Europe in a Financial Crisis

[The Virginian]

Okay - So I'm the type of person who attempts to think ahead.
So say the worse comes to fruition and we have a default on our debts?

I've tried to think things out - What happens to the dollar? Well more than likely banks will be closed for a period of time to try and limit withdrawals.

The government may declare Precious metals illegal to own. ( They did it once so don't say it would never happen) Plus our system is not set up to do trade with precious metals. I know at one time in our past locales and some companies actually issued their own "Trade Dollars" in lieu of currency. Or the government could declare all current currency void and issue new money ( It seems to have been popular in other countries like Turkey, Italy, Argentina....

The value of the dollar will most certainly drop. So a loaf of bread may cost $5-10.

Now I just want to look at this a strictly a wealth preservation scenario and staying out of the stockpiling of food, weapons, and other provisions.

For those that own stock - assuming the companies stay in business what happens to the value of your stock? Certainly you will still own the same number of shares in that company regardless of the values.

Land and real estate are good but the government , could, but not likely confiscate your property.

My question is what is the best way to protect your investments and wealth during an economic collapse?

[Deleted]

Guns and ammo?

[The Virginian]

Guns and Ammo are a different topic. This thread is just addressing wealth preservation.

The G-10 owe a total of 70 Trillion Dollars which is collateral for 700 Trillion Dollars. If the EU collapses it will certainly bring down the rest of the world with it thanks to global economics.

Is it better to own stocks versus precious metals?

[decoy409]

Virginian,probebly do ya some good to start going through the rule book. Not poking,just saying. Keep in mind that 3 things are already and have been in the crosshairs and rules are on the books. You don't have to worry about how many shares you have,period.

Also funny that you would even bring this topic up as it has been going on all around you.

[Trongersoll]

What happens if who defaults? The US Gov? how could that happen, they would just print the money they need. Sure the value would go down relative to the rest of the world, but internally? The price of imported goods would go up as would the price of internal goods with high demand both internal and external. Nations of the world depencant on the US for food would start to starve as the food supply internalized and the price of what food was exported would rise.

The cost of US labor relative to the rest of the world would decline making the US more competitive and bring more manufacturing home. Those countries dependant on the US for the consumption of their goods would most likely call foul as their economies declined or collapsed.

As for stocks vs metals? I suspect that everyones relative wealth would, on average, decline proportionally.

My answer to people who ask me what i would do if i lost all my investment has always been that if that happened there would be a whole lot of people worse off than i am.

[Virgil Showlion]

It's not unlike asking how to best flood-proof your house when you know somewhere down the line you'll be facing a flood, a meteor strike, an earthquake, and rampaging Godzilla all at the same time.

The US declaring sovereign default (or the advent of hyperinflation, at which point everyone will have abandoned or will be abandoning the dollar, which is ostensibly the same thing) will occur after a long and painful cancer. Unemployment will be through the roof, civil unrest will be rampant, production will have fallen to multi-decade lows, cities will have sold off anything and everything to private owners, many of them foreign. The OTC derivatives mess will have come to a head and have wiped out commercial banking. Social security will be bankrupt. Governments will have long since put workers on furlough, laid off entire departments, defaulted on pensions. Medicaid and Medicare will stop paying out the amounts needed to afford even basic care. Workforce participation will be at all-time lows (as they are currently). Ethnic and racial tensions will be rampant.

In short, the US finally admitting it's bankrupt (if they even bother to call it that) is more of an afterthought. The end (or at least that part of it) will come not with a bang but with a whimper.

Hence, preparing for it? You can't. The people holed up in bunkers with years' worth of supplies won't last six weeks against the US federal government, or even an army of starving citizens, for that matter.

Enjoy life now while times are good. There's my advice, and it's easy enough to follow.

[Deleted]

In the case of total collapse, not sure what the best approach is. I don't know how feasible gold would be in a collapse. Do you feel that is a good asset in such a time? And, would it be wise to keep a good stash of cash on hand to have immediately available since it may then be difficult to get from the bank.

[Virgil Showlion]

Gold is historically one of the best alternatives, but as Virginian has pointed out, governments can and have confiscated it with a wave of a pen.

[The Virginian]

My answer to people who ask me what i would do if i lost all my investment has always been that if that happened there would be a whole lot of people worse off than i am.

I agree - But what happens to the stock you own? I would assume unless the government nationalizes all corporations you will still own the stock and at some point in the future...... Your share would be worth their value. Am I correct? My point is that stocks are probably one of the safest investments you can make.

[Trongersoll]

Jun 5, 2012 7:20:44 GMT -5 The Virginian said:

My answer to people who ask me what i would do if i lost all my investment has always been that if that happened there would be a whole lot of people worse off than i am.

I agree - But what happens to the stock you own? I would assume unless the government nationalizes all corporations you will still own the stock and at some point in the future...... Your share would be worth their value. Am I correct? My point is that stocks are probably one of the safest investments you can make.

