Where is the Ultimate Safe Haven in times like this.

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PANDA_IHB

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In times like this where is the ulimate safe haven?



I wanted to start a topic on where many of you believe the ultimate safe haven is. I know that some of you are sitting 100% cash, some us are 100% in precious metals, and some of us are diversified among foreign currencies, precious metals, and the U.S. dollar. Recently the dollar has been rallying and finding support at the 80 level, however I believe that this is a temporary rally as many foreigners are running to the dollar as the ulimate safe haven, which they will later find out that it was a big mistake. With trillions of dollars in deficient, $700 bail out approved, i just can't see how the dollar will not eventually crash. I believe that our country is headed towards a hyper-inflation than a deflation.



I know also believe the Swiss Francs, Euros, Australian Dollar will also fall because of their own poor economic conditions, but not nearly as fast as how fast the dollar will fall. Lately the dollar has been the only thing rising as all International Equities, U.S. Stock market, and Commodities have taken a hit. I found it very interesting that Gold did not tank when the $700 bail out was approved by congress yesterday. This gives me more confidence that Gold has found support at the $850 level and ready to take off in a major way very soon here.



Where do you think is the ultimate safe haven to protect and conserve your wealth as we are headed into the next Great Depression? Gold? Hard Currencies? or our U.S. Dollar?
 
I am a big fan of Peter Schiff, and have quoted many things from his book in my prior posts on the Irvine Housing Blog.



After reading his book "Crash Proof" in May of 2007. I liquidated all my positions in the U.S. Stock Market, and started to convert out of the U.S. Dollar. His book also confirmed my positions in precious metals and hard foreign currencies. Peter had mentioned in his book that there will be a major crash in the U.S. dollar. Graph, you have always been wondering where Panda gets his crazy investment ideas, and now you know. What is really crazy is that i remember Peter Schiff predicting that Freddie and Fannie would go under when i read this book that was written in late 2006.



<object width="325" height="250"><embed src="http://www.youtube.com/v/youtube" type="application/x-shockwave-flash" width="325" height="250"></embed></object>

Peter discusses his book "Crash Proof" I recommend everyone on the IHB to get a copy of this book at your nearest Border's Book Store. Trust me, I don't get any commission from this guy.



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Peter predicts a major crash in the real estate market in November 2006, and of course many people think he is crazy back then.



I would love to hear what your opinion is regarding Peter Schiff.



http://www.amazon.com/Little-Book-Bull-Moves-Markets/dp/047038378X/ref=pd_bbs_sr_2?ie=UTF8&s=books&qid=1223131423&sr=8-2

His new book just came out last week, and I picked up my copy yesterday. Enjoy!



PROTECT YOURSELF!
 
[quote author="IrvineRealtor" date=1223157354][quote author="PANDA" date=1223151746]In times like this where is the ulimate safe haven?</blockquote>


Irvine, of course.</blockquote>
hahaha



Safe Haven = shorter term US Treasuries
 
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Peter Schiff said that Gold prices may reach up to $1200 by year end and up to $2000 by 2009 and can potentially peak at $5000 an ounce. If the DOW gets down to the 6000 - 7000 level, we may a situation again where the one ounce of Gold will buy the DOW just like 1980 and 1935. We'll have to wait and see if we get there. I believe that $1000 before year end is definitely within reach before 12/31/2008.



For some of you interested in diversifying your U.S. Dollar positions into foreign currencies without having to open up a bank account abroad, I recommend the Merk Hard Currency fund ticker symbol: MERKX. The fund buys T-bills in the following countries. Short term, the fund has not performed well because of the recent rally of our dollar, but long-term i believe our dollar will decline very rapidly.



MERK HARD CURRENCY FUND:



Europe Euro 38.1%

Swiss Franc 16.8%

Norwegian Krone 5.4%

Swedish Krona 4.3%

British Pound 4.0%

North America Canadian Dollar 17.0%

U.S. Dollar, net* 0.0%

Gold Gold * 9.3%

Australasia Australian Dollar 3.7%

New Zealand Dollar 1.4%
 
Panda, I feel very safe b/c I got nothing to lose financially (besides my job) :), so I don't really have any savings or any kind of money/stock I should worry about. However, following advice posted by smart people on this forum, I'm planning to buy some gold and some TIPS with what little savings I have.
 
