r2i forum

I recently came across an article with Peter Schiff's predictions that the dollar would really lose value in the near future.
I know very little about what drives currencies, although I keep an eye on the Dollar/INR rate. Since I have accounts in the US, this is a cause for concern. Not sure if I should transfer some to India.
Just wondering what the experts think about this.

Thanks

If you are intending to R2I in the near future it makes sense to convert part of your funds to rupees to hedge any potential appreciation in the USD/Rupee rate. In the short term it appears the $ is going to weaken however from India's perspective they are spending like crazy and making sure the rupee does not appreciate too rapidly. Gold denominated in rupees is not rising as the rupee rise has negated any rise gold has against the USD. For the small investor to better sleep at night hedging the portfolio provides the best insurance against rapid fluctuations.

Thanks.

I r2ied 5 yrs ago. I converted some $ for purchase of property. The rest - I didn't want to convert as my kid MAY go back for higher studies. But, with education loans available now in India, I was wondering if I should convert all my money and take a loan later on if needed. Do I sound stupid/confused?

divya0463;331352Thanks.

I r2ied 5 yrs ago. I converted some $ for purchase of property. The rest - I didn't want to convert as my kid MAY go back for higher studies. But, with education loans available now in India, I was wondering if I should convert all my money and take a loan later on if needed. Do I sound stupid/confused?

Yes, loans are available for studies. But then, consider the scenario that your kid comes to USA, studies here, gets settled here. Now, when you want to visit here or say you want to R2A at that point of time, you would need some dollars...

I am not saying that you should keep dollars for this scenario. All I am asking you to consider this scenario too while making decision.

Schiff's fundamentals are sound (at least makes sense to me) but I do not think even he can predict the timeframe for the events he says are going to play out (although he may not sound that way :wink).

I also think that he does not give proper weightage to political influence/clout as well as irrational behavior of people in power enough. For example, Can US influence other countries to keep things more favorable for it? How long can it do so? When would scale tip if at all it would? Why would a foreign country continue to keep their currency weak w.r.t dollar if it is the wrong thing to do in the longer run? How long would it continue to do so? All these are unknown variables which I am not sure he deals with - I think he doesn't (I have read his book, also listened to his show a couple of times) . He also tends to exaggerate a lot particular seeming like "impending doom" all the time. Of course ever since senate run, he became more cookie-cutter like politician in many respects (i.e. along party lines) - that was a turn off for me.

So while I also think in the longer trend dollar will weaken - because he explains the theory well and it does make sense, IMO it is hard to say how long is "long" :). In the meantime, I just hedge a bit here, hedge a bit there ! (Gold, currency ETF, but also have exposure to US markets)