Where NOT to invest after the RV!

[GrahamB]

While not directly related to the dinar, it is a strong rumour that is extremely relevant to those planning on how to invest their gains after the much anticipated RV:

+++++

Federal Agency Watchdog Warns:

48 American States Have Secretly Transformed Themselves into New Rogue-Trading ENRONs…

+++++

Many States and/or Cities are reportedly close to bankrupcy. If a city or state goes into bankrupcy it is a Chapter 9 event, and there is nothing the Courts can do to recover any funds. apparently they cannot even sell the surplus papaer-clips!. So the only people who will pay are

(i) those holding municipal bonds, and

(ii) the US tax payer, who will likely be faced with a potential bail-out by federal government that will make the recent gigantic troubles look like a party!

So get out of MuniBonds, like the big corporations are, and stay out when the RV hits!

Of course the US dollar may go through the floor too!

Edited June 14, 2010 by GrahamB

[GrahamB]

I am investing in Gold, Gold and Gold, and real estate....

Way to go! but don't be too specialised - add some Silver into the mix: It looks good, and will appreciate too!

[Jac]

I am investing in Gold, Gold and Gold, and real estate....

Exactly..since this is our county buy our land-real estate as much of it as possible. Take America back legally

in every way and one way will be buy property and land.

Blessings.

[War Eagle]

Why not invest in Iraq---the ISX---it should really boom once it goes on the forex!!!!!!If it just recovers to the 04-05 range,you will get about a 30-40 times on your money.

[Jac]

Why not invest in Iraq---the ISX---it should really boom once it goes on the forex!!!!!!If it just recovers to the 04-05 range,you will get about a 30-40 times on your money.

Iraq will still be a good investment in five years. I plan to wait until then.

Blessings.

[quadraph0nic]

All good options, Thank you very much

[EmilyJJJ]

I plan on investing in myself. More than anything I would love to have some breathing room in my life.

I plan on paying off all my debts and putting money away to pay for school and continue my education while I continue to work.

This is the best investment I can make... My Mental Health.

[kjwayne]

I am going to invest in all of our future, our kids and grandkids. Education is getting to cost more and more. An insurance policy that will pay for my grandkids education will be on my bucket list. Be Safe! and above all, ENJOY!

[k98nights]

I was told the same thing about the municipal bonds.... and that the federal treasury bonds were the best thing to invest in. I'm no money guru, but it made sense to me.

[alice]

I'm certainly open to an explaination, but you did not give logical reason not to invest in muni. I just invested some for my mom. So please do give a protracted explananation.

Seems that we are living in big government, so why would these municipalities be going under.

My qeury is sincerly not an argument, but a need to. Understand the facts behind. This.. because if imis manage my. Moms money I want to fix the problem now.

[gbrlgms]

IAM LOOKING IN BUYING GOLD AND SILVER,YOU CAN IGNORE THE FACTS THAT THE DOLLAR IS GOING TO DROP VERY BADLY, IS COMING,I HAVE LOST A LOT OF CONFIDENCE IN THIS PRESIDENT

[oilman80]

I am investing in Gold, Gold and Gold, and real estate....

Black Gold.

[EBJNYC]

While not directly related to the dinar, it is a strong rumour that is extremely relevant to those planning on how to invest their gains after the much anticipated RV:

+++++

Federal Agency Watchdog Warns:

48 American States Have Secretly Transformed Themselves into New Rogue-Trading ENRONs…

+++++

Many States and/or Cities are reportedly close to bankrupcy. If a city or state goes into bankrupcy it is a Chapter 9 event, and there is nothing the Courts can do to recover any funds. apparently they cannot even sell the surplus papaer-clips!. So the only people who will pay are

(i) those holding municipal bonds, and

(ii) the US tax payer, who will likely be faced with a potential bail-out by federal government that will make the recent gigantic troubles look like a party!

So get out of MuniBonds, like the big corporations are, and stay out when the RV hits!

Of course the US dollar may go through the floor too!

