Quote from: Possum on July 28, 2011, 09:33:02 AM

Hi

How will you survive if the US Dollar causes the Markets to crash on Aug 2nd..

How will you keep your money safe.. if the Dollar experiences runaway inflation

Thank you..

The US dollar will not cause a market crash. A default on or a downgrade to US debt is what may cause a collapse. Absolute worse case scenario is a default situation where interest is not paid on Treasuries. Odds of this happening are very VERY small. Even without an increase in the debt ceiling. A downgrade is much more plausible. A raise in the debt ceiling has a fairly good chance of happening. It would be a self-inflicted wound to do otherwise. However, S&P says they need to see cuts of $4 trillion over the next 10 years in addition to the debt ceiling being raised in order to prevent a downgrade. This may be harder to achieve as both plans in debate do not cut to this magnitude.

How do you protect yourself in a market crash? Keep your money out of the market. How do you make money in a market crash? Short the market, buy gold, buy treasuries, maybe even play the VIX.

As for inflation, I see no signs of "runaway" inflation at this time. In the end, I think Congress and Obama will just kick the can down the road.