Good for you Blackacre-seeker,



There are couple ways to buy gold. You can buy physical gold, gold coins, or buy the gold ETFs. NYSE: Ticker GLD, Canadian Gold ETF: GTU, Gold/Silver: CEF. If you go the ETF route, I personally prefer Canadian Gold ETFs: CEF and GTU as when the U.S. government starts confiscating Gold, they cannot force you to sell these shares as they are Canadian. However, there is a little premium of owning these shares. If you are ultra-optimistic about Gold's rise than go with DGP: Beta 2X Gold, which has double the volatility of gold. As Muzie has said before, DGP is very volatile as when Gold drops, DGP will drop double. I think we will see Gold at $1000 by year end. Buy it now because I think buying gold and foreign currencies will be illegal in the next 3-5 years.



In my mid 20s, I have personally witnessed the U.S. government personally confiscate everything that my enterprising father had built for the past 20 years in this free country as it was a direct conflict with a lobbying member of the government which i do not want to go into detail in a public forum. An honest U.S. citizen with an honest business stripped away all of his rights, his house, his two company buildings, his cars and all of his assets confiscated by the U.S. government, and caused get pain for my entire family even til this day.



I am not against our country or our government, but the corruption and lies that i have witnessed behind the scenes of looking politically correct in the outside with deceptive motives inside.



The U.S. Government is indeed capable of crossing any lines that you may think is not possible in the near future: confiscating innocent Americans' assets, making ownership of gold and foreign money, assets illegal are among them.
 
[quote author="PANDA" date=1223237252]Good for you Blackacre-seeker,



There are couple ways to buy gold. You can buy physical gold, gold coins, or buy the gold ETFs. NYSE: Ticker GLD, Canadian Gold ETF: GTU, Gold/Silver: CEF. If you go the ETF route, I personally prefer Canadian Gold ETFs: CEF and GTU as when the U.S. government starts confiscating Gold, they cannot force you to sell these shares as they are Canadian. However, there is a little premium of owning these shares. If you are ultra-optimistic about Gold's rise than go with DGP: Beta 2X Gold, which has double the volatility of gold. As Muzie has said before, DGP is very volatile as when Gold drops, DGP will drop double. I think we will see Gold at $1000 by year end. Buy it now because I think buying gold and foreign currencies will be illegal in the next 3-5 years.



In my mid 20s, I have personally witnessed the U.S. government personally confiscate everything that my enterprising father had built for the past 20 years in this free country as it was a direct conflict with a lobbying member of the government which i do not want to go into detail in a public forum. An honest U.S. citizen with an honest business stripped away all of his rights, his house, his two company buildings, his cars and all of his assets confiscated by the U.S. government, and caused get pain for my entire family even til this day.



I am not against our country or our government, but the corruption and lies that i have witnessed behind the scenes of looking politically correct in the outside with deceptive motives inside.



The U.S. Government is indeed capable of crossing any lines that you may think is not possible in the near future: confiscating innocent Americans' assets, making ownership of gold and foreign money, assets illegal are among them.</blockquote>


It is a post like this that reminds me that Panda is nuts, and is going to lose a lot of money investing the way he does. I respect Schiff, but anyone who thinks the US is going to confiscate every citizens gold is completely off their rocker. I mean, I am nutter, but this is so nutty that you would have to combine the nuttiness of me, awgee, no_vas, and AZdavid and you still wouldn't be nutty enough as panda.



Dollar keeps going up, and it will keep going up. For your own good, don't listen to panda, it is clear that he is nuttier than me.
 
