Quote: (12-24-2014 11:03 PM)Sonsowey Wrote:
Quote: (12-24-2014 09:59 PM)LouEvilSlugger Wrote:
If I had any money to invest I'd probably invest in arable land in Latin America
Land in Latin America has a history of changing hands due to violence or government dictate.
So maybe not the safest of all investments.
That is my major concern about ever relocating to South America, including Chile. Chile seems to be pretty peaceful and well-organised at the moment, but it wasn't that long ago that it wasn't. There's also a fair degree of support for socialism there. Latin America still seems to me like a place that could turn on a dime and go full retard, to mix my metaphors. Even aside from that, being an obvious outsider would be like painting a big target on one's chest.
My concern about economic chaos goes beyond that, however.
I really worry that we're going to see the rise of fascism again. Before continuing, it's worth reminding people that fascism had many left wing elements. Nazism was national
socialism. It's also worth noting that fascism did not support the status quo. It was revolutionary. It sought to change dysfunctional societies with populist, Utopian solutions that overturned the existing order. Thus, I don't think it's unreasonable at all to think that a lot of SJWs would readily embrace a new form of fascism. Of course, it wouldn't be called that, but it would still be fascist.
Now, here's why there's reason to fear that economically.
I think one way or another, even without the rise of fascism, we're looking at bail-ins, confiscation and capital controls. It would be even worse under fascism, however, since it would be populist and need to placate the masses. There's so much debt right now that it's unsustainable. We are going to see a massive transfer of wealth in the next decade, possibly the next few years. One way or another, there is going to be a crushing of the middle class (which has already begun). Obviously, when that happens, a lot of people are going to be pretty pissed off and grasping at straws (cue Utopian solutions). If you have any money, they're going to want some of it.
The trouble for people who have seen that coming, however, is where to have your wealth.
I think the best solution is probably to have it spread around geographically so that no one government can play games with it. There are, however, some hurdles to this. The most obvious two are residency and the large sums often required to be invested in different locations.
Obviously, anything you can't physically touch is a real danger for confiscation. Yet what about hard assets? Land is highly illiquid and easy to confiscate or heavily tax. Even precious metals are no guarantee. Here's why.
Firstly, let me say that if you're buying gold or silver, you'd better be buying the physical stuff. The paper market is going to get crushed. Furthermore, you'd better be storing it yourself. If you think any sort of depository, even with allocated precious metals, is not going to have multiple claims on its unallocated PMs (and thus, dip into the allocated stuff), or surrender it to the government, you have a lot more trust than I do. If you think you're going to store it there until things heat up, and then take direct possession, you're essentially claiming that you're going to beat everyone else to the head of the line in what will basically be a bank run. It doesn't work that way in this day and age anyway. One day, the depository is open for business, the next day the government has declared some sort of state of emergency and everything is closed indefinitely. See Cyprus for an example of this.
That aside though, the problem is that in the kind of situation where the economy is in absolute tatters, you wouldn't necessarily be able to do anything with precious metals anyway. If the government were to collapse beyond the point where it could put massive controls on the trading of precious metals, you'd have some much bigger issues to worry about (namely widespread violence). If the government weren't to collapse into complete anarchy (without another government of some form replacing it), however, how would you spend your precious metals? The government would implement very strict controls. As such, you wouldn't be able to just buy a house with precious metals because you'd still need to go through the government during the buying/registering process. Likewise, you'd have to be damn careful about going out and trying to spend your PMs on everyday items. The majority of people -- who weren't prudent -- would be only too glad to rat you out to the government.
Of course, there's a point where things might not get that bad and PMs might be worth a whole lot. That's not a sure thing though, so don't bet on it. There is no silver bullet to solve every problem.
The other issue with all of this is that quote by Keynes about the markets remaining irrational longer than you can stay solvent. I think that the markets can't go on for too much longer, but I could be wrong. Plenty of bubbles have defied expectations before and persisted (and grown) well beyond anyone's wildest dreams. Perhaps they might limp along for another decade or longer. In the meantime, big holdings of PMs might have flat or even negative returns in that time. It's all very well to say that PMs will eventually increase in value dramatically -- which I think they will -- but we're all going to be dead one day. You could miss out on a decade or more of a decent standard of living by not acquiring productive assets in the meantime simply because PMs don't produce anything that you can consume or trade. They are purely a store of value.
I am stacking PMs, but I am doing other things also. I'm under no illusions that PMs are going to necessarily be any kind of solution. I cringe a little when I watch certain Youtube videos and guys there freely admit that they don't earn much and don't have much other wealth, but pour all of their monthly disposable income into one ounce silver bars. That's a pretty big all-in bet with a pay-off under a very strict set of conditions. In my opinion, a lot of stackers have simply traded one irrational and absolute belief system for another and could be in for a rude awakening when things don't go according to their script.
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