Collapse of the American Economy?

[Quanah Parker]

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Does anyone else see a future doomsday scenerio? How would you invest for it?


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Depends on the extent of the doomsday.
For the worst case scenario:
Invest in an old fashioned backyard underground bomb shelter. Convert a large portion of your assets into guns, ammunition, and medical supplies.
Save all your coins. Once doomsday occurs, paper money will become scarce and quickly wear out. The result will be that coins will become the accepted means of exchange, along with gold, and the rest of exchanges will be done by barter system.
Also, always make sure your car's gas tank is above 50% full, just in case, you know.

[jtollison78]

I hedging... against the possibility that the American economy survives.

I tend to think hyperinflation is the more likely scenario for various reasons, but I haven't been able to get deflation out of my head completely. I haven't heard a good reason why debt default deflation cannot happen. The bankers would prefer that to outright hyperinflation I think because hyperinflation would largely be game over for them, but then again, banking is so political that I figure we'll get an inflationary scenario.

My strategy:

1) physical metals on hand (vs inflation and potential social collapse where they would likely be eventually useful as currency though food/bullets might make better currency at first.)
2) stocks - I think there's a good chance that we have a couple of good years before things fall. I'll probably get out of stocks if things hit 20k within 2-3 years.
3) bonds (and cash?) vs deflation
4) skills and tools: vs societal collapse secondary either to a straight economic collapse or to peak oil. Specifically, I started a garden this year for the first time, I went fishing the other day for the first time in 20 years, I've started stocking basic supplies(food, fuel w/stabilizer, ect...), I'm now looking at alternative sources of energy production, and I'm considering good retreat locations.

The thing with #4, I think it's hard to make an argument against increased self sufficiency. Even in most soft landing scenarios, I think taxes are going up in the future, so $ saved at the margin will make the time investment worthwhile for many.

John

[keikiwai]

having at least some precious gems seem better than metals, since gems take up less space (can cram a few tens of thousands of dollars or even a lot more into your pockets and run) and are easier to conceal

plus gem collecting is much more fun than metal collecting imo

[gonebroke2]

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having at least some precious gems seem better than metals, since gems take up less space (can cram a few tens of thousands of dollars or even a lot more into your pockets and run) and are easier to conceal

plus gem collecting is much more fun than metal collecting imo

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I disagree. If things get really bad, precious gems will be worthless. People will resort to what they have always resorted to during hard times and that is using gold and silver as a medium exchange.

[The4Aces]

GEMS would be impossible becuase barely anyone would know how to grade them. Also currently the GEM market is artifically set by a few business/faimlys in the world. The price of GEMs would plummet.

[Al P]

Everything is rosy - http://www.ncpa.org/sub/dpd/index.php?Article_ID=14773

[DJSHAD0W]

This is already happening, just look at:

.) Last five years (or 7) US$ lost 40%+ value vs Euro (0.85 exchange rate to 1.35+)

.) Increasing Inflation - I mean real inflation, not the crap the government reports.....

.) Loss in real buing power for avg guy on avg income - this has been slowling falling for a long time

.) US doesnt manufacture hardly anything anymore - not sure how long a society can live by being the "financial manager" of the world.....

All big empires in history have come and gone, and so will this one, it's just a question of time [img]/images/graemlins/laugh.gif[/img]

[DJSHAD0W]

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Everything is rosy - http://www.ncpa.org/sub/dpd/index.php?Article_ID=14773

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LOL... yeah, just turn on fox news and watch Bush and Cheney and their continous drumbeat of misinformation

[mtgordon]

So when the Euro dropped 25-30% in 2 years (Jan 99 - late 2000) the Euro market collapsed? And when the GBP dropped almost 60% from 81-85 the British economy ceased to exist? I'm not saying things are looking good or bad Euro vs Dollar trend over 5-7 years doesn't seem like the best indicator.

Sorry, I just get annoyed when things that would shock the public seem to be used out of context.

[maxtower]

If the medicare shortfall is actually $34trillion over the next 75 years, how does the future look for countries who have socialized healthcare? Do they have similar shortfalls for future medical spending?