What do you do with your financial resources?

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What are you going to do with money that is invested? Keep stocks and bonds, or go into treasuries? Fortune 500 companies? High Tech? Or real estate? Any ideas?

-- Gene on Cape Cod (carvgene@gis.net), January 20, 1999


Not an easy question Gene. How bad do YOU think y2k will impact the US and world economies? Gold and silver are a good parking place for your money at $285 (gold) and $5 (silver) there is not much downside risk. In times of crisis they do well. No one really knows how bad it will get, but in the Great Depression "cash was king".

-- Bill (bill@microsoft.com), January 20, 1999.

Thats a good question, but you cant eat gold silver or paper, so purchase everything you might possibly need, for yourself and barter then buy gold and silver I GUESS. Some things you just cannot know

-- tom k harder (tkh@earthlink.net), January 20, 1999.

Put 10% of your assets into gold or silver that you can hold. American Eagles are a good choice. You will pay about a 10-15% premium above the spot price. Money market the rest. Then forget about it and start serious preparations for food, water, shelter, heat, weapons. You don't have that much time before a lot of things become hard to get.

-- RD. ->H (drherr@erols.com), January 20, 1999.

Gene, Consider gold and silver, but also remember that gold at $290 per ounce can theoretically go down $290. It depends on whether you think well be in a deflationary time or an inflationary one. That's the call I'm having trouble making, because if inflation is the result of too many dollars chasing too few goods and services, what happens when most of the money supply disappears overnight as a result of a good electronic scrambling. You'd have fewer dollars, but you'd also, very suddenly have a lot fewer goods for those dollars to chase. I mean if things get bad, your not going to have a whole lot of dollars chasing Furbies and Beanie Babies. What would happen if and when the Fed tried to make good on deposit insurance? I don't see how anyone could predict the resulting dynamic. But history tells us that you've got to consider gold in times of crisis.

Also, consider EE savings bonds. It's been a while since I bought any, but you could use your bank account money to buy the bonds and not contribute (at least pre-2000) to the drain on dollar bills being printed by the fed. Also, if I remember right, and I need to check on this, bonds are registered in the name of the owner, so while having a tangible document that you could transport anywhere in the country, in the case of loss or theft or fire you could still redeem the bond. There's a limit on the face value of bonds you can buy, so you won't be able to shelter huge sums this way. Remember to get certified copies of your birth certificate (not just photocopies) so you can prove that you're the bondholder in the event that your in a place where you are not well-known.

Gene's question is one of great importance and I hope everyone with any ideas will chime in. Good luck.

-- Puddintame (dit@dot.com), January 20, 1999.

There is no totally safe haven. If any significant fraction of the businesses go bust, then the share price of money market funds will decrease accordingly, and you can lose a lot of money in this supposedly safe investment. You can put some money in "treasury only" money funds, and then pray for the devil. Gold in your posession is the only thing that is really safe, but its not really safe.

But according to Westergaard, the safest place is in your bank, if you believe Westrergaard.

-- dave (wootendave@hotmail.com), January 20, 1999.

So gold can "go down by $290"? Free gold, I like that idea! There is a cost of production with all commodities whether it is gold, hogs, soybeans... Sometimes the market values things under the cost of production and the producers stop producing (except some farmers who are addicted to their lifestyle) Find out production costs and you have a rational base to value things from. An oz. of gold comes from tons of ore and many manhours of work, three one hundred dollar bills are printed on 5 cents worth of paper in a micro second. Which is scarce, which is a true store of value? Copper is at 65 cents a pound, a large copper mine near where I live said in the newspaper their cost of production is 67 cents a pound. How long will the mine run at a 2 cents a pound loss? Get the idea? Gold at $200, maybe?? Gold at $100. , I doubt it. Gold at $35. again, never.

The Fed will print $50-$100 billion in new paper money this year. Could the Fed back that with gold, even if they wanted to? No way, not at $290/oz.

Get your food, water, heat, ammo, etc... after that store your assets in something that will hold it's value, takes labor and capital to produce and is accepted worldwide by over 5 billion people (sorry VISA).

-- Bill (bill@microsoft.com), January 21, 1999.

My husband and I were just discussing this very thing. Since he thinks we're most likely to have a 3-5 and I think we're looking at 7 (if the power stays up), we don't really agree on the best disposition of assets. However, given the cost of gold, we both agree that we should have a bit on hand and more silver. We've spent quite alot on food, and our next larger purchase is a wood/coal burning stove and wood/coal to go in it. Given the uncertainty of whether we will have hyper-inflation or deflation, a stash of paper money is low on my priorities. We also intend to start moving money out of RRSP's (Canada's version of 401k/IRA), and will use it to further our preparations, or possibly to pay off the mortgage.

I still wish my crystal ball worked better......

-- Tricia the Canuck (jayles@telusplanet.net), January 21, 1999.

Bank in land.. the hard question is when to buy.. now, or later when it will be cheaper.

Keep enough cash to pay taxes for 5 years.

Check for prior claims on land ownership very carefully.

Have paper docs for all land transactions.

-- Bob Barbour (r.barbour@waikato.ac.nz), January 24, 1999.

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