Dow almost 7,000 begs the question.....

[Sharky]

Re: Dow almost 7,000 begs the question.....

I hope it goes to Zero and that the system reset with sound money/system.

Your hopes are contradictory. If it goes to zero, the result is much more likely to be a totalitarian state and a complete loss of property rights. People will be focused a lot more on where their next meal comes from than on sound money.

The best hope for sound money is a good scare, but not complete destruction, famine or war.

[hayekvindicated]

Re: Dow almost 7,000 begs the question.....

You know Don
Because i am such a mis-fit, i NEVER had a penson...i was always layed off, i went from small time job to small time job. Then i started the Engineering company & i deiced that banks etc where pure Evil.

So i just saved the money.............got Gold/Silver/Schiffs.........Looks like by acceident i happened to the right course.

My main worry now is what will a totally bankupt British goverment do?
Tax
Tax
Tax

Mike

A pension plan is a waste of time, money and space. My IFA (back in 2005) kept haranguing me to invest in one. I refused it. I also fired that incompetent nincompoop in early 07 (best decision I ever made in my life).

In net worth terms, I am probably 10X what guys my age and educational/professional background would be - not bragging about it, just a simple stick to the basics approach. The basics are:

1. Never borrow any money unless it makes sense to buy assets dirt cheap at very low rates of interest and without risking too much by way of price movements on leverage (this I've actually never done - I just don't do leverage). Back in '05 I had plenty of friends tell me that I was "insane" not to buy property in London and that I'd miss getting on the "ladder". This British obsession with the mysterious "ladder" is something I always found amusing. The British Indians are probably the worst in this respect. Thankfully I didn't grow up in Britain with an obsession for the "ladder".

2. Save. save, save (on an average I save 70 percent of what I earn after tax).

3. Invest in places where the risk/reward ratios are highly skewed (learnt this from Paul Tudor Jones. Id say my investment methods combine some bits of Jones, Rogers and Faber).

4. Keep all your investments out of Britain and liquidate them when you are not in Britain - otherwise they will tax the hell out of you and turn you into a serf who has to work till age 80 just to pay the bills.

Point 5 of the masterplan would be to leave Europe altogether (ties in with 4). Europe is spoilt by too much government welfare. People have forgotten that to have a decent standard of living you need to work for it - governments cannot produce it by magic. There's no free lunch mate.

The last point in the masterplan may be to move to Thailand. It is cheap, infrastructure is good, weather is great, cost of living extremely low. From there you manage your money at little cost and in extremely tax efficient ways.

This summer might get ugly all over Europe. There may even be a revolution politically.

The future is Asia.

[BadJuju]

Re: Dow almost 7,000 begs the question.....

Good post, hayek. Mind if I ask how old you are?

[hayekvindicated]

Re: Dow almost 7,000 begs the question.....

Good post, hayek. Mind if I ask how old you are?

Early 30s.

[BadJuju]

Re: Dow almost 7,000 begs the question.....

Early 30s.

Ah, thank you, thank you.

[Mn_Mark]

Re: Dow almost 7,000 begs the question.....

The last point in the masterplan may be to move to Thailand. It is cheap, infrastructure is good, weather is great, cost of living extremely low. From there you manage your money at little cost and in extremely tax efficient ways.

This summer might get ugly all over Europe. There may even be a revolution politically.

The future is Asia.

I read something today by Doug Casey where he recommended Argentina. He said things there cost 10% of what they do in the U.S. The country is 86% European, mainly people from Spain and Italy. I guess it has great land and decent weather. And a population of only 40 million in the 8th largest country in the world. Something to think about. I've never been big on Latin America - seems they can never get their financial act together - but it might be a place to consider living if you already are basically financially independent.

[rj1]

Re: Dow almost 7,000 begs the question.....

Your hopes are contradictory. If it goes to zero, the result is much more likely to be a totalitarian state and a complete loss of property rights. People will be focused a lot more on where their next meal comes from than on sound money.

The best hope for sound money is a good scare, but not complete destruction, famine or war.

I agree with this. The Weimar hyperinflation led to sounder money, but Hitler came along as part of the deal. People when faced with total loss history has shown will go toward extreme solutions.

[hayekvindicated]

Re: Dow almost 7,000 begs the question.....

