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Oh, I thought you were talking about real cash...gold.
But you meant those paper things, dollars? Yeah, I'd be worried about holding onto too many of those. Some dollars in a safe may benefit you in a deflationary environment, but we'll spring to hyperinflationary environment soon enough at the rate we're going.
It is rather clear that the US banks and the International Banking system as a whole will do their best to keep the US economy from collapsing. There is simply too much at stake for everyone, here and abroad. A US economic collapse or depression would cascade globally - and even the very wealthy people "out there" don't want that to happen.
What we're seeing right now is that within the US Government and even within the JPMorgan/Bear Stearns buyout there are powerful and influential people pushing levers trying to keep things afloat, trying to keep things from getting worse. At some point this all will level out.
Sure we're going to have real estate, stock market, and dollar valuation "adjustments" - but I don't think we're going to suddenly see the US dollar become absolutely worthless, our banks closing their doors and keeping all of our money, and suddenly everyone standing in lines for government provided rations of food and medicine. I just find it very difficult to believe that things could get that bad. When all is said and done, our economic system is contrived - to some degree it's not real. Also it is global, not just local. As long as there are goods and services to sell and people who are buying the worst thing that can happen in my opinion are "adjustments" simply because of the support structures and levers that the people who have influence and power have set up for the systems.
Might everything collapse anyway? Perhaps, anything is possible right? I just don't think it is likely. If it happens, then just be as prepared as you can be without driving yourself nuts. The reality is that none of us have ever lived through a US depression - it is all conjecture about what might happen during one in the 21st century. I say, don't worry about it - just pay your bills, keep working, and be smart with your family budget.
It is rather clear that the US banks and the International Banking system as a whole will do their best to keep the US economy from collapsing. There is simply too much at stake for everyone, here and abroad. A US economic collapse or depression would cascade globally - and even the very wealthy people "out there" don't want that to happen.
What we're seeing right now is that within the US Government and even within the JPMorgan/Bear Stearns buyout there are powerful and influential people pushing levers trying to keep things afloat, trying to keep things from getting worse. At some point this all will level out.
Sure we're going to have real estate, stock market, and dollar valuation "adjustments" - but I don't think we're going to suddenly see the US dollar become absolutely worthless, our banks closing their doors and keeping all of our money, and suddenly everyone standing in lines for government provided rations of food and medicine. I just find it very difficult to believe that things could get that bad. When all is said and done, our economic system is contrived - to some degree it's not real. Also it is global, not just local. As long as there are goods and services to sell and people who are buying the worst thing that can happen in my opinion are "adjustments" simply because of the support structures and levers that the people who have influence and power have set up for the systems.
Might everything collapse anyway? Perhaps, anything is possible right? I just don't think it is likely. If it happens, then just be as prepared as you can be without driving yourself nuts. The reality is that none of us have ever lived through a US depression - it is all conjecture about what might happen during one in the 21st century. I say, don't worry about it - just pay your bills, keep working, and be smart with your family budget.
Agreed. Makes me very happy that I've set myself up with zero debt. I can ride this out for a very very long time.
That's what I'm up to. At least one property this year, hopefully two next year, we'll see what I can finagle.
Me too. I bought 8 rental properties 10 years ago and sat on them while the market inflated and busted. Now I'm back to buying again. And now, with all the foreclosures, our Chicago rental market is fantastic. I also set up a Canadian acct. 10 years ago (just for convenience because we spent summers there). I never thought the Canadian foreign exchange would become such a great investment. Being diversified works out.
Me too. I bought 8 rental properties 10 years ago and sat on them while the market inflated and busted. Now I'm back to buying again. And now, with all the foreclosures, our Chicago rental market is fantastic. I also set up a Canadian acct. 10 years ago (just for convenience because we spent summers there). I never thought the Canadian foreign exchange would become such a great investment. Being diversified works out.
Yup I agree with a lot of the other posters... don't buy rapidly appreciating assets (gold? oil?)... that's just another bubble waiting to burst... albeit no one knows when... but No One wants to be the last on that boat (if it goes up that fast, it'll go down fast too). I find that once the common man knows about it (media), it's already too late.
As for where to put cash in... I agree with the other posters to find value or safer haven's in Index Funds, of fixed assets.
As others have done, RE is also a fixed asset. Just a matter of how much risk you feel you can take. It's not like it's gonna get cheaper to build houses in the future. So buying depreciating assets you can see go up in the future... bargain buys in good neighborhoods that can support growth and people. If the Fed prints out more money, that house/property you bought still costs the same amount you paid, meanwhile holding Cash just becomes thinner.
Yes, the stock market always comes back- yaaa sure!
To those who think the Stock Market always comes back I have a story for you. I invested $10,000 in a Mutual Fund that basically matched the NADAQ in 1999. Now 9 years later it is worth about $5000.00.
"I thought we would have advace warning(at least a day or 2) if our banks went under. Well that theory was blown away with the collapse of Bear Sterns."
Forgive me if this is a dumb question- but isn't an investment bank like Bear-Sterns a different animal than a regular bank (where, I presume, the poster has cash he's worried about?) Yes, I know it's all interrelated, but is an investment bank crashing the same as a "run on the bank" ala 1931?
Yup I agree with a lot of the other posters... don't buy rapidly appreciating assets (gold? oil?)... that's just another bubble waiting to burst... albeit no one knows when... but No One wants to be the last on that boat (if it goes up that fast, it'll go down fast too). I find that once the common man knows about it (media), it's already too late.
As for where to put cash in... I agree with the other posters to find value or safer haven's in Index Funds, of fixed assets.
As others have done, RE is also a fixed asset. Just a matter of how much risk you feel you can take. It's not like it's gonna get cheaper to build houses in the future. So buying depreciating assets you can see go up in the future... bargain buys in good neighborhoods that can support growth and people. If the Fed prints out more money, that house/property you bought still costs the same amount you paid, meanwhile holding Cash just becomes thinner.
-chuck22b
Oil and gold have tons of global demand. Real estate cannot be exported, and only choice properties are bought by foreigners. Your 3000sqft house outside Mobile, AL isn't likely to be purchased by someone from France or China. Non-exportable service and asset demand is going to fall off a cliff in the coming months and into years. I don't think there's a roof to gold because there's no floor to the dollar. Gold is money. USD is increasingly not. Oil is also a very liquid (no pun intended) and high demand commodity. China will gladly pick up the slack for our decreased consumption.
In the 70's, an ounce of gold was worth the Dow. I expect the same to happen at the end of this bubble. Dow 7000/Gold 7000? Dow 10000/Gold 10000? Who knows?
All commodities have spiked. That is an indication of a weak dollar, not of large demand. Price oil in Euros over time and you'll see what I mean.
To those who think the Stock Market always comes back I have a story for you. I invested $10,000 in a Mutual Fund that basically matched the NADAQ in 1999. Now 9 years later it is worth about $5000.00.
The Nasdaq doesn't reflect the broader market as much as the S&P. If you invested in the S&P I think the difference would of been a lot less or breaking even.
Also, I think people are giving a general synopsis on the market based on historical trends and not from Peak to Drop. If you keep the Fund for another 10-15 years... im sure most people would agree that that fund would be worth more than the initial 10k in 1999.
-chuck22b
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Yes, the stock market always comes back- yaaa sure!
