[technovelist]

Yep, that’s exactly my view as well. The more “safety nets” are deployed, the more risk people will take. Eventually something, possibly even more inconsequential than the assassination of the Archduke Ferdinand, sets off an unpredictable chain of events leading to a disastrous end-state. The only defense is to prepare for any kind of economic disaster, rather than trying to foresee exactly what will happen.

[technovelist]

Since when was a comma a digit? They must have changed that about the same time they decided Pluto wasn’t a planet any more.

As for engineers making 6 digit salaries as employees, it is indeed possible, even in “lower-paid” areas like Dallas. You do need to be very skilled and find the right employer, but some of them are willing to pay that much for someone who really knows what he is doing.

[technovelist]

I guess reality is beginning to sink in, at least with some people. What ever made anyone think that they could get rich by owning a house? Oh, that’s right: “real estate only goes up”.

[technovelist]

One point that seems to be overlooked here is that at least some “AAA” rated securities are rated that highly only because of the “insurance” that is sold by insurance companies such as MBIA and MGIC. Those insurance companies have “guaranteed” debt amounting to more than 100 times their capital, so if they have even a few big losses, they will be insolvent. This will immediately lower the ratings on the “guaranteed” bonds they have “insured” to their underlying ratings, which are usually much worse. This will in turn cause a cascade of selling by mutual funds that can’t hold low-rated debt.

I don’t know if this applies to the specific funds you are referring to here, but the very possibility of such a disaster is enough for me to have already made sure that my mother doesn’t have any “asset-backed” securities in her portfolio.

[technovelist]

I’d bet a lot of money that gold won’t go back to $300. However, if it does, I’ll back up my truck and fill it up.

As for what “went away”, the answer is: nothing. What has actually happened is that the short-term traders have again been taken to the cleaners by the “big boys”. This is of concern only to those who have weak hands and/or margin accounts. I have neither, so I don’t pay too much attention other than to buy on these pullbacks if I have some spare cash lying around. In my opinion, gold is going much higher, and I don’t really care about the timing.

[technovelist]

You’re right that many (most?) money market funds don’t tell you much about what they invest in. But there are some that stick to short-term Treasurys, such as American Century’s “Capital Preservation Fund”. I believe their minimum is $2500. As for why one would prefer that to an FDIC insured account: FDIC may take a long time to pay off, especially in a general banking panic. Treasury funds should not have that problem, as the Treasury could just sell debt to the Federal Reserve if they can’t find any other buyers. Of course, that would be very inflationary, but you can’t avoid that risk with any dollar-denominated debt investment.

[technovelist]

Given your rant about “beta males”, I don’t think your handle is very appropriate. You’d have to look up to see the underside of a roach.

[technovelist]

I’m pretty sure the people you know are not representative of the general public. As I understand it, most of the loans made in the last two years in California are “suicide loans”, so there are hundreds of thousands or possibly even millions of people just in California who are going to be demolished when reality hits. I think it is extremely unlikely that there are that many people with huge bales of cash standing by waiting to buy “bargains” at 20% off the peak prices. And why should they, when prices are still dropping and interest rates still going up? Why not wait until prices and interest rates stabilize?

[technovelist]

I don’t need to read his comments, as I already knew that the US economy is in real trouble. On the other hand, I’m not sure that “non-oil commodities” are going to fall, at least in dollars, because the Fed can’t print commodities. However, that isn’t the most important point: if there’s anyone here who still thinks there is going to be a “soft landing”, and wants “official” confirmation of how bad things really are, they should probably read the links you sent.

[technovelist]

Right. The Fed is in a box: if they raise rates any further, or even leave them where they are, the depression will emerge in all its “glory”. If they lower rates, the dollar will collapse and we won’t be able to pay for imported goods, which is pretty much everything these days.

There is no way out of this without a lot of pain for the average American, who has at best only the dimmest notion of the train wreck that is right ahead.

[technovelist]

It doesn’t have to be terribly difficult, as I understand it, although I’m not an expert; the only reason I know anything about it is that I’ve investigated it for myself. The simplest way is probably to get a certain number of “points” on their qualifying test, which is available on the Web. It’s not terribly hard to get enough points if you have a reasonable amount of education and get a job offer there. The latter shouldn’t be too difficult if you have skills employers there are looking for. The whole process is supposed to be even easier if you are in one of the “NAFTA categories” for technical workers.

[technovelist]

My wife would love to move to Austin from our current location near Dallas. I’ve only been there a few times, but it seems like a nice town; however, I’m not crazy about the heat anywhere in Texas, and would much prefer a move to Vancouver for a number of reasons, weather among them.

[technovelist]

You are right to be concerned about the dollar, since the only thing holding it up is public denial about its actual value (sound familiar?) and foreign central bank purchases. You are also right that owning gold is not speculative, but conservative. Unfortunately, most Americans (and I’m sure most people in many other countries) know very little about gold, but I think they are going to get a very expensive education fairly soon.

Speaking of gold, I wouldn’t try to time the gold market, but would be buying a portion of the amount I wanted to hold every so often. Of course, if there is a big drop, that would be a good time to buy an extra piece. However, I’m not sure we are going to have a big drop again before the next big rise, so you could end up paying a lot more by waiting for the perfect entry point.

But going back to the Swiss annuity question, here is a fairly good explanation of their features. It includes the contact information for the annuity broker I’ve dealt with. You don’t pay any extra for going through the broker; although they get a commission from the insurance company, it doesn’t reduce your return, but just reduces the insurance company’s profit margin.

I don’t have an opinion on Swiss variable annuities, as I haven’t studied them well enough. In my opinion, however, their fixed annuities are a good place to put some money for safekeeping and protection agains the demise of the dollar.

I don’t have any connection with the insurance companies or the broker other than being a client; they don’t pay me for suggesting them.

[technovelist]

There are a number of possible investment vehicles for Swiss francs (abbreviation: CHF). My favorite, assuming you don’t need absolute instant liquidity, is the CHF annuity. It has a number of advantages over other ways of investing in the CHF, including:

1. Better interest rates
2. Good liquidity
3. No maintenance fees
4. Asset protection

The minimum to start with is about $20,000, but you can add smaller amounts later if you want to.

If you want contact information for the company I’ve used, you can email me at my hotmail account: stheller at hotmail dot com. I usually get only junk mail there, so post here first to let me know that I need to look for your email there.

[technovelist]

I’m not sure exactly what you are asking. Would I invest in them? Yes.

[Author]

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