You’re confused because you’re applying reason where there’s little of it. Trump considers Europeans freeloaders, that’s the gist of it all, and in his “mind” spending more on defence will make them less of freeloaders.
I’d disagree re the Cold War, I’d argue it stayed cold because there was real power on both sides. You need power to have peace.
Putin is a cold war relic lamenting the fall of the USSR, and doesn’t consider Ukrainians a separate nation, also is eyeing Ukraine’s many riches (soil, oil, metals - obviously mismanaged to hell forever but that’s another story), once he’s gone I doubt there’s anyone with his experience and psychology who won’t be 75+. Xi I don’t have an opinion on, historically China has never been expansionist, but they are a regional bully and “invade” through trade, they also don’t seem to care to spread any ideology, just want to save face. I think they’re smarter about it than most.
It was an interesting learning opportunity to hold gold for a few months, felt somewhat odd to hold something I have no intention to hold for a long time. Got out with a decent profit and used it for rebalancing but I’m unlikely to go in another unproductive/speculative asset any time soon. Hope no offense is taken in me calling it speculative!
I think something is going on and we don’t know about it. I don’t know if it’s entirely about Trump.
Could it be that introduction of stablecoin act might have caused even more money to be moved from USD fiat to Stablecoin which eventually is backed by treasuries.?
Or the PLAZA ACCORD Round 2 is happening without any announcement
Edit -: I followed up on news. Trump is again talking about Powell and it is pushing market to worry more
I sold gold to buy equities on “liberation day”, and now sold the remaining gold to hold for a couple of weeks and see what’ll happen with the 9th of Jul. It was always in CHF as it was in ZGLD.
I am not surprised, it intuitively makes sense that it’d be that way.
Not sure I’m following, with today’s fx rate I get more bucks (USD assets) I may want for my bang (CHF) than 1 week ago. Of course eventually they’d need to be made into a currency I actually use, like CHF or EUR. Edit: timely, I’ll be the first to put my hand up and admit I am a dunce when it comes to currencies, though, so I am watching that thread now.
Well, it achieved not turning Europe, Russia and the US into glass, for one
For large part of 20th century, central bank were mostly gold backed (due to convertibility requirement), it took some time for them to diversify.
(note that things like gold standard are not really considered a good thing, they’re a major driver for the great depression – which arguably led to some very dark times for the world --, inflation/employment mandate yield much greater stability)
I have only debt in USD. OK, net in all currencies I use at least the amount of debt that I hold cash in the accounts. Cash is trash in any currency. The USA goes the Turkey way it seems…
It does not matter that interest is higher and the Dollar loses value. At least as long as the dividend stocks I buy with the debt pay higher dividends than the debt interest. I am no fan of currency carry trades, much risk for very little gain…
There are several reasons I hold debt, mainly because inflation. I need quiet some cash for my lifestyle in different currencies and I want a little reserve, like a year or so. The debt levels out inflation. And then I live off my investments and have to take out money from time to time. I do this always with debt, me needing money is a very bad reason to sell a stock.
Addendum: just got back the tax decision returning my withholding tax. Apparently the debt interest deduction was so high that I slipped down to a very low tax bracket and therefor only get back that low tax instead of the 15% I did already pay; you only get back the lower tax. I hate that I pay more to the USA than to Switzerland where I spend more time.
Well having USD debt balances since the start of this year probably paid off well! Though I personally find it difficult to stomach paying 5-6% in interest each year.
I think the perspective may slightly differ depending on whether one is still earning a salary in CHF - or living off dividends/capital gains in USD ?
For me, as a CHF earner, I prefer to retain my margin in CHF, since I feel it reduces my currency risk (aside from the currently higher interest rate in USD, which may - or may not - be fully offset by USD depreciation).
For you, as someone who has FIRE’d and is living off investments (denominated in USD), it might be more “practical” (also from an accounting perspective) to keep everything in USD. I’m not sure what would be financially preferable, though (under current trends, USD-denominated securities - and their dividends - loose value in CHF terms, while USD margin interest rates are likely continue to rise due to inflation, etc.) ?
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