There was a similar thread recently, but I wanted to expand on the scope of the last one.
Mainly, what specific stocks should someone begin buying to profit on the demising dollar?
I was thinking about Peter Schiff’s “Crash Proof,” but it has relatively poor reviews on Amazon because Schiff doesn’t give specifics as to where to invest. He just says to invest in commodities and dividend paying foreign stocks.
So what foreign stocks should one invest in?
What about the dollar ? What will happen to the ‘financial system’ ? Will massive counterfeiting keep on going until people in poor countries, and the poor in rich countries, start to starve (more) ?
Wouldn’t be worthwhile to try to come up with some educated guess there ? The fate of stocks surely is linked somehow to those issues ?
Just a note, but Peter Schiff can’t suggest stocks in a book. He is a licensed broker. What about using his company though? Their fee is 2 or 3%, and they have a mint program in Australia and a lot of other nice stuff.
I have a copy of Crash Proof. Decent enough book, I wish more Austrians would produce lit like this, that speaks to the average economically ignorant person, who has a profit motive that drives them to seek advice.
Schiff was bullish on agriculture going forward. He talks about Gold as a hedge, but prefers (as he put it) “cash on the barrel head”, or dividends. If I recall correctly, he mentions utilities as being sound plays.
The book is an advertisement for his firm, but at the same time, has a lot of great ideas, explanations etc for laymen.
So you’d say it would be a good idea to invest in them and let them handle your money?
I was thinking about it.
I’m not American, and I don’t have much money saved to bother anyway, but I’m a listener of Schiff’s radio podcasts and he seems very competent to me. I also like his Austrian stance and how he has promoted Ron Paul and now he’s supporting some liberty-minded Senator, so he seems a principled man. I would for sure trust him my money. They have a phone number in their website, so you can contact his firm and see if you like what they suggest before moving forward. You surely don’t want to keep your money in dollars – at least use their money basket trust where they keep the money in several strong currencies… I don’t think you need to be a client to enrol in some of these programs they have going.
^ The problem is that I don’t have much money to invest anyways ATM, so I’m not sure if they’d even take my business.
Well, they sound like they are meant for your small family really, but sure I think you’ll need to hand them at least a thousand… You have also to see that their investments are long-term, and there’s always a risk involved, for how small Peter makes sure it is, so if you’re a young guy I’m not sure you really want to go here… You can’t just liquidate them when you want the money.
The big concern anyway is making sure you retain the purchasing power of the money you have saved. A simple way to safeguard yourself could just be to hoard money in a strong currency. Checkout how many dollars you would have now if you had bought, say, the Swiss Franc a year ago. Compare it with how much a savings account in the bank would get you (here, you won’t get more than 2-3% in interest). You may find out it’s actually better to hold some strong money under the mattress than keeping it in the bank. I’m not sure what the strongest currencies are, but I think that they include the Swiss Franc, the Australian Dollar, the New Zealand Dollar and the Singapore Dollar. I think Peter also mentions the Euro, but I’m not sure, check out how much it has been appreaciating. Some people also buy gold coins or gold stocks: that seems more risky to me…
Of course, any gain is nominal, what you are doing is storing the value of your money. Making sure you don’t lose out to inflation.
If all you want is something to keep under the mattress as a hedge for inflation, then Gold is the strongest currency of all. You can probably get spreads of about 3% or similar to what a bank will trade for foreign (fiat) currency. At best you’re just storing your value, but it’s nice to have something you can hold and carry with you no matter what happens “out there”. Buy physical, pay cash, and no one has to know about it.
I would like to get into to foreign stocks, but I’m worried about what kind of taxes I might have to pay on purely nominal gains. It seems so unfair to pay capital “gains” on the debasement of your own state’s currency. To me, it’s not worth the risk for the possible dividends I might get. I don’t know.
A-R, gold would be better, but I dunno what the best form and from whom I should buy it, and then how to sell it, and it just feels a little more risky. I’ve read the IMF has been talking up the USA and European countries to sell the gold they have due to the rising of gold prices… Governments still have like half of the gold in existance, so it’s not like you’re getting out of the control of government policies when going gold… Anyway, do you have any suggestion in the USA for krazy there?
