all bubbles burst.
as to gold if the world economy continues its downward implosion, with
congress helping here the bottom may drop out of everything.
people will still need to eat
its sad watching our congress play games while they can crash the
every congressman should turn in their resignation for playing these
Personally, I wouldn't touch gold (or silver) with a three meter stick.
Yes, they may go up more but they appear poised for a very large correction
(both short and long term) and unless you are an experienced AND successful
day trader you would likely get beaten to pieces. I'm talking about
commodity markets here, not physical ownership. I wouldn't even buy the
metal now to hold.
IMO, real estate is the bargain of the century. HUGE buyer's market and low
interest rates. Yes, prices may go lower and yes, it may take a few years
to really recover but it WILL recover and during the waiting period one can
at least get the benefit of rental income, tax benefits, etc. You can't get
any income or benefits from metal.
Ask yourself what sort of ROI you could get on real estate then ask yourself
what would give you a better one.
Never have understood why people buy would buy a mutual fund (or heck
even bars of gold) if the underlying premise is financial armageddon. If
things collapse, what makes you think you are going to be able to
convert a paper (allegedly) backed by gold into actual gold? Actually
the same with bars since you will have to do something to break them
down into usable amounts (Hey, Bob, you got change for a ingot?). The
only thing to actually own for the financial end times would be to own
coins or small (maybe ounce) ingots.
I am not as sanguine on the return of the market. The demographics
were arguing against a long-term bull market in real estate and all the
collapse did was hasten the demise. There would have been a big overhang
of housing develop over the next few years anyway as the Boomers began
to downsize and/or die out. The follow-on generations just aren't big
enough to soak up all of the housing the Boomers demanded. This is
obviously exacerbated by the excess supply brought about by people
getting into homes that wouldn't have in teh past.
People thought cybersex was a safe alternative,
until patients started presenting with sexually
Why would that be? Aside from the drama everything I read says the
government can spend what it could before it just can't spend more.
Simple analogy. You and your family decide to have a budget and you
agree to never borrow more than say $20,000/year (the "debt ceiling").
So now this year one of your family members wants to go on an
extravagant vacation which would require that you borrow an additional
$5,000. If you adhere to your originally agreed borrowing limit you can
still feed and clothe yourselves and go on as usual only no extravagant
And if you were sensible and you really wanted to go on the extravagant
vacation you might decide for example that you really don't need that
Why? Some of us explicitly fired out old Congressmen because we were
tired of out of control spending.
Things are starting to cost more and more. It's called inflation, and
you will be experiencing more, soon.
As far as out of control spending, every congresscritter will want to
bring home more funds for his/her constituents. As long as there is no
limit on that, why should Medicaid (example) recipients suffer? Let the
congresscritters first spend less on themselves and their staffs.
Unfortunately, it's a little more complicated. Our "family" (the U.S.
Govt.) has already borrowed that $20,000 and spent it. Now the credit
card bills are coming due and the only way to pay them (as we've done
for a long time) is to borrow MORE money.
In the end, the debt ceiling will be raised a little (at least
temporarily), taxes will probably be raised a bit and spending will be
cut a bit, and everyone will get to claim that they helped avert the
meltdown that the other party almost caused.
And the person who suggested that politicians shouldn't play games
with the future of the country must be new to the planet... :)
No, it can only spend 60% of what it spent before. Currently, they're
spending $1.75 for every $1.00 brought in. After their credit card gets cut
up they can only spend $1.00. There is still enough to pay the interest on
the card and SS, and some, but somethings can't be paid. A lot of those
things shouldn't be anyway, but that's a different discussion.
No, the "debt ceiling" would be like you only have a $20,000 credit card
maximum. *NOT* $20,000 per year. You've just spent $19,995 and have only
have $5 more to borrow, and you have an order in the mail that'll be here in
I suggest buying silver coins. You can buy old U.S. real silver coins
at a local coin dealer in bulk. Very useful for buying food and
supplies when paper money is worthless, as happened in Germany after
WWI and Zimbabwe more recently. Or you can buy bullion coins, e.g.,
American Eagles or Canadian Maple Leaves, or silver ingots.
If you like, you can buy gold coins as an investment or buy shares of
I have some. I'm keeping but not buying.
Many years ago, when I gave my wife a gold coin as an anniversary
gift, I watched the price languish and even go down for many years.
It may go higher but with the current rapid rise, you'd be taking a
chance that you are on a roller coaster.
As for real estate, they are saying it might take a decade to
recover. I don't think I'd invest in it.
I would say, if you need/want something, you might as well buy it now
as the potential for hyper inflation is there. It has been absolutely
outrageous viewing the inflation rate that the US government gives
In the index they include housing but not commodities.
From Wikipedia: As of 10 April 2011, the value of metal in a nickel is
approximately 7.1 cents at current spot prices for constituent metals,
a 40%+ premium over face value.
It is illegal to melt or export nickles but in case of a paper money
crash, the metal will have some value.
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