House was bought in late 2003 for $820K CDN, which meant that we actually bought it for $660K USD (at an exchange rate that was about 75 cents at the time).
Property values have gone up quite a bit around here in the intervening four years: house is currently assessed at $960K CDN, and would probably fetch closer to $1.1m if we actually sold it in the current market. And, as Jesse notes, those prices are now exactly the same in US dollars, too.
Which means, in essence, that we've turned $660K US into roughly a million bucks over the past four years -- a 33% ROI. Not too shabby. I'll take it.
When we noticed the loonie going up a couple years back, we acted fast to move every asset we had that wasn't bolted down (a few of them are, unfortunately) to Canada. Most of that happened while the loonie was still trading under 80. The US dollar is falling -- but we've already made upwards of 20% on that simple move, and are poised to make more.
The only boat I missed was gold. And I knew it at the time. I wanted to buy a middling-sized pile of it back when it was around $375, and never quite got around to actually hooking up with a dealer and getting it handled. Just too busy. Dumb dumb dumb.
We're also very busily killing off our remaining debt now. We didn't have much before we both decided to go to grad school; but we've been using Other People's Money to finance that and keep the house going. (OPM, especially if you can get it cheap, very often beats using and then having to replace your own earned-taxed-and-invested capital for these kinds of things). At this point, the results are not pretty -- but we're both in the academic home stretch now, so there will be jobs and income in 2008 to hasten the recovery on that front.
Get your money out of America, people. Even if you've only got a small investment account (especially if you've only got a little squirreled away), buy investments denominated in loonies and Euros and even a few yuan. It's the only way to ensure you're not stuck holding the bag when the bill for the party comes due.
And while you're at it, get out of debt.
Make no mistake: This is what a dying empire looks like.
I called my credit union last week (I'm in the SF area) to see if I can have a subaccount in euros or loonies. No such luck. Are there banks in the U.S. that offer that? The next step is to call my stockbroker and move more of my IRA into the Euro/anything but the greenback investment.
Thank you for the Bear link, Doc.
I have had a good chunk of my 401k in forign curancys for the last year (there are benifits for workign for an india based offshoreing firm) while I should worry about the counry, thsi stuff makes me a little happy.
OT: hey Jesse, hubris, is the Alica generateing a traffic spik or are yuo running this site on an amiga or somethign, i am getting intermitiant 408 errors(server too busy). Barring a DOS you sohuldn't see that on a modern system.
I do have some money invested in the stock market through a mutual fund, and my broker has standing orders to sell everything if the US attacks Iran. (Well actually, in the case of any full-scale attack on Iran, as we all know the Cheney Administration and their corporate media lapdogs will try to make Iran appear to be the one who started it.) Not only would such a foolish endeavor make our economy tank once and for all (and there would be such a run on the dollar, I don't how much good selling everything off right away will really do), I'll gladly help crash my own country's economy should we continue down this evil path of imperial aggression. And I'm sure this comment will land me in one of KBR's korporate koncentration kamps as the "state of emergency" Cheney, I mean Bush will declare will undoubtedly render certain personal investment decisions (along with reading certain books and visiting certain websites) as "acts of terrorism".
Amerikkka, Amerikkka, ueber alles, ueber alles in diesen Welt....
On Jan 21/02 you could convert US$1 into $1.60 Cdn. Early this morning the Cdn was worth slightly more than the US$. Iran wants to switch its oil dollars to Euros. They don't want to earn US$. If they do switch to Euros you can count on Darth Chaney declaring war on them.
Also, Saudi Arabia decided against lowering their interest rates -- they usually go in tandem with US rate. When things go in the middle east, it is not going to be pretty.
Go North young men. We are self sufficient in oil, have universal health care and a strong dollar.
I don't have much in my Aussie superannuation account, but the recent news settles it. My money stays there even if I return to the US.
I suspect the critical event that will make the "music stop", is when China realises that its middle class is large enough to provide a significant demand for its products. At that point, a downturn in the US (or elsewhere) won't mean as much since domestic demand can still keep the factories humming.
How long is it taking to get a passport nowadays, anyway? Will I be able to get one before the election if I apply soon?
A British friend of mine once said that a sign of a country going downhill economically is when pundits and politicians us the word "still" alot. As in the British politician who said, circa 1960, "we are STILL the second largest manufacturer of cars in the world".
Loveandlight:
But, we have to invade Iran! You see we've run out of cemetery space over here (in Kansas at least) so we have to annex more sterbenderraum (as opposed to lebenstraum). If you don't do this you're against the troops!
Andrea: The easy way to do this is to put your 401K and other investment accounts in mutual funds or investment trusts that are heavily weighted toward European, Canadian, or Asian investments. Most banks offer these as part of their standard menu; and you can re-route your money that way during a single visit with the advisor.
You can also simply buy and hold the currency (keep it in your safe deposit box). This makes it very easy to dump if something unexpected happens and you either decide the investment's no longer worth it, or you simply need the bux.
I'm interested on people's thoughts as to whether or not there's going to be much more upside on gold. Having missed that boat, I'm sort of torn about trying to crawl back on it at this point.
