Quote:
Originally Posted by SteveSouthwood
Is this supposed to be funny? Last week the S&P 500 grew by 1.44%, the DOW grew by 0.44% and the NASDAQ grew by 1.34%.
Now if you said last Thursday was a good time to own cash then I would have agreed.
|
What are you, a lawyer or something ?
If you're going to be like that it's going to be hard for us to talk. Last week was a fine time to own cash, lots of people wish they had been in cash, and there are other great times to have cash in your pocket too, I vote we move on ...
Quote:
Originally Posted by SteveSouthwood
Then you say the USD has declined by 30% in 2 years. Yes - the USD is declining - bad for those cruisers who are out there and didn't plan for this. But 30%? Really?
Probably a good comparison is the EUR which a currency for a major block of countries. In the last two years the dollar has declined against the Euro by about 12%. In exactly the same time period the S&P went up by 17%. So if Monsieur le Peu-peu converted his Euros to USD excactly 2 years ago, bought into the S&P and sold today, he wouldn't be too upset. When he realizes that EUR savings rates are less than 3% this would have been a smart move. Furthermore, the 2 year window is a particularly bad one as the S&P was on a local bump exactly 2 years ago and the dollar had some temporary strengthening. Choose 2.5 years for your analysis and Monsieur would have been very pleased with himself.
|
Yep, 30%. And you're doing it again. You know as well as I do that the Euro has been falling in value too. And to skip right on through this whole discussion without beating it to death - no, the CPI isn't a good measure because it takes years for systemic inflation to catch up, yes, a basket of goods is a good measure so long as it isn't weighted against raw materials because it takes months to years for inflation to work it's way through the supply chain (depending on the chain), no, gold alone isn't a perfect measure because it's too manipluated but it's really good, no, housing isn't a good measure because it is a bubble, no, you can't just compare against other fiat currencies during a global consolidation, and yes, 30% is still a good ballpark of how much the $us has lost value. Please I beg you not to make me prove it in detail, but here are a few graphs just for fun.
[IMG]http://www.propertyinvesting.net/cgi-******/csNews/image_upload/specialreports_2edb.UK%20House%20Prices%20since%20 1991.gif[/IMG]
And I apologize all these charts don't run through 2007, I didn't make them.
And if you want to post some graphs to show how I'm a moron and have no idea what I am talking about, might I suggest wheat through 2007, domestic milk prices, lumber, or possibly zinc. Lumber in particular probably has a really ugly graph, and it might even look like the $us has gained a lot of value since domestic home building is down.
Quote:
|
Originally Posted by SteveSouthwood
But this does raise an interesting point which is relevant to Sailnet. If you're setting off for 5-10 years based on your savings and are going to be living in many different countries, you are taking on significant exchange rate risk if all your savings are in USD. It might go up but it might go down. If your kitty is the right size, you might want to consider spreading it across a few currencies before you leave so your trip is not cut short. Course you'd feel bummed if the dollar strengthened.
|