The Future of RTW trips..
Camp 1: "I've got a bulletproof job(nursing/medicine) I can wait out any downturn and travel when I like. Economic fluctuations, save an acute global collapse, will not really affect me.
Camp 2; "I'm in a tenuous employment position. But I've lived cautiously, can change careers, so traveling remains distinct and real possibility."
Camp 3; "I'm screwed. Lost job, have little savings. Yet, my robust health, willingness to downsize my lifestyle, and take any honest job, along with a Zen-like patience, will provide me the means and mindset to travel somewhere, sometime, on the cheap."
Camp 4: "Unless an asteroid wipes out mankind, I'm going."
Good lovin', good food, good people, hearty laughter, reciprocal kindness, and travel--the elements of a life fulfilled.
Don't miss out!
Questions such as these are what I deal with every time I assure my family that "Yes, I am still going on my trip."
Just curious, what countries are you headed into?
A lot of the countries that Western backpackers head into are/were usually "poorer" than the US. You can be positive and look at it like you are injecting funds into the local economy.
And isn't the US teetering as well? I guess it's all relative.
I'm off to SEA, India, the Middle East, and then South and Central America. I'm planning on being gone 18 to 24 months.
My family says its a suicide mission, yeah, they're just a little dark. It's where I get it from.
While I am a long term dollar skeptic myself, your post is full of inaccuracies.quote:Originally posted by LizaW:
This is why I recommended bullion...
This is why the gold bugs are so set on gold....
These banks will be dumping dollars when the panic sets in...
Gold? The picture you've painted of gold market is overly rosy. "Sleepy"? Gold has double in price in the past four years and has fluctuated in price ~20% in the past month. That is not 'sleepy'. You are advocating buying high in a time of financial crisis. Not a good investment strategy.
Palladium??? FFS! It's lost 66% of it's value since its all time peak in February. If someone had followed your advice then they'd be out two-thirds of their investment in a mere eight months. Not even the dollar has performed that poorly.
Precious metals these days are effectively commodities, like corn or oil, and not appropriate for the unsophisticated and/or short term investor. More relevant to this thread, one cannot stop by the ATM in Bangkok and pull out gold--you need to have a currency behind that little piece of plastic.
China: You have neglected to mention that China's been spending much its newly earned dollars on US companies ($5 billion into Morgan Stanley? Hahaha, suckers.) and more interestingly, US T-bills...a trillion dollars worth. These are not investments that can be sold on a moments notice.
Look at the current, immediate financial crisis. It's happening now. Gold is not shooting up. All those big money investors are buying US T-Bills. (The yield on shorter term notes has been approaching 0 repeatedly for the past few weeks.) This directly contradicts your predictions.
Your advice is especially horrible in the context of this thread, the future or current RTW traveler working with a one to five year time horizon. Their safest best bet would be to stay relatively liquid (cash) in two or three stable, major world currencies: Dollars (definitely), Euros (definitely) and maybe GBP, CHF, or JPY. If bonds were not so problematic now then those two. Americans also have access to I-Bonds, which are nice because they are protected against inflation and cannot lose value. Other protected, short-term (3 to 12 month) consumer grade products from banks are good too.
Like I said, I am a dollar skeptic--that is a long term, slow decline kind of thing. (There is more than one thread around here over the years where I've said as much.) The greatest threat to the dollar's value is long-term, traditional inflationary pressures like low interest rates and printing money quicker than other major currencies...and not some late-night infomercial "run for the hills" panic that you are predicting.
Generally, with investments you want to but low and sell high. This the low prices of palladium and platinum and the relatively low price of gold means this is a good time to buy those metals.
If you were familiar with the market in these metals, you'd know that there is very little physical bullion available for sale. My favorite dealer is out of many varieties--sometimg I've never seen before, even when they were making new high price records.
Spot prices-- what you presented charts for reflect that we are in a panic....and in a panicpeople sell what they can to raisecash to cover margin calls or just to get out of the market.
Buy or sell on fundamentals--not tea reading or chart reading. Present an alternate argument about the fundamentals or an economicargumrnt--the idea you shouldn't buy because. Prices are low is contrary to the fundamentals of investing.
Recommending inflating currencies like you did is stupid. The dollar and the euro are trash. If you want to hold some paper, make it canadian or Swiss, or maybe yen though I haven't looked at the yen closely.
Yields on government securities are well below inflation which means they are a waste of money-- either prices will come down causing you to lose principle or the return will be negative due to the eroding value of the dollar.
It's pretty asinine today that my predictions haven't come true because they didn't in a matter of days--I never said what would happen in a few days time. Idont try to time markets.
If you have acounter argument make it--- but trying to bash me with your dishonesty doesn't count.
Frankly you are too unsophisticated to be giving people advice and your statements are self contradictory-- you try to have it both ways saying gold is a bad investment for people with a 1-5 year horizon while pointing out it's doubled in 4 years-- because it hadn't shot up in a matter of days. If you want to claim it's the top you need to provide a rationale.
