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What are you using as the canary in the coal mine?
Sooner or later the debt ceiling won’t be raised, and even if it is, sooner or later US bonds won’t be bought. I feel like I’m in some kind of game of chicken. That being the case, or at least my belief. What are your individual ‘Plan Bs’? What are your back up plans? What are you using as the canary in the coal mine?
It it happens, it will happen for a short duration where markets will react strongly. Having seen the market reaction and pressure from businesses and donors, our congressmen will quickly realize it is a mistake to play politics in this respect and raise the limit.
If the congress fail to raise the debt ceiling, I intend to put all my cash to work.
Isn't raising the debt ceiling putting off a major burden for our gandchildren to bear? I would rather cut the credit card now, fight the battle, and take our lumps. Our kids are going to have enough problems to solve, what with out of control immigration, over population, and region shifts in style of living. Our generation was the one that erred in over spending, let us get back to what we can afford.
Of course. You have congresspeople who talk about how we have to get our house in order, but on the other hand talk about how we have to raise our debt limit. We'll raise our debt limit and then stopping spending will be conveniently forgotten. If we do not raise our debt ceiling and do default, then I don't think the fallout from that will be short or minor, but I don't know if I see stocks responding to it as deeply or as long; the main effects will be seen and felt on main street.
I will say though - and I said this in another thread - this whole debt ceiling thing is going closer to the deadline than I thought it would. While the deadline is 8/2, I'm guessing they have to have something ready by around 7/15-20.
Geez, it's your basic CYA stuff. I'm not doing anything really crazy. Diversify your portfolio and your wealth. Get out of debt. Have a diversified emergency fund that could cover a year or so. Seek additional streams of income. Own your dwelling and grow a garden. Improve your job skills and keep your resume' current (and I don't care if you're retired or 80 - just do it). Volunteer and interact with your neighbors and community.
I'm sure I missed some things, but you get the picture. There's nothing fancy nor extreme here AND there's nothing that will hurt you should sh*t not hit the fan.
Did all of that. The question is for those of us with paper wealth; stocks, bonds, funds, IOUs, etc. In the event TSHTF; what is your signal to cash in your chips before they become worthless.
good morning great commentaries I think congress realize that we have to 'limit' our spending and we cannot buy nor spend w/ the money that you don't have I believe they will raise the debt ceiling with much restrictions and our economy/congress will stronger than what we are now... we may see a good rally at the end of these turnouts, nevertheless, I am still 80s% stocks and 20s% bonds we'll see what will happen if we do default [very unlikely], we may head toward dows @ 4Ks level again [2nd crash?]...then buy more when it reaches that level
I think, it is fantasy to think that we will be alright by withdrawing stimulus from economy when economic growth is fragile. If further stimulus is not possible and premature tightening takes place, get ready to face a lot of pain. More layoffs which in turn will case further slowdown.
Some claim that GOP is trying to have the administration take these steps with the idea that more suffering could help them win the 2012 elections. Sacrifice the country for elections? That is probably too cynical. Such a thing could not happen here right? I will go with politicians have good intentions but are misguided.
"What are your back up plans? What are you using as the canary in the coal mine?"
I never used a "Plan A" centered around a domestic base or foundation. I own some domestic, sure: PRSVX, RYDVX and just lately, I was gifted with PFE/Pfizer. My foreign bonds and equities put together comprise 62% (in whole numbers) of my total. This does not include any cash, by the way.
My own canary was already "singing the blues" back in '03 and '04, when I began investing---in spite of the USA economic "recovery" back then. It was jobless---just like the current "recovery." Only investors and CEOs will see any improvement for a long time, just as with the Great Depression. I don't think the USA will fall apart soon, but we are declining, so I'm not betting on the domestic economy to get me anywhere, compared to the results I'm getting from beyond our borders.
.....And so, having said that, here's what I'm using: PREMX, MAPIX, MACSX and RIVFX, though the last one in the list includes some domestic. A foreign gov't bond listed in US dollars worth 5.5% of my total will mature in '13.
Comments
If the congress fail to raise the debt ceiling, I intend to put all my cash to work.
I would rather cut the credit card now, fight the battle, and take our lumps.
Our kids are going to have enough problems to solve, what with out of control immigration, over population, and region shifts in style of living.
Our generation was the one that erred in over spending, let us get back to what we can afford.
I will say though - and I said this in another thread - this whole debt ceiling thing is going closer to the deadline than I thought it would. While the deadline is 8/2, I'm guessing they have to have something ready by around 7/15-20.
Geez, it's your basic CYA stuff. I'm not doing anything really crazy. Diversify your portfolio and your wealth. Get out of debt. Have a diversified emergency fund that could cover a year or so. Seek additional streams of income. Own your dwelling and grow a garden. Improve your job skills and keep your resume' current (and I don't care if you're retired or 80 - just do it). Volunteer and interact with your neighbors and community.
I'm sure I missed some things, but you get the picture. There's nothing fancy nor extreme here AND there's nothing that will hurt you should sh*t not hit the fan.
peace,
rono
great commentaries
I think congress realize that we have to 'limit' our spending and we cannot buy nor spend w/ the money that you don't have
I believe they will raise the debt ceiling with much restrictions and our economy/congress will stronger than what we are now...
we may see a good rally at the end of these turnouts, nevertheless, I am still 80s% stocks and 20s% bonds
we'll see what will happen
if we do default [very unlikely], we may head toward dows @ 4Ks level again [2nd crash?]...then buy more when it reaches that level
I think, it is fantasy to think that we will be alright by withdrawing stimulus from economy when economic growth is fragile. If further stimulus is not possible and premature tightening takes place, get ready to face a lot of pain. More layoffs which in turn will case further slowdown.
Some claim that GOP is trying to have the administration take these steps with the idea that more suffering could help them win the 2012 elections. Sacrifice the country for elections? That is probably too cynical. Such a thing could not happen here right? I will go with politicians have good intentions but are misguided.
I never used a "Plan A" centered around a domestic base or foundation. I own some domestic, sure: PRSVX, RYDVX and just lately, I was gifted with PFE/Pfizer. My foreign bonds and equities put together comprise 62% (in whole numbers) of my total. This does not include any cash, by the way.
My own canary was already "singing the blues" back in '03 and '04, when I began investing---in spite of the USA economic "recovery" back then. It was jobless---just like the current "recovery." Only investors and CEOs will see any improvement for a long time, just as with the Great Depression. I don't think the USA will fall apart soon, but we are declining, so I'm not betting on the domestic economy to get me anywhere, compared to the results I'm getting from beyond our borders.