George Gammon is an innovative real estate investor worth millions, and Ran Neuner has struck gold as an early crypto investor, showing keen foresight.
They paid a visit to the PBD Podcast on Monday to discuss the looming debt ceiling crisis as President Joe Biden and Speaker Kevin McCarthy struggle to reach an agreement.
On Fed Chair Janet Yelen, Gammon presciently asks, “Does she scale that in, does she issue all the debt at the front of the curb? You bring down that trillion dollar debt maturity from two years to one. It impacts the federal budget much more. You can see themselves painting themselves in a corner in real time. ”
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Damned if you do, damned if you don’t.
What aspects do you hold day of default? Bullets, he suggests.
Neuner lived in Zimbabwe and brings a unique perspective to the situation. “I’ve watched the currency in Zimbabwe go to zero in a manner of weeks. You want bullets, property, gold. And not pushing the crypto narrative, but if there’s a default you have to start thinking, what are the assets you always want to be holding?”
But Gammon counters that gold serves as more of an insurance item then a good investment.
Still, Neuner thinks actual default has a less than one percent chance of happening.
Gammon says, “You’ve got assets, but how does that hundred trillion come into existence? Debt. What happens if the economy collapses? So do banks. There’s no liquidity and no dollars in order to pay back loans due at the end of the month. It’s almost a short squeeze on the dollar, and it can be just as disruptive as the default on the debt.”
It’s almost a government sanctioned ponzi scheme.
“The British pound starting losing its dominance in the 1820s. What you see is you never have a global reserve currency that’s implemented by decree. And it always go bottoms up. Those entities in those economic systems, for example back then, say ‘hey we want to do more business with the United States.'”
Essentially, the same thing can happen with the US. It takes a long time for a powerful currency to die a slow death. But it does. So investments tied up with the current value in currency, while on its face can grow, can also completely plummet.
India is experiencing a stronger than ever currency as outsourcing booms and their economy grows ever more powerful.
The relevancy of the US dollar will be dominant for decades to come. But if you’re making investments into the next half century? Don’t hold your breath.
Check out Monday’s episode of PBD to see what long term economic trends you need to look out for, and what investments might be just a little more bullet-proof then the usual tried and true ones. It might just make you richer:
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