Got Money You Can Afford To Lose?[How to Safely Profit In Stocks,Gold,Crypto's etc.]

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Got Money You Can Afford to Lose? Or: How to Safely Profit In Stocks, Bonds,Gold, Crypto-Currencies etc.

FREE! Financial Safety Services Free All-Weather Speculation Suggestions!:

Step 1: Divide your total savings to date into 2 "piles" :

[a] money you cannot afford to lose,

and...

[b] money you can afford to lose.

Got No Money You Could Afford To Lose?

If you have no money you could afford to lose, don't worry, just ignore all of the speculative suggestions given below. Do not speculate with money you cannot afford to lose! 

Much more importantly, the money you cannot afford to lose needs to be safe, in a neutrally balanced,  long term, non-predictive savings plan similar to this one.

If you still wish to speculate [ in whatever], in order to get money you could realistically afford to lose [if you do not have any at the present time], you are first going to have to acquire, earn, save/put money aside that is in excess of current needs and expenditures and long term savings requirements.

 Got Money You Could Afford To Lose?

Use only money you can realistically afford to lose for any of the following speculative ideas. These suggestions are for pure speculations [i.e. bets, or gambles] - I'll say it again: don't risk any money you cannot realistically afford to lose, _EVER_.

Got it yet? :-) .

Banking Crisis Ahead?

Do you believe that a banking crisis is coming?

Suggestion: buy put options* on bank stocks 

[ using only money you can afford to lose].

 Inflation Ahead?

Do you believe that inflation is coming?

Suggestion: buy gold or call options* on gold, 

[ using only money you can afford to lose].

Recession Ahead?

Do you believe that a recession coming?

Suggestion: buy put options* on stocks or stock indices 

[ using only money you can afford to lose].

Government Debt Crisis Ahead?

Do you believe that the debt crisis is going out of control?

Suggestion: buy put options* on government bonds 

[ using only money you can afford to lose].

False Alarm Crisis Ahead?

Do you believe that a false alarm "crisis" is coming?

Suggestion: buy junk bonds - which should profit considerably when interest rates fall sharply 

[ using only money you can afford to lose].

Everything's going to Be A O.K.?

Do you believe that the economy will "muddle through" somehow?

Suggestion: buy stocks of companies you believe would most profit 

[ using only money you can afford to lose].

Deflation Ahead?

Do you believe that a deflation is coming?

Suggestion: Buy 30 year US treasury bonds, or the equivalent if you are not living in the US 

[ using only money you can afford to lose].

*An option is a security that profits if a stock, stock index, or whatever, goes up [ call option] or down [put option]. As options have very short lives, typically no more than 9 months, they usually expire worthless. Therefor any speculation made with "play money" via options should only utilize a small part of the "play money" total, otherwise you could lose all of that "play money" within a few months.

Regards, onebornfree. Quesions/comments:  onebornfreeatyahoodotcom.

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The Strange, Ongoing Contradictions of Bill Bonner

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                                                          ]

                                                                  Mr.Bill Bonner

Here's Bill Bonner [one of my two favorite financial writers- the other being Doug Casey, blatantly contradicting himself regarding the future of the economy.

First he predicts a depression : "Why Negative Rates Can’t Stop the Coming Depression"...

... then he says in the article itself: "The future is always unknown."

http://www.internationalman.com/articles/why-negative-rates-cant-stop-the-coming-depression

Hmmm, so, we are [1] in for a depression but [2] no one can predict the future ? [I agree with the last part, although someone out there may get lucky, even possibly Mr Bonner himself, I suppose].

To try to make my own position a little clearer:

Depressions/deflations , have happened in the past, so they _will_occur in the futre at some point, regardless of what some might say; no differently than inflation, recession, "stagflation", economic "good times", or whatever else, have occurred in the past and will/must therefor continue to naturally occur in the future - its just that none of those economic conditions can be reliably predicted ahead of time.

So Mr Bonner is right in one sense- there will be a depression at some point in the future, however [and ignoring the fact that I have instinctively "leaned" towards a deflationary scenario for a number of years in my conversations with clients and others], there can be no guarantee that that "the greater depression" will occur in yours, or my, lifetimes. Which is why you need a neutral [i.e. none-predictive] long term savings plan for the money you cannot afford to lose, in my humble opinion.

