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

If another crash comes it will be at the hands of Wall Street yet again.

Looney detector wrote:

Maserati wrote:

Pretty much, although essentially everybody is tied to the US dollar--however, there are those who are already preparing for a rather quick break, and putting replacement structures in place. FATCA compliance has hastened this preparation.

Again, I'm not talking armageddon--only a serious event which, if it comes at a certain point during your working/productive/investment trajectory, could be devastating, even if you are "normally diversified".

I have options that I can't talk about, but I think it may be wise to retain some US-based investments in the future...I just wonder what they should be, and whether I will be around to manage them or not.

The dude that said you are paranoid is right. Get a grip.

youse make me want to defend maserati here - we've had several disruptive events over the last few decades - he might think a more severe one is coming, but the fear is reasonable.

Each of these events hurt people trying to save their last dollars for retirement:

73/74 inflation

73/74 stock market crash

80 inflation

87 stock market crash

2002 stock market crash

2008 real estate crash

2008 stock market crash

If you were 3 years from retirement any one of those would have hurt you pretty seriously unless you had an annuity or pension or the like. And normal diversification would have only helped a little.

Maserati's fear of bank failure and infrastructure failure is extreme, but just because it hasn't happened doens't mean it won't happen.

My real point here is that when you get into yuor 50s and 60s and don't have time to go back and re-make the money, you have to be on the lookout for any pothole that could wreck your retirement.

But he has options he can't talk about.

1) Why do you assume that my house is worth a lot of money? (You've mentioned this more than once). I bought it for $134,500. It's now worth about $190,000; in 3 years I will own it outright.

2) Do you not believe the government could change rules for business owners so that that would then not be an attractive thing for you?

3) Buying or starting a business MIGHT give you more control over money, but only if it's successful. Making a go of it is RISKY...way more risky than simply investing in mutual funds. You can lose everything AND then also be in debt with a failed business. You can NOT go in the hole with investing in mutual funds, and it is nearly impossible to lose all your money in diversified mutual funds too...I'll go so far as to say impossible.

4) I also don't like your gold and silver plan (especially not the gold). Very risky.

Yes, that is correct, I have options that I can't talk about, that are quite probably not available to you. Nor will I tell you why it is that I can't talk about them.

Kaitainen continues his idiotic masturbation in the corner. Why do I currently do one thing, when I believe that conditions might change that might make it less attractive?

While Kaitainen can't think of any reasons, because he can't conceive of anything outside the narrow bounds of his own limited mind, I offer two:

1) because conditions are not yet favorable,

2) because I am part of a larger asset management structure, otherwise known as a family, and do not rule as would an autocrat like Kaitainen. I might think one thing, but that does not necessarily dictate the policy of the family structure of which I am a part. Kaitainen may grow to understand this in time, if he ever gets a life.

Again Kaitainen, feel free to ignore this thread.

kaitainen wrote:

first, thanks agip. as you know, the things you list couldn't really happen in that order, because the gigantic destruction of demand for energy would not lead to an increase in the cost of energy. but hey, if this guy believes in contrary things, so be it.

It sounds like you don't believe in the possibility of cost-push inflation ever occurring?

Resorting to insults does not help your credibility here.

1) I don't know precisely why, that's just the impression that I got, especially when you talked about moving to decrease your property tax burden. I (somewhat naturally) assumed the property to be of high value, as the lower the value, the lower the tax burden, all things being equal. However, I applaud you for being concerned with the tax burden on a property worth even only $200k. You and I seem more similar with every passing post.

2) Yes, the government changes rules for businesses all the time, most notably using the tax code. Regulatory environments and compliance burdens are also constantly changing, but at the same time, incentive programs are also changing. There are many different types of businesses available from a regulatory perspective, each with their own set of pains-in-the-butt. I have started, grown, and successfully sold two, and now have a third as a solo professional. While I don't wish to continue in the business of a solo professional ad infinitum, I recognize the value in being able to work resources directly, to extract value. I am currently attracted to agriculture, which businesses are (depending on the situation and crop), subject to, among other things, regulation coming from the Farm Bill, which is only effective for 5 years until re-considered. So yes, even there things change--potentially every year with the tax code, potentially every year with changing land use regulations, potentially every 5 years with the changing Farm Bill, and so on.

