Alstry / GoodVibe / Other Doomsdayers HOW TO PREPARE!
I will echo the sentiment of many on these boards. We all know our country is headed to hell in a handbasket, the question is HOW TO PREPARE. Alstry says to prepare, but never offers practical solutions on HOW to prepare. I'll throw out a strategy I am considering and open myself to the criticism of GoodVibe and other pot-shotters...
I, like many of you, am trying to figure out a proper asset allocation if we hit 70s style inflation or worse, hyperinflation, as Faber is suggesting is inevitable.
My strategy is three-pronged:
1. Gold / silver
2. Hard assets / supplies
3. Foreign currencies
Gold and Silver -provides typically upside as inflation heats up. Some call for gold to reach over $3K this year and silver way over 20. Miners of these metals should continue to significantly outperform the metal itself and are my preference over physical coins / bars. I expect they will outperform inflation for the next few years and be a good hedge for inflation. In some cases, with the right mining company, a couple may make a few of us rich. Mining stocks are also more easily convertible when the metal stops outperforming inflation (i.e. if hyperinflation kicks in and goes Zimbabwe-parabolic). As hyperinflation becomes imminent, I plan on phasing into foreign currencies and lessening my allocation to gold stocks.
Hard assets / supplies - anything you buy and can effetively store will be significantly cheaper than buying it 6 months or 2 years from now - dry milk, pasta, raw beans, rice, personal products, guns, ammo, and booze
Foreign currencies - for the average investor that can't afford a Swiss bank account to keep money offshore, we have to look at domestic alternatives to get foreign currency exposure. I am using Everbank's foreign currency accounts as my alternative. They offer foreign currency denominated CDs and checking accounts. The bank is subject to FDIC and SIPC insurance which may or may not be worth anything. I believe their investing strategy and growth rate will make them less likely to succumb to failure. I am betting on the fact that we don't experience asset confiscation or this money is toast. However, I am not sure I have a choice.
Alstry / others - use this blog to provide me and others practical feedback on HOW you are preparing. I'd love some feedback on these strategies and how others see the allocation between these three classes.