Where to invest should the US go bankrupt??

novaman

Recycles dryer sheets
Joined
May 12, 2007
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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?
 
A conservative portfolio of 60% Zimbabwean stocks and 40% bonds?
 
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.
 
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.
 
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
 
The United States is "too big to fail".

Right, everybody?
 
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.
 
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 :D.
 
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.
 
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.
 
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.
 
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.
 
You guys are crazy!! I'm sick of these tin-foil hat theories!!!
 
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...
 
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!
 
The United States is "too big to fail".

Right, everybody?

Not as long as we cling to our guns and religion...

Uh, oh :confused: - I have no religion - is there something else I can cling to instead? I have a copy of the complete works of Thomas Jefferson - will that do? How about if I go out & buy twice as many guns as I have now?
 
2/3 of the national debt is for SS and between government agencies. only a small portion is public debt. when the banks and AIG repay the stock interest and the government sells the stock it owns we'll repay close to a trillion of the debt. for the rest we just cut SS and medicare costs to control it
 
If you really believe the US might default, I would suggest CDS on US Treasuries.
 
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