Stay AWAY from ALL U.S. DOLLAR DENOMINATED assets -- PERIOD !!!!!

[FloridaChick]

I'm certainly open to an explaination, but you did not give logical reason not to invest in muni. I just invested some for my mom. So please do give a protracted explananation.

Seems that we are living in big government, so why would these municipalities be going under.

My qeury is sincerly not an argument, but a need to. Understand the facts behind. This.. because if imis manage my. Moms money I want to fix the problem now.

I subscribe to a lot of investment newsletters... I received these two articles in June 2010 - One from Moneynews - The other from The Daily Crux...

Saw this post and just passing along what I have read recently... I personally know nothing...

Buffett: Municipal Debt Meltdown Will Hit US‏

Breaking News from Moneynews.com 6-03-2010

Add investment legend Warren Buffett to the list of those who warn of a municipal debt meltdown.

Many municipalities have promised overly generous retirement and health benefits to public workers without any viable plans to bring in the money necessary to pay for those benefits.

They have assumed unrealistic returns in their pension fund investments and unrealistic revenue from taxes.

The Pew Center on the States recently estimated that as of the end of 2008 budget years, states had $1 trillion less than needed to pay for future pensions and medical benefits. And that number doesn’t even reflect much of the losses suffered by pension fund investments in the second half of 2008.

“There will be a terrible problem, and then the question becomes will the federal government help,” Buffett said at a hearing of the U.S. Financial Crisis Inquiry Commission in New York, Bloomberg reports.

“I don’t know how I would rate them myself. It’s a bet on how the federal government will act over time.”

In May, Buffett said the feds may end up having to bail out some states from their extreme financial woes.

“It would be hard in the end for the federal government to turn away a state having extreme financial difficulty when they’ve gone to General Motors and other entities and saved them,” Buffett said at Berkshire’s annual meeting, Bloomberg reports.

“I don’t know how you would tell a state you’re going to stiff-arm them with all the bailouts of corporations.”

The Oracle of Omaha has been cutting municipal bond holdings in his company Berkshire Hathaway. Berkshire’s portfolio of munis has dropped 17 percent since the end of 2008, to $3.9 billion as of March 31 from $4.7 billion.

The company’s 2009 annual report showed $16 billion at risk in derivatives tied to municipal debt, Bloomberg reports.

Buffett has made clear his bearishness toward municipal bonds by warning of the dangers of insuring those bonds.

In his 2009 letter to shareholders, the world’s second most wealthy man said local governments may be tempted to default on bonds whose payments are guaranteed by insurance companies rather than implement politically difficult tax hikes.

Insuring muni bonds “has the look today of a dangerous business,” Buffett wrote.

About $14.5 billion of municipal bonds defaulted in 2008 and 2009, according to Income Securities Advisor Inc., which studies distressed debt.

Los Angeles is one of the cities whose finances are in desperate straits.

“Los Angeles is facing a terminal fiscal crisis: between now and 2014 the city will likely declare bankruptcy,” former mayor Richard Riordan wrote in a Wall Street Journal opinion piece.

“Yet Mayor Antonio Villaraigosa and the City Council have been either unable or unwilling to face this fact.”

© Moneynews. All rights reserved

=====================================

Warren Buffett is dumping muni bonds

Friday, June 04, 2010

From Bloomberg:

Warren Buffett, whose Berkshire Hathaway Inc. has been trimming its investment in municipal debt, predicted a “terrible problem” for the bonds in coming years.

“There will be a terrible problem and then the question becomes will the federal government help,” Buffett, 79, said today at a hearing of the U.S. Financial Crisis Inquiry Commission in New York. “I don’t know how I would rate them myself. It’s a bet on how the federal government will act over time.”

MORE...

http://www.thedailycrux.com/content/4931/Muni_bonds/eml

More About Municipal Bond Meltdown

[SuperFlyJr]

Stay AWAY from ALL U.S. DOLLAR DENOMINATED assets -- PERIOD !!!!!

