LOOMING DOLLAR CRISIS

[teknobucks]

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Greenspan is trying to prevent a collapse of the dollar, which has been declining for 2 years. So far he has managed to minimize the downward spiral.

The only reason you're not seeing big inflation is because China has frozen its exchange rate, and to a lesser extent Japan. You don't need to be a genius to realize what a falling dollar and an increasing trade deficit means in terms of inflation.

Long term (1-3 years) the I fund willoutperform the s and c.

Tekno

ps: Over the last year I've loaded up on the I fund every time I hear the dollar is growing stronger and every time it has paid off!

 

[retiredcg]

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Tekno

Are you stilllooking for a fairly quick rebound? I saw you were at 27s and 37i on Tues. Are you still there? Would you be looking at dumping more into the S if you feel it has bottomed out? I might shift to 100s like pyriel has for short term. Thanks for your insight

 

[teknobucks]

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retiredcg wrote:

Tekno

Are you stilllooking for a fairly quick rebound? I saw you were at 27s and 37i on Tues. Are you still there? Would you be looking at dumping more into the S if you feel it has bottomed out? I might shift to 100s like pyriel has for short term. Thanks for your insight

*****only 9% g as of wed....will put that last bit in i or s if tomm. am is red. looking 4 a rebound not sure if it will start tomm. or not

Let's toss a few things around.

If inflation is in the cards with rate hikes throughout
the year, does this necessarily mean the markets will go
up, or does it mean there's more pressure on profits and
things will stagnate. In the big picture, I think it depends directly on savings and the ability to pay debt.

It makes sense to me that if you can't control expenses,
speaking of oil, ng, etc., and prices spiral up along
with interest rates, blockers are in place for economic
growth, the housing bubble cracks, and the scramble for
cash happens. It's not how Wall St. invests or plays the
interest spread that keeps the economy going, it's the
consumer.

Thoughts? Regurgitations?

 

[teknobucks]

imported post

retiredcg wrote:

Tekno

Are you stilllooking for a fairly quick rebound? I saw you were at 27s and 37i on Tues. Are you still there? Would you be looking at dumping more into the S if you feel it has bottomed out? I might shift to 100s like pyriel has for short term. Thanks for your insight

I notice quite often several of you folks go to 100% C, S, or I....that really scares me.:s

100% G if your fear meter is pegged I can see....but never ever would I go 100% into one indexed stock fund. Kinda like buying only one ticket to heaven or God forbid Hell!

***by blending no more than 40% or so in one stock fund you can diversify your position, limit your risk,and increase the overall safety of your account balance.:^

JMHO

tekno

 

[retiredcg]

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Good thoughts. Let's see now... Greenspan has raised rates what 4, 5 times since it came out of the stagnation last year? I'm not so sure that indicators are signaling a real estate bubble burst; so much of a wide disparity btwn construction #s and sales. But isn't the general consensus even with a "short" downtrend of the $, we're still going fairly strong market-wise?

 

[cowboy]

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teknobucks wrote:

retiredcg wrote:

Tekno

Are you stilllooking for a fairly quick rebound? I saw you were at 27s and 37i on Tues. Are you still there? Would you be looking at dumping more into the S if you feel it has bottomed out? I might shift to 100s like pyriel has for short term. Thanks for your insight

I notice quite often several of you folks go to 100% C, S, or I....that really scares me.:s

100% G if your fear meter is pegged I can see....but never ever would I go 100% into one indexed stock fund. Kinda like buying only one ticket to heaven or God forbid Hell!

***by blending no more than 40% or so in one stock fund you can diversify your position, limit your risk,and increase the overall safety of your account balance.:^

JMHO

tekno

Why would that scare you! This all depends on where you are at financially and what kind of risk you can handle. I look at it this way it is all paper at this time and is not worth anything until you retire. I would be more worried about Bush trying to play stocks with your social security, to me playing stocks is not the answer. Lots of people have lost their retirements because of it. There is a better way to fix things. When stocks go down and your in all three funds it just means it might go less down in one or the other, the same aswhen it goes up. The only thing we can do with our profolio is gain how many stocks we have in our account and price is relative to when we retire.

 

[Rod]

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teknobucks wrote:

I notice quite often several of you folks go to 100% C, S, or I....that really scares me.:s

100% G if your fear meter is pegged I can see....but never ever would I go 100% into one indexed stock fund. Kinda like buying only one ticket to heaven or God forbid Hell!