L&L, when my m-i-l died in '99, one of the things we inherited was a rather large pile of Haliburton stock. This was way back when Cheney was still CEO, and the stock was just sort of hanging in there. They were strictly an oilfield services and construction company at that point. Not glamorous, and nobody knew who they really were.
In early 2001, we dumped it. If we'd kept it, we'd be in very tall cotton right now -- enough that we'd have been able to retire. And we would have been war profiteers. As it was, selling it turned out to be some very expensive morality.
SQ, one of the major triggers of this war was that Saddam was threatening (in the fall of 2002) to start trading Iraqi oil in Euros -- a step that, had OPEC followed, would have undermined the petrodollar as the world's reserve currency. Nobody talks about this -- but it was a week later that Bush started demonizing him as a threat to American interests. This was a huge event in the push toward war.
DG, passports only take a couple months. You can apply for them at your local post office. Bring money and passport photos -- the specifications for these photos can be found online at the passport office's website.
EVERYBODY should have a current passport -- this is as essential a survival item as all the other stuff Jesse lists. Without one, you're not getting out of here, period -- not even to Canada or Mexico, in the very near future.
Doc,
I'm not sure whether you remember that you told me the same thing around 6 months back. Bought some gold ETF shares after you told me, after a slump, it has rocketed past my purchase price in 2 weeks.
Now accumulating petro shares and agri products/commodities shares.
Noticed the price of wheat, corn etc.?
shanks
Concurring on the passport. I got mine in 2002, after a November 2001 trip to Vancouver almost resulted in my not being allowed to board. In the past, my birth certificate (a copy of a certified copy) and voter reg card had been adequate. Not being able to get out of Dodge, period, cemented that decision.
I guess I'm just more resigned to my fate than other people here. A passport? Where would I go, and what would I do once there?
Well, for example, you might survive the massive depression equal to or worse than the Great Depression, possibly coming soon to a United States near you.
My best guess is within six months of the 2008 Olympics, after China stops propping up their economy and China has their own Great Depression (and what happens when CHINA has a Great Depression you don't want to see. It isn't good.)
I have a post coming on this most likely Saturday.
If you have a passport, you can leave the U.S. for a place which isn't going to be eating shoe-leather. Because no one is going to give a fuck about the United States if it gets really really bad.
My best bet... Chile. Oh...and what would you do? You'd work shit jobs and learn the local language, same as all immigrants everywhere.
Storing enough drinking water for 6 months is impractical for most people. Most of us have access to plenty of water, except for the people who live in a desert. It would be more practical to buy a good quality water purifier and purification tablets. And if you live in a desert, and actually believe that the economy will completely collapse anytime soon, you should probably move to a place which is more conducive to staying alive without pumping water a few hundred miles. Your best bet is to have a well insulated house in a rural wooded area with a wood stove. I've been meaning to find a second hand wood stove to chuck in my cellar, just in case I ever need it. Its easy enough to fashion a functional if ugly chimney. Ive got four acres of trees, which would keep my small house warm for at least a few years. And the open land which would result could be planted with vegetables. Dont forget a few good tree saws, there might not be enough gas for the chainsaw. A rifle for hunting would be a good idea, but I will have to make do with my crossbow. Fortunately my yard is full of deer.
Mrs Robinson:
The Oil in Euros thing is a red herring IMO, when oil is traded by the rest of the world they actually pay in thier own currency but the price is calculated at a USD rate, so here in NZ we pay NZD for oil, no USD involved in any transaction. The big thing is to actually control the stuff in the ground, then you can control the price by controlling supply.
As I said in your previous Bear post this is the biggest wealth transfer in history happening in front of your eyes. All your fixed income retirees just got it handed to them. Ben Bernake just threw them under the bus for wall st and the banks. Keep an eye on your old folks, make sure they are not going without cause its going to get tough for them!
Beware of gold, and what you buy! Make sure if you get into gold as a note holder you can convert easily to the actual physical commodity or buy actual gold and put in a safe.
And check out the crazy laws in the US in regards to gold, heard smewhere the Federal govt can confiscate gold in time of crisis ??
Jesse, come to NZ your more than welcome! You can buy land here and hold your US passport, mild climate too. Or just pop round for a BBQ, the beers are already in the fridge...
There are gold dealers who will sell you bullion for cold cash -- no receipts, no records, no names, no questions asked. You have to look around for them (I know of one in LA), but for the paranoid, they're out there.
It would be more practical to buy a good quality water purifier and purification tablets.
Yes. I live a forty-minute walk from Lake Michigan, but if I had to drink water from the lake, I'm pretty sure it would make me sick without prior purification after about ten years of drinking Milwaukee's hyper-chlorinated tap-water.
Jesse,
Odd that you should mention Chile. I was there a few months ago and in the business district of Santiago, there were signs all over the place about learning English, British English for the adverts were put up by the British Council. The posters all had prominent Union Jacks on them. Other than the TV, I saw little of US cultural interest. You go to the old presidential palace and there is a statue to Allende, guarded by some mean dudes in green. Times have changed.
I suspect that this summer's political events, showing that the Democrats aren't going to stop either the present wars or any future attack on Iran, have contributed to the recent dollar decline. Investors have given up and are getting their money out to avoid the economic war that will be waged against the US by the rest of the world once Georgie sends the bombers in. But one will never read about this anywhere in the American mainstream press.
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