If "world exchange currency" is changed, what will happen to our US currency?

I couldn't fit it all in the subject line, but if the "World Reserve/Exchange Currency" is changed, like the European governments are currently discussing and the dollar value heavily drops, what will happen to our collections?

I am most likely just paranoid, because I read that 'Stransberry' investment thing. But what if it is at all true? I looked it up separately and it is true about several governments having a 'Secret Meeting, WITHOUT the US" last fall. The meeting was supposively discussing ditching the dollar as the world exchange currency and adopting several other currencies. I also read that the 'Stransberry' thing is a total fraud, your oppinions? I'm just trying to think and plan ahead for my US currency collection, because I am currently heavily adding to it daily.

 

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Nothing would happen to *my* collection, but I assume you're talking about folks that collect US notes. My guess is that if there were some sort of dramatic inflation in the US, then the component of your collection that was not numismatic, ie, the component tied to simply the cash/spend value of your notes, would be in trouble. E.g. An old silver certificate is collectible not because of its $1 value, but because it has a collectible numismatic rarity. But a 2006 $100 note in CU is not worth $102 because of numismatic value, but largely because it's current cash. That note would obviously trade at prices largely influenced by inflation.

Realistically keep in mind that most countries outside of the US have demonetized their currencies many times, and their old notes are 100% numismatic in value. It is pretty unique to the US to have "I can always spend it" as a fall-back.

Dave

 

Interesting observation... I am assuming *your* collection is probably based off of some foreign currency, am I right? Euro... Mark... Pound...? I was also highly considering (forgot to add in original post) going to the bank and stashing aside some foreign currencies*... Does anybody think this could be good?

* In the case that the dollar has a major drop, won't international currencies go up in value in our country?

 

Very few of my notes are actually spendable. So for me, if the USD goes down by comparison to other currencies, then it would be advisable for me to not sell them in the US, but in those other countries. Same for your notes I'd say, at least if they are primarily numismatic in value. And of course this is only relevant if you're planning to sell. Buying is the inverse of course - buy in the countries where the exchange rate is in your favor.

Yes, you could do some trading in currencies to offset US inflation... I don't, but it certainly could offset issues local to the US.

Dave

 

When this type of talk started several years ago, the USD was at around .72, and the Euro was 1.45, and everyone spoke of the USD becoming "worthless", and Gold/Silver as the safe haven. Isn't quite working out that way at this moment. The USD is near .80 and the Euro at 1.32, and the safe haven ( As determined by US and international currency movement ) has become the USD, and not Gold at $2000+. But amazingly, there are still people ( especially on other coin and bullion forums) who still believe the USD is still dropping etc.

People generally believe that a strongest currency is the best for a country, but not necessarily a country who is highly export/import based as the US. A strong dollar reduces our export flow and our manufacturing base ( multinationals ), When the USD drops to .72 and the Euro is again 1.45, I might worry about a change in the world's reserve currency. The Swiss hooking the Franc to the Euro prevented the Franc from running away.

Jim

 

All very good information; but still, what explains China, the worlds largest dollar investor, getting out of the dollar? Its been reported that the Chinese government is getting out of the dollar as fast as it can without bankrupting its own country. I originally heard this with the Stransberry, but I challenged it and found it to be truthful.

 

I certainly don't know, nor does anyone else not strongly involved in the communist party or their central bank. I don't doubt it though, as I would if I were their boss. Over the years of controlling their currency valuation, they have driven tremendous exports, returning huge amounts of USD. Now that the USD has been getting stronger, it is reasonable to "sell" trade some off for Euros, Aussie, Brazilian, Russian , all of the currencies that are dirt cheap in a very long term view, which the Chinese tend to be. They will continue to hold large amounts as they need specialized imports from the US and thus the need for the dollar. I assume you have read of the "leaking" economy starting to be revealed in China. I really expect myself ( IMO, and all other disclaimers) that they will eventually have as severe a problem with their banks and companies books. I do not believe the Chinese are "selling" USD due to weakness, just increasing their future influence over Europe and the emerging nations.

Jim

 

I too have wondered about my collection of U.S. currency and what would happen to its value if the dollar went down the tubes. As Dave M said :

"Realistically keep in mind that most countries outside of the US have demonetized their currencies many times, and their old notes are 100% numismatic in value."

As long as the economy is not completely destroyed and people have funds to purchase notes our collections may still hold value. Numismatic collections are built with disposable funds and we've already seen less people being able to continue adding to their collections, many had to sell. I have no answer for what may happen to my collection of U.S. currency if the dollar lost its status. The one thing that makes it less of a worry is that I am building my collection as a hobby, not as an investment. I expect to lose money on hobbys, the way I get my money out of them is by enjoying them. Investments are a different matter.

In your second post you mentioned exchanging some U.S. dollars for another countrys currency; that's more of an investment issue. It is also what I think is a good idea and have already done. From what I've read a lot of money managers are suggesting the currency of countrys with commodities such as Canada, New Zeland, and Australia.

Several years ago I read that Canada was the only nation in the G7 that did not have a deficit; that was when the exchange was .80 to the U.S. dollar. I should have made the exchange then instead of waiting until the exchange was $1.02 to $1 U.S.

Metals I bought 3 to 10 years ago have come down making a buying opportunity but I'm done buying. The only reason for them to have come down to this level along with the dollar gaining some strength is because of fear of Europe and the Euro. Nothing has changed here to make the dollar worth more, it's just a better of two evils. Give it a little time for Europe to be moved to page 2 and the dollar problems will be back on page 1.​

 

Much of the comments have revolved around diversified investing in "money" from various countries. sadly, there are few countries with money of much intrinsic value at all. it is all "fiat," or valued solely by government decree. In a worst-case scenario, the 'money' would be useless in buying essential commodities. Real money has intrinsic value to both buyer and seller. Look to gold and silver to hold their purchasing value. If times get even worse, you can't eat silver bullion, but you can eat soup bullion. Food storage is a good idea.