***by blending no more than 40% or so in one stock fund you can diversify your position, limit your risk,and increase the overall safety of your account balance.:^

JMHO

tekno

If you feel that a particular fund will outperform all others for that day or period, then go for the gusto. At least that's what I did yesterday, and it paid off.

As was already stated, it all depends on your risk tolerance.

God Bless:^

 

[Mike]

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I think giving people the option to invest a portion of their social security is a good way to reform the system. Bush wouldn't be investing the money, the individuals would be. I'm tired of people trying to tell me to live a totally risk-free life.

Crimony, the return on social security is < 2% annually. You can outperform that by dumping it into the G fund. I could outperform it without devoting more than two braincells to my investing.

 

[Show-me]

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Good article in "Money" that talks about SocSec. The writer talks about participants putting the portion of there SocSec. into a TSP or TSP type account. You would have the same choices as we do. G fund is a no brainer. Better that what we have now.

 

[Show-me]

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Double post.

 

[cowboy]

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Mike wrote:

I think giving people the option to invest a portion of their social security is a good way to reform the system. Bush wouldn't be investing the money, the individuals would be. I'm tired of people trying to tell me to live a totally risk-free life.

Crimony, the return on social security is < 2% annually. You can outperform that by dumping it into the G fund. I could outperform it without devoting more than two braincells to my investing.

As long as you suffer the consequencies individually it may be okay. Say you allow each person to do their own thing. If you give it to the Government and they say were going to correct social security therefor we invest it in stocks. Your letting someone else do your investing. Not good. If you do it and suffer the losses then thats your problem. Social security never was developed for you to retire on. It was developed as a supplement. An easy way to fix social security is to go back to the income averaging you had before. Now they take high 3 income average. Everyone is getting more out of the kitty that is retiring now and itwon't last long will it. By going back to average over a life time it will give everyone less and spread it out to everyone instead of breaking the kitty.

 

[Mike]

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I haven't seen any proposal that would have the government doing the investing.

Of course, allowing partial privatization of social security is just one step. They have to take a few others, notably changing the way benefit increases are calculated (they are currently growing > the rate of inflation), raising the retirement age, and raising taxes on benefits/ raising the payroll tax / raising the cap on the income that the payroll tax can be assessed on.

Otherwise, it'll fall to the general treasury to try to replace the lost social security money that is going into the private accounts rather than to the retirees. I just don't see how thegovernment can do itvia this route without excessive borrowing, which is already having an impact on the dollar.

 

[cowboy]

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Mike wrote:

I haven't seen any proposal that would have the government doing the investing.

Of course, allowing partial privatization of social security is just one step. They have to take a few others, notably changing the way benefit increases are calculated (they are currently growing > the rate of inflation), raising the retirement age, and raising taxes on benefits/ raising the payroll tax / raising the cap on the income that the payroll tax can be assessed on.

Otherwise, it'll fall to the general treasury to try to replace the lost social security money that is going into the private accounts rather than to the retirees. I just don't see how thegovernment can do itvia this route without excessive borrowing, which is already having an impact on the dollar.

I agree. Actually social security was not started as a retirement fund. It was started to help financially hardshiped families.Families that lost their fathers and their incomes. Our great government just expanded it. When my father retired he received a check, my mother received a check because she had to feed him, and my brother received a check because he was under 18 years old. It is also a reason why many elderly do not marry as they lose their social security. Mmmmm! Brainstorm! Maybe trade the wife in on a 20 year old and have kids when I retire. Just joking people.

 

[teknobucks]

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cowboy wrote:

Why would that scare you! This all depends on where you are at financially and what kind of risk you can handle. I look at it this way it is all paper at this time and is not worth anything until you retire. I would be more worried about Bush trying to play stocks with your social security, to me playing stocks is not the answer. Lots of people have lost their retirements because of it. There is a better way to fix things. When stocks go down and your in all three funds it just means it might go less down in one or the other, the same aswhen it goes up. The only thing we can do with our profolio is gain how many stocks we have in our account and price is relative to when we retire.

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LOL...if I knew such I would not be a govt. employee! or posting here in my free time...

*suposeyour idea of aceptable risk and my tolerance for financial pain are far apart.....myinvestment style helps tominimize a major hit. true it also reduces the major spike up one would have if 100% s on a day the S fund roars. (please postthe days u paln to expose your account in such a way...would be interesting to follow)

I try to get outbefore a fall and back in for the rebound:

Posted: Thu Dec 30th, 2004 11:08 pm





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moving to 7% c 7% s 7% i and 79% g......just my gut telling me to.

tekno

note: this will make the market rocket up for the rest of you guys next week....LOL:dude:

good luck!

tekno

 

[teknobucks]

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Rod

I do not follow the markets close enough any moreto feel comfortable with such an allocation.

tekno

ps: 75 degrees down here....been out on the water last couple days breaking in a new ski. honda r12x!!

