So what to do with USD?

i am so tired of people parroting each other about fears of inflation. we are in an increasingly dire situation of deflation. lets work on what that means, and what means if any there are to cure it. if you're actually interested, read about the situation in germany post wwi where the means of production had been decimated---that was the beginning of runaway inflation for them. we have a situation with demand dying by the minute and increasingly idle capacity. people have to want something (desperately) for inflation to take hold.

I think we have both deflation & inflation: asset prices decreasing, but cost of goods (drug store, groceries) increasing.

nyc10023: just curious, is RE your profession or a sideline?

I agree with your question nyc10023. What to do with USD?

cc: so what's your take on what best to put cash into?

RE is neither my profession nor a sideline.

short term cash...like 3-6 month insured cds...if (and in my mind a huge if) inflation starts, interest rates have to go up.

p.s. how in gods name can you have inflation and deflation at the same time? if you think the cost of groceries is going up, you're shopping in the wrong place. manhattan is not the world...hard to believe i know.

GLD....every dip, every time, 25-30% net worth.
Read what you will, I am a simplelton, while the media and the president told you how outraged you are over AIG bonus money(165M), they blew 1.8 Trillion into the atmosphere. TRILLION!!! That more than DOUBLES the prexisiting money supply. Gee, I wonder what's going to happen to the cash I stashed in dollars? Think it might increase in value? I hate buying gold at these prices but, going to love selling it when it reaches???
Anyone got any other ideas?

Inflation??

Not with factory utilization at 65% and 10% unemploment or 15% under-employment

we are in a deflationary environment, just ask your friends which just got a cut in their salaries, no bonus etc.

return of your capital is more important than any return for the time being
so short term 6-12 month CD's, savings a/c

10023, it seems crazy this very second, but there is some serious possibility of commodities inflation. Think about it, the soybeans planter can't get his line of credit for his crop seeds, wages, etc. because the bank is afraid that demand has slowed. He goes under. Very simplistic analogy, but it can be extended far and wide. Oil? No new exploration, no money for it. Population is still increasing, supply is far from infinite. At some point, I wouldn't suggest now because although it might give you the most potential, it's also still risky, look into commoditities. Also, emerging markets and certain REITs may do well. Corporate bonds, if you are a very hands on investor, has potential.

This is all still highly deflationary. GE's profits decline 35%, despite a large increase in the areas you would expect the stimulus bill to influence, namely energy, large machinery, and STILL a 35% decrease. $4 trillion dollars injected, and still defaltionary, at least for now. Salaries are being slashed.

i am too concerned (scared) to be anywhere other than insured CDs. fantastic time to start a business if only i could think of one that would work.

I have been (very cautiously and carefully) putting $$ into the equity markets since october/november 2008, with a very long-term time horizon. But that's still a pretty small portion of our liquid assets.

A good chunk is in NYC munis, which have pretty good yields, although are not as risk-free as I like.

I am concerned about inflation at some point, but don't think that point is now, and with your cash truly liquid, I think you will have enough time to react when we get closer to it. So I agree with short-term cds and savings as a strategy.