Farms, however, can be a unique type of business in many ways, ways that I won't go into. They can lend themselves to not only a reduced tax burden, but to increased control over the working of the resources, efficiencies, and interestingly, access to a form of welfare via subsidies. I get no subsides from anywhere, nor have I ever gotten any during my adult life--no UI, no welfare, no subsidies for health care or food or education/training, no mortgage interest deduction, etc. I am a healthy, working, educated white male, with some money--you know, pretty much the only person who is on the giving end but not the receiving end. In the new paradigm, which is deepening daily, you are either in or you are out, and a farm business is one of the few ways for me to get in and actually receive something via support for minimum prices and subsidized crop insurance, among other things. Another way is to seek research funding to support a start-up, but even though I am involved in ongoing research, I am doing it entirely privately so that there is not even the faintest whiff of a possibility of giving away anything, including IP rights, to either the government, or to any third party through government-mandated publication and disclosure.

I do realize that there is upheaval every year, and every 5 years, in the farming business--but that's business. Even if the subsidies end completely, the business is potentially attractive to me for other reasons, depending on where it is situated, and on what the possible productive capacity is. As far as the other start-up is concerned, I will again build it to a certain point and probably try to sell it, this time it will hopefully be only IP that I will be selling.

BTW I am talking about a farm that is fully paid, not one that is debt-financed, which greatly eases the productive burden to the point that it can essentially always be made profitable, depending again on where it is.

Regarding the gold and silver, that is only a small part of things, and it is only because I don't have complete faith in the future purchasing power of government money. There is some risk, yes, but there is also risk in being in cash. I'm not sure when a good time would be to buy in, though, say to the tune of $100k or less. In certain jurisdictions gold can be bought and sold over the counter, instantly, at institutions that don't arbitrarily choose to close their doors when the price fluctuates a bit. It is everyday practice. And because it would be only one part of things, and a small part at that, the risk is easily acceptable to me because I likely will never have the need to touch it. YMMV

John, you're right, and I immediately regret making them.

I do apologize to Kaitainen for my insulting tone. I am genuinely thankful that he and people like him are sufficiently concerned with these issues to even begin to discuss them.

HAHAHAHA - You said "seriously". HAHAHAHA

1) We pay about $3800 a year in property taxes. I can get a similar house for about the same money (and actually some nicer houses for the same money) in other states and pay a third or less than what we pay now annually.

2) I have nothing of interest to say on the rest.

fact checker wrote:

kaitainen wrote:

first, thanks agip. as you know, the things you list couldn't really happen in that order, because the gigantic destruction of demand for energy would not lead to an increase in the cost of energy. but hey, if this guy believes in contrary things, so be it.

It sounds like you don't believe in the possibility of cost-push inflation ever occurring?

i'll readily admit to being far from expert in macroeconomics. i was thinking narrowly about the 90% drop in value of the dollar (relative to other currencies, i think was the hypothetical). with such dramatic upheaval in the world's largest economy, and the world's reserve currency, i assume there would be a depression that is greater than the great depression by several orders of magnitude. that's why i figured there would be demand destruction on an unprecedented scale.

if the guy's concern was about 15% inflation, then i think it's a more interesting and difficult thing to predict (although i'm sure qualified people (i.e., not me) have good models).

agip wrote:

My real point here is that when you get into yuor 50s and 60s and don't have time to go back and re-make the money, you have to be on the lookout for any pothole that could wreck your retirement.

i completely agree. and i appreciate you trying to find common ground.

but this guy told us that he's decades away from social security, so he doesn't seem to be in this category.

maserati, i'll say one last thing to you and then you can have the last word or whatever.

it really seems like you are letting your ideological beliefs drive your investments and your professional decisions way too much. you have opinions about "makers" and "takers", you think the country is being run by, and for, people who aren't like you, and you seem to be letting those opinions influence how you personally live your life (or how you think about living your life, perhaps). i'd strongly recommend that you not do this, either for your investments or for your professional life.

you say things like "I get no subsides from anywhere, nor have I ever gotten any during my adult life--no UI, no welfare, no subsidies for health care or food or education/training, no mortgage interest deduction, etc. I am a healthy, working, educated white male, with some money--you know, pretty much the only person who is on the giving end but not the receiving end. In the new paradigm, which is deepening daily, you are either in or you are out ..."

just live your life. nobody's out to get you. i guarantee that you benefit more from government (based on your representations of your wealth) than many, if not most, people. for example, what allows your intellectual property to have value that can be sold? the government!

if there are ways to slightly reorganize your affairs to take advantage of a tax rule, or if you see an opportunity to benefit from a government program without going too far out of your way, then by all means go for it. but if you are bending over backwards, ask yourself if it's really worth it. again, just live your life and try to worry less about what others may be getting from the government, or may be paying the government. (i mean this in terms of your day to day life; i certainly encourage you to vote, to advocate for policies you believe in, etc. in an effort to get the government to change to be more in line with what you would like it to be).