For the most part, I have to agree. I don't mind having a portion of my investment portfolio in U.S. assets, but diversification outside of the U.S. is going to be key for the future. So many people think diversification means just owning mutual funds that are invested in U.S. companies but in the current economy I'd want to be invested in foreign companies, as well as areas like foreign real estate, and commodities such as gold, silver, etc. When the RV hits be sure to find an experienced financial advisor who handles higher net worth individuals and is knowledgeable regarding offshore/foreign investments.

[alice]

thank you grahamb and floridachick et al. Called my finacial manager last night and he confirmed what you areall saaying. I'm pulling out of the. Muni's today.

What was I thinking? Should have known better. As my own financial guru put it."muni's are the next she to drop! Ithen looked at money news as floridachick suggested and oy vay...that sealed the deal.

Thank you to this greatt community. I am truly blessed.

[FloridaChick]

thank you grahamb and floridachick et al. Called my finacial manager last night and he confirmed what you areall saaying. I'm pulling out of the. Muni's today.

What was I thinking? Should have known better. As my own financial guru put it."muni's are the next she to drop! Ithen looked at money news as floridachick suggested and oy vay...that sealed the deal.

Thank you to this greatt community. I am truly blessed.

Glad you found the info useful Alice. Things seem to be changing so fast... the old rules don't always apply anymore! I am just learning myself.

Cheers and Blessings!

[dwhite1971]

I agree, Gold and Land!

[Puff]

Black Gold.

Yes indeed it is Black Gold for me!

[camerascott]

While not directly related to the dinar, it is a strong rumour that is extremely relevant to those planning on how to invest their gains after the much anticipated RV:

+++++

Federal Agency Watchdog Warns:

48 American States Have Secretly Transformed Themselves into New Rogue-Trading ENRONs…

+++++

Many States and/or Cities are reportedly close to bankrupcy. If a city or state goes into bankrupcy it is a Chapter 9 event, and there is nothing the Courts can do to recover any funds. apparently they cannot even sell the surplus papaer-clips!. So the only people who will pay are

(i) those holding municipal bonds, and

(ii) the US tax payer, who will likely be faced with a potential bail-out by federal government that will make the recent gigantic troubles look like a party!

So get out of MuniBonds, like the big corporations are, and stay out when the RV hits!

Of course the US dollar may go through the floor too!

you couldnt be any more wrong. just got off the phone with my financial advisor from my bank and she said it is insured for 500,000 and if the state cant pay that its backed by the fed gov. even if the bank goes down itself as well. sorry but you may want to get facts straight before putting this crap out

oh and municable bonds are non taxable so i think i will be investing in it. at 5% rate im good to go.

[GrahamB]

Exactly..since this is our county buy our land-real estate as much of it as possible. Take America back legally

in every way and one way will be buy property and land.

Blessings.

A great sentiment. But be a little cautious - if the US bubble bursts, and frankly i am forced to the conclusion it is getting close to a tipping point, then those investments might go south in a big way!

Residential property values could go through the floor, and if business start going to the wall then commercial rentals could also be a problem. Even a 5 year rent contract means nothing if the business folds!

You don't want to make all this money, give 35% to Uncle Sam, and then loose the rest in a firesale!

[alice]

If I've learned any thing from this....that the old rules don't apply...thanks for the good advice....yes chicks deserrve money too!

[GrahamB]

I'm certainly open to an explaination, but you did not give logical reason not to invest in muni. I just invested some for my mom. So please do give a protracted explananation.

Seems that we are living in big government, so why would these municipalities be going under.

My qeury is sincerly not an argument, but a need to. Understand the facts behind. This.. because if imis manage my. Moms money I want to fix the problem now.

It is wise to check out such speculative comments!

My information comes from a number of sources, including muy own pragmatic realisation that for years USA in particular (but far from exclusively) has been living on "if-come". If you spent up large this year on the basis that next year you will probably get a pay rise, you know that it will eventually catch up on you. and if you printed your own money to get yourself out of the mire, you would be deemed a criminal! Yet that is just what the government does year in and year out!

