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Warpy's Journal
Posted by Warpy in General Discussion (01/01/06 through 01/22/2007)
Sat May 13th 2006, 10:10 AM
but how good a hedge at this point is moot. The price has risen a little faster than the dollar has fallen, not a good sign. Plus, you have to figure out where you're gonna stash all those shiny rocks. DHS has an unconstitutional law on their side that allows them to rob your safe deposit box at the bank if they determine there's some kind of unspecified national emergency.

Gold futures are another way to approach it, as are mining stocks. However, you have to have a leap of faith that your certificate will be honored should the need arise.

As for foreign currencies, there are quite a few funds out there that specialize in currency trading. Clough is one, Barclay has another. It's hard for the small timer to make money at this stuff because of the fees the local banks charge for exchanging currency, which is how most people think they're gonna do it. The bad news about currency traders is the price of admission, generally in excess of $10,000 and some as high as $100,000.

The best thing for the small timer to do is diversify as much as possible into tax free bonds, stocks, and some of the better mutual funds. The socially conscious mutuals outperform other funds across the board, a DUer's dream. Dreyfus Third Century is one, and the price of admission isn't terribly steep there, either.

We are heading into a period of extreme economic uncertainty. The best thing you can do with your money right now is to get out from under your debts. Remember, paying off a debt that carries 8% interest is like paying yourself that 8% every year you've shaved off that loan. Even the best currency traders are generating only about 7-7.6% at this point.

Good luck to us all. I think I'm giving good advice, but it'll take the next decade to find out whether or not I'm talking through my hat.

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