Greedy Goblin

Thursday, December 22, 2011

Feeling safer

I removed all my savings from the bank, and placed it in another one, but not in an account or in form of stocks. I rent a box in the safe and put it all in as USD cash.

It was mostly motivated by safety. The Euro zone is not looking good. Hungary looks even worse. Despite I could get 7-8% interest for a simple Hungarian Forint deposit and even better offers were available on the stock exchange, I'm not feeling hedge-fundy today. I think the chance of Hungary going default and the banks bankrupt is a too high. Maybe not 7-8% as the interest, but the money has decreasing utility versus the amount. Getting 8% on the top of a nice sum does not worth even 2% risk of losing everything.

There is large difference between a bank account deposit and a safe deposit. The first is in the control of the bank. They are free to loan it out and if they go bankrupt, that money won't be there. There is no legal consequences of losing my money during bankruptcy. The safe deposit on the other hand is my property and the bank can't touch it. If they go bankrupt, I just have to show up at the liquidating agency with my papers, wait in the (rather long) line and I can access my safe. Touching my money inside is legally robbery and the guy doing it faces a decade in jail.

What I did was also an economical-political act. I withdrawn that money from the circulation of the (mostly poisoned) papers. The bank sector has less money to juggle with. If every people did the same, the "evil rule of the 1%" would end overnight, as they wouldn't have a single cent to toss around repacked in some obscure "financial product". After all, all the money circulating coming from people who believed the lie that their money will work for them. Well, until you show me ol'Ben herding livestock or crafting clothes, I don't eat that crap. People must work. If people would recognize this simple truth they would never put their money to a bank without knowing exactly who will borrow their money.

Also, by choosing USD as the form of my deposit, I expressed my opinion about the bankruptcy chance of Hungary and the Euro zone vs USA. By making the conversion, I further devalued HUF and up-valued USD. The currency values show directly to the other people how much the others trust in the economies behind them. If every Hungarian would do the same, the government would have to change their terrible economic politics due to the free-falling HUF value.

Finally, this transaction was one of the biggest fun I had. Like in WoW, I despise vanity in real life. My car is middle-aged and never was a prestige car. I rent a normal home and my girlfriend never wears jewelry. I play video games instead of golf, sailing or traveling like the people around me. Walking with an armed guard carrying a suitcase with my money, pressing my finger to the safe door reader, watching the 150 mm steel door opening, putting my key to the box hole, and placing stashes of $100 bills into it was like in the movies. I felt a rich man, probably first time in my life. Happy Christmas me!

So save your money, kick the butt of the poisoned paper jugglers and dumb politicians and have a really goblinish party! Put your money to a safe!


PS: If you see a thick steel door of a bank safe and start wondering if a SU-100 could penetrate it, you should take a break from World of Tanks.

60 comments:

Anonymous said...

My only comment is that if USD goes the way of the 1920's deutschmark, you'd be waiting in line for a whole lot of nothing.

Josiah Carlson said...

One thing that the US has going for it's banks is the FDIC, which insures deposits of member institutions of up to $250k per account holder. In the case of a financial meltdown (as was seen in the early 80's, and 2008-2010), the FDIC purchases the bank and ensures that depositors get their money back.

On the one hand, it half-way encourages US corporations to act irresponsibly. On the other hand, banks seem to have an unlimited supply of people who devise new methods to turn money into more money in ever increasingly convoluted schemes (which would make even a goblin's head spin), and without the FDIC, countless people in the last 30 years would have lost almost everything.

Tazar said...

I just don't understand why you chosen USD instead of CHF. USA can bankrupt anytime. Their dept is almost as big as Greek one. All that USA rating agencies do right now is pointing somewhere else to not see how bad USA economy is.

Gevlon said...

@Tazar: I have worries about the usability of CHF. I mean USD is accepted all around a World by people and shops, including the black market. CHF bills are largely unknown, so even if I'm formally rich with a bunch of CHF, I still can't buy food or bullets if Hungary (with all the banks here) go bankrupt.

Anonymous said...

