If the dollar is collapsing should we convert them now?

[Rock]

https://www.everbank.com/personal/curre ... urces.aspx

https://www.everbank.com/personal/forei ... px?tab=cds

IMO, Everbank is for suckers. The spreads and CD rates are very unattractive relative to a forex account via Saxo or Interactive (if you can accept the latter's very user unfriendly platform). I think the only thing Everbank offers that can't be duplicated with the above mentioned brokers is RMB exposure. But Everbank"s RMB account pays no interest and has a nasty bid/ask spread. The bank is Florida based and has terrible service too.

The better way to invest in RMB is to go to a bank in China, open an account, and wire the money over (up to $50,000 direct per year but there are easy ways around this limitation if you want more exposure), and convert it to RMB. Once you have your RMB account, you can buy fixed rate CDs (1.9 - 4.2% annual interest depending on term) and your bid/ask spread will be very attractive. Also, the smallest of the 5 government banks also offers a low risk product which pays up to 6-8% with capital protection and minimum annualized rate of 1.2% guaranteed for each quarter. Since inception some 16 months ago, it has averaged about 5% with 3.6% on its wost month.

[Winston]

Hi all,
My Citibank account in the Philippines changed their minimum balance requirements. Now I gotta maintain a balance of $2300 USD or 100,000p or else I get charged a 10 dollar fee per month. Before the minimum was 1000 USD. Now they raised it to 2300 USD. I don't know why they do that. Do they want to drive away account holders?

Anyway I am thinking of changing my bank in the Philippines as a result of this. I looked up the website of Banc de Oro, and saw that they only require you to maintain a balance of a few hundred dollars for a dollar account. I also see that they offer accounts in different currencies. Have a look:

http://www.bdo.com.ph/Personal/Deposits ... ements.asp

* Select "Third currency savings account" next to Display.

Do you think I should convert my dollars to one of the other currencies there? Chinese Yuan is available too, as you can see, which some of you (e.g. Rock) recommend.

But the thing is, I receive some of my checks in dollars, so wouldn't I need to maintain at least one dollar account?

What would you all suggest? Thanks.

[Rock]

Hi all,
My Citibank account in the Philippines changed their minimum balance requirements. Now I gotta maintain a balance of $2300 USD or 100,000p or else I get charged a 10 dollar fee per month. Before the minimum was 1000 USD. Now they raised it to 2300 USD. I don't know why they do that. Do they want to drive away account holders?

Anyway I am thinking of changing my bank in the Philippines as a result of this. I looked up the website of Banc de Oro, and saw that they only require you to maintain a balance of a few hundred dollars for a dollar account. I also see that they offer accounts in different currencies. Have a look:

http://www.bdo.com.ph/Personal/Deposits ... ements.asp

* Select "Third currency savings account" next to Display.

Do you think I should convert my dollars to one of the other currencies there? Chinese Yuan is available too, as you can see, which some of you (e.g. Rock) recommend.

But the thing is, I receive some of my checks in dollars, so wouldn't I need to maintain at least one dollar account?

What would you all suggest? Thanks.

1. Shity uhm I mean Citi Bank prolly raised the minimum cus they did some sort of customer analysis and concluded that admin costs for small accounts don't justify the small amount of revenue they earn the bank - ie they cost more than they make. The monthly fee is implemented to offset that loss. Remember the general 80/20 rule - 80% of profits are generated from largest 20% of clients.

2. Well if Rock suggested it, you probably should give it serious consideration, lol. Anyway, Globe invested in RMB too. The problem with this bank's RMB account is it pays negligible interest - 0.08% (virtually zero). In China, you get can can get 3-6%. Also, I suspect bid/ask spreads on exchanging US$ to RMB and back are much higher than China. But lets be real. If you are talking about an amount like US$1,000 or less, it probably makes the most sense to just keep it in dollars. Transaction fees for doing anything slightly complicated with such a small amount would more than offset any currency and/or investment gains you made.

[Winston]

But why does Citibank need to have such high minimum balances, if the other banks in the Philippines don't? Even Bank of America doesn't require that high of a minimum balance.

What is RMB? Chinese Yuan? So you mean if I convert my money into a foreign currency at this bank, there will be big service charges?

[Rock]

But why does Citibank need to have such high minimum balances, if the other banks in the Philippines don't? Even Bank of America doesn't require that high of a minimum balance.

What is RMB? Chinese Yuan? So you mean if I convert my money into a foreign currency at this bank, there will be big service charges?

