Practical ,,Hedging" against Currency reform during trading?
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Hey,
this thread isnt about the probabilities of a deflation / inflation scenario etc...
I think Gold is a good hedge against inflation/ uncertainty or maybe even in deflation times,where uncertainty and willingness to buy gold beats deflation consequences or the deflation is short-lived and followed by an inflation (thanks to Helicopter-Ben).
As I live in the Euro-Zone, I (have to) think about an breakup of the Euro in an Hardzone- & Weakzone-Euro, national currencies, etc..
My point here is not to discuss this (although constructive comments arent refused), but to talk about the arrangements to the scenario.
Actually, I have already bought physical gold, etc.. but my problem is:
If I want to continue trading, what are the best hedges of my deposit?
One idea of mine was to buy Gold/Usd and Sell Eur/Usd amounting to my deposit, so I can trade, but are somehow also invested in gold with my money ( margins are negligible).
The problems starts when it comes to a currency reform:
Can my gold position fully compensate the effects of a reform if it is a real reform, not only a currency change ( thus paper money is used to lessen national debt) ?
(Tip: In the German currency refom in 1948 closed liabilities were changed in the ratio of 10:1, current liabilities: 1:1, cash and deposits: 100:6,5 and national debt was priced to 0)
Will my Gold position rise the same relative amount as the Euro will fall or will the Euro vanish, the Euro/ Usd change to Dem/Usd and my deposit and my trades be priced in a bad ratio ?
Has anyone experience with the real effects of currency reforms to open positions which are priced in the affected currency?
Jass