How can I convert American Dollars to Euros?

[trailrunners]

I am completely ignorant when it comes to investing and economcs. Well, not completely ignorant, I do own several mutual funds and understand that process fairly well.

However, with the fall of the dollar, and what appears to be the rise of the Euro, would it make sense to invest in the Euro? How would I do this? Simply convert some of my American dollars into Euros and keep them in a bank overseas? I'm not talking about a lot here, a couple thousand dollars or something like that, just as a safe investment when/if the American economy goes to hell or completely collapses. Has anyone done this? If so, how would one go about doing this and do you have any advice?

Any help would be greatly appreciated!

[MercutioATC]

1. Airport currency exchange?

If you're only talking about a few thousand, this seems like a simple solution.

[Sgent]

5. Buy Euro denominated bonds

NOOOOOO....

Your local bank should be able to hook you up. One of those exchange places will cost you 5-10% on each end.

Now, currency investing is a lot like gold investing -- it doesn't earn return, but it just sits there. If you really want to own euros, talk to a stock broker and buy euro denominated bonds (debt). They will return interest and you will be protected if the euro continues to appreciate against the dollar.

One final note, about $3 trillion in currencies are exchanged daily. In general I would tell you that with all that money being traded, the best exchange rate for euros is what is trading for right now.

Edit: I wasn't clear, buy euro denominated bonds of countries. Just like the US issues savings bonds and investment bonds, so do England, France, Germany, etc. Buy one of those countries bonds.

Alternatively, open a bank account in a foriegn country and buy a CD which is denominated in euros.

[JVS]

8. Those are ripoffs

[LuCifer]

2. I'm guess...

...go to a bank? I'm dumb on this one! Just a shot in the dark. Also, try those check-cashing joints.

Interesting idea though. The way the US Dollar is going, it's going to make the Peso look like gold bullion. Thanks Bush.

Lu

[sui generis]

3. tear the dollars in half, then take them to the bank and deposit them

try www.xe.com for current exchange rates

[kostya]

4. There was recently a ton posted here on this topic, just

use the search facility. There is at least one online FDIC-insured bank that will let you hold your money in any number of currencies. You may or may not receive interest depending on the currency and there are other constraints as well. I'd say you'd be buying into a near-term top at this point however. - K

[illflem]

9. Be careful, gold prices toppled this morning

What generally happens when one currency becomes stronger than another is the strong currency country will devaluate their currency in order to keep export prices to the weak currency country from becoming prohibitively expensive.
I wouldn't count on the dollar falling too much more, you would be buying Euros near the peak if you did so right now.

[sushi]

6. I'm wondering

if * suppporters are thinking about this too!

[cyclezealot]

7. We have many finance questions/euros'vs dollars

We just sold our home...We as posted elsewhere at DU, will be in South of France by September 2005....Early Retirement.
California. Have lots of Home equity...Homes in South Of France about 40% of California cost, minus Bush dollar..Plus our savings.
Anyone have expereince in converting dollars to euros when you talk of tens of thousands of dollars. ? Any laws pertaining to such transactionns for home owners..
WOnder if Capital Gains investment requirements pertain to foreign homes....
My wife says wait and convert all that money after dollar get better. Think we will need our savings before the next four years pass? any advice. thanks....

[Sgent]

10. See your banker...

Ask for the commercial or small business banker at your local bank -- they can setup the currency conversion. There is nothing illegal about it whatsoever.

You will have to pay capital gains on the sale of any home if you havent been a legal resident there for 2 of the last 5 years.