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Old 06-26-2013, 10:53 PM
 
169 posts, read 193,021 times
Reputation: 168

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Quote:
Originally Posted by CouponJack View Post
People have been saying this for awhile now... Even very smart people....

The problem is you, nor anyone on this site knows when and how steep rates will increase...it could be another 10+ yrs and the increase might be gradual. It could be next year....who knows.

Also, how will stocks fare if rates rise? I could post a dozen articles saying they will increase if rates do increase...

I tend to tune out most of the noise and stay the course along with being patient...I have a long way to go and still in the accumulation stage. If people really are nervous, then they can change the duration of their funds or look at other fixed alternatives like I-Bonds....
They have been saying it for awhile now. And the time keeps getting closer. The bond bubble is one of the biggest, if not THE biggest, bubble in the past 200 years or so. Why stay heavily (or moderately) weighted in a market that you know is going to pop big time? That is not sound investing. I'm trying to make money, not lose it.

And stocks just took a pretty big hit with just a very nominal 50 basis point rise. My money certainly wouldn't be in US dollar-denominated stocks in that kind of environment.
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Old 06-26-2013, 10:59 PM
 
Location: Texas
2,847 posts, read 2,481,726 times
Reputation: 1774
I would wait a couple of more weeks until the market realizes the Fed tapering is pretty far away yet. The GDP came in at a lousy 1.8%. You should see some recovery in your bonds. Then when comfortable you might want to get out or re-balance. That is my plan anyway.
Just best guess but I think we may see the ten year below 2% soon for a brief period. Yep just a guess but have been doing this for over 40 years.
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Old 06-26-2013, 11:00 PM
 
651 posts, read 858,496 times
Reputation: 320
I feel your pain. I am young and only 31 yrs old. I have a kid coming on the way and I continue to look out for myself and will soon be her future. My dad is retired and honestly. It is sooooo diffcult to give him any advice. It seems like the only way to survive anything is to diversify. It used to not be this difficult in the past when government didn't jack the nation and made everyone speculators to maintain their purchasing power. The dollar backed by gold was the most stable time for money in history and created the largest wealth for the middle class. The bankers hated this because they had to pay real interest over the rate of gold. They earned super thin margins. They established the federal reserve, and now banks could earn money and pay no interest to anyone because the rate of inflation was greater than the interest paid to depositers. The retired get slaughtered in this scenario.

My opinion is much different than many others.

I view the world as a machine to enrich wealthy individuals, governments, bankers around the world. they do this by printing money (inflation) and stealing from the middle class. The bankers steal by being the ones who loan the money into existance from a blank check book that the federal reserve has. They expand on it up to 30-40X (the leverage) and collect interest on fictitious money. so its easy to see why every large building in downtowns are banks. cause they literally steal from anyone who makes anything of value. The governments love money printing because rather than raising taxes, they just steal value from the currency through inflation. print more, spend more. Corporations like inflation because they raise the price of goods at the rate of inflation or there abouts, and pay the workers at a lesser rate. they net the difference.

poor and middle class get gutted.

anyway, when looking at investments. historically. Bonds are at the peak of their time. they are in a bubble. interest rates are not going lower. I hate bonds because of this. You then gander over to unfunded liabilities and you see the US is broke. hell, by using their own numbers they are broke. in fact you could completely eliminate the government and they are still would run a deficit.

Video describing our debt.

https://www.youtube-nocookie.com/emb...IdwltaAc?rel=0


Bonds are nothing more than a printed piece of paper. Money is the same. we have a debt backed by debt system. The cruel thing about this system is more debt exists than money. so someone will always have to go bankrupt.

what is bad is what happens to the debt when interest rates rise? We default. well technically our system is in default by design, because more interest + principal exists than money to pay it back. so the end point is when the interest payments + cost of government permenantly exceed tax revenue forever. We are already there, it is done.

so in history when times like this happen, every country has had gold rocket. I mean everyone runs to real money. This has been the case for the beginning of paper money back in China.

I suggest buying physical gold/silver bullion and storing it in a place that you know about. I would have atleast a little of it. Do some research into it yourself and make the decision on your own.

