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Investments that could survive US economy failure...





ocalhoun
Looking at the troubling financial news, I was considering putting some of my money into foreign investments as a safety against a total failure of the US economy.
But then I thought to myself, that in a truly devastating economic crash, the USA could drag down these investments with it, making them an ineffective safety investment. The harder I thought, the more I was at a loss to think of an investment that would not be either directly or indirectly harmed by a US economy failure.
The best I could think of would be Russian oil production, but even that would suffer from a much reduced demand for oil worldwide (lowering prices and profits) and it would also indirectly suffer from bad effects to Russia as a whole from the crash.

Can anybody here think of an investment that would be immune to a completely devastating failure of the US economy? Perhaps something that would actually benefit from such a crash (which would help offset the losses stateside) could even be found...

I'm not really thinking about individual companies at the moment, just thinking of various industries in different countries. Once a good industry in a given country was identified, a promising company in that industry could be selected.
crdowner
Let me start by announcing my bias since I work for a pharmeutical distributor but pharmaceutical companies typcially fare well. People need their meds even when the economy is not doing well.
Glenn08
Use your money to create production, by Investment in Real Economy, instead of searching protect your savings. You will struggle against the systemic risk !!!
Libby
Funeral homes, coffin producers, etc will be very big in the coming years I assume.

Also, bicycles, windmills, manual-powered everything.

Just hide your money under the bed or better yet buy stuff you can actually use to live.
ptfrances
I think you could invest in some sustainable companies because with all these turmoils, economies of developed countries are going to change a lot.
Because people know that world economy as it is today is not the solution... but the problem.

Wink
ocalhoun
Glenn08 wrote:
Use your money to create production, by Investment in Real Economy, instead of searching protect your savings.

I'd like to do that just fine, but in a way that could survive a crash.

Libby wrote:


Also, bicycles, windmills, manual-powered everything.
A decent idea, I suppose.
Quote:

Just hide your money under the bed or better yet buy stuff you can actually use to live.

Cash stuffed under the bed can be devalued by inflation just fine, though useful stuff might be a good idea. I've thought of simply putting more of it into equity on my truck, because that will have the same value relative to other things as I go along. (Then again, if I'm worried about rampant inflation, a larger truck loan is better ^.^)
gh0stface
Invest in alcohol and tobacco based companies. Seems like as the economy goes down, people are just buying more alcohol Wink

ocalhoun wrote:
Can anybody here think of an investment that would be immune to a completely devastating failure of the US economy? Perhaps something that would actually benefit from such a crash (which would help offset the losses stateside) could even be found...

You have to realize, there are no guarantees or immunities with investments. If you want something guaranteed. Go to the bank. They are FDIC insured. Mutual funds and stocks are not insured what so ever. The best thing to do is maintain a well diversified portfolio. Having a well diversified portfolio will help minimize losses.

Also, if you put everything into international based stocks or mutual funds, you could potentially run into the risks of currency fluctuations, political unrest, and any other problems that weaken a country's economy.
bogger
gold is always a good buy, if you're that loaded Razz

of course, it's also quite hard to find first.
ocalhoun
gh0stface wrote:
currency fluctuations, political unrest, and any other problems that weaken a country's economy.

That's precisely what I was wanting to guard against happening in this country.

Sure, banks are FDIC insured, but I really doubt that would hold up in a great depression style crash.
winmark
Invest in Dubai real estate. UAE or Gulf economy is strong enough to survive this kind of crisis.
grashopa
Look for dividend plays like TCLP or utilities - but not ones that own a commodity like oil or lumber. Their dividends will fall with the drop in commodity prices. TCLP and others pipeline partnerships should be ok. TCLP owns a natural gas pipeline in the northwest US - this gas is used for electricity and you would have to see a really big problem to have electricity demand shut down the natural gas plants ( Natural gas is used to generate electricity to save the environment as its cleaner than coal )

Your fear with TCLP is government interest rates going up - if you can get 7% on a government bond why take a 10% TCLP dividend which is risky - it may be cut. With government throwing money around this is a problem. TBT is an ETF that goes up as government interest rates go up...

Internationally is impossible to say right now - the currency markets are so wild as everyone bets on where the money will end up going and which economy is going to end up with the worst problems.

Cash would be my recommendation to most people - if things get bad you will have wonderful opportunities in real estate and stocks around the world. Just think of the opportunity if a larger country goes under as Iceland did. Suddenly with your US dollars you can come in and buy real estate at 1/20th the price.
OpposableThumbs
Right now it's overly devalued and it doesn't disappear.
deepviolet
How about creating frugal living communities, where 10 of us get together and live in one house, for example?

Anybody up for it?
bogger
you're not my type... Wink

subsistence farming isn't REALLY that much of an option, is it?
deepviolet
Farming is too much hard working. I was more thinking along the lines of putting your savings into a money market account and living off the interest. Instead of focusing on the making money part, just focus on cutting expenses.

