Date: Sun, 30 Nov 2003 13:58:19 CST
From: "Nashville Pete" 
References:     <17f41cc6.0311301058.1dc08a93@posting.google.com>
Subject: Re: Alternative to Money market Funds?...Buggywhip thinking.
Newsgroups: misc.invest.financial-plan
	iQBVAwUAP8pL2/l/I4+O31e5AQEnxgIA6OdNc5l3M6ov67Gk7J7hF0FdYFth9FuR
	Dn/MdvHfzE1hoASYQHBbEa1DE6dJ3YAczq3ISu5GR/DhQp2fr4bS8g==
	=T2nh

> The key here is currency risk.
>
> While I, too, believe the dollar will fall, no professional forecaster
> has a better than random record of forecasting the dollar (ie throwing
> darts at a board has the same chance of being right).
>
> So I do not recommend taking on currency risk for the safest part of
> your portfolio.  Normally interest rates are higher in other countries
> for a reason, which makes their currencies more vulnerable.
>
> If you want to take on currency risk, a better place to do it is by
> buying a diversified international equity fund that does not hedge
> currency.

Sorry, but that's Buggy whip thinking.

The US$ no longer dominates. Argentina has told the IMF and World Bank to
"go the Hell" since it no longer needs the Petrodollar to buy Venezuelan oil
under recent bilateral agreements. The exclusive Petrodollar is soon doomed
to extinction as Oil will be bartered or bought for Euro's as well as US $.
That will end the domination of the US dollar as the sole international
trade currency. You can see it in the rise of Gold and the continuous drop
of the dollar. The IMF and World Bank will see it's power reduced.

The real risk is not to diversify the cash part of a portfolio beyond the US
dollar as the dollar declines and we get hit with the upcoming inflation
that the FED has guaranteed us with their past money supply policy. Why
concentrate too much in risky equity funds, especially foreign funds where
the managers find it easy the screw and rob the shareholders? There is no
reason to risk money in a stock fund when one can place one's holdings in
various CD's guaranteed by the FDIC and diversified in various currencies
i.e. Sterling, Euro, AUS$, CAN$, etc. Some CD's at everbank World Markets
are indexed to a package of currencies with a unique exchange and interest
rate.