What is the safest thing to do with your $$ in prep for Y2k?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Would like to hear what others are planning to do with their "cash" in preparation for Y2k.
-- Lincon (firstname.lastname@example.org), December 11, 1998
Let me ask you a question:
What do you expect the world will be like mid-2000?
1 Same as 1999, minor bumps.
3 Recession equivalent to 1973 (Oil Crisis) (Government and order are still intact, banks are still intact, but there's layoffs and some companies go out of busines, but things still pretty much work.)
7 Depression equivalent to Great Depression (Government and order are still intact, but many "established" organizations fail and there's general misery all around. Banks fail.)
10 TEOTWAWNI (The End of the World as We Know It, complete social breakdown, complete absence of any government, civil war) Probable conditions similar to those during the Civil War or worse (because of better modern weaponry) Or Mad Max.
If your answer is at 1, then you do nothing.
It your answer is at 3, then you pull back from the stock market, but keep your money in "safe" securities and in the bank.
If your answer is 6, then banks may be out, but the money will be "probably" worth something.
If your answer is 10, then convert your money to farmland, food, commodities, weapons, and pretty much everything you need to survive (My father calls this the farmland and guns scenario.)
-- Glen Austin (email@example.com), December 11, 1998.
Glen: What is a "safe security"? I don't think any exist. Even the 'safest' of securities, U.S. Treasury Bills, can be turned into a long bond by simple govenment decree! I would opt for spending $ on preparation, especailly given thateven without Y2K, global financial markets are currently a bubble in search of a pin.
-- Rob Michaels (firstname.lastname@example.org), December 11, 1998.
The securities of large companies. (AT&T, Ford, IBM, GE) These companies will lay off 3/4 of their staff before failing to meet their debt obligations. And I could understand if they missed interest payments on a quarter or two, as long as they resumed payment on the debt at a later time.
You sound like down to at least 7 on the scale, then. If you assume that the government isn't going to remain intact and pay it's debt, then you're probably down about 9 or 10.
If you're a 9 or 10, then your only solution is to turn your money into survivability and barter items. By the way, I'd get out of the city, too, because many people are going to be looking for the same items. Lots of people, angry, with lots of guns, what great place to be.
However, when you discuss accounts like 401K, do you believe it's going to be REALLY bad, pull your money out, take the 10% hit along with the addition to your income?
I'm not sure I'm willing to go that far. So I'll move my 401K money into bonds and treasuries, hoping Y2K is not so bad. Why? Because taking it out is going to cost me 40-50% of the value of the money anyway in taxes and penalties. And I'm not convinced Y2K is TEOTWAWKI.
I'm more around a 5-7, so I'm still debating about the money part. I'm stocking food, water, fuel, sleeping bags, tents, etc. just in case. But I live within 50 miles of one of the 20 largest cities in the US, so if Y2K is a 9/10, I'm not planning to stay here, so there's not a lot of point to stock a year's worth of supplies.
I'll probably convert my "liquid" accounts to cash or barterables, because I can put the cash back in the bank later, or sell or barter the barterables and put the money back in the bank.
I have realtives with farms in OK. So I'll go there, on country backroads (on bike if we have to). And help my cousin with subsistence farming. He already has plenty of water, guns and the like.
I'm sorry, but I guess if this forum about Y2K being a 9/10, then I DGI.
-- Glen Austin (email@example.com), December 11, 1998.
Glenn: Thank you very much, we are of the same mind set! We have moved our 401K to securities and bonds. When the signal comes, the bonds move into securities. No way am I going to pay the government any income tax or penalties or early withdrawal. If we go down then so do they! Just waiting for a CD to mature then moving it into T-bills and if I see things starting to go south, maybe even sooner. P.S. I'm not a buyer for gold and silver. I maintain the thought that you cannot eat gold or silver, but only rice and beans. Therefore, don't come to me with your gold, I'll trade you some beans and rice for......
-- bardou (firstname.lastname@example.org), December 11, 1998.
(from the T-bill thread)
There is no such thing as a safe investment. Period. Even U.S. Treasury Bills can be turned into a 30 year long bond simply by the government declaring it to be so. Check for yourself.
However, if you are going to hold paper financial assets the 'safest' are U.S. Treasuries. Why? Because the FEDS control the printing presses and have the power of taxation. T-Bills are direct obligations of the U.S. government. As Jim Lord wrote "If they can't pay their bills, there's no security except what you hold in your own hands. Your fundamental cash, and gold and silver coins provide protection against this possibility". Consider his words when making your plans.
-- Rob Michaels (email@example.com), December 12, 1998.
Gold/Silver/T-Bonds? My company pension is company paid. No 401k here. No control..like so many my check is payday to payday with a little to save. At this point, that is going to preparation. They are saying it will be at the least like the depression of the 30's. Can I share a story my Grandfather told me? People sometimes would start a house on FIRE in hopes the people would grab there money and run out, then they would take it. If you plan on taking cash out, don't keep it in your home! Find a safe place in which to keep it. Bury it, whatever, but I wouldn't leave it in the Banks, or with the Goverment. Not until this is over, and if the worse comes you can't take out more than 10.000 without breaking the law. See: http://y2ktimebomb.com/Tip/Lord/lord9849.htm
-- Elaine Hammons (firstname.lastname@example.org), December 12, 1998.