My father-in-law told me a couple days his 401k was down about 40%, and he's holding tight. "What else can I do?" he wondered.
I doubt he'll live to see his valuations as high as they were this summer, excepting hyperinflation of course, when they may reach that nominal level but will buy squat. And chances are that by next spring, he'll be down another 25%.
Marc Faber made the comment earlier this week that there are many examples of indicies making highs, retreating, and never surpassing the previous high. Japan should give everyone pause -- down 80% twenty-eight years later. That's freakin' amazing.
And if push comes to shove here in the US, we may see private pensions looted by the gov't as in Argentina, along with currency controls, frozen bank accounts, devaluations, etc. I believe if the deficit rate has not lowered by at *least* 50% by next summer, near term control over the situation will be lost. The real deficit running rate is now 1.4 trillion per year.
Lots of things could create a need for gold, as it will be the only way to get through the black hole collapse and new currency rebirth. Gold will pass through and roughly maintain it's purchasing power. Paper money will be worth less than toilet paper. Not if, but when. I'd prefer at least ten years out, but may not get that luxury. |
