Financial Survival Kit

What do you need to be prepared for the future financial turmoil? How can you survive?

Should I Buy Gold?

It seems like everyone is a gold bug these days, but is it the right thing for you?

What Are The Chances?

With all this "end of the world" hype going on, maybe we should consider the chances. What are the chances of a civilization threatening event?

How Much Insurance Do I Need?

Insurance is an extremely broad topic. Hopefully this generalization on the different types and amounts will help straighten things out a bit.

Iraqi Dinar: Scam or Scoop?

Some say it's an easy way to make a million bucks! But do you understand currency markets enough to take advantage?

The financial world we live in is just as wild, if not more, than the mountains and woods we walk through. We are told that the fundamentals of our economy are strong, but we can feel that something is wrong. My unique financial background and survival passion make Financial Survivalist and excellent place to learn and share.

Friday, June 24, 2016

Holy BREXIT Batman!!!

Yeah, I didn't see that coming. I should have though. We all should have. So hold on to your 401k and get the out gold from under your bed. This could be a wild ride. But what does it all mean?

The biggest consequence of a Brexit vote is risk, especially bond risk and currency risk. If the UK and leave the EU then Germany can. In fact, anyone can. If the big players in the EU leave than what is to hold it together and what is a Euro worth? I feel sorry for anyone holding Euros. I know Soros isn't, and he is a evil SOB that hits hard. I wouldn't want to trade against him. He doesn't speculate, he makes things happen.

Also, if the big guys leave the EU, why would they still bail out weak members like Greece, Italy, Spain, etc? These guys are probably hanging on only because they are members of the EU and therefore the big players have an interest in them not collapsing. However, if they leave why would they care?

Bond risk is reflected in higher interest rates. As bond rates increase, values of current bonds fall. The owners of about $10T in bonds with negative rates are counting on rates to continue to go down. If rates start to increase their bonds will become worthless very quickly. Most bond holders could just hold the bond till it matures. However, with a negative interest rate that is a losing proposition. These guys lose either way. If they panic it could cause the bond market to crash.

Is the sky going to fall? No. The U.S. still have a flight to security and I imagine that our short term pain will be minimal compared to Europe. Our stock market will probably suffer, Gold will go up, and our currency will get stronger. Rates? Who knows? All the money that MIGHT leave EU bonds has to go somewhere and generally it is stocks or cash. However, there is always US bonds. It is possible that demand for U.S. bonds could increase. Still, the biggest threat is that of a continuously stronger dollar which makes U.S. products more expensive to other countries. But junk from China gets even cheaper for us... so its a double edge sword.

So hold your breath and jump, or stick your arms in the air and scream. Either way, it will be crazy. Or not.

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DISCLAIMER!!!!!!!!!!!!!! Financial Survivalist MAKES NO CLAIMS WHATSOEVER REGARDING PAST OR FUTURE PERFORMANCE of investments. ALL EXAMPLES, DIAGRAMS, DISCUSSIONS, LESSONS, OR RECOMMENDATIONS ARE FOR EDUCATIONAL OR ENTERTAINMENT PURPOSES ONLY. THIS BLOG DOES NOT AND IS NOT INTENDED TO PROVIDE FINANCIAL ADVICE OF ANY KIND. ANY COMMENTARY USED ON THIS PAGE IS FOR PURPOSES OF DISCUSSION ONLY. PLEASE SEEK PROFESSIONAL ADVICE BEFORE YOU TO BUY OR SELL SECURITIES AND YOU SHOULD NOT CONSTRUE ANYTHING ON THIS PAGE AS LEGAL, TAX, INVESTMENT, FINANCIAL OR ANY OTHER TYPE OF ADVICE. PROFESSIONAL ADVISE should be sought before entering any dangerous environment. Do not attempt any act described or discussed on this website.