What I think is wrong that most people do, is they look at history for a short time period back, 10-30 yrs, draw the conclusion on stocks are good, because we went though a 1980-1999 largest bubble in the history of the stock market, and thinks it is going to come back.

I have a feeling that stocks and bonds are going to completely get destroyed against gold/silver. history has showen this. The government will try its best to supress the price of gold/silver and keep stocks up and bonds up.

It's obvious they are buying bonds. M0 only had 800 billion dollars till 2008, they are buying bonds at a rate of 10% of the entire 2008 M0 money supply to supress the price of bonds right now.

They gave banks 2.X trillion, and I am guessing they are in stocks and bonds with that money because they can borrow for free and invest in bonds and net the difference. this will all fall apart when interest rates rise. banks will default, real estate could go down, stocks down. so where are people going to run to? My guess is gold, that is what long term history has showen us.

asking the right questions is key.
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Old 06-26-2013, 11:00 PM
 
169 posts, read 193,021 times
Reputation: 168
Quote:
Originally Posted by mysticaltyger View Post
This could also slaughter the stock market as well. There may be nowhere to run, even cash. Look at what happened in Cyprus.
Cyprus set the precedent in terms of direct monetary confiscation. Don't think they will try that will bank accounts in the US, but the future could very well hold a blanket tax (really confiscation dressed up nicely) on retirement savings accounts. Don't count that one out. Personally, I would have VERY limited holdings in US stocks and VERY little exposure to the bond markets. Both are primed for failure.
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Old 06-26-2013, 11:05 PM
 
651 posts, read 858,496 times
Reputation: 320
Quote:
Originally Posted by Box101 View Post
Cyprus set the precedent in terms of direct monetary confiscation. Don't think they will try that will bank accounts in the US, but the future could very well hold a blanket tax (really confiscation dressed up nicely) on retirement savings accounts. Don't count that one out. Personally, I would have VERY limited holdings in US stocks and VERY little exposure to the bond markets. Both are primed for failure.

I agree here.
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Old 06-26-2013, 11:11 PM
 
Location: Murrieta, CA
1,336 posts, read 1,816,279 times
Reputation: 2419
Default Thank you

Thank you all, lots to think about and ponder. Many smart people here, and I do appreciate the time put into this thread, answering my questions.

Seems like no matter what we do, we all might get "slaughtered".

By the way my husband is heavily into coins, as a hobby but many of his coins such as a 1909 SVDB penny that he bought for $200 is now worth $1,800. He always told me his investments (coins) would do better than mine, he might be right.
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Old 06-26-2013, 11:14 PM
 
169 posts, read 193,021 times
Reputation: 168
Quote:
Originally Posted by icicles View Post
I feel your pain. I am young and only 31 yrs old. I have a kid coming on the way and I continue to look out for myself and will soon be her future. My dad is retired and honestly. It is sooooo diffcult to give him any advice. It seems like the only way to survive anything is to diversify. It used to not be this difficult in the past when government didn't jack the nation and made everyone speculators to maintain their purchasing power. The dollar backed by gold was the most stable time for money in history and created the largest wealth for the middle class. The bankers hated this because they had to pay real interest over the rate of gold. They earned super thin margins. They established the federal reserve, and now banks could earn money and pay no interest to anyone because the rate of inflation was greater than the interest paid to depositers. The retired get slaughtered in this scenario.

My opinion is much different than many others.

I view the world as a machine to enrich wealthy individuals, governments, bankers around the world. they do this by printing money (inflation) and stealing from the middle class. The bankers steal by being the ones who loan the money into existance from a blank check book that the federal reserve has. They expand on it up to 30-40X (the leverage) and collect interest on fictitious money. so its easy to see why every large building in downtowns are banks. cause they literally steal from anyone who makes anything of value. The governments love money printing because rather than raising taxes, they just steal value from the currency through inflation. print more, spend more. Corporations like inflation because they raise the price of goods at the rate of inflation or there abouts, and pay the workers at a lesser rate. they net the difference.

poor and middle class get gutted.

anyway, when looking at investments. historically. Bonds are at the peak of their time. they are in a bubble. interest rates are not going lower. I hate bonds because of this. You then gander over to unfunded liabilities and you see the US is broke. hell, by using their own numbers they are broke. in fact you could completely eliminate the government and they are still would run a deficit.

