| View previous topic :: View next topic |
| Author |
Message |
isobars
Joined: 12 Dec 1999
Posts: 20935
|
 Posted: Fri Nov 30, 2012 4:22 pm Post subject: |
 |
|
| stevenbard wrote: | During minor panics, people have been known to sell gold in order to generate cash for their immediate needs.
My very astute friends have convinced me that borrowing all you can at 3.5% is a smart move, and using the money to buy assets with a higher yield, such as real estate, utilities, and 4%-5% dividend stocks. By borrowing cheap (fixed rate) money today, and paying it back in 15 years, you will pay your loan off with cheaper money.
gold has crashed before.
TBT is the short treasury etf. When all hell breaks loose, Soros and others will shovel this into their portfolios. You will know it's time for this investment when the U.S. begins to lose its ability to print or borrow money. You can use all that borrowed money to short the U.S. treasury when the time comes.
Iso, if you think gold will work after the collapse, you might as well buy farmland and an AR 15 |
Every pro-gold book I’ve read so far insists gold is a long term investment in general, but if it’s up and someone needs to sell some for a genuine (e.g., medical) emergency, that works for me, especially if all his other investments are down. These books readily admit that precious metals are a bubble, but persuasively expect it to last at least a decade or two. Gold deflation is a slow process, giving observant holders weeks to months to bail, unlike most alternatives.
I’ve been searching the literature for the advisability of borrowing at today’s incredible mortgage rates to invest, and so far not one source I’ve found addresses that directly despite its obvious advantage of paying the loan back with inflated money (one of Bernanke's two explicit purposes with QE). It makes mathematical sense even after we lose the mortgage deduction only IF we can find an investment CERTAIN to net more after every cost including inflation. None exists, so it comes down to a form of Dirty Harry’s mantra: “(How much) do you wanna gamble, punk?” Every other mainstream finance book warns against borrowing to invest, so I’m resisting that (very slight) temptation. Even if I were certain these books are right, I’d fully invest all my existing savings in precious metals before I’d borrow to invest. On the contrary, not only am I nowhere near certain, but my certainty would not make it true.
Also, based on 1) my gut, 2) Bernanke’s and Krugman’s and Greenspan’s admissions that printing money WILL break the economy (after the 2016 election, they vainly hope), 3) thousands of pages of analysis by experts with far better track records than any Nobel Prize economist, and 4) Obama’s frequent and absolutely stunning public statements and actions that make it absolutely certain that he has ZERO interest in preserving capitalism or growing the economy and absolutely ZERO comprehension of how an economy works ... I’m becoming ever more convinced that any investments of any duration in real estate and stocks and bonds will go straight to Money Heaven almost literally overnight when this stuff hits the fan. Besides, long haul stock investors have lost money since about 2000, while their gold peers have made 500%.
Soros is already dumping hundreds of millions into gold (and Buffet advises againt it), but not for the same reasons this growing number of books advise.
Some of the books I’ve read so far admit that shorts, especially leveraged ones, as salvation when stocks, bonds, and real estate completely crash for years, may make some lucky gamblers incredibly rich; they often do in market collapses. However, the books devote very little space to that alternative, emphasizing that it requires far greater expertise, incredible luck, constant market observation (possibly even computerized real-time scrutiny and action if this QE spring gets wound too tightly, as Obama demands), and a Plan B you can live on for decades if you lose your butt on those dodgy investments. Complex gambles such as these bumfuzzle even the world’s biggest name economists, so I’m sure not going to bother with them.
I won't need the AR-15 or farmland, as any gold I buy will be stored in giant vaults (e.g., IRA precious metals depositories). You're right; at home is too risky. But as to whether and how gold will work after any economic collapse, I'll refer you to the literature. I ignore the extremist, survivalist literature as too far-fetched ... and hope I'm right. |
|
| Back to top |
|
 |
DanWeiss
Joined: 24 Jun 2008
Posts: 2296
Location: Connecticut, USA
|
| Posted: Fri Nov 30, 2012 4:33 pm Post subject: |
|
|
Brilliant advice on how to go bankrupt from the king of useless typing. Mortgage rates set the price on a note secured by your home. Any advise to speculate using your home as security is highly suspect and very unlikely to work for most individual investors.