Regards, onebornfreeatyahoo

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What’s Next: Deflation, Inflation, or Hyperinflation?

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Bill Bonner [in 2015] : "Recently, one of our dear readers summarized the three major points of view, along with one minor one:

Deflation Camp

Harry Dent is in line with the Austrian Business Cycle Theory: Money printing causes financial bubbles, distorts the economy, and is therefore counterproductive.
Like Bob Prechter (I don’t follow him closely, but his argumentation sounds similar), Dent bets on deflation and depression.

Fighting debt deleveraging and demographics is like putting yourself in front of a tsunami.
In such an environment, the U.S. dollar would gain purchasing power, and gold would underperform significantly. (Harry sees it back to $700 in 2018-19.)

Cash/T-bills/short-term Treasurys are the place to be. Rates will stay low for very long.

Inflation Camp

Jim Rickards’ thesis – “inflate debt away via a massive issuance of SDRs after China has joined the club” – is also very credible.

World currencies are massively diluted via issuance of SDRs, which serve only the powers that be. Rather than a new gold standard, this is the solution to Triffin’s dilemma (more flexibility for the elite).

[Triffin’s dilemma describes the constant need for the global reserve currency issuer – in this case, the U.S. – to supply the world with reserve currency by way of a long-term trade deficit. Eventually, argued Yale economist Robert Triffin, this would lead to a loss of confidence in the reserve currency.]

Citizens are excluded/not allowed to own SDRs. Their purchasing power shrinks. They don’t know who to blame.

The IMF does not consist of elected officials, and the majority of the population doesn’t even know it plays a role in creating inflation. And they can pretend that they have to save the world, too. (Remember the Greek bailout?)

Hyperinflation Camp

Shadow Stats’ John Williams is having a really hard time fighting for his ideas. He is right about the “CPI-CP Lie” and the current true state of the economy. But whoever invests along his ideas is running out of capital to stay in the game.

Peter Schiff and Mike Maloney are on a similar line. The problem with them is that they have a conflict of interest with their businesses. But I have no doubt about their integrity: They do/live what they say.

Deflation to Hyperinflation Camp

I recall an interview with Nassim Taleb on Bloomberg TV in 2009 when he said, “We will go from deflation to hyperinflation without seeing inflation.”

Tokyo to Buenos Aires

Our view is that Taleb will be proved right.
Back in 2009, we predicted “Tokyo… then Buenos Aires” – a Japan-like deflation, followed by Argentine-like hyperinflation.

Most likely, there will be no stop in between for moderate levels of inflation.

Inflation, as economist Milton Friedman observed, is “always and everywhere” a monetary phenomenon. But hyperinflation is a political phenomenon.

It is caused by those same authorities the masses think they can trust. When they are threatened, they will protect themselves by printing money on a scale we haven’t seen since the War Between the States. (Consumer prices in Richmond, Virginia, had risen 6,700% by the end of the war.)

There are times when printing money seems like the best course of action – especially for the people running the printing press. It may not do the common man any good, but it gets the feds out of a jam."

http://www.bonnerandpartners.com/whats-next-deflation-inflation-or-hyperinflation/

Financial Safety Services Commentary:

Fact: For fundamental reasons, to do with human action and markets,_nobody_ , but nobody, can reliably and consistently predict future economic events; not Dent, Schiff, Prechter, nor Taleb, yourself,  or anyone else.

Fact: It’ not necessary to be able to predict the economic future to safeguard one’s long term savings from an unknown , and unknowable, economic future:

Regards, onebornfreeatyahoo

                                          

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Bill Bonner :"Too Early for “Inflation Bets”?"

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Bill Bonner now asks :"Too Early for “Inflation Bets”?"
"After 35 years of waiting… so many false signals… so often deceived… so often disappointed… bond bears gathered on rooftops as though awaiting the Second Coming.

Many times, investors have said to themselves, “This is it! This is the end of the Great Bull Market in Bonds!”

And then, at the appointed hour, expecting the rapture… they took the leap of faith… only to come crashing down on the rocks below.

