Economic Collapse / Great Depression 2.0

posted by 1337cshacker
All I can say is BUY GOLD, and buy it NOW. When I get my 20g from army bonus, I will spend easily 5 or 6 on gold alone. Might throw 1 or 2 in silver. These investments are better than college, since gold has risen 158% since 01. Gold has never really fallen in price, maybe went flatline, but not fallen. This is good protection to have some gold, and I don't mean liquidly, I mean in a fireproof safe in your closet double chained to a steel beam in your house (I love my dad).

The French have been the nation with the most gold held by private citizens. The US “took” gold away from its citizens in 1933. After 1971 Americans could again own gold but we had 2-3 generations weaned off the beautiful metal. It is not very popular here.

The largest commercially available form of gold is the 1,000 troy oz bar. That is 68 pounds av. See Note 1. Such a bar is worth about $750,000 today. See Note 2. Aside: If you knew where OBL was hiding, and turned him in, the US has promised $50 million in gold as your reward. (Also citizenship and a secret identity). That would be 66 gold bars at today’s prices. About 4,500 pounds. 2 1/4th tons. As desirable as gold is, I think I’d take 10 and 20 year US Treasury Bonds in preference to the beautiful metal. End.

Note 1: To convert pounds avoirdupois to pounds troy by multiplying by 1.1215. To convert pounds troy to pounds avoirdupois, multiply by 0.823. Ex: One pound avoirdupois equals 14.58 ounces troy. 12 oz tr makes one pound troy. See www.ehow.com/how_2097191_convert-troy-weight-measurements.html

Note 2: As of 9:30 AM today, Oct. 5, 2007, the price of gold was quoted a $US735/EUD520. See goldprice.org/ Gold coins run $755 for US, Canada and 1 oz bullion, to a low of $744 for the Krugerrand.

[edit on 10/5/2007 by donwhite]

A treasurey bond is probably the safest investment you can get. It's default free and you will make some interest; while not great, it is a way of making a safe income. Me on the other hand, I'd go the rout of a Mutual Fund instead of a Bond. Personally, I just don't like bonds, at least not now, but then again, I'm just 23. Maybe when I get to be in my 50's or 60's I would prefer more bonds as it is a safe way to secure income, but for now, I like my stocks and mutual funds and prefer them to any bond, unless I found one that would give me 10% on it, which is unlikely. As of today, my 4 mutual funds have given me a total return of 62% on my investments, and this was with me selling $500 of one of them. My stocks on the other hand have returned me (.01%) of my investments. So as you can see, my stocks tend to be more risky, mainly one stock not doing what I expected it to do, however, the point is, the market is pretty safe if you do your homework.

posted by ChrisJr03
A treasury bond is probably the safest investment you can get. It's default free and you will make some interest; while not great, it is a way of making a safe income. Me on the other hand, I'd go the route of a Mutual Fund instead of a Bond.

Right! I used to say as long as there is a United States of America the bonds will be good! You said the same thing, “it’s default free.” I think the US bonds are paying in the mid to high 4's and that seems to be consistent. Until 15 years ago, the US 30 year bond was the world’s interest benchmark. Central banks were pegged to it. Today it is the 10 years bond. Which apparently means the REALLY BIG money boys are not so confident of the long term as before?

By “really big” money boys I mean the top 10,000 richest people on this planet. The REAL movers and shakers of our world. Like the Emir of Qatar. Or the Sultan of Brunei. Does not $83 oil PROVE Allah is the one true GOD? Most American billionaires are NOT party to their convergence of anti-egalitarian interests. Richard Mellon Scaife excepted.

Personally, I just don't like bonds, at least not now, but then again, I'm just 23. Maybe when I get to be in my 50's or 60's I would prefer more bonds as it is a safe way to secure income, but for now, I like my stocks and mutual funds and prefer them to any bond, unless I found one that would give me 10% on it, which is unlikely.

I agree almost completely but on one point. Never buy a 10% bond. If its too good to be true, it probably is. Considering a bond is a mortgage, that is, it is collateralized - before the Milken brothers anyway - good collateral does not need to offer 10% returns.

As of today, my 4 mutual funds have given me a total return of 62% on my investments, and this was with me selling $500 of one of them. My stocks on the other hand have returned me (.01%) of my investments. So as you can see, my stocks tend to be more risky, mainly one stock not doing what I expected it to do . .

Why not sell your stocks and put half the proceeds in each of your TWO best mutuals? What works for you may not work for others, but you have made better choices in the mutuals than you made in the stocks. Which is not really a big surprise. That being the whole theory of mutual funds.

