Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Where to invest should the US go bankrupt??
Old 11-06-2008, 09:13 PM   #1
Recycles dryer sheets
 
Join Date: May 2007
Posts: 371
Where to invest should the US go bankrupt??

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?
__________________

__________________
novaman is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-06-2008, 09:22 PM   #2
Recycles dryer sheets
 
Join Date: Sep 2006
Posts: 312
A conservative portfolio of 60% Zimbabwean stocks and 40% bonds?
__________________

__________________
Grep is offline   Reply With Quote
Old 11-06-2008, 09:35 PM   #3
Recycles dryer sheets
Culture's Avatar
 
Join Date: Apr 2007
Posts: 491
Quote:
Originally Posted by novaman View Post
Any thoughts on an investment portfolio designed to protect yourself in case such an event happens?
Assuming you are being serious, I will attempt a serious answer. Think what would happen if the US declared bankruptcy. Most likely total worldwide economic collapse and massive civil unrest. Your only real chance would be gold, buried very deep in a hidden location, so that you could hopefully dig it up 10-100 years later after things stabilized. However, make sure no one even suspects that you have the gold. I would suggest smaller stashes of silver (split up) to help you live through the intervening times. Make sure no one suspects you have this, either.

Forget the guns and ammo. The state and/or mob would crush you with no thought no matter how many guns you have. Security through obscurity should be your mantra.

Try reading The Gulag Archipelago to get an idea of how the Russians seized assets after the Revolution. If it was suspected that you had gold or other assets hidden, you were beaten and tortured until you gave it up. If you died before you could point to adequate gold, too bad, you must have been to tough to confess the location.
__________________
Culture is offline   Reply With Quote
Old 11-06-2008, 09:37 PM   #4
Recycles dryer sheets
Culture's Avatar
 
Join Date: Apr 2007
Posts: 491
Actually, I have a better idea. If you really think the US is going to declare bankruptcy, move somewhere else that is more stable before this happens, if possible. I have no idea where this would be, but it would be the best idea, if possible.
__________________
Culture is offline   Reply With Quote
Old 11-06-2008, 09:42 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by Culture View Post
Actually, I have a better idea. If you really think the US is going to declare bankruptcy, move somewhere else that is more stable before this happens, if possible. I have no idea where this would be, but it would be the best idea, if possible.
Switzerland
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 11-06-2008, 09:51 PM   #6
Recycles dryer sheets
Culture's Avatar
 
Join Date: Apr 2007
Posts: 491
Quote:
Originally Posted by dex View Post
Switzerland
Yeah, I guess it is safe to say they take rich economic refugees. They do not even care whose teeth the gold was taken from .
__________________
Culture is offline   Reply With Quote
Old 11-06-2008, 09:52 PM   #7
Thinks s/he gets paid by the post
Texarkandy's Avatar
 
Join Date: Feb 2008
Posts: 1,281
The United States is "too big to fail".

Right, everybody?
__________________
Retired 2009!
Texarkandy is offline   Reply With Quote
Old 11-06-2008, 09:59 PM   #8
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
1) Japan and Europe for example have national debts usually ranging from 70 to 180% of GDP. The US is still at the bottom of that range.

2) Europe and Japan are facing aging populations and increasing costs to support that older population. We do too, but we have fewer social programs to fund. In addition their birth rates are too low to truly provide relief from snowballing debt (fewer younger people to pay for the older generation = more debt). In the US our birth rate is still healthy enough to provide population growth (more younger people to pay for the older generation). Furthermore, many European countries are facing shrinking populations which will be disastrous for their economies. The US is probably one of the developed countries better positioned to handle the baby boomer crisis.

3) Like it or not, taxes in the US are VERY low compared to most developed countries. Therefore we are better prepared than most to face this crisis. While we could raise taxes here to help lower the national debt, Europe has already pretty much maxed out its taxing power (I don't know about the tax situation in Japan).

4) America's economy has a lot of built-in flexibility (flexible labor market, population mobility, entrepreneurship incentives, low unionization rate, etc...) which will allow us to adapt and find new ways to grow.

