One Major Threat To Tesla: THEORY

Clprenz said:

What would happen if we invest in Tesla and the Dollar and the US fall apart in the next 5 years? This is a theory I believe that could be likely. If you don't follow what I'm saying, read the book The Real Crash America's Coming Bankruptcy.
What do you guys think?!
Let the discussion begin!

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What if the sun refused to shine ?

perdru said:

What if the sun refused to shine ?

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Perfect response :biggrin:

perdru said:

What if the sun refused to shine ?

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I'm sure Elon would come up with an acceptable artificial sun. Mind you, he'd have to disclose a conflict of interest regarding SCTY.

If the U.S. and the Dollar "fall apart in the next 5 years", (which I think is highly unlikely), then worrying about Tesla or TSLA will be the least of my worries...

I took a quick look at the blurbs and reviews for the book on Amazon, and I am not too impressed. It seems to be a pretty typical RW, "buy gold and start doomsday-prepping" type of anti-government book that many Fox News viewers will probably appreciate.

GlennAlanBerry said:

If the U.S. and the Dollar "fall apart in the next 5 years", (which I think is highly unlikely), then worrying about Tesla or TSLA will be the least of my worries...

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Exactly what I was going to say.

At least if hyper inflation hits before my loan is up I can mock all those on the board that were advocating for 'pay in cash'. Then I will live out my depression life in misery like everyone else.

Hopefully being an engineer will be somewhat depression resistant.

This theory should include a country & currency that will rise if the Dollar collapses.

Clprenz said:

What would happen if we invest in Tesla and the Dollar and the US fall apart in the next 5 years? This is a theory I believe that could be likely. If you don't follow what I'm saying, read the book The Real Crash America's Coming Bankruptcy.
What do you guys think?!
Let the discussion begin!

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Isn't it US based companies like Tesla that make this a non-event?
I'd say investment in Tesla is your best hedge to prevent the scenario in the first place

Also, if the dollar collapses it would make exports extremely cheap.

The "dollar" has been on a slow, steady decline since 1971, when Richard Nixon took the United States of the gold standard, it's all been fiat currency since then. Also most other countries who are not on a gold standard (which is all of them, at this point), their currencies have also been devalued, it's a race to the bottom.

Nixon Shock - Wikipedia, the free encyclopedia

mitch672 said:

The "dollar" has been on a slow, steady decline since 1971, when Richard Nixon took the United States of the gold standard, it's all been fiat currency since then. Also most other countries who are not on a gold standard (which is all of them, at this point), their currencies have also been devalued, it's a race to the bottom.

Nixon Shock - Wikipedia, the free encyclopedia

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Uh maybe. But I probably have more computing power in my house than all of NASA had in 1972. The average standard of living is much improved since 1972. So what if there is 'devaluation of currency' we have more of it. And we can buy more than we used to.

Not saying fiat currency is a magic bullet, or problem free, but it was better than arbitrarily assigning a set amount of a useful but mostly trivial element to the value of a dollar.

This is a risk in ANY investment and is not unique to TSLA. This is why you keep hearing about diversification. Luckily Tesla is also diversifying. By selling in China and throughout Europe Tesla is decreasing their risk exposure to the American market. In fact, if Tesla can get to a point where foreign sales can make up for any dip in domestic sales, then they end up better off in an American recession because their costs go down while profits stay high. Tesla also stands to benefit when the gen III platform his the market as it is a car that could completely pay for itself in reduced fuel and maintenance all within 5-10years meaning that hard hit consumers may still buy even though they wouldn't otherwise. All in all Teska is in a pretty good position.

That said, I would never consider a stock portfolio that included only one company, or even only one sector of the economy, or one country. Tesla is part of my portfolio, it isn't my whole portfolio.

If the dollar collapsed I would be far more worried about the 50% of the gasoline we still need to import. Do you think the Saudi's would just donate oil to us

dhrivnak said:

If the dollar collapsed I would be far more worried about the 50% of the gasoline we still need to import. Do you think the Saudi's would just donate oil to us

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we moved from the gold standard to the oil standard. I'm hoping with Tesla's help we move next to the Solar standard (Gold-Light)

Saturday Night live once did a sketch, featuring a fake Jimmy Carter, the message was essentialy "Inflation is your friend"' had such famous lines as "don't you want to live in a $2 million home, drive a $500K car, I know I do" (followed by that famous Jimmy Carter grin). The point is, yeah, we have more dollars, but they don't buy as much. Look at the average new car price in 1970, now look at what it was in 2010. Are we any better off? More dollars is not the solution, the value of each dollar is. Even if the dollar collapses, we can still buy and sell things amongst ourselves, it's imports and exports that will be killed. Another reason we need to be more self sufficient.

mitch672 said:

Saturday Night live once did a sketch, featuring a fake Jimmy Carter, the message was essentialy "Inflation is your friend"' had such famous lines as "don't you want to live in a $2 million home, drive a $500K car, I know I do" (followed by that famous Jimmy Carter grin). The point is, yeah, we have more dollars, but they don't buy as much. Look at the average new car price in 1970, now look at what it was in 2010. Are we any better off? More dollars is not the solution, the value of each dollar is. Even if the dollar collapses, we can still buy and sell things amongst ourselves, it's imports and exports that will be killed. Another reason we need to be more self sufficient.

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A 1970 car != a 2014 car. The cars in the 1970s were underpowered, poor handling, unsafe, and inefficient. So of course they are more expensive (against inflation).

A perfectly opposite example is computers. I have in my house more computing power than all of NASA in 1970. I would bet that they spent millions of 1970s dollars on their computers, and support equipment. I have about $7k worth of active computers in my house.

So my 'less worth' dollars bought so much more.

Truth is most people now can buy more stuff than they could in the 70s.

You can not live a full life worrying about what's around every corner, particularly when that imagined threat is a herd of zombies and you've only got six bullets left.

ElSupreme said:

A 1970 car != a 2014 car. The cars in the 1970s were underpowered, poor handling, unsafe, and inefficient. So of course they are more expensive (against inflation).

A perfectly opposite example is computers. I have in my house more computing power than all of NASA in 1970. I would bet that they spent millions of 1970s dollars on their computers, and support equipment. I have about $7k worth of active computers in my house.

So my 'less worth' dollars bought so much more.

Truth is most people now can buy more stuff than they could in the 70s.

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Fun fact:

The US Gov't adjusts inflation numbers for such advances in technology. E.g. if you bought an IPad 1 for $500 last year and an IPad 2 for $550 this year it is not considered 10% inflation, but gets adjusted down based on advances in technology, and inflation for that item could be 0% even though it costs you 10% more to get a computer than the year before.

This inflation with regard to TSLA is killing me.

No - not really as I am long TSLA.