Nicely done. However you should spread your risk a bit. Change 10-15% of your savings into gold. Sure the US dollar have been around as a stable currency for about 100 years or so, but not once during our 5000 year history have gold been seen as worthless. As for the rest keep most of it in US dollars, but some CHF should be in there as well as maybe NOK and SEK (Norweigan and Swedish currencies). If Hungary goes south you can use your dollars to get by. The other stuff is an insurance you won't be broke in the unlikely event that the US dollar become worthless.

Andru said...

Aren't you afraid that the US will just let inflation loose to shrink their debt if push comes to shove?

I suppose you could buy and store gold, but gold is equally useless and not liquid in the case of a state default.

The problem with currency is that it's all just a representation of assets. Gold isn't much better either. (I'm seriously wondering what's with the world gold craze. It's mostly useless, apart from some use in precision electronics.)

Gah. If only one could buy food and store it indefinitely. Food is probably the only thing that is certain to have value in the face of, well, anything. Too bad it rots.

Gevlon said...

@Andru: 200l bottled water and 80kg tinned (good until 2015) food is in the basement. They are great for survival but you can't keep money in them.

chewy said...

Presumably the money in your bank account was in Euros. I can only assume that the exchange rate cost of buying USD was a good price to pay to mitigate the potential collapse of your countries economy.

I was also fascinated by your comment:"my girlfriend never wears jewelry." Possessive pronoun implies that like your Euros she's another of your commodities you might trade if ever she demands frippery. I can only imagine that your appeal must be in your hidden charms.

Gevlon said...

@Chewy: no the money on my account (just as most of my income) was in Hungarian Forint. The costs of the transactions were recovered literally overnight as just today S&P moved Hungary to BB+, making the HUF lose another 4% of value vs USD.

Imakulata said...

@Andru: Gold is considered a currency that is quite hard to print so most people think that no government can really flood the market with it as they can do with their currencies. That's why people value it.

@Anonymous: I would be careful with the NO and SE krones. I'm afraid that majority of their export goes to EU which means that in case of problems with EUR they might end up like Hungarians or Czechs did recently: Their currencies lowered in value more than Euro did. Although it's possible that Norwegian and Swedes do quite a lot of their trade with non-EU countries so they won't be affected so much.

lancore said...

While I fully agree with your reasons, I don't see why USD should be any more safe then EUR. The US is just as bankrupt as the EU if it's not even worse.

As long as people like Alan Greenspan (http://www.youtube.com/watch?v=q6vi528gseA) are going through as "economists" and are running the federal reserve system, I'd invest in gold before I even touch one dollar

Chopsui said...

I understand what you're trying to say Gevlon, but what is also kind of funny is that in the items you paint as being non-goblinish to own, there is also value.

The jewellery your girlfriend doesn't wear, contains gold and valuable stones that will be valuable come an economic collapse. The new car offers more economic value than the used one, as it will not need maintenance for a longer time and it probably has a better miles/gallon. If you own a house, you actually own a house. As long as you have your savings in the same currency, it's actually very hard to get into trouble.

I understand your drive for functionality vs luxury, but you are mixing up two things here. You choose to keep your savings and value in liquidity.

You postulate that anything over the basic functionality provides no value, and that is true in the pure and cold rational world. You live your life in such a way that you are able to rack up big savings. The problem with savings is how you are going to keep them from becoming worthless.

I agree many of the purchasing decisions made by people are terrible. Do you really need a new couch if the old one is 3 years old? However, especially the decision to buy a house, is a pretty good one, even if real estate is somewhat overvalued.

Carson 63000 said...

Should have gone with Aussie dollars, our economy is looking better than most of the world. ;-)

Chopsui said...

As an addition to my last remark - Germany can lend money from the financial markets at 0.29% interest, and the EFSF managed to get 0.22% interest.

Economically, the Eurozone is very very healthy. We just have political problems. The Eurozone countries just need to accept that the economic and political sovereignity they think they have, already went away when entered the Euro.

Anonymous said...

