How are you for Preparing Aug 12 if the Market Collaps

[BitcoinBug]

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).

[1714101697]

1714101697

[1714101697]

1714101697

[1714101697]

1714101697

[1714101697]

1714101697

[westkybitcoins]

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..

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.

[Andris]

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. 

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.

[tvbcof]

...

 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.

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.

[Clavulanic]

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.

[Kermee]

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

[tvbcof]

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.

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.

[Clavulanic]

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

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 

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.

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.

[JCbit]

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

[markm]

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 

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

-MarkM-