The way a country does this while technically still honoring its obligations is to allow steep inflation, i.e. print money like there is no tomorrow. That way it gets to pay its loans back with much cheaper money.
balogna.
as long as the US owns the printing press it cant default. you just print up a new batch of dollars and ship em to the rubes
What to do instead is a story for another DailyWealth...I'm sorry but I'm getting a little sick of this sh*t.
All these articles basically on the theme of Duck in Word World running around in circles screaming "What are we gonna do? What are we gonna do?", and no freaking solutions.
Ok. I get it. Obama is flooding the sh*t out of our currency and bigtime inflation is coming.
I'm already storing food, water, ammunition, batteries and other necessities.
But is that all I can do? Aren't there some INVESTMENTS I can be making???
I want some practical advice or I'm going to stop reading these garbage chicken-little screeds.
The nation will default on its entitlement obligations before it defaults on its debt.
“Remember, Bill isn’t some wacko. He’s the “Bond King” “
He’s also a major backer of Keynesian economics, which helped get us in this pickle.
Personally I think that Bill Gross has been given inside information that once QE2 is done there will not be another QE by the fed (at least for some period of time). If that happens then bonds are going to drop (interest increases on US treasuries) so Bill got rid of all his US treasury holdings now so that he can buy them back later at a much lower price. The more he talks up this kind of crap the more bonds drop the more he stands to make once he jumps back in. Also, this is the perfect back stop for the Fed as he now has $1.2 Trillion that can be used to fund the deficit which should be good for about 9 months or so.
Once he has tanked up on US treasuries the Fed will then step back in and start printing money again (QE3) pushing down interest rates and making Bill bunches of money. Rinse and repeat as often as needed to transfer all wealth to a handful of people in the US!
We are a banana republic, just without the bananas.
Buy gold and silver. When the government comes for it tell them you sold it in a garage sale.
Hey blam, hope you are well. I was early on getting out of Treasuries, but at least now I’m in good company. Now I’ve just sold my integrated oil positions, probably early, but you can’t go broke taking profits.
Adding to my oil/gas pipeline companies. There seems to be plenty of oil around, but moving it from place to place has become an issue.
I’m with Gross, default is inevitable. I think his scenario of a slow dilution of the currency is the tightrope the FED is trying to walk. I wish them luck, they’re going to need it.
Bonds have been in a bull market for about 25 years. It’s time for that to change. As you know, inflation doesn’t scare me nearly as much as deflation. It’s just a work-around, and inflation is much more fun to work around than deflation. You get to buy cool things like art and collectibles and enjoy them while they appreciate.
What I am wondering is this:
What happens to other countries when we do this? Whether it be outright “We ain’t paying” default, or a printing press default, we won’t be borrowing any money from anyone, so we won’t be buying much of anything from anyone.
As bad as it will be in the US - the rest of the world - emerging markets, China, India, Brazil, Russia will be complete disasters, and what about Africa?
When we no longer are the market that everyone sells to, who else is going to buy stuff from the rest of the world?
Famine will kill hundreds of millions. War millions more, and that’s just for starters.
That’s the game our leaders are playing just because they don’t want to tell people they aren’t getting their checks.
“US will default on its debt”
Duh.
We already have emergency food, gold, silver, water filters, fuels, etc., but just realized one other option to consider. Historically one commodity that can be bartered in hard times is wine. I live in Oregon, which has a huge number of really great wineries. My wife and I are going to spend a couple to a few thousand dollars on cases for a wine cellar. This process will involve several overnight trips and wine tasting expeditions. Other options for use of our retirement time will just have to wait, but first things first.
I find it incredible that otherwise rational people are willing to trade things of substance for numbers that run through my credit card and onto a bank statement to be refreshed by other numbers electronically transferred to the other side of the statement.