And krazy, please do tell us what course of action you decide to take. If you think this kind of thing is too risky, at least open a savings account for a few months to fight inflation a little bit… Some banks here offer savings for young people (until 25 years old I think) that operate like a current account. You use a debit card as usual, but still get 1-2% on interest (which I think would be none or very close to that, otherwise).
BlackSheep,
You’re right about central banks holding much of the world’s gold. Even so: what they own, they can only sell once; whereas they can double the amount of fiat in existence again and again. I mentioned gold because the transaction and storage costs are lowest. Silver is a great alternative currency (for us poor men) since very little of it is held by large institutions. Currently the gold to silver ratio is a bit over 50:1, as compared with historical ratios closer to 20:1 or 15:1. I think the ratio has many reasons to close back towards historical levels (2 - 3 times rise in silver).
Like you said, central banks might dump their remaining gold in a last desperate effort to prop up their currencies. Furthermore, if the general public starts to distrust the currency and are looking to an alternative for every day use, then silver makes a lot more sense than gold. The tiniest gold coin of any practical use would be worth at least $50+ in today’s terms. A silver “penny” (0.05 Oz T) on the other hand, is just small enough to buy the smallest typical purchases: candy bar, coffee, etc. and only slightly smaller than a current 10 cent piece. I would see demand for small denomination silver coins possibly increase dramatically in a fiat-money crisis.
As far as risk goes, I don’t know. It kind of depends on your perspective. When the price of gold is fluctuating by 5 or 10 % from one week to the next, I really see it as the other way around; ie, confidence in fiat money fluctuating wildly up and down. Just having a few hundred dollars of money in my bank account or in paper makes me lose sleep at night! To me, it seems immoral (as much as it is unavoidable) to hold or deal with even small amounts of fiat money. I prefer not to do business with and support avowed criminals. 1-2% in a bank account sounds terrible. Inflation is closer to 15% or more, and could change unpredictably. And by having your money in a bank account, you are actually contributing to inflation!
As far as buying and selling gold or silver, I believe the USA is one of the best places in the world. You can get good prices through the internet (although not anonymous) or check out coin shows, and coins shops. Definitely check out different options for the best price. I think you should be able to do at least as well as 2-3% spread on gold (1oz fine) and 4-5% spread on silver (100oz fine). Smaller sizes will probably cost more like 7-10%, though. If you’re planning on keeping them to spend directly in a fiat crisis, then “junk” silver (pre-1964 coins) can be a good idea. These can be bought for 5-10% below spot prices; although currently would cost you 15-20% to refine them, I can see them being accepted at par as money in the future.
I would really like to find some merchants around here that will sell their goods directly for silver. At least my drug dealer accepts silver! Other than that, I haven’t really looked around; but the less fiat I have to touch, the happier I would be. [:D] When I spend paper, I really feel like I’m cheating the merchant, passing off a counterfeit note. Probably the more we can grow the silver economy, the better we’ll be able to weather future government induced “business cycles”.
Sorry to be off the topic of stocks. I still think stocks will do best in the long run, since they actually do generate returns in addition to capital gains. Look for highly capitalized stocks with the best dividends. Definitely don’t chase after stocks that are just rising in price (like we all did in the 20’s and 90’s!) I’m just turned off by possible taxes, and having a paper trail. Maybe if you have enough money to pay the transaction costs, it would be worth looking for some tax haven to invest for you? I don’t know how you would be able to smuggle your money back without being detected, though. Maybe something for a counter-economic entrepreneur to think about.
A-R.
Well, I’ve been thinking about investing in Euro Pacific Capital, but I’m also thinking about investing on my own in a precious metal mining company.
Schiff regularly gives suggestions on Fox Business (you can find a few episodes w/ him on youtube), so I might follow one of those suggestions for now.