Safest? not really. I've had stock become worthless. I lost when GM went bankrupt. In another company i held stock in the about 70% of the stock was owned by 3 people. They had a shareholders vote to take the company private, by them, and pay all the share holders par value, about 10 cents a share. Two other penny stocks i held, the company just went out of business and the shares became worthless.

[kittensaver]

The government can (and has) confiscated gold bars and bullion (commodites that are tracked by our gov't), but it is possible to purchase gold in other forms (such as Swiss francs or African Krugeraands) that are not tracked. According to current rules they are not a commodity but rather are foreign currency, and can disappear into a safe or bank vault to be used or sold for their weight value if times get really hard. Just sayin' . . .

[ModE98]

A well-stocked ranch in Montana 20 or so miles out from nearest small town would be a nice thing. A few junk yard dogs to guard the house, with an electrified fence around the outer perimeter. And, of course, armed to the nth degree to prevent any unwanted "guests". Let all the unthinkable chaos remain in the cities. Sign at perimeter entrance...."Trespass at your own risk, we do not pay for your funeral expenses".

[The Virginian]

Making the Situation Worse’: Jim Rogers Explains Why the Spain Bailout Is the ‘Most Insane Thing’ He’s Heard

During an interview on CNBC’s “Fast Money Halftime Report,” Quantum Fund co-founder, free market advocate, author, and regular lecturer of finance at the Columbia University Graduate School of Business Jim Rogers said that the Spanish bailout was “the most insane thing” he had ever heard.

“It’s making the situation worse. The solution to too much debt is not more debt. This is the most insane thing I’ve ever heard,” Rogers said. “It’s going to make the collapse when it comes even worse. Be careful. You should be not careful, you should be worried.”

Spain’s sovereign credit rating was downgraded last week to just two notches above junk status. That made a bailout pretty much inevitable.

The troubled EU country announced on Saturday that it was eligible for a bailout of up to $125 billion. However, unlike literally every other bailed out EU country, Spain somehow managed to negotiate an austerity-free rescue package.

“So much for the Spain bailout. Why do you think the euphoria has been so short-lived today?” CNBC host Scott Wapner asked in reference to yesterday’s poor market performance.

“Scott, it’s nothing more than pushing the thing out into the future,” Rogers responded.

Watch the Rogers/Wapner interview [via CNBC]:

“What would you have done? What was the right answer?” Wapner asked.

“Let them go bankrupt. I would let all those people — Scott, the way the system is supposed to work, when you fail, you fail. Competent people come in, take over the assets, reorganize and start over,” Rogers replied.

“What we are doing in the West, we’re taking the assets from the competent people, giving them to the incompetent people and saying, ‘okay, now you compete with the competent people with their money.‘ It’s absurd economics. It’s absurd morality. It’s absurd economics,” he added.

Wapner continued in this line of questioning.

“That would be your same argument as it relates to Greece, then?” the CNBC host asked.

“Of course! We’re looking forward to elections in less than a week. Greece should be the first to go bankrupt. Let Greece go bankrupt and then the others would realize, ‘okay, guys, we got to shape up. If we don’t shape up, we’re finished,’” Rogers responded.

“That would be a good lesson for Europe, a good lesson for the West, and then the euro would be a very strong currency and we should buy all the euros we can,” he added.

Wapner had one last point he wanted to clarify.

“Despite all of that and as negative as that could be perceived as, you know, you sounding, you’re long commodities. You still believe in that story. You’re long various currencies as well. So you’re looking for opportunity in making money on the long side of things, too. I want to make that clear, you’re not shorting the whole world and running into the jungle,” Wapner said in what could easily be a reference to Rogers’ former partner, George Soros.

“No, no, no. I’m long a lot of stuff. But, Scott, we in the West have made some terrible mistakes in the past 30 or 40 years. We have run up staggering debts. You don’t just run up staggering debts and one day wake up and say, ‘oh, well, we made a mistake. Now everything is okay,’” Rogers replied.

“Somebody has to pay the piper. You know who it is? You, me and everybody watching this show,” he added.

[ModE98]

Would tend to agree.... you do not solve a debt crises with more debt. No doubt, should this sort of thing continue, the eventual collapse will be so drastic that a return to the Dark Ages will follow as the economic world is sucked into a Black Hole. It is only a matter of time, and that time is quickly running out. It may be well to worry, and really start serious "preparation" for one's own financial survival. The days of wine and roses are over.

[beenherebefore]

I think some European countries and rich, powerful Europeans are buying and selling the US stock market, madly trying to get as many gains as possible. That's why this market is so crazy right now. So, I'm not worried about stocks in the US Market for now, as long as they're profitable, of course.

Where else are they going to invest?

