TimocracySo... what's the best way to protect oneself and one's retirement from the all-but-inevitable default on the national debt?
Mark vW@Timocracy Surfing.
Edmund Edgar@Timocracy What country is this?
@edmundedgar The US. But it will have ramifications worldwide.
@Timocracy The US borrows in its own currency which it can print, so if they default it's because they decided to protect the value of the dollar at all costs. So hold USD.
This is an extremely weird scenario though, conventionally a country that owes its own currency would devalue rather than default.
@edmundedgar exactly. Nothing is conventional anymore.
@Timocracy So if the thought is, "I have this exact scenario in mind involving default", maybe describe it and we can think how to handle it.
If it's "stuff is weird and the national debt seems like a lot and maybe everything will go to shit", the answer is a mix of stocks and bonds, foreign and domestic. Also add some productive crypto assets with a plausible story for how they create value and return it to tokenholders (most don't) as a defence against institutions failing.
lippard✅
@edmundedgar @Timocracy No, if the US defaults it's because the House GOP refuses to raise the debt limit and forces a default because they don't understand how anything actually works (or don't care).
@lippard They may not know or care how anything works but the people who fund their campaigns do @Timocracy
@edmundedgar @Timocracy I wouldn't bet on it for big money donors like the ones referenced in this story who bankrolled Greene. https://georgiarecorder.com/2021/01/28/big-campaign-donors-stick-by-election-denier-rep-marjorie-taylor-greene/
@lippard
Those guys are the exception not the rule, and their votes aren't needed to increase the debt limit, because the Dems will also vote for it
@Timocracy
Those guys are the exception not the rule, and their votes aren't needed to increase the debt limit, because the Dems will also vote for it
@Timocracy
Chaos
miketcope@Timocracy talk to a financial adviser if you have unusual circumstances but literally doing nothing is quite likely the best option for the vast majority of people.
Retirement savings are by definition very long term and default, while possible, is definitely short term. It’s not like accounts will go to 0, expected cash flows on impacted bonds will accrue and get paid later.
@copito of course.. right now I'm just looking for ideas, but before I take any action I will consult my financial advisor. I'm getting close enough to retirement that it's no longer a "put it away and forget about it" exercise.
Quasispace@Timocracy As others have mentioned, always talk to a certified financial planner, before taking advice from others. That being said, if you don't need to do any RMDs during that period, leave everything alone, to wait it out. Just have enough free cash on hand (in banks), that won't require liquidating other assets. You don't want to be forced to sell assets when the prices drop. Unless you're out of the country, everything dollar will still work normally.