I’m quoting here from Don Surber’s morning update of the news. It’s not a news story, though. It’s a missive he received from a reader. Look, I’m not competent to say much of anything about our economic mess—still less about investing—but I know a mess when I see one. However, for people of a certain age—about my age—what Don’s reader says should really hit home. It stirs up the gut feeling that what can’t continue ultimately won’t. There’s always a reckoning. In the end this time won’t be different, because reality bats last:
Great topic, mark. One we all need to study up on because it affects us all at a survival level. I read charles hugh smith, Catherine Austin Fitts, Brandon Smith at Alt-market.us, and the sampling of zero hedge. James Howard Kunstler too.
My take based on all tje different sources and competing ideas is that you have to decide what scenario is the most threatening to your situation *and* is most likely to actually happen. So, for example, i don't waste resources preparing for world ending scenarios that are possible but unlikely, ie, EMP, nuclear war, etc... And by same token, i dont worry too much about swings in the market that don't pose a big threat to me.
So what is a likely threat worth preparing for? As far as i can figure it is a wholesale collapse of the dollar and some variation of Argentina, Venzuela, and Great Depression. The twist here is the idea of the Central Bank Digital Currency that will attempt to digitize all transactions in a totalitarian control system. This is on the drawing board right now and imho is a matter of when not if. How do you prepare for that??
Best i can come up so far is 2 strategies: 1) get local. If you don't live somewhere with sufficient local food sources (farming, dairy, cattle, fishing), youre in need of relocation asap. Be prepared to grow at least a few basic crops to supplement your food supply and serve as barter. Potatoes are my personal choice. Develop relationships w neighbors now to figure out food and basic needs. 2) Stock up on real money and items that can be traded for food and necessities. This would be junk silver, some gold coins, cheap gold jewelry (read Ferfal and his tips on surviving the Argentina collapse...great practical advice).It also means ammunition which will always be in demand and tradable especially common calibers. Do not invest in gold or other metals that you don't have in your personal possession. If you dont control it now, it will likely be gone in the kind of crisis where you'll need it. In a digital currency environment, people won't take your paper dollars but i guarantee they will take silver, gold, or ammo, at least locally. Again, the perspective is a collapse of the economy where people are panicked and desperate. If we're merely seeing higher inflation and a stock market crash but otherwise no currency disruption, no banking closures, then fine. We prepare for what can't be survived on our normal existing template.
Assume that your 401k will be appropriated by the feds. Assume your bank accounts will be frozen and then converted by the feds into digital currency at a rate favorable to the feds. We have to assume that the nice, comfy retirement fueled by retirement plans and pensions and savings isn't going to be there. We may have to rethink living in extended families to pool resources and manpower etc...
Again, we would all much prefer that we weren't living in these desperate times. Frodo said the same thing. Too bad. Denial is for victims and slaves. Bad look. We placed our faith in all the wrong people for the last 80 years. We can continue doing that and see how it works out now. Personally, in my 50s, my job now is to prepare so i can help my kids and their kids to survive. If I'm wrong then great! I'll happily find something to do with the excess gear and coin.
Does this make us preppers?! We are almost ready to go from the Jetsons back to the Flintstones.
Recently bought the dip -- the dip in lumber prices that is. Stocked up on 2x4s and 2x6s that had come way down in price. Something like 500 per 1k board feet. Going to 1500 per 1k board feet by May 2022 is the prediction. I also bought a portable sawmill for the day those prices once again go sky high.
Got two generators as well, multi-fuel. I moved from blue state, big city to red state, outside small city -- with land and a big house (that we are adding on to) to take in family members (family members who think we are a little nuts, but guess who will be the first ones knocking on the door when SHTF?!). Surrounded by trees, a river and a lake, that will serve us well. For building shelters, heat and cooking, barter, and wood alcohol. Wood alcohol will run the generator and all it's connected to.
Greenhouse goes up in Spring -- along with a climate battery for year-round growing.
Welcome to the decades of the TINA (There Is No Alternative) trade. To stay long the market for the past twenty years you had to accept that the Fed was going to do whatever it needed to do to prop up the asset markets--and to blindly trust the Fed Chair "Put." You had to ignore that given virtually every market metric said that the long term returns were going to be flat--and that the odds of a 50-60% repricing of the markets was likely. After 30 year careers, we could not afford to take that kind of risk with our retirement assets.
So, for the last three years of my working life, I also took position trades on the Russell 2000 futures market out of a self-directed IRA account. After watching the insane market manipulation during those years--we went to 100% cash except for a trading account. The markets were clearly not normal. While nearly every penny of our 401k / IRA savings for our 30 year working careers sat in cash, I day traded to make "interest" on our crappy Vanguard money market accounts. I never risked more than 1% of my account value on any given trade and was happy to make several thousand a month. After nine years, the trading bots destroyed my method and profitability, with slippage taxing both sides of every trade until I was wasting my time.
