Jobs Report

[Mr Khan]

HappySqurriel said:

Mr Khan said:

mrstickball said:

Lostplanet22 said:

Well hope your money does not only exist only off Dollars, an default of the USA is a possibility and I know that sounds very negative and one year ago laughable but today people see it as an reasonable possibility. My money is now divided in 8 different Currencies.

If this was not a bad situation for the USA and the World this would be an very fascinating situation. I am really amazed.  One year ago on Economic forums you had those big threads where the community was divided between one side predicting today's situation and an other one seeing it as negative bullshit or totally believing the government would take measures...  the last days the forums are not divided anymore..never in my ten years I am follwing Economic forums and reading them I saw this kind of situation gives me goosebumps;.

My money doesn't exist of dollars. Rather, my focus is investing in tangible assets that can make it through any sorts of situation. That is, properties that can be rented, as well as farm land to farm or rent to farmers if need be.

The goal behind such investments is that in the case of hyperinflation (due to a default), my investments aren't tied to the dollar, but the intrinsic value of the asset. Therefore, rent can be re-negotiated as hyperinflation takes place, as can farmland. Since people will always need to eat, the value of said farmland will always be pegged to the value of the crops it produces. In a truly awful scenario, then I will not be too indignant to farm for myself, and will ensure that I have properly invested in off-the-grid energy sources, so I can maintain some sembalance of security.

Furthermore, my brother and I are working hard to invest in barter/trade valuables should a bad situation occur - silver, gold, alcohol, cigarettes, firearms & ammo, ect. Such things are highly desired in bad situations, and can be invaluable for ensuring survival.

I don't believe we'll have an epic collapse that results in some sort of Fallout or Book of Eli conditions, but I think that the Argentinian example may be the best one to view, and I've been trying to read up on real-world examples of staying safe in such a meltdown situation.

Such a situation is unlikely to happen, or at least not to the USA Federal Government. Our bond ratings are still incredibly high, quantitative easing is ending to avoid inflationary risk(though they're wondering whether or not to increase it), and the only real danger of severe collapse comes from Debt Ceiling Default, and even then Obama could pull out the 14th Amendment and leave poor Mr. Orange without any leverage whatsoever

That said, your investments are a wise choice in either case, given that global scarcity will certainly hike the values of your silver, gold, and land. It's not like we'll really get more of those even with the soundest of fiscal policies

In the short run I would agree with you that the USA has a very low risk of immediate collapse, but in the not too distant future (2 to 5 years from now) the USA could be in serious trouble. With debt levels where they're at, moderate increases in interest rates will have a singificant impact on the deficit; and with how rapidly the debt is increasing it will make the impact of interest rates worse and makes the likelihood of large interest rate increases much greater.

There is a point where a feedback loop will be formed which will ensure the collapse of the economy of the USA.  Where this point is can be debated, but (unless the deficit is brought below 5% GDP in the next 2 years) it isn't so far away that it should be ignored.

I wouldn't want it to get to this point, but i would respond by saying look to Japan, who has run under a far higher level of debt -> GDP for almost 20 years now, and even managed to survive having to take most of the country offline economically in the earthquake without having to default

Larger economies can play debt games that smaller economies cannot, though again no-one should want to emulate the Japanese case