Should Americans dump their dollars?
Karl Denninger comments today on Greece’s alleged failure to roll-over her debt, Germany’s weakness and the fatal over-extension of debt in the American economy.
I respect Karl’s expertise and information, but am often put off by his (to me) excessive use of bold type, underlining and capitalised words, dramatic language etc. Nevertheless, he’s making a couple of radical predictions.
One is a very severe US stockmarket drop (“half — or more”, “try a 90% loss on for size”). Another is the consequent failure of insurance-based guarantees, including (a) annuities and (b) the FDIC.
Unlike here in the UK, where bank deposits are guaranteed by the Government, in the USA depositors are protected by a company, the Federal Deposit Insurance Corporation, so the value of the guarantee depends on the value of the assets held by the FDIC.
I touched on this question of FDIC underfunding in 2008 (following “Mish”) and 2009 (following Karl himself) and if Karl is right, the moment of truth could be drawing near.
Yet there are others, including Charles Hugh Smith, who contrariwise expect the dollar to strengthen as the world trading system unravels, or at least to survive because its collapse would properly collapse the system.
We do live in uncertain times. My instinct would be to hedge my bets, but the conventional methods employed by investors – insurance-type hedging – may not work in a very unstable situation. Consider counterparty risk.
INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Source:
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Please Help Support BeforeitsNews by trying our Natural Health Products below!
Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST
Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!
HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.
Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.
MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).
My savings is in gold. I don’t have money in the stock market. I keep a few thousand in checking.