US Debt

Now I don't usually talk politics as I don't know enough about it however what is with this US debt problem? If they default it will have some serious ripples on the world economy. Kind of make me want to run out and invest in some gold bullion. I wouldn't mind hearing some thoughts from the more knowledgeable members........

I am very worried about the hit my SS checks will take.
The stock market will crash, and my IRA will wither.
Rice and beans here I come.

I think this game of chicken between the Republicans and Democrats could have a pretty serious side effect if it comes to pass. The GOP just doesn't want to have any tax increases and they think they will be rewarded by their constituents if they hold firm. But, as soon as the mass of sheep wake up and see their 401K's in the tank, and mutual funds start getting wiped out, their reward will be of a different type.
My guess is you will see the financial markets fire a warning shot across the bow of all by a quick, dramatic drop in the DOW & S&P over the next couple weeks. The shot will be to bring people to their senses and say resolve this thing or it's going to get very nasty.
If they don't resolve it prior to the time limit, then Katie bar the door, we're heading for a real drop in the global market, no matter whether it is for a single day or a few days. And if that happens it will be slow to recover as confidence in the world markets will be shaken.

Not a pretty picture, Cash is the operative word until this is resolved.
IMHO

Good points. Now wouldn't the US dollar also tank against the rest of the world's currencies? If so, might gold be a better safe haven?

Yes, I agree, gold might be a good place to be but as the market drops gold starts rising and gets to some incredible highs. Timing is crucial.

Here's my take on the situation. The market has, for the past several years suspended the laws of gravity. The PPT, also known as the plunge protection team, props it up artificially every single day. They also set the price of gold in London and New York, every day. Now the big question, is how long can they keep this up? Who knows, maybe for a very long time. Who's in the market now, well very few individual traders. Why? The casino is stacked against you. Who is in there are mutual funds, and other institutions. If your retirement funds are parked with an institution, such as Calpers, who took a massive scalping on property derivatives, you might very seriously want to get out, and invest in some gold, and or silver. Physical only. The paper isn't worth squat.
What to do in order to protect yourself?
After weeping and wailing, then accepting the level of duplicity, it might be a good idea to stock up on some gold or silver. Consider it insurance. Why, you might ask. Well, here are a few reasons. There is a limit to the quantity of both. In other words, it can't be printed. They have tried with gold and silver ETF funds, however that puts you right back in the paper market. Eric Sprott has a fund which is backed by physical, so there's one option. The other is to put a percentage, which you feel comfortable with, into physical gold or silver.
This would give you some protection against devaluation of the U.S. dollar, and all other fiat currency ( which is essentially, all currencies). The swiss franc has some gold backing.
Pick a number, say 10 to 25%, as portfolio insurance, buy your physical gold or silver, and then relax. That my friends is as good as it gets. IMHO.

By the way, foreign lenders are pretty reluctant to buy up U.S. T-bills at the moment, so be aware of that. It is not, IMO a safe haven.

Since this thread is not part of a food fight and has very informative posts, I wish Bob would back in the general forum. There are some people who are obviously very well informed on the subject.

Who worries about their money? EVERYBODY.

CanuckBob wrote:Good points. Now wouldn't the US dollar also tank against the rest of the world's currencies? If so, might gold be a better safe haven?

Had to smile as I was scanning the headlines today and saw the following. Bob, gold is already on the rise so getting in may offer some protection, but it is already high.

http://www.marketwatch.com/story/gold-futures-gain-on-euro-zone-debt-fears-2011-07-12?siteid=YAHOOB

Big money is already in.

kiva wrote:

CanuckBob wrote:Good points. Now wouldn't the US dollar also tank against the rest of the world's currencies? If so, might gold be a better safe haven?

Had to smile as I was scanning the headlines today and saw the following. Bob, gold is already on the rise so getting in may offer some protection, but it is already high.

http://www.marketwatch.com/story/gold-futures-gain-on-euro-zone-debt-fears-2011-07-12?siteid=YAHOOB

Big money is already in.

Hmm, kiva, indeed the big money is in fact in, however the small money is not. That's when you get the really huge gains. Furthermore, never satisfied with already disgusting levels of profiteering, they are trying to snatch away even the smallest crumbs.

To wit, the very large silver short position, which to my knowledge has not as yet been covered by JPM. Yes, they are trying to drive the price down so they can get their grubby little hands on more.
High in terms of inflation, would be in the $200 range or higher for silver. Gold, well you do the math.

Silver is really out of whack with the normal historical gold:silver ratio. It's IMO a better buy. JPM is shorting the living crap out of it. Max Kaiser has unleashed the SLA. Silver Liberation Army, and what's more the mint frequently cuts off production. Would you guys like to see what a short squeeze looks like when JPM gets caught with its panties down? I would.


