What happens if Citigroup fails?

Ask the editors: What happens if Citigroup fails? - Megan McArdle

Prediction. There is no way to untangle this financial mess without losses to some people. Most poor people, apart from some disruption, which will happen whatever happens, and most middle class people whose major asset is a house will survive in some way.

For people with significant financial assets, this house of cards is falling. Some will win, some will loose. My prediction is that there will be some successful political efforts to punish some members of the VERY RICH, but that almost everybody will loose money. There is no other way, since the "money" held does not really exist.

I don't have any wealth at all, but if I did I would predict fairly intense dollar and Euro inflation in the next five years, and would use any cash I had to buy either bonds (still some risk), or at this stage, property or gold.

Gold is nonsense in theory, but has a very long cross-cultural diachronic human history. And if you have the deeds on a house, inflation will reduce a mortgage, and assuming a society in which contracts are observed survives, you will be left with something of real value.