Mike dishes the old standard of using low-rate refi money to pay down credit cards. It might work, but it also may backfire. The reason one needs to convert unsecured debt into debt secured by one's home correlates to the risk of being unable to pay the new note.
Each scenario narrows the statistical distance to bankruptcy for those securing the debt with their only residence.
_________________
Support Your Sport. Join US Windsurfing!
www.USWindsurfing.org |
|
| Back to top |
|
|
DanWeiss
Joined: 24 Jun 2008
Posts: 2296
Location: Connecticut, USA
|
| Posted: Fri Nov 30, 2012 4:49 pm Post subject: |
|
|
| stevenbard wrote: | | boggsman1 wrote: | | The GOLD story is going to have an ugly ending. Beware. |
Iso, if you think gold will work after the collapse, you might as well buy farmland and an AR 15, and leverage them with free govt money today. 
Dan, let me put it this way. If you'd borrowed cheap money in Zimbabwe and used it to buy gold or farmland, you'd been a gazzilionaire. By borrowing cheap (fixed rate) money today, and paying it back in 15 years, you will pay your loan off with cheaper money. |
Bard, I think you have it completely backward. If we have a basket of 100 rocks and hold for 15 years that basket of 100 rocks will be worth about the same as a new basket of freshly acquired rocks. 100 rocks for 100 rocks.
What you are suggesting is that the value of each dollar remains constant and that inflation is merely a multiplier. That's not true. True value of money remains its buying power. Your scenario suggests that a devalued currency allows you to game the system. It doesn't.
In the context of a loan, lenders will only loan at interest rates that roughly cover their cost of surrendering that money, which is to say the anticipated inflation and loss of use. Lender's see the value of a loan through the lens of present value. Borrowers see a loan as a way to accomplish a desire that would be impossible or ultimately more expensive without another's money.
Using principal to repay the loan is basic arbitrage. I'm not very bullish on anyone who suggests we arbitrage 15 years out.
_________________
Support Your Sport. Join US Windsurfing!
www.USWindsurfing.org |
|
| Back to top |
|
|
MalibuGuru
Joined: 11 Nov 1993
Posts: 9300
|
| Posted: Fri Nov 30, 2012 8:58 pm Post subject: |
|
|
I think it's pretty easy to see that you can't print paper money and have the govt monetize the debt without trouble down the road.
If you believe this senario, you should buy farmland, because food, will be worth more when this is all over, and paper money worthless. You can't eat gold.
Just to be clear, why do we need taxes? Why doesn't the govt just print money? Just print what they need. This is the hidden obama/bernanke tax. You could conversely raise the tax on millionaires to 100%. Guess what? Warren Buffet will still pay 0000. Why? Because he gave all his money away. TO WHOM YOU ASK? TO HIMSELF....
Millionaires just won't pay more. No matter what the rate. They won't pay more. Just look at France and England. Once the rate gets above 50% (California) people with money reject it. You are a non believer, but this is how it works more or less. |
|
| Back to top |
|
|
keycocker
Joined: 10 Jul 2005
Posts: 3598
|
| Posted: Fri Nov 30, 2012 9:10 pm Post subject: |
|
|
No offense but the world is full of places where the rich are happy and taxes are very high. Sweden Switzerland and the USA for most of my younger life are examples. Under Clinton did you see a huge exodus?
Most Americans, rich or poor, were doing quite well then.
O proposes to return to those tax rates for a tiny number of people and a larger number of Corps.