Citibank has a different type of cost base and revenue structure than a local Phils bank. As a foreign branch bank, it probably falls under different regulations and restrictions regarding the number of branches they can open, the types and amounts of deposits they can take in, etc. Local Phils banks are set-up to serve a large number of poor clients. Citibank branch there is focused on smaller number of wealthier clients. Many other reasons come into play as well. Not a simple question to answer comprehensively.

RMB = Renminbi = Chinese Yuan.

By spread, I mean the difference between bid and ask price. For example if US$ to RMB is 6.5 and RMB back to US$ is 6.8, you would loose 4.4% on a round-trip transaction -> US$100 buys 650 RMB and when you convert back, 650 RMB buys just US$95.58. So you loose $4.41 or 4.4% on each round-trip. In China, this percentage would be well under 1% (see my write-up for specifics).

[Winston]

Hi all,
Today I went to Banc De Oro to ask about opening an account. The thing is, there are a number of drawbacks to changing my bank:

1. I can't deposit checks unless I show them a utility bill in my name, which will be difficult to get as my utility bills come in the name of my landlord, who will be unlikely willing to change that.

2. If I withdraw cash from any other branch than the one I opened the account in, I will get charged some crazy fees - 100p within Angeles, and 200p outside of Angeles.

So what should I do? Stay with Citibank and continue to pay $6 (300p) a month in penalty fees for being under $2300, or go to BDO but be unable to deposit any checks? I guess I could transfer more cash from Bank of America by writing a check to my Citibank to reach that minimum, but keeping such a high minimum will be a problem.

Any suggestions?

[Rock]

Hi all,
Today I went to Banc De Oro to ask about opening an account. The thing is, there are a number of drawbacks to changing my bank:

1. I can't deposit checks unless I show them a utility bill in my name, which will be difficult to get as my utility bills come in the name of my landlord, who will be unlikely willing to change that.

2. If I withdraw cash from any other branch than the one I opened the account in, I will get charged some crazy fees - 100p within Angeles, and 200p outside of Angeles.

So what should I do? Stay with Citibank and continue to pay $6 (300p) a month in penalty fees for being under $2300, or go to BDO but be unable to deposit any checks? I guess I could transfer more cash from Bank of America by writing a check to my Citibank to reach that minimum, but keeping such a high minimum will be a problem.

Any suggestions?

Don't you have a mobile telephone service plan in your name? That kind of bill would probably work too. If you don't, you should consider as its probably cheaper than pre-paid in longer run.

Are there any other ways to cash USD checks in Phils without an unreasonable fee?

Does the cash withdrawal fee apply to local currency withdrawals or just USD? If it applies to local currency, does it include ATM withdrawals? If so, perhaps you should shop other local banks in your area to see whether or not others (perhaps some of the smaller ones) offer more attractive terms. If fees can be avoided by using local currency, convert all your USD deposits to local currency deposits. After all, your family living expenses are all in Pesos.

If Citibank turns out to be the only reasonable way, build-up a saving buffer comfortably above the minimum and maintain it. Perhaps you could borrow from home for the time being until the cash flow from your website reaches a level where you can do it on your own.

[Winston]

Hi all,
Today I went to Banc De Oro to ask about opening an account. The thing is, there are a number of drawbacks to changing my bank:

1. I can't deposit checks unless I show them a utility bill in my name, which will be difficult to get as my utility bills come in the name of my landlord, who will be unlikely willing to change that.

2. If I withdraw cash from any other branch than the one I opened the account in, I will get charged some crazy fees - 100p within Angeles, and 200p outside of Angeles.

So what should I do? Stay with Citibank and continue to pay $6 (300p) a month in penalty fees for being under $2300, or go to BDO but be unable to deposit any checks? I guess I could transfer more cash from Bank of America by writing a check to my Citibank to reach that minimum, but keeping such a high minimum will be a problem.

Any suggestions?

Don't you have a mobile telephone service plan in your name? That kind of bill would probably work too. If you don't, you should consider as its probably cheaper than pre-paid in longer run.

Are there any other ways to cash USD checks in Phils without an unreasonable fee?

Does the cash withdrawal fee apply to local currency withdrawals or just USD? If it applies to local currency, does it include ATM withdrawals? If so, perhaps you should shop other local banks in your area to see whether or not others (perhaps some of the smaller ones) offer more attractive terms. If fees can be avoided by using local currency, convert all your USD deposits to local currency deposits. After all, your family living expenses are all in Pesos.

If Citibank turns out to be the only reasonable way, build-up a saving buffer comfortably above the minimum and maintain it. Perhaps you could borrow from home for the time being until the cash flow from your website reaches a level where you can do it on your own.

