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RESET: If the market crashes, and inflation runs rampant, how do we adjust our investments?

Posted on 07/24/2021 7:26:16 AM PDT by Andy from Chapel Hill

So, Stanley Druckenmiller ("Druck") says this is the biggest bubble he has ever seen.

If we believe him, how do we adjust our IRAs and other investments -- especially for those of us approaching retirement?

I know the gold story, but what else can we do? (I like platinum better...)


TOPICS:
KEYWORDS: inflation; investment
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To: Big Red Badger

You’re in for it!


81 posted on 07/24/2021 2:09:40 PM PDT by Big Red Badger (Be Still and Know that I Am God. Rev 19)
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To: DEPcom
My only concern is how safe is that 401K stable value fund with a great reset rumors?

Put a percentage (whatever you feel comfortable with) into something outside of the financial system, like physical gold and silver.

Yes, those markets are manipulated to keep them down to discourage the public, but think of them as a store of value, not an investment, and you will have another base covered.

IMO, the coming Reset will not be political, but financial - a reversion to a gold-backed currency, digital or otherwise.

82 posted on 07/24/2021 2:18:50 PM PDT by Oatka
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To: Roman_War_Criminal
Go to your local Sams Club, Costco, BJ’s - note the shelves, especially the pallets they stock on the 2nd and 3rd shelves. Every big club warehouse I’ve been to in my area has ZERO inventory on the 3rd shelf. Not a good sign!

A perceptive comment. Will check out my COSTCO next time out.

83 posted on 07/24/2021 2:23:29 PM PDT by Oatka
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To: Andy from Chapel Hill
Stupid thread. Question is asked about every other day. A hundred responses, all of them different, most conflicting.
84 posted on 07/24/2021 3:32:53 PM PDT by LouAvul (Lying headlines from fake news articles written by pimps masquerading as journalists.)
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To: BipolarBob

“ Most of mine is a managed income which is bond like, I’m thinking they do T-bills.”

Interest rate risk is a concern.


85 posted on 07/24/2021 8:48:42 PM PDT by jdsteel ("A Republic, Madam, if you can keep it." Sorry Ben, looks like we blew it.)
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To: Fido969

“ What is going to happen to your high yield bonds when interest rates go through the roof?”

Less of what will happen to high quality bonds.

Learn about interest rate risk.


86 posted on 07/24/2021 8:52:00 PM PDT by jdsteel ("A Republic, Madam, if you can keep it." Sorry Ben, looks like we blew it.)
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To: jdsteel

Thanks to everyone for their advice and opinions.

I am fully prepped up. In fact, I have too much cheap Czech Remington .223 in the safe. More than I will ever shoot, so I guess it is there for trading for other things we will need.

My takeaway opinions from this exercise, mixed with my personal views, are:

The Fed will keep interest rates low as long as they can.
(Euro rates are lower and even negative...)

When rates do rise, the housing market will fall and housing prices will fall, but not a 2008 crash.

We will see inflation in everything, but not runaway 1978-79 inflation.

Bond prices will fall as interest rate rise.

The stock market will go up with inflation (eventually).

It seems that a reasonable strategy would be to invest IRAs in dividend-paying, large cap ETFs (SPXD, etc.).

I plan on placing an automatic sell order on everything that trades during the day at about 10% below current prices.

I will keep more cash than usual.

There are a few bug-out cabin building lots in the mountains I would like to buy at about 1/2 the asking price, so I will wait for the darkest day in winter to pull that trigger.

And, of course, if Joe resigns or is removed, I expect everything will dive and maybe that is the trigger for the bubble to burst. If we perceive that Kamala will ascend to the throne, I will sell everything I can and buy it back when things look their worst.

Maybe buy a VIX ETF...

Thanks again.


87 posted on 07/25/2021 3:58:47 AM PDT by Andy from Chapel Hill
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To: srmanuel

If we have another bout of 2008-2009 deflation, the government will collapse and who knows what we’ll get on the other side. The federal reserve will simply print to force inflation like they have been doing and massively increasing the money supply. I see 1976-1982 style inflation personally over the next 4-8 years.


