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Guest Post: How to Position Yourself for the Future: Step 1 - Financial Security
Submitted by ChrisMartenson.com
How to Position Yourself for the Future: Step 1 - Financial Security
What we care about most here is helping people adjust and adapt -- happily, profitably, and safely -- to what is likely to be a very different future.
Our framework centers on the idea that humanity is facing a set of predicaments quite unlike anything else in the history books. Because this time there are no borders to cross in search of safety; the entire world is involved. On a global basis, we've never experienced collective debt loads of this magnitude. Never before has an entire set of intertwined currency systems -- all debt-based money -- collectively been backed by nothing more than the hope of a larger future, and never before have this many people had to figure out how to move from more-concentrated to less-concentrated energy sources (from fossil fuels to sun- and wind-based alternatives).
The convergence of exponential trends in population, energy depletion, debt accumulation, and an economic model that is hooked on growth will combine to produce quite an interesting, if not challenging and disruptive, future. The funny thing about complex systems is that they are unpredictable, and therefore preparing for what may come is a non-trivial (yet absolutely essential) task.
All of this is spelled out in the Crash Course and more recently in a succinct presentation that I gave at the Madrid Gold Conference in November.
The immediate question for most people is What should I do? We break down the intelligent responses into three big buckets: financial, physical, and emotional. In this report, I detail the financial steps that everyone should undertake right now to manage future risks using the framework that I use to assess and understand the financial world and markets.
My approach is founded as faithfully as possible on facts and data. But my views on how the markets operate are formed from personal experience, observation, and connecting a few dots that rely on opinions and sometimes beliefs. Therefore, this financial and investing framework is something that you should only accept if it works for you -- and reject if it does not.
The Basics
I am of the opinion that we are in a gigantic structural bear market. The role of any bear market is to get the most people to lose the most wealth. And so our first goal is to help you be among those who lose the least, as they are the ones who win the most.
This bear market, however, has more to it than the usual bust the follows a typical period of irrational exuberance. Where past bear markets could always count on the natural world helping to induce a recovery by providing more natural resources (especially energy) in whatever quantities and qualities that were necessary, it seems that this time oil will be playing a spoiler role.
Because this bear market has the additional complicating factor of being global in nature, mauling a global financial edifice saddled with the most debt and liabilities ever recorded in addition to stubbornly high oil prices, it is my view that the economy will not respond in the same ways as it has in the past. Further, we need to be mindful of the idea that the risks are large (derivatives, anyone?), they are actively and collusively hidden from view (what are banks really holding?), and where they are concentrated is mostly unknown -- something I spell out in greater detail in Part II of this report.
Even more troubling, it is no longer unthinkable that one or more major currencies will lose some or all of their value over the next few years.
The conclusion I draw from all of this is that this is a period of time to be concerned with return OF capital instead of return ON capital. Maximum safety has its own rewards these days, not least of which is the value of having a good night’s sleep.
Our basic advice has changed little over the years.
Gold (and Silver)
The first step is to have physical gold in your possession. By this we mean bullion coins or bars stored somewhere very secure that does not place you at risk. I keep mine in vaults and safe deposit boxes, mainly because I lead a very public life and find it too risky to store it in my home. You may wish to protect yourself similarly.
Gold remains a very attractive store of wealth to me at this point because of the main tailwind factors that remain in place today, as they have for years:
- Negative real interest rates. Whenever the price of money set by the Federal Reserve is below the rate of inflation, you have what are called ‘negative real interest rates.’ Such periods of time are historically quite favorable to the price of gold. To understand why, just consider how much harder your choice to hold gold would be if you could get a 10% return on Treasury bonds today. When interest rates are positive, there’s a choice to be made about whether or not to hold gold. Plenty of people will decide the answer is ‘not,’ and this lack of buying pressure will keep the price of gold down.
- Reckless monetary policy. Since 2009, the world’s central banks have eased more than they ever have in history. They’ve done a lot of it in public and even more of it in secret, to the tune of tens of trillions of dollars. All of this money has been printed out of thin air, and there are no credible plans for how it is all going to be reeled back in someday. That’s just reckless.