While commodity prices are all flat due to panic liquidation and they are not generally good in recessions-- this ignores demand imbalances in many of them and more Importabtly that inflation is a recognized threat.
Putting your money incurrencies going into a death spiral is bad advice. Getting it Oman inflation hedge---especially when it's priced more for jewelry-- is getting in before the crowd.
Idiots buying bonds? Good for them. They deserve the pain they willget for not paying attention to the obvious- the stated intention to use monetary inflation to "fight" this crisis.
Just means fewer bidding against me in the market for gold.
See when a US dollar buys 40% less Canadian dollars, that's because the Canadian dolled has gotten stronger. Unles there is reason to believe this long term trend is going to reverse-- and recent history gives us quite the opposite-- holding CAD in preference to USD is prudent.
Don't let false patriotism get in the way of sound finances....that's the way to lose money, and make "loony" comments in public.
On investment advice: People should have a different strategy for their goals, risk tolerance and time horizon. I am not advocating any one strategy, I am not harping on commodities, but rather I am saying they are inappropriate in the context of the RTW traveler.
An investor, like a RTW traveler has a very specific set profile:
- Short term: a couple years
- Risk adverse (cannot tolerate a significant decline in value)
- Intends to spend a majority or all of that investment
They should not be invested in volatile assets, period. They cannot wait a few years for an investment to recover after a drop in price. It would cut a trip short.
(Their retirement funds? That's a different matter. Of course I would not suggest a pure cash portfolio. But that is outside the focus of this thread.)
Furthermore, you precious metals-centric advice requires a degree of active management that may not be possible for someone during their trip. Folks frequently spend weeks even months in the middle of no where with limited access to news and the Internet.
Your position seems to be "buy precious metals not matter what because The End of the World is Neigh". Maybe you should 'invest' in some Valium. Then go check out The Motely Fool: Panic 2008. The doom and gloom you are preaching is so severe that if it were to occur, RTW travel will be a decadent luxury. Folks will be more concerned about getting a good spot in the soup kitchen queue.
Seriously, your read on events and resulting one-size-fits-all advice are so extreme that you might as well advocate buying a remote cabin in Idaho, some barbed wire, a years supply of MREs and lots of guns. (Or did I miss that post in another thread?)
Relative to a other similar options like a savings account, a CD, or money market account they are.quote:Originally posted by LizaW:
I-bonds are NOT protected against inflation because their "inflation" adjustment is based on CPI
quote:Originally posted by Stoo:
LizaW, may I suggest you organize your thoughts before posting, start linking to sources to backup your arguments, and use a spell checker? Please?
Adding to Stoo's comment, I would suggest a change in tone would help a lot. Right now, you're coming off as incredibly arrogant and it's likely no one's listening to you. And I'll second his request for sources.
Frankly I've provided argument logic and facts to defend my position. Stoo has lied about what I've said and made harsh criticisms of me goi gso far as to attack me as a survivalist.
It's obvious that the objection from him and others isn't comming from a place of wanting to give people good advice or an understanding of economics-- but from politics, or just personal meanness... And since I took a position that makes me a target for the assholes.
If you can't be honest and are be t on personal attack, thereis no point in wasting time trying to convince you. If that's the mind of forum this is I'll go back to lurking.
BTW I am Canaddian.
This thread is pretty interesting.
Gold bugs are an interesting lot â€” and lest you think I am attacking LizaW by calling them a 'gold bug' I am not. I work daily with 'gold bugs'! From my experiences, they remain bullish on gold, come what may. For example, LizaW's contention that we are in a depression, rather than a recession, is predicated on panic â€” which, while may be good for gold, doesn't necessarily reflect what is happening on the ground.
I'm not ruling it out, of course, but we are not in a depression at this time, nor does it look like we are headed in that direction. I don't think we're going to get hyperinflation to the extent that we've seen in falling economies like we saw several years ago in Argentina, Brazil and what's happening right now in Iceland.
Talks of Zimbabwean style hyperinflation for major economies is likely over the top but higher inflation and stagflation looks more and more likely. The present moderation in inflation rates is probably a temporary phenomenon, but it's not like I'm going to go all out and bury bullion in my backyard,
I have a friend that when asked why gold bullion was continuing to decline despite his persistent predictions that it would rise claimed that the market, rather than he, had been wrong.
Working in the indsutry, and receiving countless newsletters, I've been able to identify gold bugs. One is the notion that gold's fluctuations don't really matter, since we ought to be investing in it as a long-term hedge against currency devaluation.
I don't buy that.
What I am looking for in advice, is someone who can accurately and objectively assess the world as it is and, after taking all relevant factors into account, make a profitable forecast about what is going to happen.
I just don't see it happening here.
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