[quote author="PANDA" date=1223237252]Good for you Blackacre-seeker,



There are couple ways to buy gold. You can buy physical gold, gold coins, or buy the gold ETFs. NYSE: Ticker GLD, Canadian Gold ETF: GTU, Gold/Silver: CEF. If you go the ETF route, I personally prefer Canadian Gold ETFs: CEF and GTU as when the U.S. government starts confiscating Gold, they cannot force you to sell these shares as they are Canadian. However, there is a little premium of owning these shares. If you are ultra-optimistic about Gold's rise than go with DGP: Beta 2X Gold, which has double the volatility of gold. As Muzie has said before, DGP is very volatile as when Gold drops, DGP will drop double. I think we will see Gold at $1000 by year end. Buy it now because I think buying gold and foreign currencies will be illegal in the next 3-5 years.



In my mid 20s, I have personally witnessed the U.S. government personally confiscate everything that my enterprising father had built for the past 20 years in this free country as it was a direct conflict with a lobbying member of the government which i do not want to go into detail in a public forum. An honest U.S. citizen with an honest business stripped away all of his rights, his house, his two company buildings, his cars and all of his assets confiscated by the U.S. government, and caused get pain for my entire family even til this day.



I am not against our country or our government, but the corruption and lies that i have witnessed behind the scenes of looking politically correct in the outside with deceptive motives inside.



<strong>The U.S. Government is indeed capable of crossing any lines that you may think is not possible in the near future: confiscating innocent Americans' assets, making ownership of gold and foreign money, assets illegal are among them</strong>.</blockquote>
If you think that, then it may be time to move to another country. I think you are being a bit paranoid panda.
 
[quote author="graphrix" date=1223254341][quote author="PANDA" date=1223237252]Good for you Blackacre-seeker,



There are couple ways to buy gold. You can buy physical gold, gold coins, or buy the gold ETFs. NYSE: Ticker GLD, Canadian Gold ETF: GTU, Gold/Silver: CEF. If you go the ETF route, I personally prefer Canadian Gold ETFs: CEF and GTU as when the U.S. government starts confiscating Gold, they cannot force you to sell these shares as they are Canadian. However, there is a little premium of owning these shares. If you are ultra-optimistic about Gold's rise than go with DGP: Beta 2X Gold, which has double the volatility of gold. As Muzie has said before, DGP is very volatile as when Gold drops, DGP will drop double. I think we will see Gold at $1000 by year end. Buy it now because I think buying gold and foreign currencies will be illegal in the next 3-5 years.



In my mid 20s, I have personally witnessed the U.S. government personally confiscate everything that my enterprising father had built for the past 20 years in this free country as it was a direct conflict with a lobbying member of the government which i do not want to go into detail in a public forum. An honest U.S. citizen with an honest business stripped away all of his rights, his house, his two company buildings, his cars and all of his assets confiscated by the U.S. government, and caused get pain for my entire family even til this day.



I am not against our country or our government, but the corruption and lies that i have witnessed behind the scenes of looking politically correct in the outside with deceptive motives inside.



The U.S. Government is indeed capable of crossing any lines that you may think is not possible in the near future: confiscating innocent Americans' assets, making ownership of gold and foreign money, assets illegal are among them.</blockquote>


It is a post like this that reminds me that Panda is nuts, and is going to lose a lot of money investing the way he does. I respect Schiff, but anyone who thinks the US is going to confiscate every citizens gold is completely off their rocker. I mean, I am nutter, but this is so nutty that you would have to combine the nuttiness of me, awgee, no_vas, and AZdavid and you still wouldn't be nutty enough as panda.



Dollar keeps going up, and it will keep going up. For your own good, don't listen to panda, it is clear that he is nuttier than me.</blockquote>


6 months ago I thought of converting some of my cash into foreign currencies like EURO or SWISS franc, but I changed my mind the last minute. The rest of the world is hurting too.
 
[quote author="graphrix" date=1223254341][quote author="PANDA" date=1223237252]Good for you Blackacre-seeker,



There are couple ways to buy gold. You can buy physical gold, gold coins, or buy the gold ETFs. NYSE: Ticker GLD, Canadian Gold ETF: GTU, Gold/Silver: CEF. If you go the ETF route, I personally prefer Canadian Gold ETFs: CEF and GTU as when the U.S. government starts confiscating Gold, they cannot force you to sell these shares as they are Canadian. However, there is a little premium of owning these shares. If you are ultra-optimistic about Gold's rise than go with DGP: Beta 2X Gold, which has double the volatility of gold. As Muzie has said before, DGP is very volatile as when Gold drops, DGP will drop double. I think we will see Gold at $1000 by year end. Buy it now because I think buying gold and foreign currencies will be illegal in the next 3-5 years.



