Well, It looks like Russia and China just put a big ass crack in the dollar hegemony with respect to oil. Russia's Gazprom Neft moves to yuan in fuelling planes in China Russia is now going to sell Jet fuel in China settled in Yuan. And China will pay Rubles when refueling in Russia. The brics are coming. Hold on to your shorts.
At least I'll be able to pay off my mortgage with pocket change after inflation meets all that reserve currency. There will probably be bills that let you write in the number of zeroes needed for the day of the week.
What will this do the the actual value of P.M's? I'm hoping for a true market value rather then the artificially deflated U.S. market valuation of P.M's, which makes my holdings that much more relevant in the future! $100 gallon of gas, $55 a gallon of whole milk, Million+ for a good pickup off the used car lot! Or, a few scratchings worth of gold or silver!
Unfortunately, i think we are going to become Japan in the 1980s. No one buys our bonds except our own government. grinding inflation 5-6% per year. 50 year mortgages 10 year car loans 100 year treasury bonds. Imports will be prohibitively expensive so we will have to consume what we make at home. hell, maybe us manufacturing will come back. But our day (200 years) in the sun is nearing sunset. It could take decades for us to lose to the Yuan. (best situation). Or if the world is tired of us being the global bully they could sell all their holdings in US treasuries and crash us out. I'm betting it's going to be in between. There will be some flesh extraction by china, russia, others. But they will gladly let us slide down the sandpaper slope. This could be our lost generation. Our kids aren't having kids so they are going to be even more screwed than those that are going to be taking the final ride in the next 20ish years.
As for what PM's will do? Well, don't look at it as dollars. an ounce of silver will by you a 5 gallon can of gas now ... it'll probably do the same in the future. that same ounce of silver will buy you a case of black beans or a case of soup .. probably the same in the future. an ounce of gold will buy you an acre or two (as part of a larger parcel purchase) if you look hard enough now .. probably the same in the future.
What to do with a 401k that offers US stock funds, foreign stock funds, or bonds? Any ideas on defense of the nest egg?
I am not a financial planner. All i can say is I'm diversified. 1/3rd in hard assets, 1/3rd in 401K funds (50% index, 30% value, 20%small cap with foreign exposure), 1/3rd in stocks in mining, energy, resources, reits. I've got no idea which is going to perform the best over time. I only hope they don't all fail together. Because if they do, my only back up is the bullets and beans like most of us here have. And if we are counting on bullets and beans .. the economy and society is over.
Hard choices ahead! I had a very small 401K and chose to cash it out with penalties and invest in hard stocks that I manage my self! to date, that has netted me a 4000% gain on that investment! Not THE answer, but a possible one, it really depends on how much you have, how big a hit you would take if you cashed it out, vs how much you could make investing it your self, ether in stocks, or,.....................
I guess the big question is what will happen to dollar denominated assets under a rapid inflation scenario? If the dollar drops to half its current value (100% inflation), my PMs will logically have a dollar of 2x their current value…need to research what happened in other countries and their stock markets. My feeling is that there would be a long-lasting losing spell in real terms as foreign investment in US markets seeks better returns and less currency risk.
I took a hit on mine with it's dollar value vs what it's investment return was, the fund had not been profiting ( I.E. Loosing Money) much for over a year, so I lost money even before cashing out! If that's any indication of where things are going, I would say to get out YEATERDAY! Best thing you can do right now is find out what the investment looks like today, what its projections are in the face of inflation near future, and finally what your cash value is RIGHT NOW, even with the penalties for cashing it early, long term, you might be money ahead to pull it now if my experience is any indication of things to come! If inflation goes 100%, you have effectively lost 50% of your value, so that 100k turns into 50K overnight, and it will get exponentially worse the longer you let it ride the train down the mountain called national debt!
The only reason I'm in my 401k is my employer matches 1 for 1 up to either 4 or 6 percent of my income with no vesting. So, I put in that percentage. I automagically make a 50% return. Unfortunately the match is paid once a year. But as long as you are still working for the company on the payment date. Shazam you get a few grand added to your account. I'm not going to leave any money on the table.
Same here on the match, though mine is added concurrently. (Also not a financial advisor!) I’ve kicked around the idea of quitting to be able to roll the 401k into a self-directed IRA.
I originally had only a 401k only. I liked how it grew tax free and only taxed when you withdraw it. Sure that sounds great at least by todays tax regs. But what about in the future. What happens if they decide to change the rules and tax the gains at 50 percent, 66 percent or more. Kind of hard to bail out of a 401k when you see them change the tax rate for long term capital gains without getting punished. So that's why i started investing in hard assets and individual stocks. That way if they are proposing new tax plans (as long as they don't make them retroactive). I can cash out other investments and move them into other assets that enjoy a more favorable tax status in a matter of days. Just my two cents.
Always been good to me. Our very first home, bought a 2500 buck lot (1975), put 20k in building the house, sold it for 50k that was enough cash to build our current house. That same first house sold a few years ago for 143k I noticed in the real estate transactions. I bought a 3ac piece in late 90's for 10k down the road from me. Split in half, built two rental properties on it, rented for 4-5 years, sold for 150k profit, put all of it in gold @600/oz Traded work on a house for a small lot, built a rental on it, rented out for 8 years (which paid me back all the material cost to build it), sold for 100k. Traded work on a house (new windows, soffit, roof, cost me around 4k) for a 1 ac lot, later sold it for 25k. Bought 33ac that adjoins us for 55k, had a trailer on it I rented for 18mo @650/mo, then sold the trailer for 6k (reducing my initial cost by 17k), then sold the land twice ( ). owner financed it for 190k, guy paid me about 40k on it, then walked away. Sold it the next time for 165k cash, and have some great neighbors. Bought a 2ac piece with a decent trailer on it for 45k 3yrs ago. Rented it a year @ only 300/mo because the guy was supposed to give me 2 days work/mo on my place. He was more into meth than work, so got him out, and sold it for 52k, owner financed at 6%/7rs Two years in, they've made every payment on time, and I expect will pay it out. I'll net around 15k profit there over 7 years assuming they complete the deal....or I'll sell it again.... There are real estate deals all over the place if you want to pursue them Went to an estate auction couple weeks back....20.9ac with a mid 70's house (decent, needed up date for sure), nice 30x50 metal shop building , couple other out buildings, view to die for, sold for 300k. I have no doubt with 30-40k spent on the house, and the right marketing, it would bring 500k within a year. I'm just getting too old to pursue it. Edit: Photos won't load for some reason. If you want to see them, they are located at the auction guy's site: Court Ordered Auction - Brick Ranch Home on 20.9 Acres And reading back over this, I hope it doesn't sound like brag.....simply stuff I've done along the way that anybody else could do in most places. Just pointing out there is money to be made in real estate if you'll work a bit at it.
