The Debt Ceiling Debacle--How to Invest before August 2nd

I wasn’t sure whether to put this in General Questions or not–I think I’ll try it here.

Given the current craziness and uncertainty about the U.S. economy because of this whole “debt ceiling thing” and the negotiations to avoid a default on August 2nd, what are your opinions about investment strategies in the immediate future (meaning before August 2nd)?

We’ve all heard that if the U.S. somehow defaults on Aug. 2 then the Apocalypse and Tears & Bedwetting will occur. It seems that if one felt a default will indeed happen there would be obvious investment opportunities right now.

I know very little about investing, and currency movements particularly confuse me. But very, very, very offhandedly, it seems that if one was “betting” on a U.S. default then a big trade of dollars for euros or some other stable currency would be a good buy. Then again, for all I know a default might somehow strengthen the $ and wreak its havoc in the stock market, bond trading, or something else.

But I actually don’t believe that the U.S. will default. I’m pretty sure that some kind of deal will be worked out (probably favoring the GOP and killing any chance of a second term for Obama). If “non-default” is the outcome someone is “betting” on, what becomes a wise investment then? I am especially interested in currency or maybe gold speculations, but any investment opinion that’s apropos to this situation is welcome.

In my case, I don’t have much money to potentially invest–maybe $2,000 to $6,000–which would be a fair fraction of my net worth because I’m rather poor and don’t own any property of value (not even a car). So I don’t think there’s much chance of me busting a big financial move anytime soon.

Many of y’all might add the caveat that you’re “not an investment professional” or if you are one, advise that you can’t offer meaningful advice in this situation. That’s all fine and good. I understand that this is just a discussion and not serious advice. I’m just interested in predictions/guesses about the currency (and other) market’s movements in the next few weeks/months.

One problem with your plan. The best investment strategy for the scenario where the debt ceiling is NOT raised is just about the polar opposite from the best strategy if the debt ceiling IS raised.

So first you need to get a crystal ball to determine whch scenario is going to occur. Then we can discuss how to profit from it. Get it wrong and you’ll almost certainly loose a bunch.

Yeah. I rewrote my post several times. But I still couldn’t fashion it so it got my point across succinctly. That, and the fact it is in IMHO is why it has only received one reply–yours. Thanks for that!

To try to summarize in as few words as possible–

I want to understand if buying a bunch of euros, yen or gold would be a good move if one believes that the debt ceiling will NOT be raised on August 2nd.

At the same time, with all the uncertainty that exists just because the negotiations about this are so fractious, I’d like to know if buying a bunch of foreign currency or gold might be a good idea (before August 2nd) if one believes the opposite–that the debt ceiling WILL be raised.

I want to know which outcome (if either) would make a pre-August 2nd currency/gold buy a good bet. Further, is it possible that such an investment would be a good (or bad) idea in both cases.

Or, to put it in even fewer words: what are people’s predictions for the U.S. dollar in the upcoming weeks?

Long ago, my late father and I were discussing whatever financial crisis happened to be in the news at that time. He said, “Son, if the U.S. government ever winds up in a place where it can’t pay its bills, you’re gonna have a lot bigger shit to worry about.”

Very true. And although you didn’t mention any investment opinions explicitly, one could read your post as a suggestion to buy gold.

Also, canned goods, bottled water, and firearms. :eek:

Clearly the first step is to collect underpants.