In my mid 20s, I have personally witnessed the U.S. government personally confiscate everything that my enterprising father had built for the past 20 years in this free country as it was a direct conflict with a lobbying member of the government which i do not want to go into detail in a public forum. An honest U.S. citizen with an honest business stripped away all of his rights, his house, his two company buildings, his cars and all of his assets confiscated by the U.S. government, and caused get pain for my entire family even til this day.



I am not against our country or our government, but the corruption and lies that i have witnessed behind the scenes of looking politically correct in the outside with deceptive motives inside.



The U.S. Government is indeed capable of crossing any lines that you may think is not possible in the near future: confiscating innocent Americans' assets, making ownership of gold and foreign money, assets illegal are among them.</blockquote>


It is a post like this that reminds me that Panda is nuts, and is going to lose a lot of money investing the way he does. I respect Schiff, but anyone who thinks the US is going to confiscate every citizens gold is completely off their rocker. I mean, I am nutter, but this is so nutty that you would have to combine the nuttiness of me, awgee, no_vas, and AZdavid and you still wouldn't be nutty enough as panda.



Dollar keeps going up, and it will keep going up. For your own good, don't listen to panda, it is clear that he is nuttier than me.</blockquote>


Graph, does that mean you are going to hand over your IHB Nutter Award to Panda? Peter Schiff, the man that you respect, has an investing strategy that is in align to my convictions in investing for many years. I have been bullish for international markets since the DOW hit 7000 back in 2002, and i have been investing in developed international markets and emerging markets since then. If you compare the returns of your portfolio compared to mine since 2002 til present, I am sure that i have kicked your butt by a wide margin. Graph, my friend, let me you that the DOW is headed toward 7500 - 8000 again, where you wouldn't have made any money had you invested in the U.S. stock market since 2000 - 2002 until now in 2008.



Currently, the dollar is in a fake bear market rally. The foriegners are temporarily running to the U.S. treasuries and the dollar as an artificial safe haven. The dollar's downward trend against other major currencies (Euro, Australian, Canadian, and Swiss) will continue for as long as the United States continues to print its way out of mess and has inflation, high debt, and a huge trade deficit.
 
[quote author="PANDA" date=1223281754][quote author="graphrix" date=1223254341][quote author="PANDA" date=1223237252]Good for you Blackacre-seeker,



There are couple ways to buy gold. You can buy physical gold, gold coins, or buy the gold ETFs. NYSE: Ticker GLD, Canadian Gold ETF: GTU, Gold/Silver: CEF. If you go the ETF route, I personally prefer Canadian Gold ETFs: CEF and GTU as when the U.S. government starts confiscating Gold, they cannot force you to sell these shares as they are Canadian. However, there is a little premium of owning these shares. If you are ultra-optimistic about Gold's rise than go with DGP: Beta 2X Gold, which has double the volatility of gold. As Muzie has said before, DGP is very volatile as when Gold drops, DGP will drop double. I think we will see Gold at $1000 by year end. Buy it now because I think buying gold and foreign currencies will be illegal in the next 3-5 years.



In my mid 20s, I have personally witnessed the U.S. government personally confiscate everything that my enterprising father had built for the past 20 years in this free country as it was a direct conflict with a lobbying member of the government which i do not want to go into detail in a public forum. An honest U.S. citizen with an honest business stripped away all of his rights, his house, his two company buildings, his cars and all of his assets confiscated by the U.S. government, and caused get pain for my entire family even til this day.



I am not against our country or our government, but the corruption and lies that i have witnessed behind the scenes of looking politically correct in the outside with deceptive motives inside.



