Topic: How are you for Preparing Aug 12 if the Market Collaps (Read 4416 times)

What, you're not going to be paid in Bitcoins?!

-MarkM-

well the debt ceiling has been lifted
we dodged a bullet there!

As it stands my loans are subsidized by the US government. I start paying interest until 6 months after I graduate. Though I may end up having to put a few grand on unsubsidized loans this semester 
It'd be neat if I paid back my debt with worthless money, but I'd be getting paid in worthless money too lol. I'd rather the dollar stay the same 


From what I understand this happened a few times throughout US history. The debtors were getting mad so in some cases where the states still had their own money, the state printed a ton of money to ease their pain. Of course that screwed over the creditors. Pretty sure the federal government has done that before too. Not a history/economics major, as one can see by my name.

In a mild form of crisis that might work to some extent.  I thought about hedging along these lines, but eventually decided against it.

I think it would be naive to expect that in a bad case with a re-invented currency, creditors would take a haircut.  My bet is that outstanding debts would be re-interpreted by the courts and re-calibrated to keep the debtors in more or less in their current condition.

So you're not paying interest on your loans?

Cheers,
Kermee

While I have some money in the bank, my overall amount of money is in the negatives. I owe money thanks to loans for school. So I guess it would be good for me (at this point in time) if the dollar crashed! Inflation means I pay back my debt with dollars that are worth less than when I borrowed them! I think I got that right, as long as I remembered economics from high school.

I read in an analysis of the Wiemar Germany hyperinflation that savers got slaughtered of course.  Holders of stock in companies actually came out of the other side relatively OK.

The most interesting thing to me was rental property owners.  Apparently during the crisis they had problems in that rent controls came in early on creamed them over the course of the event.  On the other side, they still had their property, though it is my assumption that they did not do much maintenance during the event.

I expect that a problem in Oceana would/will be somewhat different (if hyperinflative at all.)  The people who got chased out of 'their' homes when the real estate bubble popped will be large in number and irritable about things, and the governments at all levels are particularly hungry for revenue.  I theorize that there will be a backlash against people who have more homes than they need and onerous taxes will be levied.

For this reason, I limited my own investment in this class.  I have only enough real estate property to fly pretty much under the radar (I hope) and/or assist my immediate family members should they happen to end up in need.

Market prices are maintained by smarter people than who work at S&P. Their influence over the US borrowing rate will be less than their influence over Japan's, which was roughly zero.

1) Staying out of paper markets/investments. No 401k, mutual funds, etc.

2) Acquiring commodities, capital tools, and commodity-producing assets

 a) Ideal commodities at this point: silver, gold, bitcoins.

 b) Capital tools (probably not the right term) include things like, at the low end, a quality tool set that will last a lifetime. Also includes readily-usable skills.

 c) I would have just said income-producing assets, but just being able to generate cash probably won't cut it. Rental properties will continue to be worse and worse in this regard as inflation surges, especially considering the market crash isn't over yet.

US dollar won't crash because of debt ceiling, this is just a reality show of republicans vs democrats. Long term, I believe some kind of worldwide system collapse is inevitable and will probably result in hyperinflation eventually (5-20 years).

if the US dollar crashes, will the price of bitcoins crash as well, or go up?

That's a risk, but gold is far more resilient against that threat than the other options.  How easy is it for the government to track illegal drug holdings vs. "illegal home holdings"?  No, they can ban it, but you can still cash in the gold as easily as you can find your next fix.

Not sure about being forbidden.  Even 'registration' may prove problematic as a lionshare of it is likely held by a class of citizens who would not care much for that.  What I do think is fairly likely is that movements of PMs would probably be scrutinized, controlled, and taxed.  And capital controls will keep it in the borders (or at least the fraction of it which is in the hands of the plebs.)

But how on earth would that be achieved?  I think the infrastructure is being put in place for a while now:

http://www.popsci.com/technology/article/2010-11/scanners-coming-trains-subways-and-boats-homeland-security-chief-says

until private possession of gold is going to get forbidden again!

Indeed. There are a lot of things that could go wrong if the fragile balance of the global economy is even disturbed a bit. Just like with the Lehman case it is all too entangled to be able to say anything for sure. One default might cause a global domino effect.

The only thing sure is that it is not possible to keep kicking the can down the road forever, and because everyone realizes this, I somehow don't think it will take long.

Socialist in my particular case.  See you on the other side.

I'm starting to buy a lot of stocks that have dropped a lot in the past couple of weeks.  Also shorting gold.

Prepare to lose a lot of money, libertarian suckers

Always good to prepare for a rainy day

There is a mind-boggling amount of notional value in derivatives.  It would not surprise me if something much less than a downgrade or limited default triggered some issues here, and I would be surprised if either of these two events did not.

There is an argument that the _net_ value is not high, but it can also be pointed out that as counter-parties go poof, net value approaches notional value.  (Explains 'to big to fail' in my mind.)

Now, in the event of a derivatives related crisis there might be some short term relief by changing accounting rules (again) and redefining or re-interpreting various things, but I would not bet on these to have any lasting effectiveness...if much effectiveness at all.

Like the Lehman deal, there are probably a lot of not generally considered issues which could pop to the surface if the near-boiling pot is disturbed.  Here's an interesting vid for those who may not have seen it.

  http://www.deepcapture.com/naked-short-selling-redefining-systemic-risk/

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But to your question, I have a friend who does the following:

 - gold bullion
 - property
 - junk silver
 - USD in several bank accounts and some in safe deposit boxes.
 - bitcoin

He does not have any other financial instruments as he feels it unlikely that a functional legal system will be around to assist him in collecting his assets in a scenario where he would actually need them.  A functional legal system is likely to exist...it's just that it will not be his interests which are high on it's priorities.

it will default on securities (or alternatively, not pay on other expenditures) coming due from that point until an agreement is reached.

while this is not nearly as dire as the media is screaming, it's not a good idea and would result in higher bond rates and thus more money paid to interest.