With respect Kaitainen, nobody "just lives their life" without the guidance of an ideology.

I get the distinct feeling you don't understand what an ideology is. Here is a quick google definition:

i·de·ol·o·gy

ˌīdēˈäləjē,ˌidē-/

noun

noun: ideology; plural noun: ideologies

1.

a system of ideas and ideals, esp. one that forms the basis of economic or political theory and policy.

As the definition suggests, we all use our own system of ideas and ideals as the basis of our own economic theory and policy. There is no getting around it, as you would suggest there is.

Which brings up the prospect that you believe that in your case, it is something other than ideology that forms said basis. Since it clearly is not, you evidence a lack of understanding of yourself. Were I you, I would take this opportunity to consider your own life more closely.

Your "guarantees" have no worth. I understand precisely what I get from government, and I also know how much I pay for it currently, and how much I am likely to pay for it in the future. I have to pro-actively avail myself of government programs such as IP, agriculture, and health research regimes, in order to get the benefit of such programs--however, such programs are available to all Americans, as is the common defense, etc., with no conditions for eligibility other than conducting the appropriate activity and paying the required fees. The choice of whether to participate in such programs is up to the individual to the extent that they are in control of their own actions--for instance, I do not complain about not availing myself of farm subsidies, because thus far I have CHOSEN not to do so.

With regard to programs such as SS, Medicare, etc., I CANNOT presently choose to avail myself of them. When there is a system that has defined constituencies, you either have skin in the game or you do not. By not availing myself of any of the programs from which I may benefit, I am losing out on that benefit. I would point out that those programs are designed to encourage just such an effect, because they variously are seen as economically beneficial, strategically required, and socially desirable. They are incentive programs designed to incent desired behavior, unlike pure welfare programs that are designed for other purposes. I do not criticize the aims of welfare programs, although I do severely criticize their operation.

A person in my position MUST worry about having skin in the game, because without it, one is not part of any constituency on the receiving side of the coin--and some of those constituencies are powerful. Take the farm lobby as an example. Although it has been losing influence recently, it is still more powerful and successful than, for instance, the pro-IP lobby, which has only seen US IP rights progressively eroded over the past decade, with even more damaging "patent reform" on the horizon.

If you're not part of such a constituency, you get left behind, relatively speaking. Availing oneself of incentive programs is, I believe, an indispensable component of a truly diversified portfolio of resources. It is well-known that, for instance, government contractors receive different treatment as potential investments than do non-government contractors.

And that's where the business is--and I mean the real business. In availing oneself of programs, including direct government contracting. I don't know what business you are in, but all businesses are now after the fat government contract, be they professional consulting, janitorial supplies, surveying, transportation, whatever--they are after that money from all levels of government.

There is no reason that this should not apply to smaller business units, including families, or even the individual. If it's too much for you to wrap your head around, maybe you just need more experience under your belt. I, for one, can and have managed just fine, thank-you. And I plan to continue that trajectory.

I'm still waiting to hear from anybody regarding either arable land in the east/midwest, or business micro-finance. Equities, futures, bonds, retirement accounts, FOREX, COMEX, cash, MMA's, etc., I don't need generalized discussion about how those can be parts of a diversified portfolio.

Maserati, I've scanned through all the posts and I'm still trying to figure out what your thesis is exactly. When you say "crash" and inflation, are you talking about this being drawn out over a long period of time (a couple decades). OrAre you talking about a dramatic event that happens for a couple years. Then the economy gets back on its feet and goes along its merry way. In other words you have a long term positive outlook but you see a steep decline in the near future and you want to avoid that.

Maserati wrote:

Assume a huge crash is coming--markets 50% down, dollar seriously devalued, inflation taking over.

I mean serious. Disruptions in supplies and delivery of energy, communications, water, food.

What are your opinions on how to prepare for this? Seriously. What would be a smart thing to do?

UNCW represent

agip wrote:

J.R. wrote:

IRA = internal revenue account

They have control of it, and good luck getting out your money before dying, plus paying more taxes in the meantime, then it all goes to them. Heck, it's already theirs.

you topped yourself, JR - every single thing you say in this post is false.

individual retirement account (or arrangement)

it is easy to get your money out - I do it every day for my clients

you pay no taxes in the meantime

it goes to your heirs when you die

the money doesn't belong to the government

Even coming from a guy who thinks drugs are all placebos, that's an impressive degree of wrongness. Bravo!

Think again. The government ends up with more than 50 percent of those accounts in entirety, not including the taxes levied - mostly on inflation - in the meantime.

Plus IRS "rules" must be followed the entire time the money the entire time it's in the IRA, which makes it their account. The ones who make the rule own the money.