Video describing our debt.

https://www.youtube-nocookie.com/emb...IdwltaAc?rel=0


Bonds are nothing more than a printed piece of paper. Money is the same. we have a debt backed by debt system. The cruel thing about this system is more debt exists than money. so someone will always have to go bankrupt.

what is bad is what happens to the debt when interest rates rise? We default. well technically our system is in default by design, because more interest + principal exists than money to pay it back. so the end point is when the interest payments + cost of government permenantly exceed tax revenue forever. We are already there, it is done.

so in history when times like this happen, every country has had gold rocket. I mean everyone runs to real money. This has been the case for the beginning of paper money back in China.

I suggest buying physical gold/silver bullion and storing it in a place that you know about. I would have atleast a little of it. Do some research into it yourself and make the decision on your own.

What I think is wrong that most people do, is they look at history for a short time period back, 10-30 yrs, draw the conclusion on stocks are good, because we went though a 1980-1999 largest bubble in the history of the stock market, and thinks it is going to come back.

I have a feeling that stocks and bonds are going to completely get destroyed against gold/silver. history has showen this. The government will try its best to supress the price of gold/silver and keep stocks up and bonds up.

It's obvious they are buying bonds. M0 only had 800 billion dollars till 2008, they are buying bonds at a rate of 10% of the entire 2008 M0 money supply to supress the price of bonds right now.

They gave banks 2.X trillion, and I am guessing they are in stocks and bonds with that money because they can borrow for free and invest in bonds and net the difference. this will all fall apart when interest rates rise. banks will default, real estate could go down, stocks down. so where are people going to run to? My guess is gold, that is what long term history has showen us.

asking the right questions is key.
Yep!! Pretty much sums it up in a nutshell. Glad to see some people are awake.
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Old 06-26-2013, 11:18 PM
 
169 posts, read 193,021 times
Reputation: 168
Quote:
Originally Posted by happyinca View Post
Thank you all, lots to think about and ponder. Many smart people here, and I do appreciate the time put into this thread, answering my questions.

Seems like no matter what we do, we all might get "slaughtered".

By the way my husband is heavily into coins, as a hobby but many of his coins such as a 1909 SVDB penny that he bought for $200 is now worth $1,800. He always told me his investments (coins) would do better than mine, he might be right.
Well best of luck, happy! Physical bullion is a good way to invest if you are thinking about gold or silver. Stay away from GLD and SLV!
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Old 06-27-2013, 01:22 AM
 
Location: Los Angeles, Ca
2,883 posts, read 5,867,759 times
Reputation: 2762
I'm 35. I don't think anyone in my generation really understands bonds.

-We were all brought up in this cocoon, bubble. CNBC. Everyone talking the same thing. You have to be 60% stocks, 40 bonds. Bonds are "riskless". I think many people in my generation have almost thought of bonds as a money market fund. You don't really "lose" money. This is a shell we've been in.

How can you be "risk free", if your country is $16 trillion in debt? Why would a country with high debt have something risk free vs a country with low debt?

I read today that China is starting a gold ETF. I don't think people in the US realize how under developed the rest of the world is, vs the US. I think this will change.

Can you imagine the ETF money in China and Asia over the next 10-20 years? The US hasn't had any competition over the last 20-30 years. That's why prices have gotten distorted for so long. The underlying fundamentals don't support 2% bonds.

Cheap money has completely distorted assets in this country. The time to buy bonds was back in 1981, when they were yielding, 16-18%?
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Old 06-27-2013, 03:48 AM
 
105,705 posts, read 107,682,511 times
Reputation: 79329
Quote:
Originally Posted by marcopolo View Post
Bonds are for morons. Cash is trash. Put 10% of your assets in equities immediately and 10% more every month until you are 60% in stocks. If volatility in account values makes you cry like a little girl then shred your statements unopened until the Dow hits 18000.
well i would have been a happy little moron for over 35 years as bonds beat equities over almost every time frame so i certainly would not say bonds are for morons.

the last 13 years bonds have made more money for investors than anything else. capital gains were amazing.

no one can predict what is a head but for the next few years they still may end up being the investment of choice if things do not improve out there..
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