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The strange thing is its across the board. Stocks, all sectors, commodities, bitcoin, home prices, obviously treasuries. There's nowhere to put your money that'
by bko 6y ago
The strange thing is its across the board. Stocks, all sectors, commodities, bitcoin, home prices, obviously treasuries. There's nowhere to put your money that's safe.
Even if you pull out completely, if we have inflation and a subsequent market crash, this will eat away your capital. Taking your chips off the table isn't an option.
Gold isn't really behaving normally as a large chunk of it is controlled by central banks around the world. If there were a flight to gold, regulators could also restrict access to gold as they did during the Great Depression through executive order [0]
TIPs (treasury inflation protected securities) is an option but that doesn't work if you think inflation numbers are not accurately reflecting cost of living. Not to be a conspiracy theorist, but you have to consider that trillions of dollars are at stake in terms of social security alone, so there's an incentive to under-report inflation.
I'm just trying to understand what can be done.
[0] https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Executive_Order_6102
- runjake 6y agoI'm just trying to understand what can be done. Diversify?
- bko 6y agoThat's not bad advice, but as we've seen during 2008, during turmoil everything is correlated. You saw all historical relationships between asset classes break down as everything plummeted.
- dTal 6y ago>There's nowhere to put your money that's safe. Sure there is; physical assets. Doesn't matter what happens to the market, people still need (for example) houses.
- bko 6y agoHomes have been pumped up, partly due to low rates. If rates go up, home valuations would drop considerably as mortgage payments become more expensive. I suppose if you get productive land or something away from high cost metro areas
- sevilo 6y agothat is not true in the event of war or major political movements
- muzani 6y agoThis is my reasoning - there's political instability at the moment, and I'd like the option to change countries as necessary. Stable countries like the US have violent riots, less stable ones are facing coups and spiraling debt.
- sevilo 6y agothat is my guess too. It certainly feels like "there is no good place to keep money". There is so much instability around the world at the moment, it feels even the traditionally more stable ones like real estate and gold are at jeopardy. People are fusing money into anywhere that's seemingly more safe than cash just to make the most out of it in the event that any major political shift happens.
- anm89 6y agoHousing prices are based on huge demand due to 2% mortgages. They could easily take a big hit.