The U.S. Government is indeed capable of crossing any lines that you may think is not possible in the near future: confiscating innocent Americans' assets, making ownership of gold and foreign money, assets illegal are among them.</blockquote>


It is a post like this that reminds me that Panda is nuts, and is going to lose a lot of money investing the way he does. I respect Schiff, but anyone who thinks the US is going to confiscate every citizens gold is completely off their rocker. I mean, I am nutter, but this is so nutty that you would have to combine the nuttiness of me, awgee, no_vas, and AZdavid and you still wouldn't be nutty enough as panda.



Dollar keeps going up, and it will keep going up. For your own good, don't listen to panda, it is clear that he is nuttier than me.</blockquote>


Graph, does that mean you are going to hand over your IHB Nutter Award to Panda? Peter Schiff, the man that you respect, has an investing strategy that is in align to my convictions in investing for many years. I have been bullish for international markets since the DOW hit 7000 back in 2002, and i have been investing in developed international markets and emerging markets since then. If you compare the returns of your portfolio compared to mine since 2002 til present, I am sure that i have kicked your butt by a wide margin. Graph, my friend, let me you that the DOW is headed toward 7500 - 8000 again, where you wouldn't have made any money had you invested in the U.S. stock market since 2000 - 2002 until now in 2008.



Currently, the dollar is in a fake bear market rally. The foriegners are temporarily running to the U.S. treasuries and the dollar as an artificial safe haven. The dollar's downward trend against other major currencies (Euro, Australian, Canadian, and Swiss) will continue for as long as the United States continues to print its way out of mess and has inflation, high debt, and a huge trade deficit.</blockquote>


I am with Graphrix on this one. I think Peter Schiff jumps the shark on his prognostications of a total collapse of the US Dollar. If we were alone in our troubles, I might see continued weakness in the dollar, but since our problems are the worlds problems, I don't think there will be continued weakness in the dollar. In fact, since these things go in cycles, we are further along in the cycle that everyone else, and in all likelihood, we will recover sooner. This will make the dollar even stronger.
 
I'm also leaning towards Panda... but I still still don't trust my gold positions. Still got them, holding them because frankly I don't have any brighter ideas besides cash... But it's just way too easy for gold to be manipulated for it to be considered the "ultimate safe haven".



I actuallythink Berkshire is a more reliable safe haven. Unlike gold, there are no potential interests throughout the world that may like to see its share price lower.



It's not that I think Buffet's the super stock picker, although he seems to show plenty of that. But twice already he's gotten excellent deals (GE and GS) for his company that would be impossible to get for smaller investors. In a deflation, cash is king, and Berkshire is cash with a kick - aka somehow who's smart enough to lend that mountain cash with an added kick. GM, Ford, AIG, you name it- any of these guys want some cold hard cash, they know where to turn to, and if they can throw around some serious incentives (10% dividend and so forth), Warren's ready with bills in fist.



Most importantly, Berkshire has show excellent non-coorelation with the S&P this year - gold has been more a mirror image of the dollar and the S&P to a lesser degree. When things get really bad, so far, people have flocked to gold and Berkshire. Yet for whatever reason, the price action in gold is always uncertain. Gold and Berkshire are about neck and neck YTD - over the past month BRK is up 20% while gold has gained only 5% so far after all is said and done. Berkshire acts more like alpha - loosely correlated with the market, but not a whole lot, and over time somehow Berkshire managed ot distance itself from the index. Gold is more like inverse beta, tending to just track with the dollar inversely while showing very little personality of its own.



In tough times, you want "partners", that is other shareholders in your stock, to be trustworthy enough that they won't run for the hills at the first sign things are turning around.



Most importantly, if something happens and we do start a new bull market at some not too distant point, Berkshire may well continue to rise, whereas gold will be at high risk of just deflating out of any gains every time things seem to get better imho.
 
[quote author="PANDA" date=1223237252]Good for you Blackacre-seeker,



There are couple ways to buy gold. You can buy physical gold, gold coins, or buy the gold ETFs. NYSE: Ticker GLD, Canadian Gold ETF: GTU, Gold/Silver: CEF. If you go the ETF route, I personally prefer Canadian Gold ETFs: CEF and GTU as when the U.S. government starts confiscating Gold, they cannot force you to sell these shares as they are Canadian. However, there is a little premium of owning these shares. If you are ultra-optimistic about Gold's rise than go with DGP: Beta 2X Gold, which has double the volatility of gold. As Muzie has said before, DGP is very volatile as when Gold drops, DGP will drop double. I think we will see Gold at $1000 by year end. Buy it now because I think buying gold and foreign currencies will be illegal in the next 3-5 years.



