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7734



Joined: 19 Sep 2003
Posts: 4175

PostPosted: Mon Nov 27, 2006 11:46 am    Post subject: -> MONEY <- Reply with quote

All right, fuck drugs. Let's talk money. How to get it, and how to hang on to it.

Who here is a financial whiz?

When is the dollar going to take a complete shit?

Is buying gold a bad idea?

Any thoughts on the Federal Reserve, our fiat currency system, or the discontinuance of M3?

I'm all ears.
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Felix Havoc



Joined: 07 Oct 2003
Posts: 2678
Location: Minneapolis

PostPosted: Mon Nov 27, 2006 1:09 pm    Post subject: Reply with quote

I think the dollar is heading for a crash, it's already at 1.25 vs. the euro and .90 vs. the Canadian dollar. If the Chinese and other central bank stop buying t bills the dollar will collapse.

You can now buy CDs in euros through a bank in the US, evergreen I think is the name.

Gold is already at record highs (bouyed by the rise in commodity prices and fears of the dollar dropping) The problem with putting assets into gold is that they are fixed, that is to say gold generates no wealth (the way say real estate, stocks or bonds do). And gold is somewhat volatile. For instance, you may think gold is great if the money supply is threatened, but at some points in history the gold price has actually dropped in this situation because so many gold hoarders have to start converting their gold into cash.

To my mind the best places to invest right now are real estate and energy efficiency. Energy prices are going to continue to rise, probably soon they will start to rise quickly, and most of the rest of the 21st century will be about adapting the economy to dwindling supplies of fossil fuels. Inveting now in more efficient home heating, lighting, etc. is going to have an increasingly high pay off. And of course, real estate both generates wealth and tends to increase in value with inflation. You can for sure argue that real estate is currently over valued, but the wave of forclosures many prdicted is starting to take off, so bargains will soon be coming back on line in that world.

I would put very little faith in the dollar, or the stock market right now. I think rising energy prices could take most of the growth out of the economy and the huge deficits and shaky fed practices could take most of the value out of the dollar. If for example, world commodity and bond markets shifted to euros, it would suck a ton of value out of the us currency as a "currency of reserve" and those circumstances are not so far fetched.
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7734



Joined: 19 Sep 2003
Posts: 4175

PostPosted: Mon Nov 27, 2006 1:21 pm    Post subject: Reply with quote

Thank god I got a reply. I thought I hit the ultimate boring nerve or had avatar B.O.

So let's say I want out of the stock market now and I can't see buying more property just yet. Do you think buying CDs in euros is the best bet for short term?
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DEDLY DAEGO



Joined: 23 Sep 2003
Posts: 3613
Location: South Side

PostPosted: Mon Nov 27, 2006 1:28 pm    Post subject: Reply with quote

Bootleg shirts.
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7734



Joined: 19 Sep 2003
Posts: 4175

PostPosted: Mon Nov 27, 2006 1:38 pm    Post subject: Reply with quote

What do you want? I'll have it on CafePress in a heartbeat.

Didn't you say you had a few dollars in a fund?
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Felix Havoc



Joined: 07 Oct 2003
Posts: 2678
Location: Minneapolis

PostPosted: Mon Nov 27, 2006 1:40 pm    Post subject: Reply with quote

I took most of my IRA out of mutual funds and put it in one year CDs. Interest rate is still 5 or 6%, and typically it's a one year CD so you aren't locked into anything long term. I also moved a big chunk of my IRA into REITs.

The rest of the money I earn goes into records, and improvements to real estate I own. Or in theory, (if I had more money) into paying off the principle on my mortgage. My plan is to install solar hot water heat, passive solar and wood heat over the next few years. I've already blown in insulation and replaced the windows with insulated replacement sash and stuff like that. If you take it one project at a time as your budget and time permit I think it's a long term pay off but "like money in the bank" especially as energy prices rise and purchasing power of the dollar shrinks. Better to do sensible stuff like this now, than in a full blown 1973 style energy crisis.
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Ollie Stench



Joined: 22 Sep 2003
Posts: 13697
Location: Hong Kong Noodles

PostPosted: Mon Nov 27, 2006 2:29 pm    Post subject: Reply with quote

I took my 401k to use as a down payment on my house. I figured real estate was much safer, and probably more profitable, than mutual funds.
Unfortunately I'm one of the 70% of Americans literally living paycheck to paycheck. The thought of a few grand to improve my house is out of the question. I've got feelers out for better paying work, and with about $15k worth of improvements my place would be shaped up enough to get a room mate in, which is the plan.

But what can the average not-educated-at-a-college schmo do to make extra money, and then what can I do with it to make sure that I'm not working when I'm 70? (I plan on dieing before I hit 60, but just in case...)
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Roland Deschain



Joined: 28 Jan 2005
Posts: 4554
Location: Lud

PostPosted: Mon Nov 27, 2006 2:36 pm    Post subject: Reply with quote

Jesus Christ! I didn't know Felix was Donald fuckin' Trump!

