PS – Ukraine’s currency, the “Greevnah”, has gone from 8 to 10 to the dollar, in just over the past few months. In the near future, will the dollar drop that fast against the currencies of China, Canada, etc, and against gold?
Hi, I am not in the US, but I think about where to house cash outside the country I live in too. Remember, if we are talking cash as in bank accounts, what we have is a loan to the bank outstanding. If the bank goes into default, then you are relying on the government deposit insurance scheme in your jurisdiction – administered by the FDIC in the US, and that insurance is limited to a maximum ceiling amount per person per bank. So, the question of where to put your cash outside the US involves answering the question what country’s credit am I comfortable with, and which bank in that country. In a crisis everything can change in a heartbeat. A country can impose currency controls, take your deposits (see the case of Cyprus) and arbitrarily decide the recovery amount if any you will be able to get for your funds. One can indeed buy gold, but please don’t see gold as an inflation hedge in the short term, it does not seem to behave like one. To the extent that it is no one’s liability it has safety in terms of credit. Best to hold some physical amount of it in one’s possession, but be prepared for value fluctuation versus dollars.
If we look for solid countries out there, it would seem to me that one of the safest is Norway, and one might consider putting some cash in a Norwegian bank, although at this point I don’t know which one. The question is then, does one hold US Dollars or Norwegian Krone (NOK). If you hold NOK, you then carry price risk to the dollar. A more popular jurisdiction of late has been Singapore and the benefit here is that Singapore wants to become the new Switzerland, so banking secrecy and security are very tight, but bear in mind what might happen in a crisis.