What does any sane person do with their investments now? Get completely out of debt. Move to a red state. Live off your income only. Could you recover from another 2000-2002 market crash? 2008-2009? There is no good answer anymore. Investing for growth right now is picking up nickels in front of the steamroller.
I made my bet the week before this past one- I sold the last of my stock holdings and am betting on longer duration treasuries. I could be catastrophically wrong, but I think the 10 year treasury will go below zero in the next recession and the 30Y will go below 1%. If sentiment continues to deteriorate, I might actively short this stock market. Right now, I think it still too risky to short, but that might change soon.
I made a partial bet last spring. Sold all my tech, health care and a few other stocks (probably earlier than I should have) but kept most oil, energy and financials, which had languished over the last few years but finally have started to come back nicely. Am about 40% cash now, gaining almost zero interest, but letting it sit until opportunities arise with individual companies that will inevitably get oversold when the big crash occurs. Good, financially sound companies that sell products and services that people want and need will always be able to weather these storms, raise their prices as necessary to offset inflation, and come out OK on the other end. Those are what I have and will be placing my bets on.
Good point Forbes. Wouldn't surprise anyone if that is the eventual plan the gangsters are betting on: collapse the system, create deep food and financial panic, and then offer up a "Great Leader" who will provide security in exchange for total submission. The twist here is that history has never seen an attempt like this against a large population that is as heavily armed as Americans. The amount of weaponry out there (as well as veterans who know how to effectively use it) is staggering. No wonder the gangsters have been trying to disarm the People relentlessly while turning every federal agency into an armed strike force.
Oh you're right about that but just because we don't see anyone now doesn't mean he she isn't out there in the prep room. Afterall, Lenin wasn't in Russia until the Germans shipped him in during WWI to destabilize Tsarist Russia. That worked a little too well.
A Great Leader savior of the country will only come from the right, because borders/country is not an issue for the Left. A bureaucratic coup could come from the Left but IMO won't stick.
Note how deeply unpopular the Left is--and that it's NBC telling you this:
Only come from the right? It would be too easy for the commies to synthesize a charismatic figure out of nowhere to promise to restore order, safety, and prosperity at the barrel of a gun and w all the propaganda arms and bureaucracy at his her disposal. Who was Napoleon, for example? A nobody artillery officer who had a moment in battle and then caught fire. The gangsters could create someone and conjure up an origin story etc... Stop thinking Democrats Republicans labels. The game is much bigger.
Great topic, mark. One we all need to study up on because it affects us all at a survival level. I read charles hugh smith, Catherine Austin Fitts, Brandon Smith at Alt-market.us, and the sampling of zero hedge. James Howard Kunstler too.
My take based on all tje different sources and competing ideas is that you have to decide what scenario is the most threatening to your situation *and* is most likely to actually happen. So, for example, i don't waste resources preparing for world ending scenarios that are possible but unlikely, ie, EMP, nuclear war, etc... And by same token, i dont worry too much about swings in the market that don't pose a big threat to me.
So what is a likely threat worth preparing for? As far as i can figure it is a wholesale collapse of the dollar and some variation of Argentina, Venzuela, and Great Depression. The twist here is the idea of the Central Bank Digital Currency that will attempt to digitize all transactions in a totalitarian control system. This is on the drawing board right now and imho is a matter of when not if. How do you prepare for that??
Best i can come up so far is 2 strategies: 1) get local. If you don't live somewhere with sufficient local food sources (farming, dairy, cattle, fishing), youre in need of relocation asap. Be prepared to grow at least a few basic crops to supplement your food supply and serve as barter. Potatoes are my personal choice. Develop relationships w neighbors now to figure out food and basic needs. 2) Stock up on real money and items that can be traded for food and necessities. This would be junk silver, some gold coins, cheap gold jewelry (read Ferfal and his tips on surviving the Argentina collapse...great practical advice).It also means ammunition which will always be in demand and tradable especially common calibers. Do not invest in gold or other metals that you don't have in your personal possession. If you dont control it now, it will likely be gone in the kind of crisis where you'll need it. In a digital currency environment, people won't take your paper dollars but i guarantee they will take silver, gold, or ammo, at least locally. Again, the perspective is a collapse of the economy where people are panicked and desperate. If we're merely seeing higher inflation and a stock market crash but otherwise no currency disruption, no banking closures, then fine. We prepare for what can't be survived on our normal existing template.
Assume that your 401k will be appropriated by the feds. Assume your bank accounts will be frozen and then converted by the feds into digital currency at a rate favorable to the feds. We have to assume that the nice, comfy retirement fueled by retirement plans and pensions and savings isn't going to be there. We may have to rethink living in extended families to pool resources and manpower etc...
Again, we would all much prefer that we weren't living in these desperate times. Frodo said the same thing. Too bad. Denial is for victims and slaves. Bad look. We placed our faith in all the wrong people for the last 80 years. We can continue doing that and see how it works out now. Personally, in my 50s, my job now is to prepare so i can help my kids and their kids to survive. If I'm wrong then great! I'll happily find something to do with the excess gear and coin.
