A friend recently asked me for my thoughts on the USA’s demise and retirement planning. Here’s my reply :
I would not invest in gold. I saw somewhere recently an analysis of the investment reasoning going forward. Gold used to be a store of value and an exchange medium. It will not fulfill those uses going forward is the short version.
Buy something that makes money. There are all sorts of things available.
Banks – Singapore. I think Hong Kong is good too but perhaps the Chinese influence there may affect them. Currently China has issues so money may flood in for safety which drops the interest rate. They are both well cashed up at 20-25% equity compared to US and other first world banks at 2-3%. Yes, that includes YOU New Zealand and Australia.
Timing for a collapse – before the US election starts looking like a one horse race. At a guess – XChristmas cutoff but it will be election driven. All other issues are still there and worsening but it needs a tripwire. I can’t see any but the election is one as it will signal policy change and uncertainty. Trump will self destruct. Clinton is a ‘Woman’ and I can’t even name the others so that tells me how noticeable they are and their policies are equally invisible. Perhaps a rudderless ship scenario looms? At least Obama is a known quantity which leads to predictable behaviour. Imagine Trump and China in a war of words! ROTFL
There’s a million other tripwires but my gut tells me (considering the statistic about the derivatives market being 45% greater than at the time of the Global Financial Crisis) that it could well be that the rich just bail out and abandon ship. After all, the top 1% are obsenely wealthy, live overseas, pay no tax, are amoral, ruthlessly selfish and aren’t loyal to the country or ‘of the people’ (Unlike in George Washington’s day). Their businesses can be run remotely and the cheap workers are locked in to the Simpsons, Kardashians and a lottery to give them hope.
The rich Chinese are already doing this. The rich live in NZ, Australia etc. and their extended family or slave workers get the crumbs and pollution at home. The revolution will not be televised (as someone famous said). I think a subtle move toward a feudal state like that Jim Carey bubble movie – The Truman Show but with a grittier, Detroit and tent city reality.
Now that Greece has been raped and the template proven to work, Spain, Italy, Portugal are next to be shoved into the mincer. Don’t forget the bankrupt cities you have too. On that note – If there is another QE deadline looming, that might be a trigger too. However, with an election looming, both sides will want to kick the can into the other side’s territory until the election is over. A lot of posturing with each side trying to be ‘In the right’ or at least ‘Less wrong’.
Your friends probably think you are a fringe dweller. After all “God, Guns and America’ can NEVER be wrong (In their mind). The self belief is confidence building but the rest of the World sees the cliff and the bus more objectively.
To some extent, the lack of belief will cause the 1929 scenario, so it’s better to keep the status quo that provides the lifestyle than admit the looming issues. Also, nobody wants to break ranks with their friends. Psychologically, they behave as a group with a group mentality rather than rogue individuals thinking for themselves. You are the threat to their group thinking, and, being the minority – get ostracised. Leave them alone, cultivate their friendship and use that friendship later to advantage – don’t slam doors on rich people. One day you might offer them CR furniture to sell in their shops – Cultivate any useful people with money.
The rich have already left with their money. The people you know are the ‘middle class’. They will be the victims. Cyprus bank closures for forced bail-ins, tax rises etc. will incapacitate them. The poor will be left to rot.