Bitcoin Forum

Hi

How will  you survive if the US Dollar causes the Markets to crash on Aug 2nd..

How will you keep your money safe.. if the Dollar experiences runaway inflation

Thank you..

Good answer..  :)

It's a good answer and the easiest to act on, despite the hoops needed to fund your exchange accounts.
Otherwise, it is put options, reverse trackers on indices, oil etc.
& Income producing investments.

I spread myself over these three options and need to put more focus on income producing investments now.

Especially, invest your time in what you enjoy and desire.

They will probably find a way to raise the debt ceiling.
Again... -,-

Since this huge amounts of debt are build in the system there is no other way then creating more money to solve the problem temporally.
But at the end it will create more debt, its kinda like the chicken and egg story.

But eventually the debt will win and the dollar will crash.
Is this is on 2 August 2011? ... no I don't think so, I do not believe this.

Buy goods, yachts, sports cars, paintings, land, jewellery and watches....before the dollar crashes.

Or Maybe Silver

You mean August 2nd...

The US dollar will not cause a market crash.  A default on or a downgrade to US debt is what may cause a collapse.  Absolute worse case scenario is a default situation where interest is not paid on Treasuries.  Odds of this happening are very VERY small.  Even without an increase in the debt ceiling.  A downgrade is much more plausible.  A raise in the debt ceiling has a fairly good chance of happening.  It would be a self-inflicted wound to do otherwise.  However, S&P says they need to see cuts of $4 trillion over the next 10 years in addition to the debt ceiling being raised in order to prevent a downgrade.  This may be harder to achieve as both plans in debate do not cut to this magnitude.

How do you protect yourself in a market crash?  Keep your money out of the market.  How do you make money in a market crash?  Short the market, buy gold, buy treasuries, maybe even play the VIX.

As for inflation, I see no signs of "runaway" inflation at this time.  In the end, I think Congress and Obama will just kick the can down the road. 

Even if debt ceiling is not raised by Aug 2, US will NOT default.
Don't believe everything the politicians and the media says. Rather, do ur own research and you will find out all this default thing is just a game.

Some of those work, but highly-visible, bulky things are not going to be safe.  If they're not outright seized, they'll be taxed to death ... and they know you have them.

Best option is gold coins ... easy to conceal, and easy to redeem for its previous purchasing power when the shizzle hits the fan.

it will default on securities (or alternatively, not pay on other expenditures) coming due from that point until an agreement is reached.

while this is not nearly as dire as the media is screaming, it's not a good idea and would result in higher bond rates and thus more money paid to interest.

There is a mind-boggling amount of notional value in derivatives.  It would not surprise me if something much less than a downgrade or limited default triggered some issues here, and I would be surprised if either of these two events did not.

There is an argument that the _net_ value is not high, but it can also be pointed out that as counter-parties go poof, net value approaches notional value.  (Explains 'to big to fail' in my mind.)

Now, in the event of a derivatives related crisis there might be some short term relief by changing accounting rules (again) and redefining or re-interpreting various things, but I would not bet on these to have any lasting effectiveness...if much effectiveness at all.

Like the Lehman deal, there are probably a lot of not generally considered issues which could pop to the surface if the near-boiling pot is disturbed.  Here's an interesting vid for those who may not have seen it.

  http://www.deepcapture.com/naked-short-selling-redefining-systemic-risk/

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But to your question, I have a friend who does the following:

 - gold bullion
 - property
 - junk silver
 - USD in several bank accounts and some in safe deposit boxes.
 - bitcoin

He does not have any other financial instruments as he feels it unlikely that a functional legal system will be around to assist him in collecting his assets in a scenario where he would actually need them.  A functional legal system is likely to exist...it's just that it will not be his interests which are high on it's priorities.

Always good to prepare for a rainy day 8)

I'm starting to buy a lot of stocks that have dropped a lot in the past couple of weeks.  Also shorting gold.

Prepare to lose a lot of money, libertarian suckers :D

Socialist in my particular case.  See you on the other side.

Indeed. There are a lot of things that could go wrong if the fragile balance of the global economy is even disturbed a bit. Just like with the Lehman case it is all too entangled to be able to say anything for sure. One default might cause a global domino effect.

