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  1. #21
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    Quote Originally Posted by allaboutthebets View Post
    More people should think like that. I have friends who live well beyond their means. Buying expensive cars, TVs holidays they can't afford
    That is because the world economy has been more and more financialized for decades now. Finacialization and debt have created a monster that will one day have to be slain.

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  3. #22
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    Quote Originally Posted by baldidiot View Post
    I was reading a 'fact check' article the other day that was saying danish mortgages don't work like most other countries, so it's not the same as a negative mortgage rate in the US or UK.

    Something to do with them being treated more like bonds with a fixed management fee paid to the bank in addition to the interest (1% I think it said). So the bank is still charging 1% annually, with the interesting being based on whatever rate the bonds are trading at (which is currently negative).

    I only skimmed it quickly so could have gotten the wrong end of the stick. Maybe someone from denmark could chime in with how it works?
    Yes this way work mortgages in continental Europe. And not just mortgages, all kinds of loans. Either way my negative interest rates in bank are reality.

    I guess the gamechanger might be when the interest rates drop much further and then whole economy will have to decide what to do. If there will really be negative interest rates for borrowers or not.

    That is because the world economy has been more and more financialized for decades now. Finacialization and debt have created a monster that will one day have to be slain.
    In bigger picture it is maybe just some form or wealth redistribution. Indeed after the reset we all will be at the same level like after the war. Maybe just crypto will retain the value and even appreciate. Then the crypto would be the redistribution vehicle. Which would be psychedelic fun: power would be retained by the smarter hedge fund clients but also redistributed to drug dealers and people from gambling.

    Still I am thinking, what if even crypto fails. Where can value be preserved? Real estate properties can be seized or taxed, therefore it will be. Gold looks better, but historically can be seized too and does not fit to digital economy. So the only asset that remains are our brains. So hard and soft skills; languages known; understanding the human interactions; networks of trust; information in general. That is I guess what can not be seized. That is my focus.
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    Yep, the greatest wealth is the ability to create, all the rest can be taken of course.
    Problem is also when it catches you. 20,30,40, 50 its fine. At certain point i guess its kind of difficult to recuperate and start over.
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    In 40s I can already feel that the vitality is going south. So I am counting with fact that we will be in deep **** regardless of assets amassed. I guess there are still options for old geezers before they get senile: like building the network of trust. This is why I for example really want to employ and teach my 17 years old brother-in-law, because it would be a great investment from this point of view. Nobody in the family, except him and his sister, understands this concept. In Europe it is much worse than stupid cars, homes and vacations on credit. Everything changed the perception of people that nothing bad can happen. Except refugees of course, who are the scapegoat of all subconscious fear.
    We are all bloodsucking ticks, hungry, devious
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    The only thing I worry about are law changes, as these can close the door of a business. That's a real danger. Recession can only ruin you if you panic and start making dumb moves because you think the sky will fall.

    Keep your eye on the ball and you'll be fine.

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    Remember reading about various disaster preventing investment strategies. You can read about Fail safe invseting strategy by Harry Browne.

    His method is quite simple. 25% stocks, 25% long term gov bonds, 25% gold 25% cash.

    tested backwords it has 4.8% yearly CAGR and 13% biggest drop and shortest recession time (3 years). not sure how BTC comes into play here but might be worth adding somehow.
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  10. #27
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    Quote Originally Posted by MMM View Post
    His method is quite simple. 25% stocks, 25% long term gov bonds, 25% gold 25% cash.

    I have read about this strategy before, however, good luck implementing it.

    In the USA for example, if you have "large" amounts of cash, which in some cases is a mere 4 figures, you are subject to Civil Asset Forfeiture where the police can, and in some cases do, confiscate your funds with no evidence of a crime whatsoever.

    Imagine if you had a million dollars plus of cash in your house? Surely you are a criminal!!!

    If you want to call "cash" some sort of liquid money, like a money market account, think again. That **** is digital and thanks to the repeal of Glass-Steagal, it is not safe and can lose value (and it will one day, catastrophically, due to all the distortions in finance).

    What about Gold?

    Similar problems I think. Yes, you can store it in a vault somewhere, but then, do you really own it? If you can't put your hands on it....

    Government Bonds

    Yes, that's fine until all the bonds you want to buy are negative yielding. There are something like 15-17 TRILLION DOLLARS of government bonds that you have to PAY them to own their debt. For example, Germany's entire bond portfolio is negative yielding! They just sold 30 year paper yesterday at a NEGATIVE YIELD!

    In case you don't understand that, it means that YOU PAY THEM for the privilege of loaning them money. Then you pray that they will give you your money back in 30 years when the bond matures.

    Stocks

    Well, we're in the biggest bubble ever so...



    ^^^ This is what Sherlock is talking about I think when he says the reset will leave us all ****** and poor.