- Reckless fiscal policy. The world’s reserve currency belongs to a government that spends 40% more than it takes in and runs a deficit in the vicinity of 10% of GDP with no end in sight -- a government that also carries enormous off-balance sheet liabilities in the tens of trillions of dollars and an effectively broken political machine that assures paralysis through at least the next election cycle. Note that I didn’t put a date on that election cycle; I am confident that this statement will be true for many an election cycle to come.
There’s a fourth reason that I really like gold, centering on the idea that there’s a possibility that gold may be remonetized someday. Not because it’s a perfect system, but because in times of crisis, the solutions that get adopted tend to be the ones that are lying around.
We don’t have any other tried-and-true monetary systems to dust off and reuse that can do all of the things that we know gold can do, such as assure a balance of international trade and monetary flows and impose a non-evadable limit to what any given country can do in terms of overspending and consumption.
Perhaps there are other ideas sitting on shelves somewhere in the IMF or World Bank libraries, but none have been tested, and so they will not be selected in a moment of crisis.
Like any good call option, gold remonetization will pay off for the holders of gold quite handsomely, assuming that confiscation without adequate compensation is not also part of that future scenario. My personal target for the price of remonetized gold is somewhere between $10k and $30k per ounce.
Silver is an entirely different metal to me, and I love it because of its industrial utility more than its potential monetary role. It is the most conductive and reflective element with other magical properties as a microbicide for which no substitutes currently exist. Further, it tends to be used in trace quantities, so if it goes up significantly in price, its demand does not ratchet down by an equivalent degree.
One final thought is that a lot of silver is produced as a by-product of other base metal production, and I am of the view that as energy costs continue to rise, fewer and fewer mile-deep mining pits will be dug into the earth in pursuit of vanishing ore yields. So scarcity becomes a factor, combining nicely with the observation that a whole pile of silver is simply lost, one smidgen at a time, into the environment every year, never to be economically recovered. Once mining slows down, people will suddenly realize that there’s a lot less silver left above-ground than is perhaps commonly assumed.
I happen to hold silver as my generational play: If I ever have grandchildren, I plan to pass my silver along to them. This exposes my personal belief that we will go through a dark period economically, but that recovery from some lower level will occur, and silver will be both scarce and in demand for industrial processes in that future.
For more information on the specifics of where to buy gold and silver bullion and in what proportions, please read my free guide on buying gold and silver.
Cash
Given the instability in Europe and elsewhere, the possibility of a banking holiday that would prevent credit and debit cards from functioning normally is no longer too remote to consider.
Because we have no idea if or when the banking system might enter a protracted shutdown due to some form of systemic failure, we recommend that everyone have some cash out of the bank equaling at least three months of living expenses. Similarly to gold, the fact that bank balances are earning close to zero percent makes the decision to hold cash in hand a pretty easy one.
During our most recent natural calamity here in New England, which resulted, once again, in the power being off for days on end, people discovered that cash was king, especially for the local purchase of needed goods.
One final note to anybody reading this in one of the PIIGS countries: There’s not much reason to keep your money in either cash or deposit form in the banks there. In fact, there are plenty of reasons to remove your money from those banks and place it elsewhere, and you’d be joining tens of thousands of other former depositors who have already moved their money to safer locales.
In fact, when it comes to pulling your money from a failing banking system, you either get it out in time or you don't. It's a binary event.
Anxious Greeks Emptying Their Bank Accounts
Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale," he recently told the economic affairs committee of the Greek parliament.
With disarming honesty, the central banker explained to the lawmakers why the Greek economy isn't managing to recover from a recession that has gone on for three years now: "Our banking system lacks the scope to finance growth." He means that the outflow of funds from Greek bank accounts has been accelerating rapidly.
At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion -- by the end of 2011, they had fallen by €49 billion. Since then, the decline has been gaining momentum. Savings fell by a further €5.4 billion in September and by an estimated €8.5 billion in October -- the biggest monthly outflow of funds since the start of the debt crisis in late 2009.
(Source)
There are still more people with their savings in Greek banks than there are people who have removed their funds, and this reflects the inertia that is typically found at key moments like these. I would submit that the rational response for anyone looking at the actual data would be to get their money out of Greek banks as soon as possible, even though I know that everyone cannot do this at once because fractional reserve banking assures that those funds are not really there. It's a conundrum, but enlightened self-interest may trump civic altruism here.