The Trump Trade

In 2008, in 2012, in 2014… Each time, the market made fools of them.Now, weary… wary… and nearly broke… they make their bets as though they were setting an explosive charge at a federal building........"

http://bonnerandpartners.com/too-early-for-inflation-bets/
Onebornfree commentary:

Of course, if those "weary… wary… and nearly broke" persons had only made their bets on inflation with money they could realistically afford to lose, and kept the money they could not afford to lose in a long term savings plan similar to this one:

http://onebornfreesfinancialsafetyrepor ... pdate.html

..... then they would not be now so "weary… wary… and nearly broke", but perhaps ready to try yet another bet on the return of inflation, using, of course, money they could afford to lose [assuming they had any].

Regards, onebornfreeatyahoo

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David Stockman's Dangerous "Best Strategy"

                            

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Financial Safety Services commentary : 

Both good and bad news in a recent "interesting" article by David Stockman: "The Best Strategy for the “Bubble Finance Era”" 

First, the good news:

"Money You Can Afford To Lose"

What's interesting to me is the fact that at least he has had the sense to imply that the saver/investor divides his/her money into 2 categories, as he states [using exactly my own words no less, but purely by coincidence, I'm sure :-) ], that a person should use "money you can afford to lose" to make bets with:

".....On the wealth-building side, you should consider deploying your discretionary capital — money you can afford to lose — by betting against vastly overvalued stocks. This could reap huge rewards during this unfolding market crash. ....."

My Question: So What About Money You Cannot Afford To Lose?

If you separate out the money you can afford to lose, as he suggests [assuming you are lucky enough to have some, that is :-) ], then the money left [presumably the bulk of your savings], must be money you cannot afford to lose.

And now, the bad news:

About this precious money/savings, which Mr Stockman labels "wealth preservation" money, he says:

"....On the wealth preservation side, you should buy the one asset that will be left standing tall when the central bank money printers finally fail: gold." 

So basically, he's telling the reader to put all of the money they cannot afford to lose into one "investment",  gold bullion, and then any money that they can afford to lose into puts [i.e shorts] on certain "overvalued stocks" [or is he talking about the entire market?]

This Just In: Nobody Can Consistently, Reliably Predict Future Economic Events

Unfortunately, because no one can reliably predict future economic events and scenarios, putting all of one's money you cannot afford to lose into one investment [gold] is an attempted predictive [and therefor very dangerous] move; that is, he is stating unequivocally that one type of economic future is "on the cards" for sure, that is inflation, as gold, although it does OK in times of unrest [e.g. bank instability etc.], only really does really well during inflation; that is, when the world's No.1 reserve currency, the $US, is losing purchasing power at an increasing rate.

Image source

 Or, if you believe he is not predicting inflation in yours/ my lifetimes,  then he is "merely" predicting  [1] the collapse of the US banking system, and [2] that gold will be the best bet when this happens, in yours and my lifetimes.

Bottom line: he's advising the reader to make a predictive bet on the unknown [and unknowable] future, with gold, using money that you, the reader cannot afford to lose.

Is The End of the Federal Reserve and $US System Coming Soon?

Like Mr Stockman, I believe that at some point, the Federal Reserve system might collapse, or at least change drastically.

However:

 [1]: there is, and can be, no guarantee that this might happen within yours or my lifetimes.

[2] if it does collapse, there is no guarantee that the system will collapse or change in the manner that  either you, I, or Mr Stockman or anyone else imagines, nor that what replaces it would be what he, you,  I, or anyone else imagines "should" or "would" replace it. 

Again, the economic future is largely unknowable to us.

Therefor, using only money you can afford to lose [ or some of it, assuming you have any in the first place], it might make sense to buy puts  [i.e "shorts", or "short positions"],  on bank stocks, instead of using all of that money you could afford to lose to buy puts on US stocks, as Mr Stockman suggests, if you believe that the banking industry is in for  rough[er] times in the future.

As to his prediction of large,  imminent stock market losses, I have no idea, although I do currently lean towards there being a significant correction in the current deflationary environment- but at least he's telling you to bet with money you can afford to lose, so that if he's wrong, then no real damage is done to your savings, which is very much in contrast to what might happen if you bet all of the money you cannot afford to lose [i.e long term savings] on one investment vehicle, gold, as he advocates in the article. If he's wrong about that bet, you could be in serious trouble.


Regards, onebornfree.
email: onebornfreeatyahoodotcom

Edit: Related article [2017]: "Got Money You Can Afford To Lose?

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