You could have chosen to buy gold instead of USD. Thought this option would be beneficial in a long run, 10+ years as gold now is getting cheaper. Gold would be more trustworthy than any currency.

Gevlon said...

@Chopsui: jewelry cost 2-3x more than the gold and stones in it. The real estate in Hungary is terribly (I mean 200-300%) overvalued. The only reason that keeps the prices "just" drop 10%/year is that the government doesn't allow the liquidation of defaulted mortgages. But due to the current state of Hungarian economy, their ability to protect (pay for) the defaulted mortgagees will soon be over.

Anonymous said...

CHF right now is so strong that we Swiss had to couple it arbitrarily to the EUR, or else our export companies would just crumble over 50% price drops. JPY is also a really strong currency right now, though I am not sure for how long.

CHF is as safe as it gets for paper money. As said before me, the euro-zone isn't actually in a bad shape, it's just politics and the 1% playing with the exchange rates for fun.

spinksville said...

Good call, although gold would also have been an interesting buy.

For me, I have a mortgage whose cost tracks the bank base rates. And since base rates are rock bottom at the moment, I'm paying off the mortgage as much as poss. rather than focussing on savings.

Squishalot said...

@ Carson - indeed, AUD is looking very healthy at present. Chinese RMB would also be a reasonably good bet right now, relative to the USD. It's never going to depreciate relative to the USD, not while the Chinese growth is higher than the developed world's.

@ Gevlon: Out of curiosity, what makes you think the Hungarian economy will survive if the banks go under? One of the big problems associated with a bank run, other than the collapse of the bank, is a broader collapse of the economy. Sure, you may have technical financial wealth in the form of USD in your deposit box, but that is meaningless unless you're happy to live in squalor, which is what will happen if everybody took your advice.

Fidtz said...

While the safe deposit box is better than a bank account, if lots of people start hoarding Euros in Hungary, expect the equivalent of this:

http://en.wikipedia.org/wiki/Executive_Order_6102

Anonymous said...

As I am still paying my house mortgage, I will keep a big part of my money in the same bank. If the bank goes bankrupt, I would have a cashflow problem, but would not lose the money. The moment I owe the bank less than the amount in in my account, I will probably withdraw all I can and invest it spreadly.

I do not trust any kind of currency for this. I would choose gold and stocks in big, classic, non-petrol big companies: land telephone, chemist, electricity distribution, aeronautics.

Absolutely agree with the goblin on the power we have granted to the banks; it should (I'm tempted to say MUST) be taken back from them. But situation rins so, so deep that we would probably need a revolution to set it properly.

Dangphat said...

Now obviously this is a "goblinish"thing to do. But everyone removing their funds is impossible because the banks dont have it. Only the first 10% or however many would have it.

I personally keep a range of options property/investment funds/bank deposits. I do not speculate on the currency market as it is too fluid. For example if oil prices continue to rise the cost of American goods shoot up and the value of the dollar deminishes.

Anonymous said...

good idea, but if I was you I'd invest at least half of those money in gold.

Currencies come and go, but at the end if we end up with 100% healthy economy each $ will have it's coverage in gold.

Besides gold is quite rare material with some interresting properties that there is pretty much nothing else that could eliminate it from being universal corrency.

To summarize - good call, but I'd still go with something like 1/3 USD + 2/3 gold.

Anonymous said...

It's an interesting observation that you don't mention inflation anywhere in your post even if it's the obvious drawback of your actions. Either you don't know or you succumb to rationalization (with is obviously a good behavior if you want to /feel/ safer).

I guess the explanation is that as it's more than 30 years it has not been a problem in many western countries due to political choices. In the states and in Europe, central banks have done everything to control inflation. Economists usually agree that, in between cyclic crises, inflation should be maintained but at a low value.

However, the is two things inflation is known to be good for: helping against recession and releasing pressure from the debts.

These days, debt has been promoted a critical issue and recession is occurring in several western countries.
Central banks will likely not let inflation loose but it should definitely grow and will erode your paper savings.

Predicting future in economy is a game that includes losing. If you want to maximize your expectation, investing into the value that you predict having the most return on investment is obviously the way.

