RE: Preparing for Financial Thriving During Global Downturns
Such good stuff. It's a good compilation of a lot of the things that I've been reading and learning over the last year or so. It's definitely good to be prepared and to invest in things that retain their value. Who cares if gold hasn't gone up in the last 100 years (the price of the suit)?! It's held its value a lot better than dollars!
I personally like cash. Money market funds, and also actual paper script.
It's probably a good idea to have some cash on hand because 92-95% of our currency is created through fractional reserve by banks. Therefore, not everyone will be able to withdraw their cash, and there could be a run on the bank.
From what I understand, there's still risk in putting money into money market accounts. The laws are written such that a family of funds can borrow from other funds within the family to pay one fund's liabilities. Therefore, if you are invested in a money market account with XYZ, and one of their funds has a ton of derivatives that go bad, they can take money from your money market account to cover their losses in the other fund. Just something to consider.
Again, I really liked this article. I'm looking forward to the next one where you'll talk about passive income streams!
Yes, money markets aren’t as safe as script, which I hold. But people with 401k plans can’t hold cash in them. They can’t directly put gold bullion in those either. And for most Americans at least, most investment is held in those 401ks. So for them money markets are the closest they can get to cash.
If I had a lot of money in those and was retiring within the next 10 years, as 2 of my sisters do, I think I’d take my chances with money markets and short term US Treasuries and nothing else for now. Plus stack my own precious metals outside the retirement account.