I mean, there’s a non-zero chance it happens in the next 6-12 months, so it seems like a bad thing to bury our heads in the sand about. I get why you’re saying that, but it seems like a risk that increasingly needs to be hedged.
It’s financial armageddon. Not sure how you would hedge against it. Gold coins?
I just bought a 26 week note at 97.62. comes out to 4.88%. and free of state and local taxes. Unlikely there is a better deal out there with less risk.
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I’m not sure either, I would think some combination of gold, bitcoin, waaaaaaaay out of the money put options, and possibly foreign currencies but they might all be fucked too.
The Republicans didn’t even rollback Obamacare, they aren’t defaulting on the debt.
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I assume there’s somewhere you can buy CDSs on US debt.
Way out of the money insurance should be really cheap
I thought about using this strategy to hedge against a Chinese invasion of Taiwan.
When it comes to US debt I think you just go unhedged and realize WAAF if it comes to that.
Great, would then just need to buy a CDS on the scamming financial institution pretending like they would be able to honor their debts in the event of US government default!
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I don’t think even people who pay a lot of attention to politics understand how truly insane the incoming R house is going to be. They’re not going to fold and it will be a complete shit show.
Kind of what I was thinking. The value of the dollar is sure to suffer massively In the event if a default so you get wortless dollars insured at a rate the might not even cover the purchasing power of the premium.
The us debt market is almost entirely unhedged because there would never be enough liquidity to insure it.
Right?
Ok but you cannot hedge it by having any type of account in any bank. You also couldn’t hedge it by owning any stocks. I guess you could buy German bonds or something but they’re going to pay less and have currency risks
Jkjk
I do think it is ironic that some sort of crypto currency is probably the best way to hedge against the dollar in the event of a default. Just seems so unlikely that the US would ever voluntarily default in its debt . Then again Kevin McCarthy…
That came up earlier today. Idk if a world where BTC is 1mm would be a very pleasant one to live in because it would mean things went extremely pear shaped
There is a good chance they nuke McCarthy and go with someone legit insane like Jordan
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Bitcoin most likely initially gets slaughtered in this scenario
Yeah basically commonwealth needs to stock up on ammo and kuggerands if he really wants to hedge a US debt default
John McCain is not walking through that door.
Exactly.
What would you have bought options on? Puts on Taiwanese companies?
Normally I’d agree, but the inmates may be about to takeover the asylum in a way they never have before.
This.
Foreign stocks, perhaps? Problem is it can’t be ADR’s in USD, and the account they’re purchased in probably can’t be in an American brokerage so that’s basically a non-starter for me.
Seems like physical gold or bitcoin are the real options here.
I think we’re drawing live to Speaker MTG or Speaker Gaetz.
Probably? But if it doesn’t get slaughtered worse than the dollar, it’s still the thing to be in, right? I guess real estate is a good option. If the dollar totally collapses, it should be pretty easy to pay off a mortgage.
Real estate, gold, and bitcoin seems like the trio to look at here. But what about the scenario where we mint the $1T coin?