However, if you want to minimize your risks of breaking down, you need to use mixed strategies, looking for Nash equilibrium. Optimizing expectation and reducing probability or failure are two different optimizations that require different strategies.

Your title suggests that you want to prevent your loss, but it's not what you're not doing at all: you just prepare to win the most (which might include an absolute loss but you just expect to minimize it). You shouldn't feel safer, you should at most feel savvier (this, I'm confident you do, actually).

Anonymous said...

I wouldn't trust much in USD, I'd personally buy gold, which keeps its value in the long term, and doing so is really against this communist system.

And, the Government also has the power to steal what you have at a bank safe (http://www.dailymail.co.uk/home/moslive/article-1222777/The-raid-rocked-Met-Why-gun-drugs-op-6-717-safety-deposit-boxes-cost-taxpayer-fortune.html#ixzz1UqIz09JG).

The Government is the only entity that has legitimacy to use violence, so you should always expect the worse from it.

Vedast said...

First Anonymous, even if the dollar is still here, you have to consider how badly it preserves purchasing power. From 1964 to today, it has lost 90% of its value.

Unknown said...

What you did with your money looks great but if safety is your goal you can do better than this.

How about diversification?

Instead of changing all your money to USD, you could get a portfolio of USD/EUR/CHF/JPY/INR/RMB/whatever and the expected value of your money will be higher "if something goes wrong".

Anonymous said...

" If every people did the same, the "evil rule of the 1%" would end overnight"



Is not needed every people to do the same.
10% of the people is enough to put the bank sistem down because the capitalisation in cash for them is around 10-15% .

Dave said...

Gevlon while putting all your money into liquid usd might be at the end a winning move you are doing the biggest mistake a person can do in economy: concentrate risk into 1 only asset.
The best way to avoid risk is always, always diversification.
I think the best way to handle this problem is dividing your money into different assets.
So give a personal rating to several "goods" (usd chf euro gold etc.) and diversify your money according to it.

Anonymous said...

By the way weaponry is even better long time investment than food, gold, or anything else.

Sacristy said...

Gevlon I'm surprised you chose Dollars over Precious metals. While HUF and even the Euro may indeed default, precious metals will always have value. Your spy like investment story did bring a smile to my fave though.

Gevlon said...

@Sacristy: the problem with Gold is the same as CHF. How can I pay for stuff? Give 20 mg gold for a bread and 1.5g for a .22 gun? Even if they would accept it, how could I precisely cut, measure and prove its purity?

Quasar said...

Congratulations! You have just invested in the biggest ponzi scheme in the history of the planet.

You will get 5-10% poorer every year as the "evil rule of the 1%" steal your money through inflation.

You won't get the safety you are looking for, but will instead be left with some worthless pieces of paper since all ponzi schemes eventually collapse.

If you would have bought gold/silver you would have just made the smartest move possible, but instead all you have done is jump out of the frying pan and into the fire.

I seriously can't believe you have done this. This is something only a moron would do.

Gevlon said...

@Quasar: every investment has a risk. Gold also has it, as gold has no inherent value either. Gold "worth" just as much as people pay for it. It's skyrocketing now, but will free-fall after things get better as people want to liquidate their deposits en masse.

I know about inflation and fully aware that my USD will lose value due to it, yet I consider it (along with the cost of the safe rent and the cost of cashing an account) a cost I pay for safety.

I simply believe that the USA will remain strong while Hungary (and maybe the Euro-zone) goes down. I am fully aware of the problems of the USA but I believe (=/= know) they won't blow before the EU reconstruct.

And I'm 100% sure the EU will stand up after the fall, since it did after it was literally leveled to ashes in WWII.

In short: I needed something that will hold MOST of its value for 1-2 years. I believe, one way or another the EU crisis will be over in 2 years. The US crisis will start only when the Chinese can effectively challenge the US world domination as serious part of the income of US is extorted from client states.

Quasar said...

@Gevlon: Gold has been money for more than 2000 years, paper only 40 years, and already politicians have lost the will to resist money printing.

