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Old 03-14-2009, 09:47 AM   #41
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With the continued bloating of the national debt, talk of another bailout bill/stimulus package, a new administration coming in with many promised new programs, my fear is that the US could cease to be able to meet its debt obligations and go bankrupt in the next decade.
Any thoughts on an investment portfolio designed to protect yourself in case such an event happens?
I think you need to define "cease to be able to meet its debt obligations". Do you mean:
1) We'd have to raise taxes or reduce benefits to balance SS and Medicare?
2) The US would just say "your treasury securities are worthless"?
3) The US would print money so it can pay off the treasuries with greenbacks (okay, new colors may not be green)?

My guess is that (1) has very little impact except for looking for tax efficient investments (hard to predict since tax laws would be changing).
(2) isn't going to happen, since (3) is a better choice for the gov't.
(3) is the way it would probably play out. For mild inflation it's the same old prescription - real assets, real estate, TIPS, stocks that would just ride the inflation escalator (e.g. food stores). For hyper-inflation it's real assets, historically gold has been good.

What I read tells me that our current troubles are creating problems all over the globe, so I'd expect some sort of world-wide recession/depression if the US got into hyper-inflation. Maybe I'd take the chance that some other currencies will hold up better than the dollar and diversify into some of them.

In spite of trying to think seriously about this, I think "mild inflation" is the likely scenario.
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Old 03-14-2009, 09:48 AM   #42
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Cruising and Tom, please note this is an old thread that Novaman resurrected yesterday. The Ladelfina post you are responding to is more than four months old (11-08-2008).
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Old 03-15-2009, 09:59 AM   #43
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Oops, thanks for that. Ladelfina had some fun with us back in November 2008. When all we had to worry about was a roughly 30% drop in equity values. The glory days.
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Old 03-15-2009, 04:23 PM   #44
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Well not so sure about the US Gov't, but States and Cities should.. It's going to be the only way to Break those Unions and Those Outragious pensions we're Locked into..
Costing an average of 30% of a the Budget? expected to rise to 40% by 2015?
and the same with the Teachers unions.. Their pensions are just plain Ridiculous..

Wonder why the USPO went private... It was the only way to break them up..
Wonder why The unions Don't want us to Privatize alot of things?
let alone Allow You to Transfer your Kids out of PS and into Private one's?
It's a Real Mess...and maybe Bankruptcy IS the Only way out..?

It works for Business and didn't California and other states do it in the past?
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Old 03-23-2009, 04:46 AM   #45
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Now we have a US Senator floating an idea of this being possible.

Washington Times - Gregg: Deficits could bring bankruptcy
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Old 03-23-2009, 08:40 AM   #46
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Now we have a US Senator floating an idea of this being possible.

Washington Times - Gregg: Deficits could bring bankruptcy

I don't think it's impossible. And if does happen, I guess that means FDIC insurance is meaningless? What about SS? I need someone to cheer me up.

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Old 03-23-2009, 08:50 AM   #47
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I don't think it's impossible. And if does happen, I guess that means FDIC insurance is meaningless? What about SS? I need someone to cheer me up.
Cheer up, Dawg. Most of us have income coming in from so many different sources that it is unlikely they would all freeze up at once.

Besides, if the government goes bankrupt, it would affect everyone (it seems to me). The country and all aspects of our lives would be in shambles, and our currency would be worthless. So, getting or not getting a SS check wouldn't make much difference one way or another.

Feel better?

(I don't think there are world bankruptcy laws that cover entire countries, although I really have no knowledge of world economic practices... but either way, I doubt the USA will go bankrupt.)
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Old 03-23-2009, 09:48 AM   #48
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Two words................Variable Annuities
As long as they are backed by the requisite amount of Swiss francs, I am in. I vote for Austrailia, they seem to like Americans......
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Old 03-23-2009, 10:41 AM   #49
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Everybody is focusing on the liability side of the USA balance sheet. What about our assets? Couldn't we sell something, like Alaska or Hawaii or something like that?
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Old 03-23-2009, 11:12 AM   #50
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Can we sell Washington DC? That would be my vote.
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Old 03-23-2009, 11:22 AM   #51
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It's fully encumbered and there is no equity in DC. You would have to pay somebody to take it. hmmmmm.....
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Old 03-23-2009, 11:38 AM   #52
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You would have to pay someone a LOT to take it, further exacerbating our debt problem. Yep, our govt is "too big to fail!"
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Old 03-23-2009, 11:39 AM   #53
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It's fully encumbered and there is no equity in DC. You would have to pay somebody to take it. hmmmmm.....
Let's sell California!! It's got beaches, mountains, Hollywood, and skyscrapers, and some of the wealthiest residents in the country.

We can just softpedal the part about California's financial woes...
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Old 03-23-2009, 12:33 PM   #54
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Let's colonized iraq and afganistan ... then sell them off to China. Deficit solved!
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Old 03-23-2009, 12:43 PM   #55
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go to intrade and put all your money here> DEFAULT.USA.DEC09 17:43
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Old 03-23-2009, 01:13 PM   #56
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Actually, if the US filed bankruptcy at this point it would probably be a chapter 7 liquidation and the bankruptcy trustee would probably just liquidate California after relocating the condors.
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Old 03-23-2009, 02:52 PM   #57
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would barter my crops and possessions for ammunition so i can learn to shoot and hunt the wild critters that abound here. i would teach myself some basic trade so i can barter for other people's production items.
I was talking to my father about conditions in Oklahoma in the later dust bowl days (late 30s). He stated that by the end of this period, there was not a game animal of any type alive, and he lived in a lightly populated area (The Sans Bois Mtns in SE OK). I am certain that hunting would provided meat for about the first 30-60 days of an economic breakdown. After that, long pork would be the only hunting option.
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Old 03-23-2009, 03:00 PM   #58
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I had some buddies out on Washington's Olympic Peninsula who were high school age during the depression. This area was very sparsely populated and hard to reach from any city or larger town. The rivers were full of salmon and steelhead, the mountains full of large game, the beaches loaded with clams and the sea full of fish easily reached in a small boat.

With no pesky game cops to annoy them they had the time of their lives.

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Old 03-23-2009, 03:10 PM   #59
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Welll - for the no guts no glory crowd - Vanguard Total World Stock Index.

Info for the whussies - my Father left Brooklyn in the Great Depression and taught English at a Finnish shipbuilding company for a number of years. While on vacation got to see live Nazi's in Germany - which he claimed prompted his return to the USA.

A friend of ours daughter has been in China teaching English under contract(American company) - has no plans to return except to visit relatives and laugh comparing her pay/perks vs Louisiana.

heh heh heh - And lest I be remiss - a little pssst Wellesley so we can feel better.
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Old 03-23-2009, 06:44 PM   #60
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Let's sell California!! It's got beaches, mountains, Hollywood, and skyscrapers, and some of the wealthiest residents in the country.

We can just softpedal the part about California's financial woes...
Depending on who's buying, even as a Californian, I might go for this solution. California's financial woes seem small for it's economy compared to the USSA.
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