A Twofer..
The second part on dollar naysaying from Forbes:
http://www.forbes.com/home/free_forbes/2004/1213/198.html
Their suggestion: foreign bond funds. I've been saying that since August. ( Lot of good it's done me). One thing I did learn from the article, foreign equity and bond funds are often hedged to prevent currency fluctuations from effecting the value of the fund. That's bad. Especially if you assume the dollar will continue to slide. They suggests some funds that are no doubt not in many people's 401(k) options.
Choice bits:
OK. The problem with this line of thinking is economic growth in these countries depends largely on the U.S. and China.....yeah...right...who isn't. That leaves me feeling like:
"I look at myself as if I'm on a lifeboat and I'm floating around trying to get as many people on board as I can before the ship sinks,"
"I look at myself as if I'm on a lifeboat and I'm floating around trying to get as many people on board as I can before the ship sinks," (Lewis Black had a similar rant a few years ago).
Except I'm not really trying to save anyone. Trying to save everyone would rock the boat and lose all hands.
I have no problem investing in Australia,but Singapore is a scary place. like Farmington Hills but with less middle-class and more with physical punishment for violating social taboos. My money isn't going to support a government like that....how's Finland doing these days..
http://www.forbes.com/home/free_forbes/2004/1213/198.html
Their suggestion: foreign bond funds. I've been saying that since August. ( Lot of good it's done me). One thing I did learn from the article, foreign equity and bond funds are often hedged to prevent currency fluctuations from effecting the value of the fund. That's bad. Especially if you assume the dollar will continue to slide. They suggests some funds that are no doubt not in many people's 401(k) options.
Choice bits:
"He argues that the U.S. has been living beyond its means and that current fiscal strategy--running big deficits to finance a war and tax cuts while also amassing big trade deficits--has stretched the economy to the breaking point. "It's the U.S. dollar that's at risk," Schiff says. "Very few people understand that.""...well thanks, now (thanks to Forbes) everyone else does know. Generally, I'm not one for jumping on the investment bandwagon in this fashion. Maybe raw materials would be a better bet? My big concern there is prices may have already peaked going into 2005 and economic slowdowns in the U.S. and China may very well cool off prices in these markets. That leaves us with what in the way of unexplored investment avenues? Maybe it's time to start stockpiling gasoline, motor oil, kerosene, crop seeds and the like.
"....countries as Australia and Singapore with supersafe AAA bond ratings"
OK. The problem with this line of thinking is economic growth in these countries depends largely on the U.S. and China.....yeah...right...who isn't. That leaves me feeling like:
"I look at myself as if I'm on a lifeboat and I'm floating around trying to get as many people on board as I can before the ship sinks,"
"I look at myself as if I'm on a lifeboat and I'm floating around trying to get as many people on board as I can before the ship sinks," (Lewis Black had a similar rant a few years ago).
Except I'm not really trying to save anyone. Trying to save everyone would rock the boat and lose all hands.
I have no problem investing in Australia,but Singapore is a scary place. like Farmington Hills but with less middle-class and more with physical punishment for violating social taboos. My money isn't going to support a government like that....how's Finland doing these days..
posted by Oberon at 4:54 PM
3 Comments:
You stated "Maybe it's time to start stockpiling gasoline, motor oil, kerosene, crop seeds and the like." Welcome to my world. Add tools to that list while you're at it. Seriously, I think that's the best investment nowadays. Until you can survive for, say, at least a week (I think that 1 month would be better) "off the grid", I'm not sure if makes much sense to worry too much about investing for retirement. And if I'm wrong? I don't see a downside to having that sort of stuff around.
I think that 2005 is the year for the paranoid investor. The Y2K guys weren't wrong; they just peaked early.
I understand your line of thinking, but here's the big problem. If we get to the point where needs are that dire having stockpiles is not going to help you. Roving gangs of assholes in pickup trucks, fourwheelers, and snowmobiles will ransack the countryside and unless we all get together and create a compound (see "The Postman" for examples), I don't see how we're going to fend anyone off. So you're best bet is to find somewhere to hide and hope to God you don't need anything ( medical attention, etc.).
Honestly, I think municipalities will survive. It will be isolated areas that will be at the largest risk. The drawback here is that without a strong federal presence, states and local governments will devolve.
I'll go back to my long-standing views on the likely outcome of a massive U.S. depression modified for a post 9/11 world. As soon as this year, consumers will stop spending as they try to pay down their debt in the case of debtors, or start saving. Eventually, there's going to be a huge outflow of capital as wealthy people read articles like the one above and move their money overseas. The cycle of rising interest rates and declining consumer spending will lead to cuts in jobs and the spiral will start. The fed won't be able to do anything because rising comodities prices will cause inflationary pressure.
Bankruptcies will start to emerge as a problem around June of next year (all those people with variable interest rate mortgages). By the end of next year the housing market will collapse eroding the value of most homes.
I think at that point even, we're probably OK if we can enact some sound fiscal policy. Things will be bad, W. MI is probably not where you want to live during this time..but I think we might get out of the hole in 10-15 of our prime earning years.
I think the problem comes with the options in weathering this decade of decline. You can hide like I suggested and endure the pitfalls of a transcedental lifestyle...or you can move to a city/urbanized area. I think the issue here, besides crime and corruption, will be the complete lack of rights for anyone without money. No gun rights, no speech rights, no freedom of movement.
Rosey picture.
I agree that some municipalities will survive, but I don't think it'll be any big urban areas or their surrounding suburbs. Best to be in an isolated close-knit community, preferably one with abundant natural resources. That's if things totally collapse, which I don't think is too likely. More probable is violence limited mostly to urban areas when things finally come crashing down, Argentina-style.
The bottom line is the urban areas scare me in uncertain times. Maybe that's my sheltered surburban prejudice shining through.
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