Does this make us preppers?! We are almost ready to go from the Jetsons back to the Flintstones.
Recently bought the dip -- the dip in lumber prices that is. Stocked up on 2x4s and 2x6s that had come way down in price. Something like 500 per 1k board feet. Going to 1500 per 1k board feet by May 2022 is the prediction. I also bought a portable sawmill for the day those prices once again go sky high.
Got two generators as well, multi-fuel. I moved from blue state, big city to red state, outside small city -- with land and a big house (that we are adding on to) to take in family members (family members who think we are a little nuts, but guess who will be the first ones knocking on the door when SHTF?!). Surrounded by trees, a river and a lake, that will serve us well. For building shelters, heat and cooking, barter, and wood alcohol. Wood alcohol will run the generator and all it's connected to.
Greenhouse goes up in Spring -- along with a climate battery for year-round growing.
Ditto on everything else you say above.
Anyone who is not a prepper to some degree is either blind or a child.
Welcome to the decades of the TINA (There Is No Alternative) trade. To stay long the market for the past twenty years you had to accept that the Fed was going to do whatever it needed to do to prop up the asset markets--and to blindly trust the Fed Chair "Put." You had to ignore that given virtually every market metric said that the long term returns were going to be flat--and that the odds of a 50-60% repricing of the markets was likely. After 30 year careers, we could not afford to take that kind of risk with our retirement assets.
So, for the last three years of my working life, I also took position trades on the Russell 2000 futures market out of a self-directed IRA account. After watching the insane market manipulation during those years--we went to 100% cash except for a trading account. The markets were clearly not normal. While nearly every penny of our 401k / IRA savings for our 30 year working careers sat in cash, I day traded to make "interest" on our crappy Vanguard money market accounts. I never risked more than 1% of my account value on any given trade and was happy to make several thousand a month. After nine years, the trading bots destroyed my method and profitability, with slippage taxing both sides of every trade until I was wasting my time.
What does any sane person do with their investments now? Get completely out of debt. Move to a red state. Live off your income only. Could you recover from another 2000-2002 market crash? 2008-2009? There is no good answer anymore. Investing for growth right now is picking up nickels in front of the steamroller.
I made my bet the week before this past one- I sold the last of my stock holdings and am betting on longer duration treasuries. I could be catastrophically wrong, but I think the 10 year treasury will go below zero in the next recession and the 30Y will go below 1%. If sentiment continues to deteriorate, I might actively short this stock market. Right now, I think it still too risky to short, but that might change soon.
I'm way to ignorant to offer an opinion, but I'm interested in what others are thinking. I know this has to be preying on the minds of many.
I made a partial bet last spring. Sold all my tech, health care and a few other stocks (probably earlier than I should have) but kept most oil, energy and financials, which had languished over the last few years but finally have started to come back nicely. Am about 40% cash now, gaining almost zero interest, but letting it sit until opportunities arise with individual companies that will inevitably get oversold when the big crash occurs. Good, financially sound companies that sell products and services that people want and need will always be able to weather these storms, raise their prices as necessary to offset inflation, and come out OK on the other end. Those are what I have and will be placing my bets on.
Good point Forbes. Wouldn't surprise anyone if that is the eventual plan the gangsters are betting on: collapse the system, create deep food and financial panic, and then offer up a "Great Leader" who will provide security in exchange for total submission. The twist here is that history has never seen an attempt like this against a large population that is as heavily armed as Americans. The amount of weaponry out there (as well as veterans who know how to effectively use it) is staggering. No wonder the gangsters have been trying to disarm the People relentlessly while turning every federal agency into an armed strike force.
There's a snag in that plan--Where's the Great Leader? Zhou, Nan, Chuckie? No charismatic military types, either. Milley? LOL.
Oh you're right about that but just because we don't see anyone now doesn't mean he she isn't out there in the prep room. Afterall, Lenin wasn't in Russia until the Germans shipped him in during WWI to destabilize Tsarist Russia. That worked a little too well.
Kamala? Bernie? Liz Cheny? Liz Warren? Gavin?
A Great Leader savior of the country will only come from the right, because borders/country is not an issue for the Left. A bureaucratic coup could come from the Left but IMO won't stick.
Note how deeply unpopular the Left is--and that it's NBC telling you this:
https://redstate.com/bonchie/2022/01/23/nbc-poll-reveals-the-most-unpopular-major-political-figure-and-where-things-are-headed-n511289
Only come from the right? It would be too easy for the commies to synthesize a charismatic figure out of nowhere to promise to restore order, safety, and prosperity at the barrel of a gun and w all the propaganda arms and bureaucracy at his her disposal. Who was Napoleon, for example? A nobody artillery officer who had a moment in battle and then caught fire. The gangsters could create someone and conjure up an origin story etc... Stop thinking Democrats Republicans labels. The game is much bigger.
Who was Napoleon? An emperor, right? So, from the right.