In my mid 20s, I have personally witnessed the U.S. government personally confiscate everything that my enterprising father had built for the past 20 years in this free country as it was a direct conflict with a lobbying member of the government which i do not want to go into detail in a public forum. An honest U.S. citizen with an honest business stripped away all of his rights, his house, his two company buildings, his cars and all of his assets confiscated by the U.S. government, and caused get pain for my entire family even til this day.



I am not against our country or our government, but the corruption and lies that i have witnessed behind the scenes of looking politically correct in the outside with deceptive motives inside.



The U.S. Government is indeed capable of crossing any lines that you may think is not possible in the near future: confiscating innocent Americans' assets, making ownership of gold and foreign money, assets illegal are among them.</blockquote>


If the US starts confiscating gold I would expect Canada would follow suit for the simple reason Canada tends to not really have any leadership whatsoever when it comes to these matters. Witness Canada's shorting ban two days after the US.



In fact the whole world is just playing "follow the leader". Ireland just guaranteed ALL bank accounts on the back of the Irish government. The whole thing, backed by them, no limits. It appears likely the European Union will follow suit to avoid capital fleeing to Ireland, and the US will follow suit after that imho.



France also announced it will simply BUY 30,000 new houses outright to help out the housing market. That's another precedent.



It's the job of the governments to do everything in their power to prevent a breakdown of their economies. I don't think principles and preservation of market freedoms are very hard on the priority list right now. Just doing something, anything to prevent collapse.
 
The following analogy is a bit harsh and in no way is meant to offend or denigrate opposing viewpoints. It is the best way I know to make my point.



The USD index is useful for Forex traders, but is not particularly useful when discussing or computing the strength of the dollar. Determining the strength of the dollar by comparing it to the Euro is like comparing the odors of two different piles of dog poop before stepping in one pile and entering one's home. No matter which pile has the least offensive odor, they are both piles of poop and it is better to avoid both before entering one's home.
 
[quote author="awgee" date=1223325641]The following analogy is a bit harsh and in no way is meant to offend or denigrate opposing viewpoints. It is the best way I know to make my point.



The USD index is useful for Forex traders, but is not particularly useful when discussing or computing the strength of the dollar. Determining the strength of the dollar by comparing it to the Euro is like comparing the odors of two different piles of dog poop before stepping in one pile and entering one's home. No matter which pile has the least offensive odor, they are both piles of poop and it is better to avoid both before entering one's home.</blockquote>


Actually... that is a great analogy and I recently came up with something very similar in my head the other day. I just would say that our pile of poop has been sitting around for a while longer than everyone else. So... our crappy dollar isn't as crappy as everyone else. That is why people are going to the dollar. Will it make it stronger? I dunno, but at least it doesn't smell as bad as every other currency out there.



BTW, DXY is up $.80 as I started to type this.
 
[quote author="awgee" date=1223325641]The following analogy is a bit harsh and in no way is meant to offend or denigrate opposing viewpoints. It is the best way I know to make my point.



The USD index is useful for Forex traders, but is not particularly useful when discussing or computing the strength of the dollar. Determining the strength of the dollar by comparing it to the Euro is like comparing the odors of two different piles of dog poop before stepping in one pile and entering one's home. No matter which pile has the least offensive odor, they are both piles of poop and it is better to avoid both before entering one's home.</blockquote>


That is funny.



You and Peter Schiff may be right. There is one main reason I have a hard time imagining a collapse of all currencies including the dollar: where else is the money supposed to go? I know you guys like gold, partly because gold has been a currency, but gold is not a currency any more. I haven't seen too many people going to the grocery store with gold bullion lately. Unless gold makes a comeback as a true currency (possible but unlikely,) people will need to keep their money in a currency they can actually use: people will still need to select the least smelly pile of crap. I just don't see us (as a world) abandoning fiat currency altogether.
 
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