Local Cities and States do the same thing (except they cannot print money so they borrow yours), and run up humungous debts which they fund, all too often, with municipal bonds.

To quote from one of my sources, TheSoveriegn Society's Offshore A Letter:

****

"One of Wall Street’s most popular government-backed investments is about to implode!

Fair warning: This has nothing to do with Social Security… health care… or US

Treasuries.

This massive bubble is just weeks away from bursting. And according to the Pew

Research Institute, it will blindside 96% of Americans from Maine to Maryland… from

New York to New Mexico and virtually every state in between.

All told, $2.81 trillion is tied up in this ill-fated investment.

It’s been sold to generations of working families, small business owners and retirees as

“risk-free.”

And during a recent 30-year period it was very safe… with a failure rate of 0.04%.

But it’s about to become the most risky “safe” investment on the planet.

So risky that Warren Buffett privately told his shareholders, “It’s dangerous business.”

What makes it so dangerous?

Well, most people think it’s “unsinkable.” Millions of trusting Americans bought them for

safe, tax-free returns of 5%… 10% (or more).

Now they’re stuck holding this toxic, ticking time bomb that’s about to blow.

And when this $2.81 trillion “safe” investment implodes… it will cast America’s stock and

bond markets into an even deeper recession – perhaps even a depression – with

stunning speed and ferocity."

****

And again:

***

"Most people don’t know this… But states have gotten so desperate… they’ve resorted to

ENRON-style-fraud – to “trick” investors into buying their debt.

“Fraud in the municipal market and incompetence, which in some ways is worse

than fraud, has never been greater.” –Arthur Levitt, Former SEC Chairman

Thanks to years of fraud and bureaucratic ignorance… this government-backed bubble

is about to burst.

They’ve run out of credit… lies and excuses. And now, in 2010, the evidence is bubbling

to the surface:

Colorado Springs has let 1/3rd of its streetlights go dark… sold police

helicopters on eBay… and halted all street paving.

•

Arizona plans to sell – then lease back – its State House and Senate

buildings… a desperate one-time move to raise cash.

•

Illinois’ liquid assets have dipped below $1 million… as they scramble to limit

fallout from a giant $39 BILLION deficit.

•

States from Kansas to Hawaii have considered bills to cut the five-day

school week down to four… or cancel entire grade-years altogether.

•

Los Angeles has called for ALL city agencies (save Fire and Police) to cut

back to a 3-day workweek."

***

And further:

***

"Today, 48 American states are teetering on the brink of bankruptcy.

Unemployment has soared up to 18%… when you count folks who have quit

looking for work… pushing job loss insurance funds into the red and

gutting payroll tax receipts.

•

• Consumers have tightened their belts… putting a damper on sales tax revenue.

• Home prices continue to plunge… along with lucrative property tax revenue.

Ratings agencies from Moody’s to S&P have cut EVERY state’s municipal debt

rating… jamming their interest payments even higher.

•

And the stock market’s flat-line performance has slammed their pension

funds with a $3.2 trillion deficit!

•

Expenses are WAY up… Revenues are WAY down… And the bill is fast becoming due.

But unlike years past – they can’t roll the debt forward.

“A market of buyers for such large borrowing does not exist… [As a result]

municipalities will not be able to pay employees, vendors and bondholders.”

–Frederick J. Sheehan, author of Greenspan’s Bubbles: The Age of Ignorance at the

Federal Reserve

And that, my friend, is why dozens of states are about to do the “unthinkable” and default

on their debt.

As an immediate result, one of the safest, most respected investments in the country –

municipal bonds – will crash, take down conservative investors with little-to-no warning

and force one little-known clutch of alternative investments through the roof!

While Wall Street Sneaks Out the Back Door…

The vast majority of investors remain “in the dark.” But top financial institutions know

exactly what’s going on. That’s why they’re shedding Muni Bonds like there’s no

tomorrow.

