How to swim with the sharks?

[andrasnm]

If you knew that the financial system somehow will melt down what would you do?
1) speculate in commodities
2) buy a ranch somewhere and raise food
3) buy real estate

I know it is a loaded question (with a similar one) posted before but the knowledge of this would make someone a huge edge if one was prepared.

I am planning to trade commodity spreads to make cash and invest the cash in RE and or gold, silver etc.
The problem is always timing and inaccurate foresight, coming events could unfold many ways and even radical banning of speculative venues such commodities markets is not out of the question (it was discussed after the 70,80's inflationary times) by the morons calling themselves politicians.

So the above list being non inclusive what else can one do to make money in others misery?

 

[ElectricSavant]

?

Michael B.


radical banning of speculative venues such as commodities markets

 

[bdixon619]

Quote from andrasnm:

If you knew that the financial system somehow will melt down what would you do?
1) speculate in commodities
2) buy a ranch somewhere and raise food
3) buy real estate

I know it is a loaded question (with a similar one) posted before but the knowledge of this would make someone a huge edge if one was prepared.

I am planning to trade commodity spreads to make cash and invest the cash in RE and or gold, silver etc.
The problem is always timing and inaccurate foresight, coming events could unfold many ways and even radical banning of speculative venues such commodities markets is not out of the question (it was discussed after the 70,80's inflationary times) by the morons calling themselves politicians.

So the above list being non inclusive what else can one do to make money in others misery?

I would rather loan money with real estate as collateral. If everything goes to hell, you still have the ability to foreclose. I think this gives you more options during unstable economic conditions.

 

[ElectricSavant]

Well, if quote "everything goes to Hell" wouldn't your collateral be effected? What do you mean with "goes to Hell" ? Perhaps taking losses slower is the goal with this hypothetical example, as the value of cash might even be deflating fast. Gold could be discussed I guess.

Michael B.

P.S. The Financial System going to hell would mean catastophic ripples in all sectors of the economy...wouldn't it?

P.S.S. By a ranch somewhere and grow food, might be the correct answer...HeHe

Quote from bdixon619:

I would rather loan money with real estate as collateral. If everything goes to hell, you still have the ability to foreclose. I think this gives you more options during unstable economic conditions.

 

[bdixon619]

Quote from ElectricSavant:

Well, if quote "everything goes to Hell" wouldn't your collateral be effected? What do you mean with "goes to Hell" ?

Michael B.

P.S. The Financial System going to hell would mean catastophic ripples in all sectors of the economy...wouldn't it?

Think of the Great Depression. The people who weathered that storm were people who had accumulated great wealth. One of the surest roads to riches is real estate. When I was growing up, the neighbor lady next door was the daughter of a man who loaned money with real estate as collateral several years before the onset of the Great Depression. That man loaned out quite a bit of money. As the Depression deepened he foreclosed on more and more people thus, acquiring sizeable land holdings. That lady, and some of the things I learned from her, are the basis for some of the ways I think to this day.

 

[TorontoTrader2]

I do not really consider Real Estate to be an asset in the short term. Most properties (unless you rent it out) require cash flow to maintain - mortgage, taxes, utilities, upkeep etc.

And if a collapse occurs, who will be able to pay you rent? Yet you will still need your own monthly cash flow to carry it.
If the book value of the asset drops 50% during a collapse, but the carrying costs remain the same, your percent carrying cost of fixed assets doubles. What kind of return is that.

An asset should produce a return. In my opinion in the short to medium term, real estate does not fit this criteria.

Invest in commodities instead.

Cash flow is king. Stay liquid in the case of a meltdown (no pun...)

 

[andrasnm]

Mortgage is a killer you are right there. I hear that many millions have 5 year floater (fix for 5 years and adjustable after) mortgage now as the banks suck the buyers in.
It is a setup for repo and hard times for millions if the rates start to go up as they undoubtedly will soon people realize that the once mighty greenback is not what it used to be....

Quote from TorontoTrader2:

I do not really consider Real Estate to be an asset in the short term. Most properties (unless you rent it out) require cash flow to maintain - mortgage, taxes, utilities, upkeep etc.

And if a collapse occurs, who will be able to pay you rent? Yet you will still need your own monthly cash flow to carry it.
If the book value of the asset drops 50% during a collapse, but the carrying costs remain the same, your percent carrying cost of fixed assets doubles.
What kind of return is that.

An asset should produce a return. In my opinion in the short to medium term, real estate does not fit this criteria.

Invest in commodities instead.

Cash flow is king. Stay liquid in the case of a meltdown (no pun...)

 

[Covertibility]

This forum should be called doom and gloom. Financial collapses, real estate bubbles, gold nuts..etc... Thank God most of you don't have real money.

 

[Epsilon]

Quote from Covertibility:

This forum should be called doom and gloom. Financial collapses, real estate bubbles, gold nuts..etc... Thank God most of you don't have real money.

Nice

 

[andrasnm]

very ill informed or very naive and of course a majority. It is this majority of people who think everything is going to be alright despite their instincts and facts.
I pray that is the case but I have learned well that things are seldom as they seem....
Adjustments in world financial markets and economies are inevitable. Marx knew that as many in Europe had lived through times you are unaware. (no, I am not a Marxist
If you had studied history that I doubt very much you would know that these cycles go back much longer than the great Depression. If you think that an other major down cycle is not going to happen you are majority and very wrong. Yes, most everyday schmoe thinks Greenspoon is going to save us every year - like Santa is coming to the mall every time in December. But one year Santa will get hit by a bus....

Quote from Covertibility:

This forum should be called doom and gloom. Financial collapses, real estate bubbles, gold nuts..etc... Thank God most of you don't have real money.