I'm impressed, and couldn't agree more with your views on gold 'n' real estate.
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Felix Havoc



Joined: 07 Oct 2003
Posts: 2678
Location: Minneapolis

PostPosted: Mon Nov 27, 2006 2:41 pm    Post subject: Reply with quote

Ollie, if you wanna make some extra cash you should start bootlegging some of your classic (but out of print) punk VHS tapes to DVD. I know some dudes doing brisk trade in bootreg punk DVDs. Why more of this stuff doesn't get re issued legit is beyond me, there's a lot of demand.
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7734



Joined: 19 Sep 2003
Posts: 4175

PostPosted: Mon Nov 27, 2006 3:05 pm    Post subject: Reply with quote

Fuck Ollie, you're doing better than I was at your age. You don't have any huge debt right? Get that renter quick and stick some of that extra income away. Do you need to build a room? No working toilet?

Felix, what kind of split would you do between the CDs and REITs?
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TLH



Joined: 10 Sep 2004
Posts: 5486
Location: Way West of the river.

PostPosted: Mon Nov 27, 2006 3:26 pm    Post subject: Reply with quote

7734 wrote:
Thank god I got a reply. I thought I hit the ultimate boring nerve or had avatar B.O.

So let's say I want out of the stock market now and I can't see buying more property just yet. Do you think buying CDs in euros is the best bet for short term?


I erased two replies about investing in real property- specifically residential rentals. Buy it, live in it, do what you can and what you have to, hire as little outside help as possible. Rent it. Buy another and do the same. In every place in the U.S. that I've lived realestate has never devaluated for more than a blip on the timeline- real estate tends to go up where I've been. I've lived by trusting real property to hang in there. Though what do I know- I live on the side of an active volcano.

I'm no financial whiz, but I am pretty observant and do tend to pick up on patterns. One thing I've observed again and again and have experienced a good bit firsthand: people who have bought several properties way low and hung on to them and stuck it out through the hard times really flourished when the good times rolled around again. I don't know exactly why, have speculated but there's lots of variables- but there's a lot of tenacious landlords out there- both good landlords and bad, stupid and smart and whatever- who have scraped by through the hard times and then ended up pretty well set during the good times.

In real estate, the people who are tenacious enough to scrape by tend to end up pretty Ok.
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Felix Havoc



Joined: 07 Oct 2003
Posts: 2678
Location: Minneapolis

PostPosted: Mon Nov 27, 2006 3:34 pm    Post subject: Reply with quote

I'm no financial planner 7734. I would stress diversifying (not too much real estate, gold, euros or whatever). I don't have much in my IRA (less than 20k) because most of my money is in my real estate or my business (inventory and equipment)

I mainly even have an IRA for the tax deduction in years that I need it. Personally, I have better places to invest the money right in front of me than trusting it to some banker or financial advisor, if they were so damn smart, they wouldn't be giving financial advice to guys like me and working at a local bank, would they?
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Ollie Stench



Joined: 22 Sep 2003
Posts: 13697
Location: Hong Kong Noodles

PostPosted: Mon Nov 27, 2006 3:40 pm    Post subject: Reply with quote

I've got the room, its the back entryway to my house. Probably 5' by 8', maybe 10'. I need to plumb it, install a toilet and shower, and move the back door to the other side of the house.


Felix, I remember you telling me about a year ago about how our entire economy would collapse if OPEC changed over to euros instead of dollars. I think a few other people here might find that interesting. Any chance of a recap?
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TLH



Joined: 10 Sep 2004
Posts: 5486
Location: Way West of the river.

PostPosted: Mon Nov 27, 2006 3:42 pm    Post subject: Reply with quote

Oh shoot yeah I agree with felix- diversify. The only reason I stick solely with real estate at this point is because I have a way limited amount of funds temporarily and because my business allows me to write off a ton of shit as a loss to the business rather than profit spent (though you can write off home improvements in the long run and you can make a business out of your rentals, contracting for a living creates some opportunities that are too good to avoid.)

I've read a ton about investing but it's all Greek to me- looks like voodoo or something from where I stand- and so I stick with the shit that's worked for me.
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rahpower



Joined: 17 Sep 2003
Posts: 2879
Location: NYC

PostPosted: Mon Nov 27, 2006 3:44 pm    Post subject: Reply with quote

I'm still staying with the market, but I'm heavy on foreign investment. I think that Felix is correct, if you're going long and can get in for a reasonable price, make energy investments. These will pay off down the road.

I have read a couple of articles recently that stated the belief that there is going to be a upsurge in corporate bankruptcies in the next 6-18 months. Most analysts are expecting the liquidity bubble to burst due to higher interest rates. Industries that are expected to be the most vulnerable are real estate and construction, but also possibly airlines (surprise), manufacturing, transportation and consumer products. I don't know whether to cheer or cry, since I work in the field.

I like to take some risk and am looking at getting into some SPACs, possibly. I'll probably end up losing my ass. I would love to get into hedge funds and start buying on margin; however, it will be a long time before I have the time or the capital to make this happen.

As far as the fiat system goes, I don't really have a problem with it in theory, but will wait until I review the films you gave me before waxing too in depth. Then, I might be able to address some of the points that we have already mentioned in conversation.
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