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How Do I Get Out Of Sterling?


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I have saved up a fair amount for a deposit on a house (in the UK) and I think sterling is in for a rough ride!

How do I diversify out of sterling?

I know of bullion vault but we all know gold prices are very high, however with currencies now under attack and china dumping the $, this could still present a good investment not least because it's dollar denominated, so if the pound falls I win.

How about the Norwiegan currency, which is very strong. How would I invest in that?

Thanks.

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I have saved up a fair amount for a deposit on a house (in the UK) and I think sterling is in for a rough ride!

How do I diversify out of sterling?

I know of bullion vault but we all know gold prices are very high, however with currencies now under attack and china dumping the $, this could still present a good investment not least because it's dollar denominated, so if the pound falls I win.

How about the Norwiegan currency, which is very strong. How would I invest in that?

Thanks.

withdraw it all as cash and send it to me, I will look after it for you!

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Some High Street banks, eg Barclays, will let you open a foreign currency deposit account without charge, subject to you keeping a minimum balance. (Others want £5 a month which is a rip off!) The interest rate will be pants but you get wholesales rates on currency transactions - you'll also need a Barclays current A/C.

Norweigan Kroner sounds like a OK idea considering they are sitting on 6 billion barrels of oil. Of course it would have been an even better idea a couple of years ago. :lol:

Even if you don't use the foreign currency account much you at least have it ready to ship a load of pounds offshore if things turn nasty.

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I have saved up a fair amount for a deposit on a house (in the UK) and I think sterling is in for a rough ride!

How do I diversify out of sterling?

If you are interested in Gold there is also GoldMoney.com

I think HSBC do foreign currency bank accounts as well

Watch out though, if you want the money for a house in the UK priced in sterling. If you are wrong about sterling, currency speculation is one of the quickest ways to lose all your money.

Diversifying is fine, but be careful.

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I have saved up a fair amount for a deposit on a house (in the UK) and I think sterling is in for a rough ride!

How do I diversify out of sterling?

I know of bullion vault but we all know gold prices are very high, however with currencies now under attack and china dumping the $, this could still present a good investment not least because it's dollar denominated, so if the pound falls I win.

How about the Norwiegan currency, which is very strong. How would I invest in that?

Thanks.

You could buy a house or two

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If I'd got my money in sterling, waiting to buy a house in sterling, I think I'd stay in sterling.

My opinion as well.

You're looking at two lots of txn costs as well if you convert.

I can see the pound having a surge if Labor lose the election and go up to €1.30 IMHO. So that may be a better time to get out.

Edited by barry
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I have saved up a fair amount for a deposit on a house (in the UK) and I think sterling is in for a rough ride!

How do I diversify out of sterling?

I know of bullion vault but we all know gold prices are very high, however with currencies now under attack and china dumping the $, this could still present a good investment not least because it's dollar denominated, so if the pound falls I win.

How about the Norwiegan currency, which is very strong. How would I invest in that?

Thanks.

I am shifting my savings back into US $ this morning. I daresay Norwegian Kr. would be a good bet also. Sterling and the Euro are stay aways.

AFAIK you go to your bank and ask for an account denominated in a foreign currency. I have a US bank account so its easy for me. The other possibility is to drop into the London branch of a Norwegian bank with enough ID and open an account. Or open an account online with FOREX which is easiest but it could lead you into currency trading addiction where everyone loses.....eventually.

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My opinion as well.

You're looking at two lots of txn costs as well if you convert.

The cheapest way I've found to convert to Euro's is to take it to Krakow and convert cash. This give a idea of rates

http://www.kantory2.republika.pl/

you are looking at paying a spread of 0.45%, peanuts compared to rates in the UK (5-6% seems common). I think you would pay this going GDP to Euro but you would have to check with them, although paying twice is still cheap..

List of rates at Kantors in all of Poland http://kantory.pl/kursy/

You must declare it to customs (over 5keuro) and prove that you have it legitimately (i.e. out of a bank account). They would confiscate it if they suspect its drugs money or whatever.