I don't understand how you can take the USD seriously when they have printed over $2,000,000,000,000 since 2008 and show no sign of stopping, or of some magical recovery happening.

You might make it 1-2 years in the USD but it's a huge risk, and when I take a risk I expect a reward if it pays off, not 20% of my wealth stolen from me.

Dar said...

I suggest you consider reading up about Modern Monetary Theory (see http://pragcap.com/resources/understanding-modern-monetary-system). It explains how the ECB and the euro is doomed because it is not a sovereign currency.

I have a feeling you may enjoy the read, given the content and the application of this theory with your goblin'ish views. I would also be interested to see what you think of MMT in relation to the M&S of this world.

Dar said...

@Tazar: the USD can NEVER go bankrupt.

It is a sovereign currency and all they need to do is print more currency to pay their debts. No country with their own sovereign currency can go into debt. Unless they do not have a high debt ceiling cap (the US just increased their ceiling and are currently printing more money in QE3).

The big losers are the ones holding debts in USD. It's almost as good as holding a movie ticket and finding out that the movie theatre printed out too many tickets. Sure, you can squack and complain, but there's nothing you can do if the movie theatre is popular and they have hired security to kick those who complain off their property. Sure, you will be pissed off, but at the end of the day, the movie theatre is popular and has the protection it needs to stave off those who could not enter the theatre.

Of course, there are issues with the theatre having quality products, good staff, and possible reputation decreases by selling too many tickets, but a good product is a good product. As long as it is not corrupt, it will continue to be the primary choice of most people.

The US is a good theatre and can print as many tickets as they want. They just need to keep offering a good service (i.e., knowledge-based services) to the rest of the world, protect its own people and keep printing currency to suit the expansion of its economy.

Michael said...

Would recommend buying TIPS bonds instead, or just buying into a TIPS fund. Even if the US gov has to start printing dollars by the trillions to cover debts, TIPS bonds will at least retain their value against inflation.

Actually, tbh, I think withdrawing from the system is a bit too alarmist. Get some money in brazil, china, and the us, if you think the EU is going to do poorly. Be an active goblin, instead of waiting for bad things to simply roll over you, like one of the sheep.

Anonymous said...

If I were you, I'd have diversified my assets a bit. First, weapons. Join a hunting club, do the exam, and you now can legally keep guns at home (excluding auto and burst fire capable guns) Second, survival supplies. You already have some, though I don't really understand why you have pure water instead purifier pills. I would also buy some jewellery too. If hell breaks loose, jewellery would be more useful in the chaos than any money. Also, jewellery (and art pieces in general) isn't affected by inflation, making them a good long-term investment. I'd also invest in useful training, which increases your value on the job market or your chances of survival. Your knowledge can't be taken away. For the remaining money, convert them into differing currencies, not a single one.

Anonymous said...

I have no confidence in the USD. (I am an American.)

Chaos Engineer said...

In general, the economy suffers if a lot of people hoard money instead of investing it. When money is hoarded (in safety deposit boxes or elsewhere) it goes out of circulation, which leads to deflation.

So all modern governments implement policies to discourage this kind of hoarding. The most common is just to arrange for a few percentage points of inflation a year. If there's inflation, hoarded money is guaranteed to lose value, which encourages people to accept the risks of investment.

If you want to maximize returns, then you should invest in a diverse mix of stocks, bonds, real estate, and commodities. You'll have the best chance of beating inflation, but of course you'll lose money if the economy tanks.

If you want to minimize risk, then you should invest in something like municipal bonds, or put it into a bank savings account. Those pay a low interest rate and usually don't keep up with inflation, but you'll still get a higher rate of return than you would if you stashed the money in a safety deposit box. Risk is as close to zero as you can get.

Buying gold is for suckers. The problem is that the Glenn Beck/Ron Paul crowd in the US has this weird superstition that gold is some kind of magic talisman that will protect you from Socialist Liberal Communists. (They also think that Socialist Liberal Communists have political power in the US. The whole thing is just bizarre.) This has lead to increased demand for gold and the price is artificially high, so it's likely to crash at some point...but there's so much hysteria and irrationality involved that there's no way anyone can make sensible buying or selling decisions. Frankly, even complicated mortgage-backed securities would be a safer investment than gold at this point.

