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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