of currencies - some euros, some Canadian dollars, some Swedish kronor and possibly Danish kronor, some yen, and some Polish zloty. The problem in the states is buying and holding foreign currencies. If I was overseas in eastern Europe, I could buy physical currency at good rates at exchange houses and put it is a safe deposit box. Exchange rates for physical currency here are awful from all the sources I am aware of. A string of bank accounts would require different banks for different currencies, for the most part, although some banks in eastern Europe allow accounts in euros, Swiss francs, and dollars as well as local currency. That is impractical. An added problem is that one provision in Obamacare purports to require foreign banks to file reports on accounts held by Americans, which most foreign banks assert the US has no power to make them do. While many eastern European banks simply ignore that law and still deal with Americans, many western European banks will no longer open accounts for Americans. The Wuhan coronavirus also creates problems in flying to Europe to acquire physical currencies and put them in a safe deposit box.
Until a few years ago, I would have heavily gone into Swiss francs, one of the strongest currencies in the world historically, but the Swiss for a number of years have been taking steps to depress their currency so as not to get too far ahead of the euro. The EU is their biggest trading partner, and the strength of the Swiss franc was pricing their exports out of that market. Right now, the Swedish kronor is particularly appealing. Sweden did not do a virus lockdown, prefering to deal with it by herd immunity, and now their economy is booming compared to everyone else.
I don't want to rely totally on gold and silver, but building a currency portfolio right now is not so easy. Before I do more research to try to find a solution to buying and holding foreign currencies here, does anyone have any suggestions?
If it looks like our very system of governance is in doubt, then our economy may take a big hit. The stock market is one bellweather, but bonds and the value of the dollar in the foreign exchange market may also be hard hit.
A recent wargaming by a group composed of Democrat operatives and "Never Trump" Republicans forecast one possibility that Biden would refuse to concede if Trump won narrowly, followed by some Democrat governors attempting to substitute Biden electors for Trump electors who won narrowly in their state, a contested result at the Electoral College, followed by the House and Senate recognizing different people as president, the west coast states threatening to secede, and everyone looking to the military as the final source of settling the issue.
While that may well be an overblown scenario, even lesser divisions can have dire impacts on our economy and our investments, and the chaos may continue for weeks or months, with economic impact lingering even longer.
What to do? I am out of stocks totally, and by election day want to be out of dollars as much as possible. I am debating what to do about rental property, as property values may also be impacted. I am increasing my holding of precious metals, and looking at foreign currencies. I am looking at a mix of currencies - some euros, some Canadian dollars, some Swedish kronor and possibly Danish kronor, some yen, and some Polish zloty. The problem in the states is buying and holding foreign currencies. If I was overseas in eastern Europe, I could buy physical currency at good rates at exchange houses and put it is a safe deposit box. Exchange rates for physical currency here are awful from all the sources I am aware of. A string of bank accounts would require different banks for different currencies, for the most part, although some banks in eastern Europe allow accounts in euros, Swiss francs, and dollars as well as local currency. That is impractical. An added problem is that one provision in Obamacare purports to require foreign banks to file reports on accounts held by Americans, which most foreign banks assert the US has no power to make them do. While many eastern European banks simply ignore that law and still deal with Americans, many western European banks will no longer open accounts for Americans. The Wuhan coronavirus also creates problems in flying to Europe to acquire physical currencies and put them in a safe deposit box.
Until a few years ago, I would have heavily gone into Swiss francs, one of the strongest currencies in the world historically, but the Swiss for a number of years have been taking steps to depress their currency so as not to get too far ahead of the euro. The EU is their biggest trading partner, and the strength of the Swiss franc was pricing their exports out of that market. Right now, the Swedish kronor is particularly appealing. Sweden did not do a virus lockdown, prefering to deal with it by herd immunity, and now their economy is booming compared to everyone else.
I don't want to rely totally on gold and silver, but building a currency portfolio right now is not so easy. Before I do more research to try to find a solution to buying and holding foreign currencies here, does anyone have any suggestions?
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