O.K. the shorts are a derivative, all paper, no physical. It's commonly referred to as naked shorting. Somebody major comes along and wants physical, Comex is in trouble, which means JPM is also in trouble, because suddenly there will be a massive demand for physical silver, driving the price up, and JPM loses its shirt, underwear and everything else as its naked short options expire, worthless.

gringal wrote:Since this thread is not part of a food fight and has very informative posts, I wish Bob would back in the general forum. There are some people who are obviously very well informed on the subject.

Who worries about their money? EVERYBODY.

OK I'll put it in "the Mirador" as long as it doesn't turn political. In the meantime I'm off to buy some gold bullion and a shovel.......

It's about political infighting between the Republicans and Democrats. Since Obama is president a default would make him look very bad and a political win for the Republicans come election. And I don't think they care if we don't get our social security checks or if the US defaults so long as the Republicans can get elected. They - both political parties in congress - have the best health insurance in the US and are out of touch with the life of an average American.

There is no economic restructuring plan ... which means they have to up the debt limit until these BOZO's get serious. Flat tax rate or national sales tax is all that makes sense in the short term. LOOPHOLES are the USofA

Short term, stay out of the crazy see/saw stock market

If a friend asks you " whats up? or whats happening?" to reply " nothing " would be totally inacurate!!

http://www.usdebtclock.org/

After I started this thread I spoke with my money guy. He said it would be wise to put 5% of our total portfolio into gold bullion and stash it away somewhere. He actually said "don't put it in a bank vault because if there is a natural or economic disaster you may not be able to get in to get it". He recommended finding someone we can trust who has a personal vault and store it there. Food for thought........

I bought into Guns & Ammo...

The trouble with gold bullion is: how many of us have a secure vault or know someone who has, and who we trust implicitly?

If anyone finds out you have it, are you going to face a gun pointed at you and refuse to tell where it is? Let's face it, it's a mattress or a hole in the ground.......and good luck with that. Hey hey hey and a bottle of rum????

hence... gold certificates...handy & secure
but the guy with the gun may end up being the bank

CanuckBob wrote:After I started this thread I spoke with my money guy. He said it would be wise to put 5% of our total portfolio into gold bullion and stash it away somewhere. He actually said "don't put it in a bank vault because if there is a natural or economic disaster you may not be able to get in to get it". He recommended finding someone we can trust who has a personal vault and store it there. Food for thought........

Cash is king ( reserve ) and Real Estate ( revenue ) have always been my strategy...

With Gold you are at the mercy of the Markets... you still need a buyer...
and the suspicious side of me says " the suits who control that market... are the same clowns who crashed Wall Street"
Stocks and money markets have never been my strong suit... thank God... cause I still have my savings..

Suggestion... form a group and buy an appartment building in a reasonable market.... leave it in the hands of property management... that should be safe enough and provide a decent return

I agree in general.
The price of gold and silver are so high right now that anyone getting into it is probably too late at the party.
Real estate investments, as we can see, can whomp you if your timing isn't right, and the suits that control the market are NOT your friends. "Investment advisers" get paid whether you're buying or selling. They are tickled if you keep doing both frequently.

Rentals can be a real PITA, but right now they are usually getting a way better return than many other ventures.

hockables wrote:hence... gold certificates...handy & secure
but the guy with the gun may end up being the bank

Unfortunately I'm told that gold certificates will be worthless in financial armageddon. You need the real deal and yes a hole in the ground would probably be best. Not saying I was told to go all in with the gold, just a small insurance policy (5% or less). Remember when gold was approx. $900 oz around 1979? $1500 oz is nothing. Some of the doomsayers are predicting $5000 + per ounce within a few years. I believe it's not the price of gold that fluctuates it's the perceived value of US dollar that goes up and down. The gold is the baseline.

Real estate investments.....been there, done that. Now I'm out and don't want the hassle of being a "long distant" landlord. Besides one can buy real estate based stocks and funds that will pay monthly dividends. Same idea without the hassle.

With real estate investments, I've found that
(1)I want it to be close enough to keep track of what's going on there. As in, within 50 miles.

(2) I want to see and touch what I'm buying. I am allergic to the real estate based funds.

YMMV, of course.

I have not had experience with these Real Estate Funds although I wouldn't mind learning more about them.

When I spend my money... I like ta get something for it...

I buy property.... I want the deed....

Property Management works for me, cause I pay them....

I don't like giving my money to some smartass selling: paper, smoke & mirrors

Even with the RRSP Program..( the fund run by both your bank and your government ) I bought into it as a Tax Savings Vehicle... not a Savings Vehicle... oh yeah... that lost money too...

Problem is, at least around here, is that a $500,000 house will only get you about 2K per month in rent (gross). Once you minus out land taxes, insurance and maintenance you will net about $1400 month. Now if you add on a management fee of say 10% your down to $1260 per month ($15,120/yr or 3% ROI). That's not near enough of an ROI for me. Yeah the property might go up in price but that doesn't do you any good unless you sell it.

What sort of ROI are you getting on your rentals out in Saskabush Hocks?