88 posted on 07/25/2021 4:21:32 AM PDT by rb22982 ( )
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To: ConservativeInPA

USD usually goes up in a market crash though as people flee to safety.


89 posted on 07/25/2021 4:22:17 AM PDT by rb22982 ( )
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To: Mr. Jeeves

Agree 100% with this comment.


90 posted on 07/25/2021 4:23:03 AM PDT by rb22982 ( )
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To: rb22982

If food, gas and electricity prices accelerate with the vast majority of people barely able to get by with no money for discretionary spending, the economy will collapse


91 posted on 07/25/2021 4:29:12 AM PDT by srmanuel (`)
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To: srmanuel

Those three aren’t as bad as people can and do shift - less dining out, less steaks, etc (half of spending), gas (fewer trips out, shift to smaller cars - larger vehicles are focus now) and electricity is a small piece of the average household budget. But I think stagflation is likely - heavy inflation with small real declines in GDP but prices of everything - including stocks and real estate - keep rising in $ terms as the Fed prints to paper over the debt. People forget housing prices rocketed in $s from 1975 to 1982 even if they dropped in real terms slightly.


92 posted on 07/25/2021 4:36:39 AM PDT by rb22982 ( )
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To: heavy metal

There’s that too. 😆


93 posted on 07/25/2021 5:49:57 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped)
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To: Andy from Chapel Hill

“ The Fed will keep interest rates low as long as they can.”

One correction; the Fed only sets short term interest rates. The rest are set by the market, beyond their control. Inverted interest rate curves (short term rates higher than long term rates) can be a thing.


94 posted on 07/25/2021 7:09:48 AM PDT by jdsteel ("A Republic, Madam, if you can keep it." Sorry Ben, looks like we blew it.)
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To: jdsteel

I thought they were manipulating the longer end with their market purchases.


95 posted on 07/25/2021 7:39:35 AM PDT by Andy from Chapel Hill
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To: rb22982

I sort of agree with you, my point is, the more people spend on essentials due to inflation and flat earnings, the less they will spend on discretionary items, like vacations, cars, appliances, etc.....

I will be following how fast home building and prices start to fall once interest rates start to rise, especially if they rise quickly.

Most people today have never experienced a period of inflation and high interest rates. It will be interesting to see how they react...

My first mortgage was 11.15% and I took advantage of a first time home buyer program run by my Savings and Loan, which don’t exist anymore....

Same thing will happen to cars...interest go up, sales go down how much remains to be seen....


96 posted on 07/25/2021 8:13:01 AM PDT by srmanuel (`)
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To: rb22982
USD usually goes up in a market crash though as people flee to safety.

Couple of things to note here. Druck is a disciple of Soros. Soros has made tens of millions by creating situations in countries that crash currencies. Let's use more accurate terms. Crash means devalue. Druck has made money on the coattails of Soros in the currency market when a currency is devalued.

What happens in currency markets is separate and apart for other markets. Other markets include the stock market, bond market, treasuries market, and commodities markets. Certainly there is movement between asset classes in changes of economic conditions. However, what I think you are referring to is that people move their money into cash - which in this country is USD. So if you look at a typical retail investor brokerage account, the investor closes positions in stocks (hopefully before a stock market crash) and then that money now sits in the account as cash - USD. That money needs to either stay as cash in the brokerage account or moved to some other bank account. Some will move to the 'safety' of bonds and treasuries. Few will try their hand at commodities and get their asses kicked. And others may try forex (currency) and really get their asses kicked. Their assumption is that the value of the USD will be going up against other currencies. I contend the exact opposite.

It has everything to do with how Soros and Druck made their money in the past. That is macro economic conditions are leading to the devaluing of USD. In simple terms, the USD buys less today than it did yesterday. In global terms, other currencies buy more USDs. Everyone knows this as inflation. However, there is more going on here. It hasn't been seen since the days of Jimmy Carter. That is stagflation - a combination of recession and inflation.