The Kantors hold large amounts in cash - I've converted £10K with no problem, but count the money very carefully and watch it when they count it.

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The cheapest way I've found to convert to Euro's is to take it to Krakow and convert cash. This give a idea of rates

http://www.kantory2.republika.pl/

you are looking at paying a spread of 0.45%, peanuts compared to rates in the UK (5-6% seems common). I think you would pay this going GDP to Euro but you would have to check with them, although paying twice is still cheap..

List of rates at Kantors in all of Poland http://kantory.pl/kursy/

You must declare it to customs (over 5keuro) and prove that you have it legitimately (i.e. out of a bank account). They would confiscate it if they suspect its drugs money or whatever.

The Kantors hold large amounts in cash - I've converted £10K with no problem, but count the money very carefully and watch it when they count it.

If you are changing over 10k, you can spreads down well under 0.45% using a foreign exchange specialist Currency Solutions is the one I use but there are several others. NB to get the best rate you have to haggle, for large amounts aim for 0.2%.

Regards

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Some High Street banks, eg Barclays, will let you open a foreign currency deposit account without charge, subject to you keeping a minimum balance. (Others want £5 a month which is a rip off!) The interest rate will be pants but you get wholesales rates on currency transactions - you'll also need a Barclays current A/C.

Norweigan Kroner sounds like a OK idea considering they are sitting on 6 billion barrels of oil. Of course it would have been an even better idea a couple of years ago. :lol:

Even if you don't use the foreign currency account much you at least have it ready to ship a load of pounds offshore if things turn nasty.

Yup I've got a euro account which is doing as bad as the pound! lol Might setup a dollar account today.

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A brilliant question. I'll be watching this thread closely.

Me and my girlfriend (both aged 21) have about 10k in cash in bank accounts, 20k in isas/savings and at least 1k adding to that each month in preperation for a house deposit once prices are low.

(Just because you 'can' afford a deposit/mortgage does not make it good value. I refuse to partake in this ponzi scheme as it's current level).

I'm scared sterling will collapse and be worthless, and my hard earned savings will have no value. I've been looking at gold/metal, currencies, ftse shares but I'm still not sure how best to defend myself.

Edited by fadeaway
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If I'd got my money in sterling, waiting to buy a house in sterling, I think I'd stay in sterling.

+1 especially if you're looking to buy a house soon. If you're thinking of buying it at least a couple of years in the future then go ahead and diversify, but you won't be looking to diversify into other currencies because of the poor exchange rate so you're probably looking at commodities

Edited by catmandu
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You can invest in currency funds easily and cheaply. You can find funds that attempt to beat the odds, but you have to watch out for the fees charged; at the kind of interest rates available in the market today a few tenths of a percentage point in fees will wipe out your gain from interest.

The value of a currency depends on several things:

- its use as a reserve currency (this concerns mainly the dollar, to a small extent the euro, and also the SDR (special drawing right; perhaps mimicked by some funds, I haven't looked). The point of this is that there is a huge demand for dollars even when their intrinsic value would cause them to fall, or fall further.

- interest rates (Bank rate, Federal funds rate, Discount rate, etc.)

- indebtedness of a country (This is why Greek bonds have a higher interest rate than other euro-denomiinated sovereign debt)

- trade flows

- resources of a country (Canada, Norway, Russia - as Sterling used to be - have petro-currencies)

The Swiss franc and the euro have a special relationship:

http://www.investopedia.com/articles/forex/06/EURCHFRelationship.asp

but the Swiss franc is backed by substantial (but becoming less so as the country sells it off) reserves of gold. And the Swiss franc interest rates are very low now. Should interest rates in Switzerland rise, the franc itself may do well.

You can freely trade in currencies in your home country; once your money crosses borders it is reported. That the US Internal Revenue Service, through the Treasury, may get to know of the transfer means nothing unless you have a US connection; but most US intelligence is shared with the UK (think: Cheltenham, The Puzzle Palace) so don't use purported currency trades for money laundering or tax evasion.