[ModE98]

For the time being you are correct. The wind down to the final world financial collapse is a long term process. They keep plugging the dam with chewing gum to keep up the sham. The US Stock Market is the only reasonably secure place to invest one's free money... or gold, silver, platinum, etc. Can always barter if world currencies become virtually worthless.

You never can tell, maybe some time in future years, people will come to their senses and live within their means. Debt should not be extended to those who obviously do not deserve it or cannot handle it. Maybe everyone will go along with writing it all off and starting all over again.

Of course, we are only talking about conditions in the event the "unthinkable" becomes a reality. Times will become decidedly tough.

[beenherebefore]

, you are correct, Mod. Until then, lets drink a martini and eat some cake. LOL!

[tyfighter3]

You might as well have some Ice-Cream with your cake too. LOL

[The Virginian]

the eventual collapse will be so drastic that a return to the Dark Ages will follow as the economic world is sucked into a Black Hole.

Ah com-on Mod - You're just trying to make us all feel better.

[The Virginian]

MILAN (AP) — Italian Premier Mario Monti saw nearly seven months of confidence-building by his government wiped out by Wednesday, when a debt auction showed the country's borrowing rates were back near levels last seen in December.

A sale of 12-month bonds, a warm-up for Thursday's weightier long-term debt auction, demonstrated the speed with which market jitters spread from Spain following Madrid's weekend concession that its banks need a bailout.

Italy paid an interest rate of 3.972 percent — up from 2.34 percent in a similar auction last month — to borrow €6.5 billion ($8.12 billion) in 12-month money from bond markets. Though demand was strong, the high rate suggests investors worry Italy may need a rescue of its own if Spain takes one.

"Contagion is back with a vengeance, and Italy is bearing the brunt of the fallout from Spain's request for external assistance," sovereign debt expert Nicholas Spiro said. Markets, he noted, are no longer differentiating fiscally-stronger Italy from Spain, "which is a sign that panic has set in."

Just before the sale, Monti urged lawmakers to speed the pace of reforms in a bid to persuade skeptical investors — whom he referred to as "observers that don't nurture an innate sympathy for our country"— that Italy was willing to make the necessary sacrifices to escape the debt crisis.

Although Italy's deficit is relatively low, at 3.6 percent of GDP compared with Spain's 8.5 percent, the economy is not growing and overall debt is huge, at €1.9 trillion ($2.4 trillion). To lower that debt, the economy needs to become more competitive.

hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-06-13-EU-Italy-Financial-Crisis/id-eff1d1312869435fadd2865a74d28249

[ModE98]

Bought a mountain and preparing my cave. My pet bear will stand guard.l

[beenherebefore]

Well, I"m not leaving the desert, it's good for my arthritis so I guess I'll just have to move into Area 51, if the worst happens. LOL!

[ModE98]

Wow, be carefull around Area 51. If you are able to get past security, some Alien may run off with you to Planet Zingdingaring in the 21st galaxy. Zooooooooooommmm and away you go into a new life experience.

Well, it would be a bit exciting.....maybe. No more worry about European problems disturbing your port.

[beenherebefore]

Maybe I'll sell stock in the new planet. LOL! An IPO, InterPlanetory Offering.

[The Virginian]

Seriously, I have started to buy a few extra cans of food each week just in case. My wife thinks I'm nuts ( but that's nothing new) but I figure if you just stock up on can goods that you normally use anyway and make sure you rotate them then what does it hurt? I guess my Boy Scout days still come out in me "Be Prepared"

[beenherebefore]

My hubby is doing the same thing, Virginian. LOL!

[ModE98]

bhb.......... If you price your IPO correctly, I'll pick up a few shares. Your new Alien friends already have the technology for space travel, so I believe you have it made. Intergalectic Transport Services LTD. Could name it Zoom Zoom, Inc., but Mazda would probably claim "zoom zoom" as a copyright and sue.

Mr. V, were you an Eagle Scout? I sort of wilted out after only 15 badges....just an "owlet". it seems. Perhaps I no longer gave a hoot. Darn lazy kid!

[beenherebefore]

ROTF Mod! We bought a new car less than a year ago and it's a - you guessed it - Mazda.

[tyfighter3]

Yes WXYZ, everyone in the World will get up in the morning and put one leg at a time in their pants and go on with life just as they have the day before. The only thing different will be that they will start over from scratch. They will OWE nobody nothing and will not have Debt hanging over them. It will truly free them up to do the things that could make them rich beyond their dreams. The ones that have Drive behind them will do very good but the ones that say Woe is Me will be left in the Dust which is the way it should be. Just my Thoughts

[The Virginian]

Mr. V, were you an Eagle Scout? I sort of wilted out after only 15 badges....just an "owlet". it seems. Perhaps I no long gave a hoot. Darn lazy kid!

No, My Boy Scout "career" ended on a camping trip when I got stung by a bee and discovered I was allergic. Since then I try to enjoy nature from a distance! ;D