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    25% stocks - this worked in the good old times before index funds and when dividends were actually paid and IPOs were not scams; at those times investors DID their research and the investors were not just ordinary people who are already on the hook of advertisement; the only reason why this **** worked during last years is that the inflation is shown not in prices, but in stocks; but deep inside is exactly the growing worm talked above

    25% long term gov bonds - it is defacto the same as stocks, ticking timebomb everywhere + even more countries offer around zero or negative returns nowadays than banks offer negative interest

    25% gold is great until the market does not flip to for example crypto and until government does not seize the gold

    25% cash is exactly the the thing you really do not want during money printing time bomb; cash is really not what you want when banks go bankrupt


    Whatever people are using en mass (like this mix is pretty common I think, maybe with lesser gold), is always the wrong strategy. The majority always fails. Those wannabe safe portfolios will be exactly the target.

    I bought bitcoin with relatively small fraction of my assets. I already have gains that no stock market would make me in my whole life even if this nonsense go on forever and I will not commit suicide.

    The only good advice is to learn about the world and put money into the research. Anyone blindly following something he read or was told by some advisor is a duck to be shot. Exactly like the poor gamblers who follow the random tips of fellow affiliates.

    The advice is to put relatively small money into so called high risk projects, which in fact are much less risky, than playing it safe. The question now is what are those projects now. In other words: what will survive.

    Some idiots say bitcoin is the ponzi/greater fool game. In reality bitcoin is smallest ponzi around. Stock market is the ponzi. State pensions are funny ponzi. State debts are ponzi. Paper gold is ponzi. It is so insane, that our brains just switch off and we pretend it is normal and there is a light at the end of the tunnel. And the whole system holds on only because we are so good in pretending and playing the games on ourselves. It is called cognitive dissonance I think. The critical mass of panic was not yet collected, the crucial points of backbone economies were not yet affected. But of course there is no free lunch. It just takes a long time, that is all.

    The classic investment advices from 2019 will be soon totally laughable and unbelievable. Exactly like the old books of Marxism-Leninism.

    As there is the old leftist saying: we can much more imagine Earth to be destroyed by some cosmic catastrophe than the end of recent "capitalistic" system.
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    Quote Originally Posted by Sherlock View Post
    High interest? You mean the -0.2% offered by my bank instead of -0.4% standard?
    In Canada you get 2.3 -2.75% on savings ,OK for 80 year old .I think Canada only got the Visa Debit card 5 years ago so would have been impossible to live without one til then Dave .

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    Everyone knows that. I can't speak for the global economy but as a representative of the USA...to any Russians here, please stop sending America into a recession with your $7,500 google ads budget and your social media comment xml scripts. We know it's you. You win, we surrender.

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    Quote Originally Posted by ryanmarketing View Post
    Everyone knows that. I can't speak for the global economy but as a representative of the USA...to any Russians here, please stop sending America into a recession with your $7,500 google ads budget and your social media comment xml scripts. We know it's you. You win, we surrender.
    LOL

    Quote Originally Posted by casinobonusguy View Post
    Wait you are serious that you get charged by your bank for having savings?
    Yes. Europe is plagued with NEGATIVE interest rates. Some banks are passing that on to consumers already and CHARGING THEM for holding their money.

    It will get worse.

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    Quote Originally Posted by casinobonusguy View Post
    Wait you are serious that you get charged by your bank for having savings?
    Yeah, I am serious. Yes, I keep converting the EUR to USD mostly, also to CAD and haha AUD and even more funny GBP. This is after all why USD is appreciating. This is why the **** did not hit the fan still. Once USD goes towards zero, we will see a supernova that is for me hard to imagine and seriously I took quite strong LSD few hours ago.

    ARS has 70% interest rates, but about 55% inflation. But since the country is on the verge of collapse the 55% can be 555% tomorrow, so I would not bet on things like that easily.

    Back to CAD - it is money from commodity economy. Normally they are hit even harder than average basket during recession.

    Here is the problem: there is at least one economic theory why every ******* asset can seriously go to nowhere. It is nearly certain some of the assets will be either safe haven or at least the brake. But now is for me seriously impossible to predict which one should be outperforming. Except bitcoin. It is so obvious that 2019 is BTC accumulation year.
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    Quote Originally Posted by Sherlock View Post
    Yes, I keep converting the EUR to USD mostly, also to CAD and haha AUD and even more funny GBP. This is after all why USD is appreciating. This is why the **** did not hit the fan still.

    ARS has 70% interest rates, but about 55% inflation. But since the country is on the verge of collapse the 55% can be 555% tomorrow, so I would not bet on things like that easily.
    What exactly are you doing with the USD? Are you spending it? Or holding it? Maybe it is slightly better to have dollars rather than euros, in a USD savings account you may get 2 % and in a EUR savings account you may get minus 0.5 %. Why do you hold these currencies? Maybe UK and the pound (GBP) will come up victorious, the country went through worse things in the history...