The US has been printing money for years. The amount of government spending right now is on steroids. And it seems with two infrastructure bills, that spending will even be greater. Which means more USD will be printed (digitized). The USD will be further devalued. I suspect it will crash. (Personal opinion, not investment advice.)

I will give you another piece of the puzzle. Big Banks (they trade stocks, bonds, treasuries, and currencies) will want to make a killing in all of this. The foreign exchange market is one of the least regulated markets in the world. It is also the largest - approaching $5 Trillion per day (yes, that is per day). That is enormous compared to every other market. Big Banks move the price of currencies, not retail investors. They move the price in the direction they want and when they want. It is for this reason that very few retail investors can make a living trading forex. I suspect that Big Banks will cash in on the devaluing of the USD. In fact, it will contribute to the devaluing of the USD. All they need is significant enough news to make the USD crash.

Let's look at this as it would appear on the surface. Economic indicators (unemployment, inflation, housing starts, prime lending rate, etc.) all suck at the same time. The fed can't sell enough treasuries to Japan and China. China is actually going broke right now. The fed starts a major round of quantitative easing (or what ever euphemism they use for printing money). Big Banks will acquire positions in USD from retail investors by stopping them out. Big Banks need the capital and positions for their big crash play. This is what I mean by Big Banks moving price when and where (direction) they want. (By the way, they do this all the time, just on a smaller scale.) Once Big Banks have their positions in place, they will crash the USD.

These are globalist pieces of $hit, that care not about the USD or the US economy and they care even less about American citizens.

All is needed is a combination of news to set things into motion. The number one contributor will be a stock market crash.

Now more on what this looks like and to clarify my original post. When I wrote sell USD short, I meant to enter positions in which the USD will lose it's value relative to other currencies. In forex, that depends on whether the USD is the quoted currency in a currency pair or the base currency. For instance, in the EURUSD (euro vs USD) the USD is the quoted currency. The USD is devalued when the price of EURUSD goes up. It take more USDs to buy euros. In the USDCHF (USD vs Swiss Franc) the quoted currency is the franc, the base currency is USD. The USD is devalued when the price of USDCHF goes down. It takes fewer francs to buy a USD. The trade to bet the crash of the USD is go long on EURUSD and go short on USDCHF. Both are shorting the USD without respect to a currency.

Here's a good video on understanding Big Banks.

Here's an interesting thing to monitor, IG Client Sentiment. Drill down on EURUSD. When retail forex investors go long on EURUSD, Big Banks drive the price short, and visa versa. It all there in historic charts. You will tangibly see how Big Banks manipulate markets - take price in the direction they want and when they want.

97 posted on 07/25/2021 8:27:46 AM PDT by ConservativeInPA (“When injustice becomes law, resistance becomes duty.” ― Thomas Jefferson)
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To: ConservativeInPA

The main problem with your thesis is every other country is doing the same as the US and worse most have recovered far less economically AND seem to be far more willing to shut down again. So you are correct the USD printing is high, but so are all the other currencies and worth worse macro financial situations.


98 posted on 07/26/2021 1:38:21 AM PDT by rb22982 ( )
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To: srmanuel

Interest rates will not rise, the federal government can’t handle higher rates and the fed reserve will continue to buy UST’s like they are going out of style. There is no Volker in the Fed Res anymore - just the opposite in fact. A 10% interest rate increase would crash the US government - adding more interest annually than we collect in taxes not even counting any actual spending.


99 posted on 07/26/2021 1:41:13 AM PDT by rb22982 ( )
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To: rb22982

At some point interest rates will have to rise, when inflation is 7-10% or higher, loaning money at 2% makes no sense.....

If rates don’t increase the rate of inflation will be even worse than it would be otherwise....


100 posted on 07/26/2021 2:20:35 AM PDT by srmanuel (`)
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