Norwegian guy said...

I would recommend Norwegian Kroner (NOK) as a safe currency more than USD. Both at a short and longer term.
Norways biggest export is oil, and an oil-based economy is bullet proof on your 2-year perspective.

In the very long run(20+ years), however, I believe the NOK will diminish if less the anti-nuclear laws are lifted(we have the worlds biggest deposit of thorium).

Wilson said...

@First Anon-

Your only comment is woefully ignorant, unless you are aware of some Chinese plan to militarily occupy the American heartland and refuse to leave until the US pays off the debt, as France did to Germany in 1923.

randomspy said...

as a physicist I would recommend you helium-3 as a safe and worthy deposit/investment if it weren't for the trouble inherent in handling it and the "niche"-market of researchers who have a use for it...
;)

Quasar said...

@Chaos Engineer: People like you have been saying "gold is for suckers" or "gold is a bubble" for as long as I can remember, and recommending to invest in these pathetic bonds and stocks or whatever... It was only when I discovered Peter Schiff, Ron Paul etc. that I saw the truth and decided to invest accordingly, and since that point (3 years ago) my net worth has almost trebled, whereas if I had done what you are saying my net worth would be LOWER than it was then.

For anyone who wants to learn the truth, watch this video in which Peter Schiff predicts the 2008 crisis on TV and everyone laughs in his face: http://www.youtube.com/watch?v=2I0QN-FYkpw&hd=1

After watching that, go to his youtube channel and watch more of his videos. You will learn a lot and hopefully it will change your life like it changed mine. (http://www.youtube.com/user/schiffreport)

Bristal said...

None of you armchair financial experts has addressed Gevlon's need, which is a liquid, usable currency in the event his country's currency tanks.

USD is a near universal currency with decades and decades of stability. Nobody can possibly predict what will happen, but the dollar becoming worthless? If that were really to happen gold would be the last thing people cared about.

I'm an American, I have much of my savings for retirement in a diversified stock plan, and plenty of cash in dollars. What would I do with any other currency?

Anonymous said...

your only failing here was choosing US dollars. The US economy is in almost as bad shape as the Euro. Within 6-12 months the US is facing another debit crisis and we default on it's loans without another debt cap extension.

Kwillock said...

Gevlon, I really enjoy your blogs. I have this ideal that even though the USD is no longer backed by gold, it is backed by crude oil. OPEC (Saudi Arabia) requiring the oil transactions to be made in USD. I believe that is one reason why the dollar remains strong despite the rapid printing of excess dollars. Does the worlds demand for more oil cover my countries mismanagement in growing the money supply?


Kevin Bullock Kevinmkj@gmail.com

Kuckuck said...

A few things:

I feel that putting all of your money into usd is "putting all of your eggs into one basket".


The Mormon curch has a bunch of freely available tips on food storage and preservation on their website.
Did you know that properly stored beans can last for 30+ years?!

Andru said...

@Quasar

Gold *will* crash, sooner or later.

Economic reasons aside, nuclear science takes leaps and bounds. It's only a matter of time until some nuclear reaction is found that produces stable gold isotopes, which could be further refined. When that happens, gold price will be fixed to its production cost, and potentially, to its raw material, mercury.

At that point, the whole gold-based savings model will come crashing down.

Anyone who's buying gold right now is betting against nuclear science.

Kronos said...

I follow US politics as an outsider and although i'm no expert at economics, it seems to me, from what i can see happening, that the USD is about to go even further down, maybe even faster than the euro.

Australia, however, seems to be on the rise. In the last couple of years, the AUD has gone up quite a bit, and during an economic crisis. This is most likely because they trade much more with China and Japan than Europe and the Americas. So, if i had any money, i'd put it in AUD. But again, I'm no expert.

Anonymous said...

There is only ONE scenario when Gevlon and any other who keep their savings in USD can go wrong.
And that scenario is the least probable : an alien invasion.