[edit on 10/5/2007 by donwhite]

Well I did sell my two best stocks, AT&T and Dynegy. I made 60% on the AT&T stock and about 100% on Dynegy. That's been sitting in my account till Wednesday when I got a stock that split. Those mutual funds, most of them I picked up cheap; so that is one reason why my return is nice. I have one fund that is at over 100% return, so that helps. Well to talk of the 10% bond, right now, I'd have to say that would be some kind of scheme. I recently attented a lecture by some SEC lawyers and that's one of the main points they where hitting on. Pyramid schemes are some of the easiest ways to make money, and there was another major one he was talking about, but, I can't remember what it was. However, most are the same and take your money, promise you a certain return and then sucker more people in. With the new peoples money, you pay off the old people who invested first. Now sometimes the schemer will promise the older investors a higher interest rate, like say 15% which is just too good to be true, but people still go for it. If the scheme gets big enough, people will be selling for the origional guy with out knowing what they are doing. They will get a nice cut of profits but the origional schemer is making a killing. Most of these schemes are targeted to older people because in some cases the elderly know the person and trust them. If I could get a 10% bond from a reputable dealer, i.e., like Edward Jones, I might consider it. If I had to recomend it, I'd say that a Tresurey Bond would be a good bet, and you're pretty close, I believe it's a little over 4%. Regular bonds, not sure on those; I know stocks went up today, so I'm sure 10 year bonds went down. I know for sure though, that I wouldn't want to buy a 30 year bond now; there's just no telling what rates will be like 5, 10, or 15 years from now.

What year coin/silver is the *good* year to get? I heard it's something pre- either 1970s or 60s, at the price of gold and anyone doubting an imminent stock crash, you're turn at the plate.... plus, the dollar dropped all the more yesterday, to 1.41 per euro. Not pretty times ahead in this opinion.... the U.S. savings rate is at pre-depression levels. The deficit is at record levels, you can't keep raising the debt ceiling, it'll catch up to haunt (credit card/mortgage holdings of debt) the service economy sooner then. Right or wrong there?



ps... I hear schools and hospitals could be the first to close in severe times, food prices/availability would be awful and gas prices more then 90$ a barrel? Is it 'peak' oil or abiotic? Adjusted for inflation, $100 per barrel is Iranian Revo era prices. We need to goto solar/nuclear energy asap should it be 'peak' situation.

[edit on 6-10-2007 by anhinga]

reply to post by anhinga


anhinga What year coin/silver is the *good* year to get? I heard it's something pre- either 1970s or 60s, at the price of gold and anyone doubting an imminent stock crash, you're turn at the plate....

In Re “silver” dollars, half dollars, quarters and dimes. The last silver coins were minted in 1964. This was done because the price of silver exceeded the value of the silver in the coins. I do not know for sure, but it is my memory only that nickels were never silver. And of course, pennies have always been copper except 1943 when they were made of zinc coated steel. Beginning with the 1965 date, our coins are nickel clad copper core.

Holding gold for a total breakdown of society is not a good move, IMO. I used to say, “I’m saving lead for that time.” Lead bullets. I’d rather have 10 lead bullets than 10 gold coins. You don’t have to pay with lead bullets. You just take. Gold is for the R&Fs. Rich and famous. Not for the P&P-ers. Poor and poorer. For us P&P-ers, times will be rough and most of us will die. R&Fs will hire Blackwater types with gold to kill us when we get either too close or begin to aggravate them. Bullets shelf life in a cool dry place is 20-30 years.

Another real problem with gold in times of disaster is ASSAYING. This makes gold coins with ridges popular because that is a defense against shaving the coin. A very accurate scale is also desired. Bottom line, if it gets so bad we need gold to buy food, it is already TOO late. Enjoy.

anhinga plus, the dollar dropped all the more yesterday, to 1.41 per euro. Not pretty times ahead in this opinion....

Look, there are 400 billion worth of US dollars in print. 240 billion worth is used in the US, 160 billion worth is the WORLD currency and is used abroad. Money speculators are the one’s setting the trading prices on a day to day basis and that has not much to do with the price of gasoline. When the Euro is in the history books, the US Dollar will still be there.

That is because 300 million industrious people, the world’s best 3.6 million square miles of land, and a $12 t. economy BACKS the US dollar. Sleep easy my friend, let the speculators have their own brand of fun.

anhinga the U.S. savings rate is at pre-depression levels. The deficit is at record levels, you can't keep raising the debt ceiling, it'll catch up to haunt (credit card/mortgage holdings of debt) the service economy sooner then. Right or wrong there?

I’m ignoring all but your remark about raising the debt ceiling. Actually, you can. They have proved that. I HATE IT. America is worth about $60 t. if you put everything here up for sale. American “makes” about $12 t. a year. We currently pay about $400 b. to “service” our national debt. $8 t. $3 t. is owed to ourselves in a complicated sort of way. To “service” the debt means you pay interest only. As long as your lenders do not object, it works.

