Not a sign. A Signal.
Y’all are going to love this new wrinkle in the expanding clusterfuck:
For anyone who’s not aware, my wife and I are permanent overseas residents, and are preparing to retire here in a few years. We recently identified a very nice retirement flat in the south of our country, and put down an offer. We’ve been waiting for the bank to come back with confirmation on financing.
We heard back yesterday. Result: denied.
This came as a shock. We’re both employed with excellent salaries, and we have substantial savings. We’ll get a generous pension here, nearly matched by Social Security payments from the US. The flat isn’t wildly expensive either. As far as we’re concerned, this should be a routine loan deal.
We dug into the explanation from the bank’s loan officers. And guess what?
Their sole reason for turning us down (paraphrased from the French) — the applicant’s long-term retirement scheme is supported in part by a currency which our forecasts do not consider fully stable.
Politicians around the world may be soft-pedaling their public reactions to America’s accelerating decline, but the humorless bean-counters behind the scenes, the people responsible for quantifying real risk, are shaking their heads and saying, Nah, those guys are fucked.
Have a pleasant day.
Oof. Sorry to hear that.
Have you considered that the US dollar is not regarded as (excuse the metaphor) the gold standard any more? I’ve gone around the world, never using US dollars (mostly CAD, AUD, GBP), and every currency I’ve used has been accepted without question.
Americans who think that we foreigners are somehow hungry for American dollars, and that American dollars are accepted everywhere, are delusional. I’ve been able to use my Canadian dollars in such places as Spain, and Morocco, and Greece. If it trades on world markets, they’ll take it, in open-air markets or through their banks. At the same time, I know a couple of local businesses who refuse to accept American dollars. No Canadian dollars, no service. Period.
It’s up to you, but maybe you should divest your earnings and bank accounts into GBP or CHF. Nowadays, they might be a lot more solid and stable than USD.
Oh, believe me, I know all that. I’ve been in Europe for almost a decade and have watched US stability crumbling from afar.
As I’ve mentioned previously, we are in the process of removing all our savings and other assets from the US. But there are substantial penalties for moving things all at once, and we’ve been proceeding gradually. And further, relevant to this particular situation, “future Social Security money” is not something that can be moved, at all. We’re stuck with it, the way it is.
@Cervaise , I understand. I am sure that you are doing the best for you as time allows, and I have no comments or complaints as to how you handle your affairs.
I’m sure you know that US dollars are not the be-all and end-all of world currencies. Just saying, is all.
I know nowt about the French retail banking system.
But if you have the security and repayments adequately covered then would there not be multiple alternatives options available? If time is available, shop around. Talk to aquaintenances.
A bank with more international affiliations? Or the equivalent of a building society, or co-operative lending facility? There have been no official statements from the French central banks, surely.
Apologies if that sounds presumptive but sometime you simply lodge with a loans officer whose book is full, is being provincial and doesn’t want to admit he once had a bad experience in Disney World. Or seeks to change the international banking system on their lonesome.
To be very clear: I am not looking for advice on financing. We have been here a long time, we understand local banking, and we have other options, which we are pursuing.
I shared this story only because we were surprised to learn that at least one large European financial institution now classifies the US’s currency and/or economy as unacceptably risky in the long term, and I thought that would be of interest.
It was interesting to me and surprising that it was due to the currency being risky, which is a change from the relatively recent stance of “local” banks not wanting US Citizen’s as customers because of the regulatory headaches that brings. To have it be because US holdings (or US dollar holdings) are risky is a change that can be tied to the current situation instead of ongoing and long standing banking regulations.
//i\\
In recent “flight to safety” occasions we’ve seen gold (not too unusually) be the way to go. It’s been a while since the dollar was a place to park money- even long term (10+ years) bonds do not look that attractive (and the USA itself is stoking this turmoil and flight).
Trump is riding his own personal high as President now and has nobody smart in the treasury department. There’s a non-zero chance the petro-dollar may shift, probably to Euro’s and that would be catastrophous. Trump may have a smart accountant and you bet he’s diversified with other countries. Wanna see his portfolio? You can’t.
It’s expat/non-magas like yourself and me (though I left a year before the term was coined) who still spend dollars (essentially) abroad. The HMRC (IRS of UK) just got a fat check from me today funded in dollars which are crumbling compared to the Pound Sterling.
Meanwhile Trump is not only interfering with foreign Politics - in this case Argentina - with extortion and threats not to buy 20 Billion Pesos (I hope he knows there are many kinds) and that threat alone gave the A-peso a haircut. And that currency keeps crumbling. Is there such a thing as throwing bad money after bad money?
It’s not like they’re in some retail store offering US bucks and getting upset when the owner balks. This is an electronic transfer of their Social Security deposit. This is the bank saying they don’t believe the SS deposit will be stable enough to let them lend on it. This is something a lot more worrisome not only for Cervaise but every American living abroad.
As long as the dollar is a participant in trades on FOREX (beyond our lifetimes), retail stores and banks will take “American Money” as it’ll be quickly turned into the domestic currency.
It’s not like Russia in the 80’s well into the 90’s where you could buy things with dollars (at some outlandish rate) yet those dollars got stuffed under a mattress.
It’s the strength of the US Dollar - and trust of the stability of the country who prints the money - that is at stake. Some accountant in France has decided that $10 in twenty years will not be worth anything close to $20 or somewhere around €18 (even if printed on million dollar bills with trump’s pic on them)
It is widely known in Argentina that the peso is way overvalued at this point and only “heroic” efforts by the government (and now Trump) are keeping it that way.
Once the midterms are over and the government can “afford” inflation to shoot up they will let the peso go and anybody holding them will lose their shirt.
So anybody who has pesos to spare quickly buys all the dollars he can (or in my case construction materials, since I’m refurbishing the house I bought last year).
If Milei catastrophically loses the election the peso will fall to new lows and if he wins… the peso will fall to new lows.
Exactly right. This is only distantly related to the traditional macroeconomic questions about investing or parking money in the US (or in US-stabilized vehicles). This is the risk department looking at what used to be a reliable source of retirement income and saying “…nah.”
I really do reckon it’s akin to Frodo’s example with catch-the-falling-knife Argentinian Peso.
It won’t be that bad (perhaps). All those “parking money” and “safe haven” strategies (while generally with a <5 year window) all amount to the same thing: If, let’s say your Nice place on the French Riviera is funded with $5,000 and €5,000 per month (really nice!) the guy who does the math sees a forward-looking risk to that dollar-denominated pension fund.It’s unfortunate and I hope you succeed, yet it’s all quite fair to a banker.
That’s not unusual. There are places here that no not/no longer accept Canadian dollars. It’s not political, in my observation. It’s the exchange rate fluctuations, and that the businesses don’t want to do the extra work. (That’s why there are credit cards. 
)
If you have excellent salaries and savings, and will be getting an in-country pension, could you re-apply without Social Security?
Thanks though.
Social Security is not safe or secure for elders living in the USA.
I say any one counting on it should be concerned.
Shit’s tough allover. Tighten your belt. The ride gets bumpy from here.
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