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Tough Sledding Ahead, Surviving A Coming USD Collapse
Old 11-09-2008, 06:35 PM   #1
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Tough Sledding Ahead, Surviving A Coming USD Collapse

This is an editorial about the US dollar collapsing. What do you folks think of this? Is it a reasonable possibility? Bill
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Old 11-09-2008, 06:41 PM   #2
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Christopher Laird is regularly published on Kitco, Gold-Eagle, FinancialSense, TheBulliondesk, and many other gold and financial sites. He has been qouted in Newsweek on gold. Chris publishes the PrudentSquirrel newsletter, a financial and gold commentary.

Chris Laird has been an Oracle systems engineer, database administrator, and math teacher. He has a BS in mathematics from UCLA and is a certified Oracle database administrator.


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Old 11-09-2008, 06:48 PM   #3
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wow a gold bug talking up gold...
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Old 11-09-2008, 07:09 PM   #4
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ahh, thx guys. I haven't followed this gold stuff much at all. But I have been worried about the general economic collapse ongoing and also worried about what will happen to the dollar when the U.S. consumer stops buying.

I have a lot (to me anyways) of cash I've liquidated from two real estates I sold over the last couple of years. Been waiting for this market to further bottom out before diving back in. So I'm worried about holding U.S. dollars if it might collapse.
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Old 11-09-2008, 07:15 PM   #5
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If you are really worried about the USD, then you should start looking at diversifying your cash into foreign currencies (you can buy foreign currency CDs, and unhedged foreign bonds and stocks or even open an account abroad to hold your Euros, Swiss Francs, British Pounds or what have you). Off course Gold is not a bad thing to hold (in moderation though).
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Old 11-09-2008, 07:40 PM   #6
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If you are really worried about the USD, then you should start looking at diversifying your cash into foreign currencies (you can buy foreign currency CDs, and unhedged foreign bonds and stocks or even open an account abroad to hold your Euros, Swiss Francs, British Pounds or what have you). Off course Gold is not a bad thing to hold (in moderation though).

along these lines you may want to look at GIM. I haven't bought into it yet, but it appears to be one step ahead of other similar funds.

Jim
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Old 11-09-2008, 07:43 PM   #7
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I would worry about foreign currencies perhaps even more than the USD. I was reading about Iceland is all but officially bankrupt and the fact British can't get their money out of Iceland now. A more recent NYT article on Iceland: Iceland, Mired in Debt, Blames Britain for Woes

But then I read this: "Where does the crisis go next? Most exposed are countries with large amounts of external debt relative to the size of their economy. A quick calculation suggests that by this measure, the U.S. is relatively well off, with external debt about equal to GDP. Japan’s external debt is about 40-50% of GDP, as is Canada’s (these numbers may change as I refine my calculations). Italy is at about 100%, and Germany and France are in the 140-150% range." [source] and maybe the USD isn't so risky.

I guess if currencies are going to fail, and real estate keeps dropping, maybe things like Gold and Silver are logical.
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Old 11-09-2008, 08:04 PM   #8
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...and maybe the USD isn't so risky.
That's what I have been arguing for a while, but that's just me... But who really knows what's going to happen? That's why I hedge my bets and keep about 1/3 of my investments abroad and about 2% in physical precious metals (gold and silver).
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Old 11-09-2008, 08:14 PM   #9
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... and about 2% in physical precious metals (gold and silver).
Ah hah! Meaning coins buried in your backyard?

A purist gold bug wouldn't buy ETF like GLD, or SLV. In case of "real trouble", who's to say you would be able to log in your Internet brokerage account to get at that shiny metal?
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Old 11-09-2008, 08:17 PM   #10
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Old 11-09-2008, 08:28 PM   #11
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Ah hah! Meaning coins buried in your backyard?

A purist gold bug wouldn't buy ETF like GLD, or SLV. In case of "real trouble", who's to say you would be able to log in your Internet brokerage account to get at that shiny metal?
That's right, I own a few gold coins (Canadian Maple Leaves) and about 30 lbs. of silver (in the form of silverware which I will use for Thanksgiving dinner). Nothing buried in the backyard though.

I am not a gold bug... I prefer income producing assets. But I think that small amounts of precious metals do have their place in any portfolio.
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Old 11-09-2008, 08:39 PM   #12
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People hiding treasure around their property better leave a treasure map to their heir, lest it becomes lost like in the following story. A man hid $182,000 in the wall of his home during the Great Depression, to be discovered by the present homeowner. This windfall bounty caused a lot of grief, however.

Cash found in Ohio house's walls becomes nightmare - Yahoo! News
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Old 11-09-2008, 08:46 PM   #13
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People hiding treasure around their property better leave a treasure map to their heir, lest it becomes lost like in the following story. A man hid $182,000 in the wall of his home during the Great Depression, to be discovered by the present homeowner. This windfall bounty caused a lot of grief, however.

Cash found in Ohio house's walls becomes nightmare - Yahoo! News
Here's a thread on that same news item: Interesting tale about the division of some found cash
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Old 11-09-2008, 08:51 PM   #14
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Given our ongoing budget and trade deficits, I think it is inevitable that, over time, the USD will decline in value against many other currencies. And, to a certain extent, demography is destiny. Brazil, India and China all have growing populations that are younger than ours and their economies are expanding at at faster rate than ours. I would expect their currencies to appreciate. The euro? probably not so much.

However, FOREX is notoriously volatile and unpredictable in the short run, as we have seen in the great USD reversal this year, so you would need to ensure than your investment horizon is long before taking steps in this direction.
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Old 11-10-2008, 09:06 AM   #15
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This is an editorial about the US dollar collapsing. What do you folks think of this? Is it a reasonable possibility? Bill
Hmmm, the worse things got, the stronger the dollar has gotten (so far). The USD is up something like 20% against the Euro since the beginning of the crisis and even more against the Pound. The US is still seen as a relative safe haven investment. I don't think we have much to worry about in the short to intermediate term. Meanwhile the collapse of credit availability is deflationary which isn't good for commodities (as we've seen).
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