 

[cowboy]

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Currently 100% I fund, Tekno! Good luck with that Honda! I guess all us poor people can do is set and watch paper. By the way is Amelia Island a great place to live or is it over populated. Do you worry about Hurricanes and Sunomi's too. I would think beach front property would be cheap after all the bad news nationally. Good luck!:^

 

[coolhand]

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teknobucks wrote:

Let's toss a few things around.

If inflation is in the cards with rate hikes throughout
the year, does this necessarily mean the markets will go
up, or does it mean there's more pressure on profits and
things will stagnate. In the big picture, I think it depends directly on savings and the ability to pay debt.

Inflation has been relatively tame so far, but excessively low interest rates will almost certainly start to change that. Especially now that the economy seems to be moving along (4% GDP). The fed needs to raise rates to ensureinflation stays in check. As long as AG doesn't over-do the rate hikes and keeps it measured, even if they do not pause as some speculate, I would think the market would view it favorably. Did you notice that the 10Y bond market didn't sell-off today? Bonds hate inflation!!This is one of the things that has been really odd for over a year. Five rate hikes last year and the 10Y note was almost at the same level at the end of 2004 as it was atthe beginning. Isitforex inflows?And the dollar has rallied all week. Of course thatcould changequickly. I've been listening to a lot of pundits say small caps are rotating to large caps because of looming rate hikes. That's probably true at the moment, but I'm having a hard time seeing such ultra-low rates putting a damper on small caps for a while yet (right now I think it's a knee jerk reaction).If the 10Y note (remember, it's indirectly tied to mortgage rates) can't get any traction soon I'm inclined to think spending by US consumerswill continue. I'm not disagreeing with your thoughts,just throwing in some more food for thought. The savings issue is also very real, but when might it become a concern? These are interesting times in the economy.

It makes sense to me that if you can't control expenses,
speaking of oil, ng, etc., and prices spiral up along
with interest rates, blockers are in place for economic
growth, the housing bubble cracks, and the scramble for
cash happens. It's not how Wall St. invests or plays the
interest spread that keeps the economy going, it's the
consumer.

True. But I'm hopingAG may have this well in hand. He's been down this road before. jmho.

Thoughts? Regurgitations?

Oh yeah, I had to order that book "The Creature from Jekyll Island". It came in today. Looking forward to a good read. Thanks again.

 

[teknobucks]

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Cowboy

First of all…..great idea[/b] that you see the value of the I fund, however let me explain where I am coming from:

Some people really count on the tsp for an annuity. For those individuals to gamble with 100% of their monies in one indexed fund is just insane….that was my point.

My approach to stocks, tsp, and real estate to a lesser degree have been conditioned by the azz kicking we took in 2000-2001. (Lost 175k alone in ETYS, another 45k in bvsn L) even though the tsp funds are a small part of my retirement plan (csrs convert in 98 to fers) I will not ever again expose myself to a lopsided investment style. Plan to retire in Feb 07 (air controller retirement allows 25 years any age) and travel with the wife while we still have our health.

The wife and I did inherit some money which has helped with living here on the island. Yes it is expensive…taxes and insurance for just this house alone exceeded 10 k last year. Everything rusts away in short order but we love it!

Amelia Island is still exploding onto the real estate radar screens. Since the Ritz Carlton came to town the place has gone crazy…real estate has tripled in value in just five years.

Yes we worry about hurricanes…installed bertha storm panel system last year. Left them up for over a month…very depressing not having sun light in the house. Never thought twice about a tsunami until recently.

Hope this covers your ?’s

Peace

tekno

 

[teknobucks]

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Coolhand

One of the best financial books I've ever read! Hope you enjoy it as much as I did.

tekno

 

[Timer]

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teknobucks wrote:

Long term (1-3 years) the I fund willoutperform the s and c.

Take a look at this book:

The United States Of Europe: The New Superpower and the End of American Supremacy by T. R. Reid

I heard an interview of Reid on National Public Radio. The book makes the case that Europe is coming on as an economic juggernaut and that the Euro may replace the dollar as the world's supremecurrency. I intend to buy the book. After the radio interview I was thinking that long term the I fund should be a blockbuster investment (like it was in the '80's).