What to do with money now, assuming a huge crash is coming?

The crash is coming, but not for another year or two. And the market will only drop about 20% or so.

Bank on it. Literally.

Borrow a lot of money and use it to purchase hard assets? Something that will increase significantly in value if your hypothesis is correct.

like everyone else.

Can't you 'short' stocks where it's like betting against the company - you get more money if the stock drops?

Two words: Bitcoin.

Peter Schiff of Euro Pacific Capital has an investment philosophy specifically designed to prepare investors for this scenario. It consists of diversifying out of the US Dollar and into the kinds of currencies and hard assets who are good candidates to be the beneficiaries of the dollar's weakness. He recommends taking your dollars for precious metals and a carefully selected portfolio of primarily non-US equities of commodity-producing companies with strong earnings. He is especially bullish on gold mining stocks. Visit europac.net for more info.

If all goes to hell in a handbasket, I would want something over which I had direct control, not something like non-US equities.

Physical metals I can understand, but not gold mining stocks.

As far as shorting goes, what does that get you? More money? If money becomes essentially worthless, what good is that, unless you have a mountain of it?

Speaking of which, how much would represent "a mountain" in the event of collapse? By that, I mean how much would you need to have in order to still be wealthy after the crash?

I think a diversified farm is a good investment, no matter what commodity prices currently are, as long as they haven't driven up land prices too high. For anything to be worthwhile, you need to be able to trade as well as produce, and for food, there is always a local market, making trade less expensive than if you had to use an established long-distance distribution system.

And as far as that goes, I think only really good, reliable, defensible distribution systems would be a good bet. Know of any? Pipelines vs rail vs trucking vs shipping?

Just thinking out loud.

Shorty pants wrote:

Can't you 'short' stocks where it's like betting against the company - you get more money if the stock drops?

The market can remain irrational longer than you can remain solvent.

Huge crash AND inflation?

How can the market crash AND have runaway inflation at the same time? Think about that. Especially when we have reasonably tame inflation right now. Say what you want about inflation. But ultimately the very existence of inflation inherently means people have money to buy things to inflate the price in the first place.

If the market crashes 50% than there will probably be high single digit deflation. Especially if you count the price of homes as inflation as they should and always did before the 1980s.

In that situation the answer is obvious. Have your money in an FDIC insured bank account. You will effectively be getting a high single digit return by being able to retain the money you put in.

Seriously, how did so many Americans get brainwashed into thinking that a market crash and high inflation happen at the same time? When has that ever happened?

I suppose high inflation precedes a market crash. And to be prepared for the market crash you have to put money away into a safe haven in the face of the high inflation. That is the tough part. But then again, if you are so certain the market crash is coming than its no big deal.

The market was "supposed to crash" in 2008... And 2009... And 2010. It ain't happening. Right-wing chodes like Schiff are trying to sell their books and "survival kits" and whatnot. Don't buy into this nonsense.

* wrote:

Huge crash AND inflation?

The inflation is going to happen because the Fed isn't going to allow the market to crash. At the first sign of distress, Yellen will announce that she intends to reverse the taper and usher in QE infinity + 1. This will go on indefinitely until there is a currency crisis. Our government us addicted to inflation and is not going to stop inflating until it can't print anymore.

ryan foreman wrote:

ultimately the very existence of inflation inherently means people have money to buy things to inflate the price in the first place.

People have a specific value of money. For example let's say the people begin with having 100% of all the money in the country which represents X. The government prints more money so now there is 10X money, but the people don't get any more, so now they have only 1/10 of the value that they did, and if they make gains then it's taxed. Thus inflation is a planned taking of the labor and assets from the people, which goes to the rich who are running the system.

The government continues to print more so now there is 100X money, but the people still only have X, thus only having 1/100th of the value they began with, and any interest or profit (inflation) of that money is taxed, again a taking of the assets of the people, which goes to the rich who are running the system.

Yes. The volume of money pumped in the economy is a factor. But in and of itself it doesn't cause inflation. People have to use it. If people and corporations are just stashing all that money away in some vault, computer, or mattress and not transacting money then there is still deflation. I believe the economic term for this is the velocity of money. All things being equal, the lower the velocity of money transacted, the lower the inflation (or higher deflation). Of course a market crash is almost by definition a drastic reduction in the velocity of money. It is a massive deflationary force. Really, the only possible way you can have both a market crash and high inflation is if there is some epic disaster like a major war on our own soil and where the fundamental productive capacity of our country is suddenly destroyed.

This topic has been beaten to death on prepper forums, gun forums and survivalist forums. It's generally referred to as SHTF scenarios or TEOTEWAKI (The End Of the World As We Know It).

Without becoming a survivalist nut job, there's a lot you can do. Here's a few ideas.

Water: Fill the bathtub at the first sign of problems. Don't flush or use the toilets. A toilet tank contains 10 gallons of water. You probably have three in most homes. That's 30 gallons of water. Keep unscented clorox on hand. A few drops will purify creek water.

Food: I buy extra protein powder, peanut butter, and cereal. That's a lot of calories and they have long shelf lives. Not great balance, but it's food.

We have a propane tank, so we can always cook even if the power goes out. It goes without saying you should have lighters to start a fire.

Investing is hard, because as a crisis deepens some investments that might perform well in a 50% market decline would not be good if the markets collapsed and closed.

In the event of a major stock market crash, gold and especially gold mining stocks would skyrocket. But if the markets closed, you wouldn't be able to sell your stocks. If you buy gold, you could benefit, but what good would gold be in a real TEOTWAWKI scenario? A Glock and a couple of boxes of ammo would probably be worth a lot more than a couple of gold coins.

fisky wrote:

A Glock and a couple of boxes of ammo would probably be worth a lot more than a couple of gold coins.

otherwise they'd be taking away by the zombies.

I'm not going to assume that, okay?

Buy SDOW

Two words - Ice Cream. Or is that one word? I can never remember.

Dude, EVERYBODY loves ice cream!