Well I only use my cell phone for texting. I only call during emergencies. To get a cell phone plan, I'd probably have to sign some sort of contract.

I think I might be able to take out my money from my Citibank account and keep a zero balance in it, and just use it for depositing checks and cashing them out when they clear? I'll ask them about that.

Or I can try to have my checks cashed in the US.

Gosh, this is so darn complicated.

[samlauncher]

hey frndz m looking for best dollar exchange company plz tell me if anyone knows…

[odbo]

who thinks the dollar will collapse in 2011/2012 end of the petrodollar here we come!

i dont think it even has to suffer hyper inflation, as america is done either way. point of no return...

[Think Different]

The dollar is fiat currency, basically backed by oil and the government's promise to always pay back what it borrows from us (with interest). Our national debt is so extreme that we could never realistically pay it off, and other countries are wising up to that fact. Once enough countries lose enough confidence in the US government's ability to pay back its debts, those countries will start selling all those Treasuries they bought over the years, and expect to get interest too (insert laugh track here). The US gov't will then do one of two things: print more money to pay the debts and devalue the dollar even more, or just say WTF...we can't pay you back. One of the first things I'm doing, once I get overseas is to open up a euro bank account (and maybe Swiss franc/Norwegian Krone) and start transferring some of my money from here to there. I'll be buying some gold and silver with some of that money I transfer over there, too. That way, I'm hedging my bets legally and not putting all my eggs in one basket (US $$).

[ErikHeaven]

Real simple China holds close to a trillion dollars of U.S national debt. America is the biggest debtor nation on earth. China will rise and the yuan will be the reserve currency in our lifetimes. They are telling their citizens to buy gold and silver. So buy gold and silver to preserve your wealth. Buy food and medical supplies. And also guns and ammo. China will be ruling our foreign policy as they will hold the notes.

[fschmidt]

The world's major currencies, the dollar, euro, and yen, will all crash together. None of them is strong and when the paper money crashes, people will look for alternatives. It may be gold or silver or something else. I don't know what and I don't want to bet. Since real estate was a hot investment but crashed and is now shunned, I think this is probably the best investment now. Real estate is the only hard asset that actually pays you for owning it. So I will buy rental property and unload all of my stocks and bonds. You can calculate your effective yearly return on rental property where you live to see if it is a good value.

[momopi]

The dollar is fiat currency, basically backed by oil and the government's promise to always pay back what it borrows from us (with interest). Our national debt is so extreme that we could never realistically pay it off, and other countries are wising up to that fact. Once enough countries lose enough confidence in the US government's ability to pay back its debts, those countries will start selling all those Treasuries they bought over the years, and expect to get interest too (insert laugh track here). The US gov't will then do one of two things: print more money to pay the debts and devalue the dollar even more, or just say WTF...we can't pay you back. One of the first things I'm doing, once I get overseas is to open up a euro bank account (and maybe Swiss franc/Norwegian Krone) and start transferring some of my money from here to there. I'll be buying some gold and silver with some of that money I transfer over there, too. That way, I'm hedging my bets legally and not putting all my eggs in one basket (US $$).

All major national currencies today are fiat money.

[Rock]

Don't chase tail ends. Buy low sell high.

Gold and silver are over-priced and you should wait until they drop before buying. Keep a small % of your assets in precious metals (1-2%?) but not everything.

Well Mr. Momopi, it looks like you spoke way too soon here, lol. Sliver has appreciated 5 fold since October 3, 2008 when you made these comments!!! The guys who short sold your advice made 4 bags. There's a lot more behind that than just a weak dollar. Gold has doubled against the US$ since then too. The lowest gold ever closed from the time you made your comments was a modest 12% down; silver slightly more, both just minor corrections to raging multi-year bull markets, especially the one in sliver.

I've warned before, short term market timing is a fools game. Don't go there unless you at least have a strong fundamental argument to back it up. I'm talking about things like interest rate and yield trends in major currencies, inflation outlook, money supply growth, risk sentiment which can be partially quantified by a few indicators, supply/demand dynamics in gold and commodity markets, price ratios between gold/silver/leading stock markets/oil/commodity currencies such as Aussie dollar and Canadian dollar, etc. Then if you are wrong, you can at least point to how you misinterpreted the factors driving the price or how they changed. Your advice was clearly against a wonderful bull trend which could have more than preserved the true value of precious savings for investors who concentrated assets into these precious metals.

What made you think gold and silver were overpriced anyway? Just because they had already appreciated so much during the first few years of the 21st century? Or did you perform some sort of technical analysis hocus-pocus to come to that conclusion? Just very curious.