With all the bad economic news deluging us over recent weeks, some people appear to be panicking. They're running around trying to find a safe haven where they can "ride out the storm" with their money and wealth intact, and get back to normal as soon as the trouble has passed. Sadly, that's not possible any longer. We've spoken about this for years in these pages, pointing out the consequences of bad decisions taken decades ago and how they've been piling on top of each other all along. Today's situation is the culmination of a whole lot of them.
Furthermore, it's not a matter of partisan politics. Both sides of our political aisle are equally guilty of over-spending, under-saving, and wasting trillions of dollars on policies that have burdened us today with a debt so vast that it can't be adequately envisioned. Our minds can't grasp the reality of thirty-trillion-plus dollars. It's too great to conceptualize. All we can say is, we're broke, and yet our politicians are still bickering over shutting down the government, taxes versus tariffs, and all the rest. Those matters are now small beer compared to the fire in our economic engine room.
If you haven't been paying attention to the economic news, I recommend you select a few articles from this list and read them carefully. Some focus on specific areas, such as a business activity or precious metals; others are more broadly focused. All are informative.
- "I've Never Seen Anything Like This": One Bullion Dealer Sees A Rupture In Gold And Silver Markets
- Don't look now (money quote: "The dollar has lost 3/4 of its value in the past decade, 90% of its value in the last 20 years, and 98.5% of its value since we went away from being a gold based currency in 1973. That isn’t the greed of the banks, that’s the greed of our government.")
- Wall Street has been worried about bad loans for weeks. Now those fears are spreading
- The Bizarre Bankruptcy At The Heart Of This Week's Regional Bank Meltdown
- Auto Loan Delinquencies Surge 50% As Cracks Deepen Across U.S. Credit Markets
- 'Nobody's spending $17 on an egg sandwich': Restaurant owners say inflation forcing tough menu choices
- L.A.’s Entertainment Economy Is Looking Like a Disaster Movie
- The Final Crisis: This is Our Future
We're all in for a very hard time, friends. Let's do our best to help each other stay afloat.
Peter
5 comments:
I have done all of the above. I have PMs, index funds, and a paid-for house. I designed that house to hold up to 8 people—more if we get more beds. We can actually get much of my family in here, so we can work together to weather this storm.
Advise I wish I could have followed the past 20 years, but when critical outgo = total income, you're screwed. "Junk"silver, pre-'64 US coins without numistic value, but are 90% silver content, gains value like bullion but can be used in barter type economies to buy the needful, divided into dimes, quarters, half-dollars & silver dollars. It gives options when paper cash is rejected as toilet paper....
"The dollar has lost 3/4 of its value in the past decade, 90% of its value in the last 20 years, and 98.5% of its value since we went away from being a gold based currency in 1973."
This is nonsense. Overall prices have not gone up fourfold in the past decade--for example, my grocery bill is a little higher than it was in 2015, but not by that much--and they certainly aren't ten times higher than they were in 2005.
One thing if our economy crashes that will be different is food. Our industrial system relies on spare parts and feeder chemical stock, much of which is imported. Yields will go down without fertilizers, pesticides, and herbicides. Scarcity will drive price.
Many of our fruits and veggies are seasonal and imported.
Meat - the current industrial system is built on using massive feedlots to fatten cattle on cheap grain. Then transported over long distances to industrial slaughterhouses.
I have a small farm in NE Alabama. I volunteer with some organizations. It surprises me how few people know they can buy meat much cheaper at processors. Buy a quarter or half a cow. Storage is either a deep freezer or you learn to can a lot of beef stew and make some jerky. Get to know a small farmer or meat processor. Figure out how you will preserve that meat. Or, work with a group of people to share an animal once a week. Organ meat for pets. Leftover fat for lard for cooking. And the food pyramid is inverted, fat is good.
Buy flour and make your own bread. Etc. You can trade time and convenience for dollars. Takes some time to learn.
If you want to go really wild-have your neighborhood buy goats or sheep. They will mow/eat the grass and make meat. (Don't name your food). Small ruminants covert grass to meat more efficiently than large. However, they need a lot of attention and protection. Cows are laissez-faire. Cows aren't mean as a rule, but they are big enough to do damage just giving themselves a good scratch. Rabbits and chickens are other options. Chickens keep the bug population down. Hens produce eggs without roosters. Learn to do your own vet work and harvesting.
No, it's not nonsense. Consumer prices are far from the only measure of a dollar's value. There's industrial and commercial buying and selling, asset valuation and a host of other factors - and all of them, taken together, bear out Divemedic's observation. The value of the dollar today is a pale shadow of what it was.
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