BTW guys, I just found this site: http://www.gold-stocks.com/
It has a list of gold mining companies and how their stocks have been doing. I was recently thinking about buying stocks from some Canadian gold, silver, tin, and zinc mining companies.
Go to my partners site. www.omegabullion.com
First, I would advise you to read “Conquer the Crash” by Robert Prechter.
That being said, I would not invest in stocks at the moment (I’m also an options trader), I would even shy away from gold as a short term investment, although it is an absolute necessity as a long term one (I personally prefer silver). We have not yet seen the end of this deflationary environment and only when it ends will the dollar begin its true demise.
I’m now thinking about playing it safe by putting my money into some kind of CD, bond, or fixed annuity denominated in either AUDs, NZDs, SGDs, or Yen. I just need to figure out how to go about doing that.
I just got some silver from APMEX.com
Pretty good prices in my opinion.
I’m also a jeweler, so if worse comes to worse, I can always cast them into things to sell/trade.
I was actually contemplating making some ‘Austrian’ silver coins to get up for sale…But we’ll see how that goes.
I thought a good investment would be alternative energy companies back before Obama got elected. I bet my money on him winning, and according to his policies he was going to dump tons of money on those companies.. I took the initiative and bought. The market crashed a little after that and brought the little known companies to their knees. You win some you lose some I guess. I’ve always just bought and sold things on craigslist to make money. I’ve never made less than a 20-30% return in a matter of weeks… Occaisionally I’ll get a really good deal and even double up! $1400 Honda Civic, washed, cleaned, drove for 3 months, sold for $2800. 
Of course, you can’t always get those good deals, and its all about keeping up to date on finding them.
As for large investments.. You can always start your own business selling cheap goods? Or perhaps investing in an indian car company? I have been contemplating starting some taco stands around my campus (of course, permits are a bitch).
Good luck!.. and if you find anything, make sure to let me know!
As corporations become increasingly regulated, the actual control of shareholders over their business becomes increasingly weak, and the management becomes to true power, proceeding to loot the company for everything until the entire outfit is nationalized. There may not be any safe stocks out there.
And, by extension, corporate bonds.
I think Schiff is more concerned with the long term big picture, compared to rating individual companies. I wish I could invest in EuroPac but all my money is tied up in my 401K. I just recently figured out how to go outside of the normal crappy choices in my 401K so I’m in the process of moving my money into gold stocks and foreign companies. What I’ve been doing is looking at the top ten holdings of gold and international mutual funds to see what they are investing in. I randomly picked some mutual funds and a copied their top ten holdings into a list. Here’s what I came up with:
Gold: Agnico-Eagle Mines |
|---|
Agnico-Eagle Mines |
Agnico-Eagle Mines |
Agnico-Eagle Mines |
Anglogold Ashanti Limited |
Barrick Gold Corporation |
Barrick Gold Corporation |
Barrick Gold Corporation |
Barrick Gold Corporation |
Buenaventura Mining Company Inc. ADR |