So you can run, but you better do some research before deciding where to hide.
__________________
FIREd is offline   Reply With Quote
Old 11-06-2008, 10:02 PM   #9
Recycles dryer sheets
Culture's Avatar
 
Join Date: Apr 2007
Posts: 491
Somalia has no national debt, and a zero tax rate. Therefore, it is well established to handle the coming financial storm. I suggest you take refuge there .
__________________
Culture is offline   Reply With Quote
Old 11-06-2008, 10:03 PM   #10
Recycles dryer sheets
Culture's Avatar
 
Join Date: Apr 2007
Posts: 491
Quote:
Originally Posted by FIREdreamer View Post
In the US our birth rate is still healthy enough to provide population growth (more younger people to pay for the older generation).
Not that it is relevant to your point, but our native birthrate is at replacement levels. It is immigration that is taking up the slack.
__________________
Culture is offline   Reply With Quote
Old 11-06-2008, 10:06 PM   #11
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by Culture View Post
Not that it is relevant to your point, but our native birthrate is at replacement levels. It is immigration that is taking up the slack.
Good point. But the new immigrants tend to have a higher birth rate than natives.
__________________
FIREd is offline   Reply With Quote
Old 11-06-2008, 10:34 PM   #12
Recycles dryer sheets
 
Join Date: Mar 2007
Posts: 92
I too think that this would result in a global meltdown and great social unrest. I'd probably want some good hiking boots, a pair of fleet running shoes, and some gardening tools. I don't think we'll ever see this in our lifetimes for similar reasons that FIRE dreamer pointed out, but I've learned not to time the market.
__________________
roger r is offline   Reply With Quote
Old 11-06-2008, 10:49 PM   #13
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
Quote:
Originally Posted by Texarkandy View Post
The United States is "too big to fail".

Right, everybody?

Of course.
__________________
Notmuchlonger is offline   Reply With Quote
Old 11-06-2008, 11:32 PM   #14
Dryer sheet aficionado
 
Join Date: Nov 2008
Posts: 37
FIREdreamer suggested some things the US could do before declaring bankruptcy, such as raise taxes.

But I think there's an even easier solution that the US could do and it's guaranteed to generate enough revenue to pay off the US debt.

The solution is to get the printing press fired up and starting churning out dollar bills!

The result is of course runaway inflation in dollars.... so one investing strategy might be to buy other currencies. As the dollar gets cheap, Euros or Yen will buy more dollars.
__________________
Dreamweaver is offline   Reply With Quote
Old 11-06-2008, 11:33 PM   #15
Thinks s/he gets paid by the post
ladelfina's Avatar
 
Join Date: Oct 2005
Posts: 2,713
You guys are crazy!! I'm sick of these tin-foil hat theories!!!
__________________
ladelfina is offline   Reply With Quote
Old 11-06-2008, 11:41 PM   #16
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by Dreamweaver View Post
The result is of course runaway inflation in dollars.... so one investing strategy might be to buy other currencies. As the dollar gets cheap, Euros or Yen will buy more dollars.
It looks like everyone is cranking up their printing presses right now (the US, the UK, Europe, etc...), so the dollar will get cheaper against other currencies only if we overdo it compared to everyone else! Dollar valuation is all relative...
__________________
FIREd is offline   Reply With Quote
Old 11-06-2008, 11:45 PM   #17
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by ladelfina View Post
You guys are crazy!! I'm sick of these tin-foil hat theories!!!
What theories are those?
__________________
FIREd is offline   Reply With Quote
Old 11-06-2008, 11:53 PM   #18
Dryer sheet aficionado
 
Join Date: Nov 2008
Posts: 37
Quote:
Originally Posted by FIREdreamer View Post
It looks like everyone is cranking up their printing presses right now (the US, the UK, Europe, etc...), so the dollar will get cheaper against other currencies only if we overdo it compared to everyone else! Dollar valuation is all relative...
Well even if with worldwide runaway inflation, don't worry, you're not SOL yet!

How about investing in fixed assets?
Real estate? (oh wait...)
Oil? (hmmm...)
Gold? (maybe...)
Campbells soup? This might be your best bet. People need food!
__________________
Dreamweaver is offline   Reply With Quote
Old 11-07-2008, 07:40 AM   #19
Recycles dryer sheets
shotgunner's Avatar
 
Join Date: Jun 2008
Posts: 454
Two words................Variable Annuities
__________________
Never surrender what you really want for what you want right now.
shotgunner is offline   Reply With Quote
Old 11-07-2008, 08:21 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
Quote:
Originally Posted by Texarkandy View Post
The United States is "too big to fail".

Right, everybody?
Not as long as we cling to our guns and religion...
__________________

__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What happens if lifetime annuity issuer goes bankrupt? mark FIRE and Money 82 06-06-2012 06:00 PM
My TX power company is bankrupt Htown Harry FIRE and Money 27 09-03-2008 01:05 PM
Public Pensions Bankrupt??? jerryo FIRE and Money 46 08-12-2006 07:20 AM

 

 
All times are GMT -6. The time now is 08:16 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.