If you are an Arab sheik with $83 a barrel oil, and you are making about $50 million a week, WHERE are you going to put your money to be safe? In India? Ha! In the PRC - China - about to blow apart? Ha? In Euro’s where they can’t even get a Constitution passed? Ha! In Russia? Ha ha ha! Maybe in Myanmar (Burma)? Please, there is only ONE place the R&Fs can put their money, THE U S of A!

RELAX!

[edit on 10/6/2007 by donwhite]

Thanks for your input Don W, it's always insightful and full of information.

You didn't mention the import/export difference aka trade deficit. Losing jobs since IT bubble burst and Drug Jr prez ruined economy. No more auto jobs, tool industry was our number one industry through the last century, what's our main export today? Credit debt and waste to China. A services economy cannot survive, maybe we'll agree to disagree here Don W, I believe the extremists and thanks for that 'lead' info.

Seriously, the debt will bankrupt people all the more foreclosures, which is the biggest "bad word" today. Then what? Druggie Jr changed the personal bankruptcy laws where I don't think you can file anymore. Interest rates change at the drop of a hat. You have Harry Reid admitting, finally last week, "We didn't realize how serious a crisis this is." which is in regards to the sub-prime fallout, which isn't over yet.

A person on here bragging about their hedge fund, yet that's what's still yet to collapse, they will, they hell breaks loose, see my last post for what's next then.....

....places like Bear Sterns, Merrill Lynch and high-caliber (private) banks are cutting jobs and predicting dismal outlooks, this could get ugly. I know you don't put it together like I do, but this is not a healthy economy, can't trust a 'services' economy ever, looking to fall like Rome.

reply to post by anhinga


anhinga Seriously, the debt will bankrupt people all the more foreclosures, which is the biggest "bad word" today. Then what? Druggie Jr changed the personal bankruptcy laws where I don't think you can file anymore. Interest rates change at the drop of a hat. You have Harry Reid admitting, finally last week, "We didn't realize how serious a crisis this is." which is in regards to the sub-prime fallout, which isn't over yet. I know you don't put it together like I do, but this is not a healthy economy, can't trust a 'services' economy ever, looking to fall like Rome. [See my Foot Note.]

Economics is not known as the dismal science for no reason. It is basically because we cannot understand it either in the present tense or the future tense. It is only comprehensible in the past tense. Which is why Bernacke doesn’t know what to do, either. Alan Greenspan may have been the luckiest man alive! Like promotions in the Armed Forces, being at the right place at the right time is more important than all your other qualifications.

Prior to the 1980s S&L debacle the Fed controlled interest rates paid by banks on deposits. S&Ls were allowed to pay a half point more. This policy was established in the 1930s when neighborhood S&Ls were the largest source of home ownership loans. Banks paid 2.5-3.0%. S&Ls got a lot of money deposited in them because they paid a higher rate. By the 1970s, banks wanted to end the preference enjoyed by S&Ls. It seemed to all the smart guys who “knew” macro economics the original reasons for the disparity in interest rates paid on deposits had passed. And so it was agreed. The interest rate cap was off banks.

Since S&Ls were only into single and 2 family dwellings, on 30 years montages, for 4-5%, their income was sharply limited. To further reduce their liquidity, S&Ls had "pledged" existing mortgage income for cash to handle the rush of loans in the housing boom of the 1950s-1960s. They were already extended. No unencumbered collateral remainedl

Unwisely S&Ls asked for and got permission to engage in venture lending in order to get a better cash flow. A national institution throughly inexperienced in big time capital investments, was suddenly turned loose. In less than a half dozen years trouble began when too many “investments” went sour and the borrowers went belly-up. An SOP for many of them. The S&Ls learned the hard way that commercial property sold in distress frequently sold for less than the loans. There are not nearly as many shopping center buyers as there are home buyers.

No one foresaw this event which came on very quickly and with far reaching consequences. Some writers have estimated the bailout by US taxpayers will run to $900 billion by 2020. I don’t know. No one wants to talks about it. Its worse than a southern white girl having a mulatto child. What can she say?


My Foot Note. Maybe with irony or wonder, Gibbons described the “Decline and Fall” of Rome to have taken the better part of 5 centuries. He used 44 BC when Julius Caesar was made Dictator for Life as the beginning of the Empire. Romulus Augustus was the last emperor and he was deposed by Germanic mercenaries in 476 AD. Founded as a republic in 743 BC, Rome endured 1,219 years. Not bad for a bunch of olive growers.

[edit on 10/8/2007 by donwhite]