From: bible@iastate.edu (Anthony E Bible)
Subject: Re: Social Security is a Tax?
Keywords: n
Organization: Iowa State University, Ames, IA
Distribution: usa
Date: Thu, 15 Oct 1992 22:50:54 GMT

In article <1992Oct15.155309.12966@lmpsbbs.comm.mot.com> upp@ssd.comm.mot.com (Steve Upp) writes:

[stuff deleted]

>
>Since I'm posting this to misc.invest I guess I should bring up
>something that relates directly to investments.  I have come to the
>conclusion that government bonds are no longer a good investment.  The
>primary reasons (tax issues aside) for purchasing government bonds is
>their safety.  However, if you look at projections for the US
>governments revenue and expenditures through the end of the decade it
>is clear that there will come a point in time where there won't be
>enough money to pay all of the interest on the debt.  Sooner or later
>investors will realize this and the market for newly issued bonds will
>dry up.  With the government no longer able to sell its debt it has no
>other choice but to default.  If this happens bond holders will be
>left with nothing....absolutely nothing....
>
>If bonds crash (an understatement), stocks won't be far behind.  I'd like
>to hear some discussion on how an investor might protect himself in the
>coming times.
>

	Well, you might consider reading a couple books on how to protect
yourself in case your prophecy becomes fact.  It has been awhile since I read
Ravi Batra's book about the coming depression (The Depression of 90 -- 92 --
something like that), but I believe he had some suggestions about how you might
protect your assets.  I believe there were predictions of some sort of economic
collapse in the late 70's or early 80's.  Howard Ruff's name comes to mind.
There were others.  At that time they thought the country would be consumed by 
rampant inflation.  That scenario still seems like a possibility.  Depressions 
do not have to be deflationary I suppose.


	I am somewhat bothered by the idea that the destruction of the 
economic structure of Western Civilization is predicted, and then
recommendations are provided which (in some instances) employ that very
structure -- money market, bonds, real estate.  However, my background was in
Physics and Math so my training -- and consequently my understanding -- of the 
real world is limited.
	Imagine that you manage to avoid the collapse and save your assets in
some form.  Then imagine that nearly everyone loses everything they have.  What
would you do?  What do you think they will do?  Do you think there might be
some change in political institutions within the country?  What about the rest
of the world?  What do you think the "new world" will be like?  You have
analyzed the situation and made a prediction about what will happen.  Now take
the next step and predict what will follow.  Absent the sun going super nova or
collision with a large meteor or such the world will still be there, and we
will still have to live in it.  Once you have an idea what the world will be
like you can better decide what to do.
	I have heard several other people predicting similar calamities, and
the basis for the predictions usually seems to justify serious consideration.
I would just like to see the predictors predict a little farther into the
future so some of the rest of us can try to make judgements about what would be
reasonable strategies to follow.

Regards,
tony
Newsgroups: misc.invest