I read something today by Doug Casey where he recommended Argentina. He said things there cost 10% of what they do in the U.S. The country is 86% European, mainly people from Spain and Italy. I guess it has great land and decent weather. And a population of only 40 million in the 8th largest country in the world. Something to think about. I've never been big on Latin America - seems they can never get their financial act together - but it might be a place to consider living if you already are basically financially independent.

Thanks for the tip. Argentina scares me a little - hyperinflation and all that so many times over. Im also not totally sure how safe it is. And politically, its been a basket case so many times.

I agree that the land to people ratio is fantastic and the weather must be great near the coast closer to Uruguay.

[GRG55]

Re: Dow almost 7,000 begs the question.....

You know Don
Because i am such a mis-fit, i NEVER had a penson...i was always layed off, i went from small time job to small time job. Then i started the Engineering company & i deiced that banks etc where pure Evil.

So i just saved the money.............got Gold/Silver/Schiffs.........Looks like by acceident i happened to the right course.

My main worry now is what will a totally bankupt British goverment do?
Tax
Tax
Tax

Mike

Tax
TAX
TAX...

...isn't that what they did on the way to bankrupcy?

[LargoWinch]

Re: Dow almost 7,000 begs the question.....

I agree with this. The Weimar hyperinflation led to sounder money, but Hitler came along as part of the deal. People when faced with total loss history has shown will go toward extreme solutions.

I agree with Sharky as well. I do not want total collapse; I want commodity-based money and get rid of CBs.

BTW: Ed. (FRED) made the point that Hitler did not rise as a result of hyperinflation, but due to other factors. I will try to find the thread if I can...

[ASH]

Re: Dow almost 7,000 begs the question.....

I agree with Sharky as well. I do not want total collapse; I want commodity-based money and get rid of CBs.

BTW: Ed. (FRED) made the point that Hitler did not rise as a result of hyperinflation, but due to other factors. I will try to find the thread if I can...

I think the point regarding Hitler is that the Weimar hyperinflation occured in the early 20's, and although Hitler's political career started then, that initial episode concluded with the failed Beer Hall Putsch, and Hitler being thrown in jail. In fact, the period of hyperinflation ended in 1923, and Hitler wasn't elected Chancellor until 1933. It was actually the Great Depression and unpopular austerity measures (budget-balancing rather than money-printing) that brought Hitler to power.

[hayekvindicated]

Re: Dow almost 7,000 begs the question.....

I agree with Sharky as well. I do not want total collapse; I want commodity-based money and get rid of CBs.

BTW: Ed. (FRED) made the point that Hitler did not rise as a result of hyperinflation, but due to other factors. I will try to find the thread if I can...

We will never have a return to a gold standard type monetary system again because politicians find it extremely inconvenient. The pressure in democracies to please every conceivable constituency with government money means that a gold standard is something no one in politics wants. How do you promise people all the goodies they want and give them low taxes at the same time?

The US break with the gold standard under Nixon is worth some serious examination (as EJ once carried out in one of his articles). It is not as if Nixon hated gold and was therefore squarely to blame for the severance of the Dollar's connection with gold - he was left with no choice. Kennedy and then Johnson spent such phenomenal sums of money on their welfare/warfare programs that closing the "gold window" was the only sane option left for the Nixon administration.

Churchill once wrote that every fiat money system that had ever existed up to that point had failed because the propensity to print eventually overcame monetary discipline. In earlier times Benjamin Franklin said the same thing. And yet, why does the world continue to persist with fiat money - despite a litany of failings over hundreds of years? Because fiat money allows the rulers to loot the productive clandestinely. They don't have to raise taxes, they just rob you through the printing press - and they don't even have to admit to what they are doing. In the end, it always boils down to the same causes.

I don't think we will ever get rid of fiat money. Even if a gold standard type monetary system was introduced after American hyperinflation, it would eventually fall apart as democratic politicians will continue to promise the impossible: goodies at no cost. The gullible public will buy it eventually and the system will eventually fail.

[c1ue]

Re: Dow almost 7,000 begs the question.....

I think it is a little premature to say that some type of hard asset backed currency will never happen.

If the current bout of synchronized world devaluation continues, I think the lack of interest so far exhibited by most first world nation citizens in a stable currency may well be reversed.

After all, Germany to this day still seems to have a complex about inflationary policies.