Tuesday, July 22, 2008
Hopefully we all know by now we are entering a period of global economic slowdown, less production with increasing consumption (in general). Most of us ain't ballin' like my role models. As job opportunities decrease and prices go up, so does crime, hunger, and.... creativity!
The prices of precious metals such as gold, silver, and copper are skyrocketing at historic rates because of the large scale inflation mostly seen in the U.S. Dollar.
This is a chart of the price of copper in the last 8 years:
My cousin who is 18 and has never been employed in his life, found himself a nice little hustle to keep him eating in these hard times. My cousin has a Mexican friend who put him on to "copper distribution." There is a copper distribution company out here in Denver that pays anyone that brings in copper sheets, copper pipes, copper anything!
Guess what yall... Since nobody is buying houses and the inventory of unfinished houses is sky high, large developments of incomplete houses have stacks of construction material, including copper, lying around inside them.
So my cuz drives around these neighborhoods gathering the unused copper metals and pipes and sells them to the Copper Distributor at the end of the week. It's better than having a job for him because he wakes up when he wants to, gathers the copper when he wants to, chooses what days he wants to gather, and turns it in for a lump-sum when he wants to.
That's some creative hustling right there.
*Shout out to Raw Dawg Buffalo for referencing me in his post on the U.S. economy.*
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JAY MIDNYTE: I felt uncomfortable about offering any REAL opinions on such a well-travelled spot as RDB.
The laws in the US are also so weird as to what people can say with regard to foreign currencies and foreign banking, that I'm hesitant to really let fly. I'm safe where I am. I can't vouch for you.
Just the mere fact of your putting up a copper chart and your comment to "No_slappz" about your spot gasoline projection 4 years out tell me that you UNDERSTAND how to make money in a good or bad American economy and you know the factors that have made and continue to make the USD just hideous. If you are borrowing USD to lend currency un-correlated or negatively correlated with the USD, you're making a smart trade. There really is no trade short USD and long ANY hard asset.
You use an example of physical copper. And you right to do so. I have a friend here in Panama who has a cocrete and cement company who's basically stopped pouring jobs in favor of warehousing Portland cement because it has been appreciating so rapidly against the USD.
To keep things general, just pick up a finance textbook and look for the chapter on Harry Markowitz and portfolio theory. That will give you a sense of how to construct a portfolio to maximize return and minimize volatility. Combine that with an OPINION about a weak dollar and you'll probably be looking to be diverse, at least half ANTI-DOLLAR. You want to have some dollar exposure because you live in America and need dollar liquidity just to live!
I feel uncomfortable also discussing real wealth figures with you. I know that you're in school but I don't know what your side businesses are or how risky they are, so I can't give you more specific advice.
I could write chapter-and-verse on any asset, but without knowing your needs, means and goals I can't help you.
Hit me back on my spot with any specific questions and I'd be happy to give you my opinions.
Kelso, Found your blog and thanks to visiting mine.
"Since nobody is buying houses and the inventory of unfinished houses is sky high, large developments of incomplete houses have stacks of construction material, including copper, lying around inside them."
That's an amazing story and hustle. Hope your cuz don't get locked up.