Money printers in COVID?

Hey MP Forum,

I am new posting here, but I have been following this forum for a while now. I was curious if anyone had data on what currencies have been printed the most during the COVID pandemic, and if that affects your strategy for investment/currencies at all?

For example, if the Eurozone printed billions of EUR, and CH has not, then can we say that in a few years down the line, the CHF will be waaaaay more powerful than the EUR, warranting us keeping our cash in CHF and not EUR. I know a lot of USD was printed, but am curious about USD, CHF, EUR and GBP :slight_smile:

Does this knowledge affect your investment strategy at all? I keep delaying putting money in, since the markets seem to be up (not down) which is so confusing to me, considering global production is affected negatively.

Not sure if this is wise.

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Welcome to the forum @bsaurabh!

No. I stick to my strategy. I just keep rebalancing when necessary.

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It’s not hat easy, see the video below,

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USD: Monetary Base; Total (BOGMBASE) | FRED | St. Louis Fed
CHF: https://data.snb.ch/fr/topics/snb#!/cube/snbmoba?dimSel=D0(N1,N2)

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Wow! This is super informative. Thanks for sharing :slight_smile:

My initial question was inspired primarily from: https://www.youtube.com/watch?v=1HmGLV46L60

I keep an absolute minimum amount of CHF cash in my current account as working capital needed to pay bills.

I am building a -ve 10% cash position using Interactive Brokers margin loan (~1.5% interest). This is a risky approach and this is not advice for anyone else to do the same. It works for me because my assets at IB are quite high relative to my monthly spending - so low possibility of a margin call from IB in case there is a stock crash. If this wasn’t the case I would need to keep more cash as “emergency fund”.

Worth reading some of the articles from Ray Dalio “The Changing World Order” - here a summary of his view on cash and bonds

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Maybe a stretch, but have you thought of borrowing to invest as well? In line with the video above (and also Ray Dalio’s article) of borrowing cheaply to hold for a few years. The reason I ask is because I was thinking about Swissquote’s Lombard loans (since I use SQ)… Now they have a 3% interest rate, and I am not saying that I will use it - but curious about what the community here has to say :slight_smile:

Indeed this is what I am doing. To repeat this is not advice - do your own research and proceed at your own risk, consider that in the event of a crash stocks could go down 60% or more.

Note that Interactive Brokers’ Lombard loan Interest rate is lower the Swissquote.

I don’t know… s/he says s/he’s been holding back on his/her investments because s/he’s confused. To invest with borrowed money one needs inch-thick nerves or steel.

I think that “does this help me sleep at night?” is a good foundation for all financial decisions.

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I have seen that video as well today together with https://youtu.be/ddgxidI-X74 , I am wondering what would be the best approach to be ready for possible hyperinflation? Start hoarding some gold and silver ingots/coins? (≈5% of Net Worth?)

Speaking of hyperinflation, where money looses thousands of its buying power overnight in contrast to simply high inflation:

Have assets, family and friends in other countries, be ready to move before it gets too bad and migration becomes more regulated.

If the whole planet is affected, having built hard skills (food growing/hunting, healing, shelter building, craftsmanship), having hard assets (stores of non-perishable food, warm clothes, useful tools and consumables) in different hiding spots and some bargaining power (the aforementioned hard assets, easy to carry/trade precious metals, cigarettes, candy, if the grid/the internet don’t collapse, maybe cryptos) and a good network of friends and family.

Financial solutions are not always the best way out of tough financial problems. :wink:

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Wolverine the Prepper. :grin:

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Nothing more exotic than the mundane advice of “invest in yourself”, only with the added step of “then invest in your network”. :stuck_out_tongue:

Other kinds of assets are just a bonus to get a better start, really.

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Just a possible strategy: have a mortgage a bit larger than what you really need and use the corresponding extra cash for buying pet rocks if and when significant inflation begins to materialize.

Everyone keeps suggesting that to maximize the mortgage but in reality the bank doesn’t just give you the cash to invest in whatever you want… or at least mine requires the extra money to be going into the apartment.

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I played Fallout 4. Including all the DLC.

I am ready.

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Same here! They require it to be invested into the apartment.

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You can get a high mortgage even if you could afford to pay the whole apartment in cash. You invest the cash you get from the bank into the apartment. However, you are then free to invest the rest of your money in whatever you want. In the end there is no difference which cash you invested in what.

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