Bank and Trading Accounts
Most of us need to have money in both bank and trading/brokerage accounts. Not all institutions are run equally well. Because of this, I keep my money spread across three banks and three brokerage accounts, which I regularly monitor to ensure that those monies and funds are safe.
The banks are all highly rated, are well-run by my standards, and have never appeared on any of the Federal Reserve bailout lists. While this is no guarantee of anything, I prefer to avoid companies that have already demonstrated that they cannot manage to survive without being bailed out from time to time.
Further, the MF Global fiasco, where segregated client accounts were raided and drained to support the failed bets of John Corzine, was an enormous wake up call, or should have been to those with money in a brokerage account(s).
What it told us was that major violations of normal operating practices and agreements will not only be tolerated by the authorities, but helpfully covered up after the fact. More on that below.
My general rule is that I only keep as much money in any one account that I could lose without being overly harmed. Sure, it would hurt, but I wouldn’t be wiped out; far from it. I keep less than 10% of my liquid net worth in any one institution precisely because I have no faith that the rule of law will protect me or that the bailouts will continue indefinitely.
Editorially, the loss of investor faith in US institutions and the erosion of the rule of law is an incredibly important process, yet it seems to be almost entirely out of mind for US authorities -- as if US dominance in something as simple as running lucrative paper-trading and banking schemes was somehow a permanent birthright.
Having the Right Investments
Listen, if we were at the endgame stage and the situation was clear, we could just toss all of our money into gold (and silver) while we wait out the emergence of the next monetary system and that would be simple enough. We'd drain all of our accounts, buy tangible assets, and patiently wait.
But we’re not there yet, and a lot of time may yet pass before anything too dramatic happens. Life goes on, bills must be paid, savings must be stored somewhere, and cash flows must be managed.
Here we are adamant that you need to be working with a financial advisor whom you trust to safely navigate the most perilous speculative environment that anyone has lived through. If you must have your money at work in the markets, then you must have someone you can trust managing it for you.
It is our view that the days of simply tossing your money into a diversified universe of stock and bond funds is over and that over the coming years, returns from these vehicles will be lackluster at best and destructive at worst.
You deserve to work with someone who understands the true predicament we are in, knows the risks, and can adjust your holdings to match your life stage and preferences. I have listened to hundreds of stories from people who tell me that their broker openly scoffs at the idea of holding gold and actively tries to dissuade ownership for a variety of reasons (“it’s in a bubble” being one). Or their broker just tilts their head and stares quizzically when the subject of currency risk on the portfolio, especially dollar devaluation or euro destruction, is raised.
You deserve to work with people who not only appreciate the risks, but know how to manage them, and even have a plan for profiting from some of the larger and more obvious trends -- in energy, for example.
Most importantly, you should be able to sleep well at night knowing that your money will not be absconded by some former Goldman Sachs alum, nor tossed faithfully but blindly into a failing investment strategy because that’s what worked in the past.
To this end, we are slowly accumulating a list of firms and investments that we think offer appropriate solutions for these troubling times (contact us if you're interested in learning about them). But do not skimp on doing your own due diligence to identify wealth managers that provide you with the insights and conscientious stewardship most fitting for your needs. At the end of the day, you have to be able to trust yourself and the decisions you make with your assets -- or anxiety will keep you awake at night and likely lead to poorer decisionmaking when volatility really hits.
Putting Safety First
The basic theme here is safety. Managing risk is everything in these times when official policy is opaque, risks are actively hidden from view, and true losses on bank balance sheets are still being masked by fantasy accounting gimmicks.
For example, Bloomberg went through an exhaustive FOIA battle to get at Federal Reserve documents that would show the true extent to which banks were bailed out during the crisis.
Secret Fed Loans Gave Banks $13 Billion
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy.
And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.
Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.
(Source)
As speculated about here during the crisis, there was plenty going on behind the scenes that was never publicly disclosed about the true nature of the risks that had been discovered or the scope of the efforts to contain the damage.
How can anyone assume that we know anything about the actual condition of the banks or the true risk of a systemic crisis now? Personally, I am hopeful that the risks are low, but hope alone is a terrible strategy, especially when it comes to money and investing.