    So yes, USD may be sort of better. My understanding is that Trump would want a weaker dollar, more dovish Fed policy and more export-oriented economy, less dependent on China. However, the problem is that dollar is interconnected into other states business - Saudi oil is directly connected to the dollar. China produced and exported huge amounts of nearly everything, undervalued their currency and funnily they invested their profits into USA, directly or indirectly. Now they realize that there are other possibilities and other things to do as well.

    I guess converting to USD would make sense if you live in Argentina where people prefer dollar anyways.

    Quote Originally Posted by Sherlock View Post
    Here is the problem: there is at least one economic theory why every ****** asset can seriously go to nowhere. It is nearly certain some of the assets will be either safe haven or at least the brake. But now is for me seriously impossible to predict which one should be outperforming. Except bitcoin. It is so obvious that 2019 is BTC accumulation year.
    I'm not an economist but one thing that interested me recently was something mentioned by an congresswomen for New York (AOC), she's bizarre enough and she mentioned something called Modern Monetary Theory. It sounded "modern" so I researched it a bit. I still don't understand it very well but I guess former monetary theories stand on some pillars - there is a contract between state and citizen; citizen pays taxes; smart politicians redistribute it so that the society is better off; then there are these relations between inflation and spending, inflation and unemployment etc...

    Modern Monetary Theory as I understand it basically says - fiat money is fiat after all, not backed so why should it be connected with taxes and with fiscal policy? Government can print as much money as it wants (or more specifically commercial banks can), so let's just do that. Worrying about debt is pointless. Let's make as much money as it necessary and still keep taxes but the taxes will work as a means to combat extreme shortages or extreme surpluses and they will prevent inflation. MMT as I understand it says there can be endless amount of fiat money, there can be subsidies and sector taxes and everything will work fine. It kinda makes sense and at the same time it doesn't make sense at all...

    Maybe someone will do this experiment, my guess is countries like Switzerland, Japan, Denmark (though they are now pegged to euro) can try to do weird things; actually even China can. Then Europe will follow and if USA follows as well, then we're all screwed.

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    The MMT sounds like newspeak with old name helicopter money, that does not sound that cool.

    Why I hodl USD is rather existencial question, so difficult to answer. It is just small part of my portfolio, most is in BTC. Fiat is just a hedge of BTC and not vice versa. It is also the best from all bad "investment" opportunities. I do not spend the money because I really am unable to spend even fraction of my money in my life. I live quite a modest life on average.

    What should I do? Burn the money as joker? Go 100% crypto+gold? I want some hedge for my insanity if BTC tanks and this MMT will be a thing. It is a complete nonsense, but yeah, I am pussy, I hodl some cash on timedeposits and it really is not a bet with some value.

    The money itself is just a fuel, but one needs the car. So I am trying to learn new things in the world and maybe some business will be worth of investment or spending. So far I see nothing appealing. Yes for example it is possible to buy big pieces of land and divide them into small plots in some countries. Easy money now... maybe... maybe even if I substract the possibility that I will hit the recession. But honestly this business is not worth of my time.

    It is like a zen exercise. Waiting for the inevitable hit and doing nothing. Calmly for years. Time to create kids.
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    Recession doesn't come when every Tom, Dick, and Harry is expecting it.

    Because, the idea becomes redundant.

    We should worry when your pizza delivery man is crushing NASDAQ, and giving you stock tips.
    Last edited by Malikbhai; 24 August 2019 at 5:35 am.

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    Yeah, no simple recession is coming. Either depression of scale unheard of even in 1929 or we have VIP tickets to madhouse, because something is way off with reality.
    We are all bloodsucking ticks, hungry, devious
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    Quote Originally Posted by Sherlock View Post
    The MMT sounds like newspeak with old name helicopter money, that does not sound that cool.
    I'll be the 1'st to admit when it comes to world-economics, I'm not the sharpest knife in the draw. However, June 30 is last day for the AU financial year. It was announced a few months previously that the Federal Gov., was giving out cash to stimulate the economy.

    Found this article from the ABC (title includes "helicopters") and the article specifically mentions helicopter money:
    https://www.abc.net.au/news/2019-04-26/should-the-rba-deploy-helicopters-for-a-money-drop-on-australia/11048102
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    No surprise it is Citi that took that stance. Even though they say otherwise I bet they would hope that part of the stimulus would go to them with people paying down their debt with them, and that inflation would raise interest rates later so they make more when their clients took on more debt spending later.

    Whether the economy would be stimulated enough by such practices is difficult to determine. If people went out and spent that money it could help, but if they did use it to reduce personal debt, the banks benefit, and although the consumer may save more in interest over the short term I think it would have less impact on the economy.

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    Quote Originally Posted by universal4 View Post
    If people went out and spent that money it could help
    Quote Originally Posted by AussieDave View Post
    the Federal Gov., was giving out cash to stimulate the economy.
    However, most people used it to pay Utility Bills (Aussies get charge insane prices for electricity and gas. Both home-grown-resources. That also includes petroleum). Anyway, the AU "Helicopter Cash" didn't have the desired affect.
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