What most people don't understand is that the USD value is backed NOT only by USA economical power, but also by their military power.

On the other side, EU is on the brink of collapse, and the issue is NOT political only, as someone believe so, but economicaly.
You people need to understand that a german worker is 15 times more productive then a romanian, bulgarian, hungarian worker, 8 times more productive then an italian or spanish one...the HUGE diferences in productivity among EU states (17 eurozone ones and 10 non eurozone ones )is what caused the current issues.

Euro, as currency, was artificially created, with only one reason : avoid future wars in Europe.

EU is NOT USA.USA is one state, who have one constitution, one president and one federal government...and ONE economy.
EU is just a bunch of states, with different economies, fiscality, productivity, goverments, etc...you named.

There are only 2 ways to get outof this mess in Europe : everyone get back to their own currency OR everyone drop their sovereignity to Berlin.

Which one you think will happend?

Either way, the collapse of EU is imminent.You can't keep a Frankenstein ALIVE to much time.Because this is what EU is :
A FRANKENSTEIN.

Quasar said...

@Andru: USD *will* collapse sooner not later.

If gold was close to being produced in an economical way the price would have already collapsed to it's expected cost of production.

Anonymous said...

And one thing that you have to consider is that any strategy is tied to particular scenarios.

Anyone who is saying "if you do this one thing, then you'll be ready no matter what happens" is a complete idiot.

The things you need to do to prepare for, for example, a 1930s style depression are almost completely different then what you'd need to have ready for a Mad Max style end of civilization scenario.

Gev has spelled out what scenarios he's planning for (and which ones he isn't) and his preparations are reasonable for those. If you disagree, you need to first say what scenarios your plan is suited to.

PT Barnum said...

As an American, I know from the facts on the ground that you are going to dearly regret having your money in USD within two years.

Dearly.

People who say Canadian dollars are making a reasonable suggestion.

If you want "emergency money" then keep a PORTION in USD.

When Lord FDR confiscated all the gold in America, due process could STFU and they sealed every bank deposit box before a duly appointed representative of the government could come and take the gold.

So safe deposit boxes also have problems.

Péter Zoltán said...

USD is not safe at the moment. They fucked up their banking system pretty much, generated metric gigatons of national debt and printing money all day to pay it off... Your only hope is that HUF will plummet faster than USD :D

PT Barnum said...


USD is not safe at the moment. They fucked up their banking system pretty much, generated metric gigatons of national debt and printing money all day to pay it off... Your only hope is that HUF will plummet faster than USD :D


Amusingly enough this has nothing to do with the United States problems.

Unless you mean by their "bank system is messed up" is that the super important bankers are accountable to no one and can draw on unlimited amounts of money from the government.

Their fundamental problem is that corruption has reached unheard of levels.

Anonymous said...

First lesson: you spread.

20 % in bonds - 20% in stocks - 20% in gold - rest in real estate.

Cash has to be less than 2 %

As long as Germany is within the Euro, it is rock solid. Period. Don't believe anything about the euro as it is much stronger than you think.

I have around 80% in Euro, the rest is spread.

And a good advice : take funds that hold all components of the economy.

Result ? My banks are working for me. We made 60.000 euros this year pure on investment. In 2010 that was 90.000.

Not counting our salaries (we save my wife's salary as an extra)

You let others work for you as an investor, that's the principle.

Really, only your first 100k is the hardest. The rest is easy money.

In fact I retired this year, playin 6 hours per day Wow and soon D3, doing 2 hours sport and just relax.

The economy works for me...

Anonymous said...

You would have been insured upto 100000 euros

tweell said...

Two words - junk silver.
Old Austro-Hungarian silver pieces would be nice to pick up whenever you can, Gevlon. As you pointed out, gold's problems are proof of purity and concentration of value. Silver has less value concentration, while still being a precious metal - US junk silver has a metal value ~20x the coin face value, so a silver dime is $2. IIRC, the Austro-Hungarian silver came in handy when the Soviet Union imploded and currency was in flux.