That said, UK Sterling but not foreign currency accounts held in UK banks are included in the estate for Inheritance Tax purposes of persons non-domiciled in the UK. If you are domiciled in the UK or have lived here for 17 out of the last 20 years you can ignore this point.

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Personally I have

gold (general advice seems to be avoid gold ETFs and go physical)

commodities (ones that DID NOT boom in 09 ...)

US treasures

Euro corp bonds

A "long CFH / short $" fund

So far I've "made" about 5% nominal but realistically thats nearly all sterling devaluation ...

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This comes up all the time. You will always hear from people who moved into the 'right currency' at the right time. You will rarely hear from those who did the opposite. Last year when the £ was nearing parity with the € - Loads of people were talking openly about moving their cash to the €. Now it is about 1.11.

When was the last time you heard anyone on here reminding us all that they moved into the € at 1.04 ? Not seen even one myself. When there must be loads.

Be careful with currency. I think diversification makes sense. However doing it now does not. Diversifying should be done when you don't think the whole thing is about to collapse. That is the entire point. If you are doing it now you are simply gambling. Good luck and it may come off. Then again it may not.

Anyway I am not an investment expert so what do I know !

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I have saved up a fair amount for a deposit on a house (in the UK) and I think sterling is in for a rough ride!

How do I diversify out of sterling?

I expect there may be charity appeals doing the rounds on behalf of folks in Chile who've lost their homes and livelihoods.

Just be sure you offload your sterling to real charities, not scammers.

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This comes up all the time. You will always hear from people who moved into the 'right currency' at the right time. You will rarely hear from those who did the opposite. Last year when the £ was nearing parity with the € - Loads of people were talking openly about moving their cash to the €. Now it is about 1.11.

When was the last time you heard anyone on here reminding us all that they moved into the € at 1.04 ? Not seen even one myself. When there must be loads.

Be careful with currency. I think diversification makes sense. However doing it now does not. Diversifying should be done when you don't think the whole thing is about to collapse. That is the entire point. If you are doing it now you are simply gambling. Good luck and it may come off. Then again it may not.

Anyway I am not an investment expert so what do I know !

Yeah I agree with this. The Global Financial Collapse is essentially a chaotic event, so it really is impossible to predict where and when the next shoe will drop. An economy (and associated currency) that looks strong one month can look weak the next.

I've stayed in Sterling, although I've been tempted by NOK, but really I know they're both gambles. Maybe NOK is 3/2 whereas GBP is 4/1 atm, but neither has a guarantee. As ever, only those who will end up having gambled correctly will be crowing about their financial omniscience.

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If I'd got my money in sterling, waiting to buy a house in sterling, I think I'd stay in sterling.

Even when you stay in sterling, it all comes down to good timing anyway.

When inflation and the IRs pick up, house prices may go down but the mortgage repayments will become more expansive.

So, wait till the house prices come down a bit in a couple of months and then fix your mortgage for over 5 years to survive the inflationary mess.

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Sorry, I don't get this at all. In fact I never understand this. I do not understand why gambling on forex is a way of wealth preservation.

Firstly,

You have savings in sterling.

You are buying in sterling.

Why do you think a plummeting pound is going to affect house prices?

I believe a plummeting pound would most likely make house prices fall, as we are reliant on imports. Daily cost of living goes up, thus amount of money available to service a mortgage declines, therefore house price falls. This would mean your savings as a %age of the cost of a house will rise.

Secondly,

Forex is notoriously hard to get right, especially over prolonged time frames. Sterling will move up and down relative to other currencies. Ok the UK is ******ed, but so is the US, EU and Japan on many levels. For sterling to fall you need to argue it is more ******ed than those other 3.

Thirdly,

I think you have missed the boat. Here is sterling versus mjoar currencies (figures are approx)

Versus Now Recent Swing Low Most Recent Swing High

USD 1.50 1.35 1.70

EUR 1.10 1.02 1.19

JPY 134 119 163

CHF 1.61 1.51 1.81

Any decent forex chart will show you clearly what I am saying. So we are closer to the Jan 2009 bottoms than we are to last year's tops. Sterling is making new lows versus the AUD.

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