My parents and I don't totally agree on economics, but they aren't actually educated in the field at any degree. They just like to cling on the shirts of government. But the other day they hinted that they were a little skeptical of the governments ability to resolve the economic difficulties, and they wanted my opinion of what they should do and what I plan to do, to minimize the harmful effects of the possible recession that may occur, especially after the bailout. But, I didn't really have any reliable suggestions. So...
(from the austrian viewpoint) What should an individual do to best secure their financial and personal security and maintain a healthy living standard? And what activities and financial decisions should be avoided to avoid financial failure? What preparations are needed? If you could, please explain your reasoning and suggest articles to read. Thanks. (If it helps, my parents are in their early 50s. My mom works a desk job for wellmark, selling life insurance. And my Dad is a small business owner that sells Apple computer products by retail.)
Thank You - Brandon
I guess some of the following should do:
But don't take my word on it. I'm here to discuss the efficiency of these approaches.
Why would I want to sell land assets and buy them back later?
I think he's alluding to the notion that land may depreciate later.
I don't think that is a good tactic personally. This will be an inflationary period, not a deflationary one.
Well, I doubt that our government will be able to get loans from foreign countries to pay for all of these bailouts going on right now. If this does happen, the government will probably resort to printing money which will mean high inflation and a comeback for gold and silver. On the other hand, if this doesn't happen, we might get lucky and see a "more normal" recession - still bad, but not catastrophic. The bad news is that commodities might not be profitable in such a situation.
Political Atheists Blog
liberty student: I think he's alluding to the notion that land may depreciate later. I don't think that is a good tactic personally. This will be an inflationary period, not a deflationary one.
Yes, but timing is essential, as one wants to be near the top of the bubble when selling, just before the burst.
Government intervention will cause inflation. On the other hand, this is a land bubble, so not only the dollar is inflated, but the land is overpriced with respect to this inflated dollar. I'm interested to see XAU / land unit, as it's the only thing that provides meaningful data.
''Real Estate: Farmers and holders of urban property seemed to benefit if their property was mortgaged; the inflation soon wiped out the mortgage debt. However, they received no income, as noted above, since rents were frozen. After the stabilization, heavy new taxes and the urgent need for cash forced most holders to remortgage their property, often more heavily than originally, so that their gains were illusory. Still, those who held real estate throughout managed to save the capital thus invested. However, those who sold during the inflation (often through desperate need for cash) fared poorly. Because it brought no income, real estate sold at extremely low real price levels during inflation''
''Foreign Exchange: Those who held funds in dollars, pounds or other stable currencies, or in gold, saved their capital. The government set up rigid exchange controls as the inflation proceeded. As usual under such conditions, a black market flourished. The ones who fared best were the small minority who had the foresight to exchange marks into foreign money or gold very early, before new laws made this difficult and before the mark lost too much value''
The Nightmare German Inflation by Scientific Market Analysis, 1970.
http://www.usagold.com/germannightmare.html
Its important to note that we live in a era that is a lot different now , we now have a globally integrated economy and no foreign currency imay be safe , Gold is our only safe asset. Mints have suspended sales on claims of shortages , who needs laws limiting gold ownership when you control its production . I think I'm going to start looking at some Islands to buy , anyone recommend a region?