My taxes are going to rise also, and in Belize we don't have pay at all, but I plan to stay here in Maui anyway because every rise in taxes is the result of a much larger rise in my income which makes my higher taxes easy to pay.
Moving out there in the world isn't easy and picking a place based on it's taxes sounds feasible only of you never tried living in various countries.
I like America whatever the tax rate. You leaving Cali soon to live in Lagos?
You know, Buffet gave away assets to his trust. You don't pay taxes on assets, only income and he is keeping that. |
|
| Back to top |
|
|
isobars
Joined: 12 Dec 1999
Posts: 20935
|
| Posted: Fri Nov 30, 2012 10:31 pm Post subject: |
|
|
| stevenbard wrote: | why do we need taxes? Why doesn't the govt just print money? Just print what they need. This is the hidden obama/bernanke tax. You could conversely raise the tax on millionaires to 100%. Guess what? Warren Buffet will still pay 0000. Why? Because he gave all his money away. TO WHOM YOU ASK? TO HIMSELF....
Millionaires just won't pay more. ... You are a non believer, but this is how it works more or less. |
I had to look to see whether you were talking to me.
Good God; that was a mistake.
Really, Dan? Not only can you not read ("speculate with home as security"? What are you talking about?), but you make stuff up (who said anything about credit cards?). I talking about taking out a mortgage (I have none) to buy gold, rather than putting up my home to secure a note to pay other debts (I have none), and I was advising against it.
Don't bother replying until you grow up. |
|
| Back to top |
|
|
keycocker
Joined: 10 Jul 2005
Posts: 3598
|
| Posted: Fri Nov 30, 2012 11:17 pm Post subject: |
|
|
Mr Charm has been replying to all the folks whose posts he can't see.
It must be bitch punishing all these people by blocking them and find them throwing a party to celebrate.
Then looking like an ass by responding to the posts you lied about blocking.
Guess he got thrown off that East Coast site. |
|
| Back to top |
|
|
pueno
Joined: 03 Mar 2007
Posts: 2807
|
| Posted: Sat Dec 01, 2012 6:47 am Post subject: |
|
|
| keycocker wrote: | Mr Charm has been replying to all the folks whose posts he can't see.
It must be bitch punishing all these people by blocking them and find them throwing a party to celebrate.
Then looking like an ass by responding to the posts you lied about blocking.
Guess he got thrown off that East Coast site. |
Good ol' Mr. Charm. He must have "blocked" (yeah, right) about everybody except his far right frootloop friends.  |
|
| Back to top |
|
|
isobars
Joined: 12 Dec 1999
Posts: 20935
|
| Posted: Sat Dec 01, 2012 10:36 am Post subject: |
|
|
Obamacare regulations targeting the fast food and grocery store market require signs detailing calorie and nutritional information on every product. This will force pizza makers like Domino's to post up to 34 million different signs in every store, one for every possible pizza ingredient combination. One smaller pizza chain owner told Obama personally, by invitation, that this will cost him $300,000.
Ditto for the grocery stores, which are shifting to providing more fresh made and baked goods. If one blueberry muffin is sold, you need a nutrition sign or sticker. If a half dozen are sold, a different one is required. Same if you sell a dozen." Stores average 1,500 fresh made items each, so just that labeling will cost chains with 20 stores or more a billion dollars nationwide. |
|
| Back to top |
|
|
keycocker
Joined: 10 Jul 2005
Posts: 3598
|
| Posted: Sat Dec 01, 2012 12:55 pm Post subject: |
|
|
Duh. I forget the most important thing for American millionaires thinking of moving overseas to avoid US taxes. While I owed no taxes in Belize to the gov.there, US citizens have to pay US taxes wherever they live.
The news stories we see about Brits moving over taxes would not apply to us.
I understand why Bard thought otherwise. The fake news mentions this "problem" often. |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
You cannot attach files in this forum
You cannot download files in this forum
|
|
|
Search
Profile
Log in to check your private messages
Register
