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To: Pelham
You just won’t be able to liquidate immediately if there is a crisis.

What if the "crisis" is hyperinflation - and by the time you can liquidate - you're money's not worth squat?

57 posted on 01/03/2010 4:34:54 PM PST by GOPJ (Success is cast as evil and punished while failure is blamed on others and rewarded.-Rand)
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To: GOPJ
What if the "crisis" is hyperinflation

Probably not in any classic wage / price spiral. But what is realistic is a government-engineered one-time devaluation. The Fed is not going to shrink their balance sheet back to "normal" ever. So their best option at some point will be to print and send out dollars instead of pushing on the string. The dollars will go to some of the same suspects as the credit so they can be used to eliminate large chunks of private debt.

Then the debt machine will start over again. But in the meantime your dollars have taken a 33% (or some similar) haircut.

59 posted on 01/03/2010 4:40:56 PM PST by palmer (Cooperating with Obama = helping him extend the depression and implement socialism.)
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To: GOPJ

Commercial paper is very short term so the withdrawal delay would never be very long. You just wouldn’t be able to liquidate on demand. Hyperinflation shouldn’t cause the sort of problem that would lock you into your MM fund. There will be other, much greater problems to worry about than that.

If we are going to get hyperinflation then the smart move is to load up on the maximum amount of debt possible. The biggest possible mortgage, credit cards maxed out. And use all that debt to buy hard assets. But I don’t see that scenario playing out, there are just too many people betting on the dollar continuing to fall apart. I suspect that the coming big surprise will be interest rates spiking up and the dollar getting harder.


94 posted on 01/03/2010 7:45:08 PM PST by Pelham (ObamaCare, it comes with a toe tag)
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