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Posted by Larz on July 24, 2008, 5:11 am
I have been somewhat nervous about the economy. I feel that if the
Iraq war does not end soon, or that the US attacks Iran, the economy
may get very bad.
I also have watched some conspiracy stuff on how the federal reserve
is actually controlled by the Rothschild family and how Milton
Friedman had said that the Federal Reserve caused the great depression
and could have prevented it. This seems somewhat chocking, but I have
seen a video of Friedman saying that, and although I may not agree
with all of his economic ideas, I think there may be something to that
assertion of his and others. Bernanke had apparently agreed with what
Friedman had said and acted as if it was all a mistake and part of a
learning process, though in reality it seems like the Fed in the end
is going to protect certain Wall street entities and not the middle
class type investor.
The guy at Fidelity Investments discouraged me from moving my IRA
into FDIC CD's. He recommended a managed portfolio type account that
he says has become popular, maybe it was PAS or something. I am
considering putting a large chunk in that to see how it does. He also
said that investments are covered with SIPC, but I see that that is a
private insurance. With FDIC, I guess the govt can print money if it
had to, though that would devalue what you get anyway. He also gave
the usual argument that moving to CD's you will get low yields and
all, but I think if I hear much more bad economic news I may be
prepared to move into CD's,
I am somewhat conflicted on this and am afraid that my gut feeling of
moving alot of my assets into CD's may be the thing to do, but the
recommendation not to leaves me a bit uncertain of what I should do.
He also had said that the S&L crisis in the 80's caused alot of
people to think it was the end of the world. I have heard stuff like
that on the radio, one guy claiming that the 70's was worst than the
depression, but that seems wrong because the depression was a greater
hardship for the common man. It seems like economists measure the
economy based on how a large corporation would view things and not the
average person trying to live a life free from stress and hardships.
That leaves me feeling frustrated with many economists, and if you
listen to The Electric Politics podcast on the internet, they have an
episode that argues that economics has become some high ended
mathematical modeling approach that is actually disconnected from the
real world to a large extent.
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Posted by Rich Carreiro on July 24, 2008, 10:41 am
> Friedman had said that the Federal Reserve caused the great depression
> and could have prevented it. This seems somewhat chocking, but I have
> seen a video of Friedman saying that, and although I may not agree
> with all of his economic ideas, I think there may be something to that
> assertion of his and others.
That's no big secret. It is broadly accepted macroeconomics that the
Depression-era Fed really bleeped it up by persuing contractionary
policies. Which is a far cry from saying that the Depression-era Fed
wanted to cause/prolong the Depression. Only the tinfoil hat crowd
believes that.
The modern Fed (and Bernanke, whose PhD thesis was all about what went
wrong in the Depression) have learned from that mistake, which is why
the Fed is currently turning on all the liquidity taps as fast and
hard as it can (which of course has its own set of negatives to watch
out for).
--
Rich Carreiro rlc-news@rlcarr.com
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Posted by kastnna on July 24, 2008, 10:45 am
Larz,
Aside from a lot of speculation, all you told us is that you are
thinking of "selling low" and investing in "safe" (read: no growth)
investments. "The guy at Fidelity" recommended against this.
Some important questions:
How old are you?
When do you plan to retire?
How much money do you have invested?
How much do you plan on needing in retirement?
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Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
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Posted by rick++ on July 24, 2008, 11:21 am
When in doubt, go 50% CDs and 50% what you have now.
I would bet five years from now your CD half will be way
behind your other half. But peace of mind may be worth
something.
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Posted by Michael on July 24, 2008, 11:26 am
Larz, I have to say I share your concern. I watch my IRA plummet and
consider taking similar action as you described. As of now I am opting
for sitting on the sidelines debilitated by fear. My advisor keeps
saying to me that as long as you own, or lend to, quality companies
this is the best course of action. Truth is, I don't think anyone has a
clue as to how this problem economy will resolve itself.
Michael
>
> The guy at Fidelity Investments discouraged me from moving my IRA
> into FDIC CD's.
> I am somewhat conflicted on this and am afraid that my gut feeling of
> moving alot of my assets into CD's may be the thing to do, but the
> recommendation not to leaves me a bit uncertain of what I should do.
>
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Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
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