reply to post by projectvxn
reply to post by projectvxn
Yes, I think everyone is on the same page in realizing that our currency is getting debased and faces the real possibility of no longer being the
world's reserve currency in the future. And, hopefully most people are already doing as both you and I recommend: Paying off Secured Debt (Mortgage,
vehicles). It is the way to go for most people and a excellent idea whether TSHTF or not.
Beyond that, most people are struggling with what to do with their investments to protect their wealth going forward and there are no real easy
answers for that. That's why physical gold/silver markets are booming.
Here on ATS, most of us have read about Tungsten in the Gold Bars, ETF's selling beyond what they have holdings in, Precious Metals manipulation,
etc... so it is a harder question for us.
People really should read up on what Argentina went through during their crash. Those selling physical gold after the crash usually got paid at
jewelery gold prices and took losses.
The million dollar question for me is: If the Dollar crashes, will our stock market crash as well?
In the short term, I say yes, but in the long term I say no.
Take XYZ utility company for example:
So, the dollar doom has arrived and our currency value is 20% of what it was pre-crash.
The utility company still has all of the same assets, equipment, systems and customers. Sure, their operating costs just went through the roof
because fuel for power generation has skyrocketed. They simply pass these costs onto the consumer. What, is the consumer going to live in the dark?
No, they will pay because they have to and just try to cut down on their usage.
OK, so the utility company is still a functioning and valuable business. In fact, it has roughly the same value as it did before, regardless of what
happened to the US dollar. That means it's stock price has to raise 80% in US dollars to match what the company is actually worth.
Of course, this is a little over simplified and does not take the company's debts and cost of debt or future debt costs into consideration, but again
that's why I say search for the rock solid (low debt) companies.
That's my bet, invest in a rock solid utility company and let inflation push the stock price up.
That's why I mentioned a Swiss Utility company earlier. The Swiss Franc is no longer backed by law in Gold, but the Swiss still do maintain roughly
20% reserve backed by gold which, combined with investing in a utility company in their stock market, you gain both a hedge against a dropping US
dollar and the income potential from actually owning an active company. Gold just sits there and fluctuates based on people fears and emotions.
I say pick companies which sell core products and services that people cannot do without. (Electricity, Water, Food) A dollar crash means inflation
and stock prices of certain companies will inflate with everything else.
If things get horrible, brass and copper (in the form of ammunition) is a better play than gold and silver!
edit on 6-12-2010 by AP-Chris because: spellin!