Buenaventura Mining Company Inc. ADR |
Eldorado Gold Corporation, Ltd. |
Eldorado Gold Corporation, Ltd. |
Franco-Nevada Corporation |
Franco-Nevada Corporation |
GOLD COIN |
Gold Fields Limited ADR |
Goldcorp, Inc. |
Goldcorp, Inc. |
Goldcorp, Inc. |
Goldcorp, Inc. |
Goldcorp, Inc. |
IAMGold Corporation |
IAMGold Corporation |
IAMGold Corporation |
Ivanhoe Mines, Ltd. |
Kinross Gold Corporation |
Kinross Gold Corporation |
Kinross Gold Corporation |
Lihir Gold Limited |
Lihir Gold Limited |
Newcrest Mining Limited |
Newcrest Mining Limited |
Newcrest Mining Limited |
Newmont Mining Corporation |
Newmont Mining Corporation |
Newmont Mining Corporation |
Newmont Mining Corporation |
Osisko Mining Corporation |
Randgold Resources, Ltd. ADR |
Randgold Resources, Ltd. ADR |
Randgold Resources, Ltd. ADR |
Randgold Resources, Ltd. ADR |
Randgold Resources, Ltd. ADR |
Royal Gold, Inc. |
Silver Wheaton Corporation |
SPDR Gold Shares |
Yamana Gold, Inc. |
Yamana Gold, Inc. |
Yamana Gold, Inc. International: |
AEON Mall |
|---|
Ahold Kon |
ALLIANZ SE SPON ADR |
Anheuser-Busch Inbev Sa, Bruxelles |
AstraZeneca PLC |
AstraZeneca PLC |
Banco Santander SA |
BASF SE |
Bayer AG |
BG Group PLC |
BG Group PLC |
BG Group PLC |
BHP Billiton PLC |
BP PLC |
Brazilian Petroleum Corporation |
Canon, Inc. |
Canon, Inc. |
China Life Insurance Company, Ltd. |
CNOOC, Ltd. |
CSL Limited |
Daikin Industries, Ltd. |
Deutsche Bank AG |
E.ON AG |
E.ON AG |
E.ON AG |
E.ON AG |
E.ON AG |
Eni |
Eni |
Eni |
Eni |
ENI |
Essilor International |
Essilor International |
Eutelsat Communications |
Fanuc Ltd. |
Fondiaria-Sai Risp |
France Telecom SA |
GlaxoSmithKline PLC |
GlaxoSmithKline PLC |
GlaxoSmithKline PLC |
Haseko |
Heineken N.V. |
Hengan International Group Co. Ltd. |
Hennes & Mauritz AB |
Honda Motor Company |
Hong Kong and China Gas Co. Ltd. |
Imperial Tobacco Group PLC |
Infosys Technologies, Ltd. |
iShares MSCI Japan Index |
Japan Digital Laboratory |
KDDI Corp. |
MITSUI & CO LTD |
Muenchener Rueckver AG |
Muenchener Rueckver AG |
MUNICH REINSURANCE (REG) |
National Bank of Greece |
Nestle |
Nestle |
Nestle |
Nestle |
Nestle |
Nestle |
Nestle |
Nintendo |
Novartis |
Novartis |
Novartis |
Novo Nordisk A/S |
OSAKA GAS CO LTD |
QBE Insurance Group Limited |
Qiagen NV |
Reckitt Benckiser Grp |
Reckitt Benckiser Grp |
Rio Tinto PLC |
ROCHE HLDGS GENUSSSCHEINE |
Roche Holding AG |
Roche Holding AG |
Roche Holding AG |
Roche Holding AG |
Roche Holding Ltd |
Rogers Communications, Inc. B |
Royal Dutch Shell PLC |
Royal Dutch Shell PLC |
Royal Dutch Shell PLC |
Royal Dutch Shell PLC B |
ROYAL DUTCH SHELL SPN ADR CL A |
Samsung Electnc Pfd |
Samsung Electronics |
Sanofi-Aventis |
Sanofi-Aventis |
Sanofi-Aventis |
Sanofi-Aventis |
Sanofi-Aventis |
Seven & i Holdings Co., Ltd. |
SGS |
Sony Financial Hldgs |
Swiss Re |
Syngenta |
Syngenta |
Taiwan Semiconductor Manufacturing ADR |
Takeda Pharmaceutical Co., Ltd. |
Telefonica, S.A. |
Telefonica, S.A. |
Telefonica, S.A. |
Telefonica, S.A. |
Tenaris SA ADR |
Terumo Corp. |
Teva Pharmaceutical Industries, Ltd. ADR |
Teva Pharmaceutical Industries, Ltd. ADR |
TNT NV |
Total SA |
Total SA |
Total SA |
Total SA |
Total SA |
Total SA |
Total SA |
TOYOTA MOTOR CORP |
Toyota Motor Corporation |
Turk Hava Yollari AO |
UNICREDIT SPA |
Vivendi |
Vodafone Group PLC |
Vodafone Group PLC |
VODAFONE GROUP PLC |
Vodafone Group PLC |
Vodafone Group PLC |
Woodside Petroleum Limited |
Zurich Financial Services |