Anyone wanna join?
Alaskacameradude
Gold is a good investment from everyone I've talked to....
deanhills
How about stockpiling favourite food items? I would draw money that will cover at least six months worth of spending and put it under my mattress. Invest as much money as I can in real food, supplements, all consumables as well as necessary clothes. The rest I would invest in a roof over my head, perhaps something that could double up into a bed and breakfast. Make sure my home is close to work, get rid of the car and use alternative ways of commuting.

Seriously though, think the general advice is to put your money where people are running from. If people are baling out of the stock exchange, it is probably a good idea to invest in solid blue-chip stock, and if they get back into the stock exchange, get out of it. Now is probably also a good time to buy oil stock in reputable blue-chip companies such as BP and Shell. Think some say you need to diversify, so pharmaceuticals should be good, and perhaps software companies like Microsoft.
shrykull
I recomment keeping money in Bank, really. You won't loose anything.....
But if you plan to make a profit, think that gold stocks in some investment funds like Black Rock Merrill lynch are now form reasonable low price. And If you don't need to have quick return of probit, that means that you can keep money in one place for longer period of time than one year, that should bring you reasonable interest rates. That what I would do with surplus of cash Smile during this recession!!!
deanhills
winmark wrote:
Invest in Dubai real estate. UAE or Gulf economy is strong enough to survive this kind of crisis.


You've gotta be joking! The Gulf Economy may be strong, but it is definitely not going to bail out Dubai Real Estate. AND Dubai Real Estate is where people will stay away from.

ocalhoun wrote:
Looking at the troubling financial news, I was considering putting some of my money into foreign investments as a safety against a total failure of the US economy.
But then I thought to myself, that in a truly devastating economic crash, the USA could drag down these investments with it, making them an ineffective safety investment. The harder I thought, the more I was at a loss to think of an investment that would not be either directly or indirectly harmed by a US economy failure.
The best I could think of would be Russian oil production, but even that would suffer from a much reduced demand for oil worldwide (lowering prices and profits) and it would also indirectly suffer from bad effects to Russia as a whole from the crash.

Can anybody here think of an investment that would be immune to a completely devastating failure of the US economy? Perhaps something that would actually benefit from such a crash (which would help offset the losses stateside) could even be found...

I'm not really thinking about individual companies at the moment, just thinking of various industries in different countries. Once a good industry in a given country was identified, a promising company in that industry could be selected.


I would keep my money as close to me as possible, and invest it in things that are simple and that I can understand and have a passion for. How about horses? Or any aspect of horses, i.e. equipment company, consortium of stables, training companies, information on horses? If you want to do this internationally, perhaps you can expand on this where good horses, stables, equipment and training are? Smile Money wise I would be careful. I am in exactly the same boat and visited Guernsey recently. I think regulations and compliance are so strict there now, it almost like knocking on Fort Knox to get an account there, and of course all that compliance costs money. Interest rates are also not attractive, and investments not secure.

Libby also gave good advice. If you have store room space, buy lots of things you need for later use and stock up on it. I assume you are debt free, as I think one of these days credit cards may be very scarce and super expensive to have.
shrykull
I belive now is a good time to buy gold shares or gold itself. In time of crisis gold among few things is safe investment. Gold has its own cycle and during recession it usually surges. If you carefully investigate, for instance Black Roch Gold Fund in 2001 you will notice that the pricess went up significantly. Other factor in faver of gold is a demand over supply factor. In other words banks and private owners order more gold than its mined. There is also Kondratiewe theory that the price of gold will reach $1400 oz by the end of 2009 and 2000 for oz by 2012. Anyway, this what I am investing in. When corporate shares are falling I invest in shares of gold mining companies...

Regards,
Shrykull
deanhills
shrykull wrote:
I belive now is a good time to buy gold shares or gold itself. In time of crisis gold among few things is safe investment. Gold has its own cycle and during recession it usually surges. If you carefully investigate, for instance Black Roch Gold Fund in 2001 you will notice that the pricess went up significantly. Other factor in faver of gold is a demand over supply factor. In other words banks and private owners order more gold than its mined. There is also Kondratiewe theory that the price of gold will reach $1400 oz by the end of 2009 and 2000 for oz by 2012. Anyway, this what I am investing in. When corporate shares are falling I invest in shares of gold mining companies...

Regards,
Shrykull

Think there is one rule in investing and that is if people come up with saying "Gold is a good investment", it is already time not to invest in gold. The price of gold is very high. I would rather go for other commodities as gold is always a high-risk industry too. If you know what you are doing of course, that is a different matter, but this is one stock that you have to watch every day. You can't just buy gold stock and let them take care of themselves.
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