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I refuse to buy T-notes as a form of indidvidual protest against my US govt and its policies.
I only wish more people did the same.
Instead I hold state muni bonds.
Godraz, be careful with the muni bonds they're likely to default if they cannot roll them over. In a financial meltdown they're the least likely to be able to remain solvent (especially if they have large pension obligations, as in the UK). Their revenue base will be left in tatters by the fallout and without credit to fill the gap they'll cut services and default on their bonds.
Best to avoid all financial instruments, exotic and illiquid investments. When the system gets bent out of shape, nothing can be relied upon to work as it should and even the banking system may lock up.
Triumvirate of collapse - Economy, Ecosystem, Energy
Hi Stoneleigh,
Delightful lot of crunch and catastrophe articles, interesting times for our 'interesting' species.
Particularly enjoyed the Consumer Price Index graph as none of it seems to be hitting me particularly hard. In fact I may just go out and buy a new TV, at 27% inflation over those years that looks like a real deal:)
Transportation: downscaled to a tandum bike or bus. Only use FF transport to transport large objects. (Summer use of Triumph motorcycles doesn't count does it?)
Housing: Own home ( on one quarter acre in city/town of 60,000). Have extensive collection of tools and do own building and repairs. Though taxes hit here along with materials increases.
College expenses etc: Paid for by old scholarship plans and RESP, good for another two years which has resulted in a decrease in home expenses (deflationary?) don't know what will happen in two years. Though I imagine with his Physics and Journalism diplomas in hand he will likely be a great hand in the garden.
Food: Grow most of or own fruit vegetables even grind our own whole wheat flower (grain wholesale). Don't have our own chickens ducks etc but the chicken shack all fenced and painted is in. Must buy some poultry, before we end up with an inflated duck, though.
Apparel: So that's what they call what I wear? Hmmm pretty high falutin' term thet.
Hi Burgandy, Sorry, that last was supposed to be posted in new thread, but I as well want to ask you where you feel Godraz with his muni-bonds should go. I would say into Can treasuries but what do I know, I have spent my professional life as a sculptor/fisherman/ painter/neo-beat (AKA hippie). Where do you draw the line on what is a financial instrument? Jack had a cow to do business in the bean trade , does that qualify:)
Crystal, I believe we're going to see deflation, rightly or wrongly, so my solutions are geared to that outcome. One aspect of credit induced deflation is that the demand for cash increases which also increases its value over other assets (ie other assets are sold to raise cash).
So in answer to your question; cash and safe cash equivalents, or invest in ELP. Mostly, cash is nothing more than a ledger entry at some bank and doesn't physically exist, so I'd put that in the cash equivalent group. Not much physical cash actually exists, it represents as little as 2% of the money supply in some currencies (I think it's about 8% for the US dollar, but most of that is probably overseas). As you can see there isn't actually much real physical cash to go round. So that's the stuff you want, that's where the real demand will be.
As Godraz indicates, the problem is timing, but if you try and time things you are in fact speculating. Best to ignore timing and just move towards ELP and cash at a fast or slow rate depending on how bad things are going (ie. start moving towards the exit before everyone else).
When TSHTF there's going to be a rush for the exit, a bottleneck which few will get through intact.
Triumvirate of collapse - Economy, Ecosystem, Energy
Burgandy, thanks for your concern but I am well aware that in the deteriorating economic conditions we are facing that state municipal obligations are at risk of default. I do also agree that all financial instruments are at risk, even cash in my bank.
I have made and continue to make other preparations and adjustments for the eventual seizure/meltdown of the financial world, but in the meantime I do not expect that this will happen overnight. I may well get caught with a loss on them but if such were the case so would T-notes. As go the states in default, the Federal govt. will also be insolvent, despite their ability to print money.
In any event, I'd rather lend money to my state than the Federal govt. and my muni holdings are but one piece of my financial affairs that I have to play the game as rigged. IMHO it is better to support my state which is trying to keep our infrastructure intact while the Federal govt. is paying for weapons of destruction.
Edited for clarity of thought.