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> If you get your salary in Swiss Francs, you maximize the chances that the salary you earn will actually be worth something in the future and is not just paper
by lgieron 11y ago
> If you get your salary in Swiss Francs, you maximize the chances that the salary you earn will actually be worth something in the future and is not just paper.
Or, when living in a country with untrustworthy currency, you can just exchange your savings to USD (or CHF etc.) and have them equally protected.
- s3nnyy 11y agoThe downsite is that you loose liquidity then. Assuming you live in Russia, how / where are you going to buy bread with USD, let alone with CHF?
- lgieron 11y agoI don't know about current Russia, but in communist Poland (with a terrible currency) you could exchange the USD for a local currency in an instant on a black market, and at an extremely favourable rate (which reflected the weakness of the local currency).
- pbosko 11y agoIn Yugoslavia all deposits were blocked at one point. You couldn't withdraw your own money from the bank. So, it's not the same which country are you living in.
- lgieron 11y agoI'd keep my long-term savings in a foreign bank, so the authorities could at most get my grocery and rent money (still bad, but not quite as devastating). If foreign bank was not an option, I'd just keep my money in the proverbial matress - in fact, that was a common option for saving in communist Poland (US dollars stored at home).
- irixusr 11y agoYour comment suggests you've never lived in a country where you would want/need to exchange your currency. The smart money (I.e. politically well connected) gets to exchange their money. As soon as every one else finds out, capital controls have been introduced. The politically well connected, usually, get to continue exchanging their money at an artificial rate.
- lgieron 11y agoThe idea is to be exchanging them _in_advance_, i.e. exchanging the savings part of your monthly salary to USD every month. Don't wait till the shit hits the fan and everybody wants to get rid of their local money.
- irixusr 11y agoA country cannot have a widely distrusted currency for long, because everyone will do as you say (exchange away).This causes capital flight, so the gov't introduces capital controls shortly thereafter. So the only way to do as you say is to be (far) more prescient than your peers. You need to be far more prescient because you have to beat the gov't insiders too. Also, prescience does not save your future earnings (I.e. after controls have been imposed) Or you take a risk and use the black market