AIG has cast off $6.48 billion of Munis in the last year alone.

•

Berkshire Hathaway Assurance Corp, one of the nation’s top insurers, has

downsized their position from $595 million to $40 million.

•

Allstate Corp. has • shed $1.88 billion…

Citigroup has dumped $1.72 billion… Wachovia has sold off $1.51 billion-worth…

and Bank of New York Mellon has ditched 33.4% of its portfolio…

•

They’re doing this to protect themselves. To make sure they don’t get hurt. And the sad

part is, Mom and Pop investors will be left holding the bag. After all, they own around

70% of the market.

“Retail investors have gorged municipal bond mutual funds with cash...”

–Dan Seymour, The Bond Buyer

History shows that when states, cities or towns default on their debt… conservative

investors lose their shirts."

*******

So sadly, US MuniBonds are dead meat, and still more US banks are going under, so be very careful indeed where you put your hard-won profits. And if you can, get your Mum out of those bonds!

Disclaimer:

I am not a licensed financial advisor, I am not a resident nor citizen of the United States of America. I have no pecunary interest in the Sovereign Society.

Edited June 16, 2010 by GrahamB

[tport]

you couldnt be any more wrong. just got off the phone with my financial advisor from my bank and she said it is insured for 500,000 and if the state cant pay that its backed by the fed gov. even if the bank goes down itself as well. sorry but you may want to get facts straight before putting this crap out

oh and municable bonds are non taxable so i think i will be investing in it. at 5% rate im good to go.

On this subject at this time in our economy, I would not rely on 1 financial advisor's opinion. Gov't entities can (and have) default on their issued bonds. When the Federal Government backs these types of investment vehicles, it is usually for pennies on the dollar. IMO, the message is check and double-check what you decide to invest in and make sure you diversify, in case the worst happens on any given investment. There are no "absolutes" when it comes to investing - including the IQD.

[GrahamB]

you couldnt be any more wrong. just got off the phone with my financial advisor from my bank and she said it is insured for 500,000 and if the state cant pay that its backed by the fed gov. even if the bank goes down itself as well. sorry but you may want to get facts straight before putting this crap out

oh and municable bonds are non taxable so i think i will be investing in it. at 5% rate im good to go.

It is good to know that your Financial advisor has more sense than the gnomes at AIG, who cast off 6.48 Billion of Munis (those lovely safe and tax free investments!) last year, or more sense than berkshire Hathaway who has dropped their exposure to thiose lovely investments to a mere 7% of their previous exposure! How about you ask your Finacial advisor 3 questions:

1. Has your commission (as a percentage of investment) on MuniBonds increased in the last 2 years? [i don't know the answer, but if what i hear and feel is true, then the answer will probably be YES]

2. How much money is invested, in your State, and if the Sate reneged on the payments, what does that $500,000 guarantee work out in cents per dollar for those who are invested?

2. Are you prepared to give me a written guarantee underwriting this advice?

And by the by, who is the fed. gov?

That is YOU THE PEOPLE!

If you think the fed. gov. is going to pick up all the pieces if munibonds start going down the sewer, then stop for just one second, engage brain, and ask what another 2 Trillion Dollars in debt does to the economy!

And sadly the challenges are not just limited to municipal oganisations.

According to one source:

"The FDIC currently has 775 banks on its "Problem Bank" list. So far this year, 82 banks

have failed, about half of which did so in the second quarter. That's a truly frightening

number by historical standards: About a third of the banks that have failed since 2000

have done so in the first 5 months of 2010."

And 4 more occurred in the first two weeks of June2010 (they happen on fridays, and there are still 3 more Fridays before Independence Day!) How many more in those 3 weeks.

Hey, camerascott, I'm not some doom-sayer. But I am a realist, and an extremely intelligent one at that (modesty forbids me from staing my IQ, but it is up there!

I am just concerned that my Dinar Friends don't loose it all because of ignorance, complacency, or bad luck! We have waited too long for this RV to see it all go down the tubes!