daft[at]hotmail.com (jt) wrote in message news:<be594162.0309301145.4ec0eaaf[at]posting.google.com> ...
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Ulp! Don't try to use an old dollar bill in eastern Europe! The
counterfeiters are very good, so there is great suspicion of an old or
heavily handled US dollar.

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You can, I believe, still take old european currencies to a bank and
exchange them for euros, but they are not legal tender. One of the
big issues was all that hidden money under matresses, black economy
etc. flowing back into the system.

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How about Permanent Portfolio fnd http://finance.yahoo.com/q?s=prpfx

Purer approaches are unhedged foreign bond funds, but that brings in
risk from bond cycles. You can get foreign bank accnts on internet
sometimes with high interest (eg. Norway), but that has it's own risk.

Could get gold stock funds (speculative) or more conventional foreign
stock funds. But much of foreign capitalization exists in tired
Japanese and European economies burdened with aging workforces,
about to plunder their economies via pension payouts (I do notice
in many of these places a rising tide of Filipino and other guest
workers that may help things). Anyway would it be best to target
less developed economies (asia, east euro, latin america) or small
growing companies like in fnd http://finance.yahoo.com/q?s=fismx

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This is such a good point where such bonds are indexed against
prices (probably understating rising service prices you experience)
and not the spikes in interest rates that may have experienced.

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But not cash. I've kept bills and coins that have gone obsolete
when I return to that country and try to use it (some Belgians
almost seemed ready to call police on me). Sure is nice the way
old US currency stays negotiable.

"John A. Weeks III" <john[at]johnweeks.com> wrote in message news:<270920030733294109%john[at]johnweeks.com> ...
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Agreed, but there may be funds that invest in gold shares that are
interesting. Because gold shares do pay (small) dividends, and the
world supply of gold appears to be diminishing (or rather, the cost of
production appears to be rising, and there has been relatively little
new investment, particularly in South Africa, over the last 20 years).

I hate gold as an investment, because I do not understand it. And
holding it as a hard commodity strikes me as a very expensive
investment strategy. But my very distrust/ distaste, could well be a
sign that there are real opportunities for contrarians. I note Marc
Farber has started a commodities fund (one way of playing that by a
closed end fun is the Merrill Lynch World Mining Trust, listed on the
London Stock Exchange: only about 30% of its assets, however, are gold
shares).

Gold plays an interesting role in portfolio hedging. Because it is
highly sensitive to the dollar and inflation (high volatility, and
relatively uncorrelated with the stock market), a relatively small
amount of gold can provide diversification benefits which would
require a much larger holding in foreign currency bonds (unhedged)
and/ or inflation indexed bonds.

Beliavsky is right. We are likely in for an extended period of a weak
dollar: this is to correct a record current account deficit, and
parallels the period after the September 1985 Plaza accord, when the
dollar halved against the Dmark and the Yen.

http://www.j-bradford-delong.net/mov...es/002263.html

http://www.j-bradford-delong.net/mov...es/002249.html

In such an environment, the dollar prices of raw materials (and
gold) could well rise. Inflation could increase, particularly as the
dollar fall will force the European Central Bank to cut interest
rates.

But I agree most such direct investment schemes into gold are likely
scams.

In article <3064b51d.0309230516.66cf62bb[at]posting.google.com> ,
<beliavsky[at]aol.com> wrote:

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1) Gold produces no rate of return, it just sits there and
gathers dust.

2) Gold investing has been a disaster over the past decade.

3) Gold has not approached within even 50% of its all-time
highs for over 20 years.

Nearly all gold investing schemes are scams designed to prey
off of paranoid religious extremists who believe that the world
is going to end any day now. Avoid these things at all costs.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

The Federal Reserve is keeping short-term interest rates at
artificially low levels -- the real (after-inflation) Federal Funds
rate is negative. Although the U.S. is running large budget and trade
deficits, and thus needs foreign investors, Treasury Secretary John
Snow supports dollar depreciation, especially against the Japanese yen
and Chinese yuan. This scares me. In the past, when the U.S. has
wanted a "moderate" depreciation, it has gotten more than it asked
for.

I think the current situation illustrates why gold and foreign
currency investments should be part of investors' portfolios.
Inflation-indexed treasury bonds are another possibility, but the
current inflationary policies of the U.S. will operate with a lag on
consumer prices. The foreign exchange and commodity markets react much
more quickly.

In general, I think it's good to have some diversification among
currencies, just as one diversifies among stocks.