The only thing sure is that it is not possible to keep kicking the can down the road forever, and because everyone realizes this, I somehow don't think it will take long.

until private possession of gold is going to get forbidden again!

Not sure about being forbidden.  Even 'registration' may prove problematic as a lionshare of it is likely held by a class of citizens who would not care much for that.  What I do think is fairly likely is that movements of PMs would probably be scrutinized, controlled, and taxed.  And capital controls will keep it in the borders (or at least the fraction of it which is in the hands of the plebs.)

But how on earth would that be achieved?  I think the infrastructure is being put in place for a while now:

http://www.popsci.com/technology/article/2010-11/scanners-coming-trains-subways-and-boats-homeland-security-chief-says

That's a risk, but gold is far more resilient against that threat than the other options.  How easy is it for the government to track illegal drug holdings vs. "illegal home holdings"?  No, they can ban it, but you can still cash in the gold as easily as you can find your next fix.

if the US dollar crashes, will the price of bitcoins crash as well, or go up?

US dollar won't crash because of debt ceiling, this is just a reality show of republicans vs democrats. Long term, I believe some kind of worldwide system collapse is inevitable and will probably result in hyperinflation eventually (5-20 years).

1) Staying out of paper markets/investments. No 401k, mutual funds, etc.

2) Acquiring commodities, capital tools, and commodity-producing assets

 a) Ideal commodities at this point: silver, gold, bitcoins.

 b) Capital tools (probably not the right term) include things like, at the low end, a quality tool set that will last a lifetime. Also includes readily-usable skills.

 c) I would have just said income-producing assets, but just being able to generate cash probably won't cut it. Rental properties will continue to be worse and worse in this regard as inflation surges, especially considering the market crash isn't over yet.

Market prices are maintained by smarter people than who work at S&P. Their influence over the US borrowing rate will be less than their influence over Japan's, which was roughly zero.

I read in an analysis of the Wiemar Germany hyperinflation that savers got slaughtered of course.  Holders of stock in companies actually came out of the other side relatively OK.

The most interesting thing to me was rental property owners.  Apparently during the crisis they had problems in that rent controls came in early on creamed them over the course of the event.  On the other side, they still had their property, though it is my assumption that they did not do much maintenance during the event.

I expect that a problem in Oceana would/will be somewhat different (if hyperinflative at all.)  The people who got chased out of 'their' homes when the real estate bubble popped will be large in number and irritable about things, and the governments at all levels are particularly hungry for revenue.  I theorize that there will be a backlash against people who have more homes than they need and onerous taxes will be levied.

For this reason, I limited my own investment in this class.  I have only enough real estate property to fly pretty much under the radar (I hope) and/or assist my immediate family members should they happen to end up in need.

While I have some money in the bank, my overall amount of money is in the negatives. I owe money thanks to loans for school. So I guess it would be good for me (at this point in time) if the dollar crashed! Inflation means I pay back my debt with dollars that are worth less than when I borrowed them! I think I got that right, as long as I remembered economics from high school.

So you're not paying interest on your loans?

Cheers,
Kermee

In a mild form of crisis that might work to some extent.  I thought about hedging along these lines, but eventually decided against it.

I think it would be naive to expect that in a bad case with a re-invented currency, creditors would take a haircut.  My bet is that outstanding debts would be re-interpreted by the courts and re-calibrated to keep the debtors in more or less in their current condition.

As it stands my loans are subsidized by the US government. I start paying interest until 6 months after I graduate. Though I may end up having to put a few grand on unsubsidized loans this semester  :(
It'd be neat if I paid back my debt with worthless money, but I'd be getting paid in worthless money too lol. I'd rather the dollar stay the same  :-\


From what I understand this happened a few times throughout US history. The debtors were getting mad so in some cases where the states still had their own money, the state printed a ton of money to ease their pain. Of course that screwed over the creditors. Pretty sure the federal government has done that before too. Not a history/economics major, as one can see by my name.

well the debt ceiling has been lifted
we dodged a bullet there! ::)

What, you're not going to be paid in Bitcoins?!

-MarkM-