Most gallingly, even as the banks were receiving money at 0% and lending it back to the US government at 3% for the ultimate free lunch in risk-free profits (with special emphasis on the word “free”), they were doing two things: paying themselves record bonuses and continuing to make larger and larger bets on derivatives.
What can we deduce from the extra $100+ trillion in derivatives taken on over the past two years? The key thing would be that the lesson was not learned.
Making Better Decisions With Your Money
So my conclusion is simple enough: Where the chance exists to take money/wealth out of the banking system and store it elsewhere for a while until the situation clarifies a bit, it is a prudent thing to do. Gold and cash represent two obvious ways to play that game, with gold sporting the larger role in that story. For money that remains in the system, be sure to rely on trusted institutions and advisors as much as possible.
In Part II: The Framework for Predicting Our Financial Future, I share in detail a framework that has taken me years to refine, which I use to forecast what to expect from the financial markets, how things will most probably unfold, where the risks lie, and otherwise demystify and enable investment and wealth management decisions. The intent here is to provide a hard-won set of rules that can increase your odds of making sound decisions when facing tough choices in the increasingly volatile future we're entering.
Click here to access Part II of this report (free executive summary, enrollment required for full access).
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Ms.--good to see you around here. Me b guessin' great minds think alike ;-) Best on ya' - Ned
Deep Winter Trilogy by Thomas Sherry. He does a good job of looking at all aspects of a modern day dollar collapse and the ensuing means of survival, restoration, and political/military consequences. He goes into so much detail on some things it can get tedious but he covers a great deal of information on what, who, and how in a fictional but fairy realistic US default scenario. Good read if you have the time...
(Hands to forehead) Do you REALLY believe that leveraged ETF like DBA, UNG, etc reflect anything at all about the prices of the underlying commodities ???
Something not enough people stock up on are OTC pain killers - i.e. naproxen sodium, acetominephen, motrin/ibuprofen. Those are worth a lot in a survival scenario.
And if you're not in excellent physical shape, get there.
A good 1st aid kit is a must, several is even better.
I have one in the kitchen, one in the garage, one in every car.
One in the bug out bag.
Minimum contents
band-aids, anti-histamine cream, antibiotic ointment, bandages, needles and nylon thread, lighter,candle,butterfly closures, hydrocortisone ointment,disinfectant towelettes.
Store in a waterproof case, water-tight case or double ziploc bags where space is tight.
Add additional perscription drugs where needed.
Extras can be added to extend comfort and stamina, caffiene tablets, antacids,antihistamine tablets a good first aid book.
The kitchen and garage kit see regular use for cuts and burns and insect bites. Handy to keep them close to where the injury occurs.
Most of these items have a very long shelf life, so buy on sale and store them.
Lighters and matches are great, but you should back up with one of these for $4:
http://www.google.com/products/catalog?q=magnesium+and+flint+fire+starte...
Big Lots! if in your area, stocks tons of generics from $1 on up. They also have tons of spices from $.50 and up, cheap soaps, shampoos, bleach, bandages/bandaids, etc. as well a cheap supply of auto/engine consumables like gas treatment, oils, lubricants, etc. Find a local army supply or auction that has military shipping containers. I have ones almost 4' square that hold alot of TP and paper products I can store outside(waterproof and pressure vented) as well as smaller ones for the garage that handle all the other products. Keeps out rodents and bugs and minimizes temperature extremes. Learn as you go...
Bend Over
Flexibility is key in volatile markets.
Grab Your Ankles
A new perspective is always helpful.
Click here to access Part III.
"...and never before have this many people had to figure out how to move from more-concentrated to less-concentrated energy sources (from fossil fuels to sun- and wind-based alternatives)."
There's some stupid. Don't 'move' to inefficient and expensive energy sources. Nat gas and nuclear, bitchez.
The first step is to have physical gold in your possession. By this we mean bullion coins or bars stored somewhere very secure that does not place you at risk. I keep mine in vaults and safe deposit boxes, mainly because I lead a very public life and find it too risky to store it in my home.
Do you realize the only people that lost their Gold to FDR's Gold confiscation were the people keeping their Gold in Safe Deposit Boxes and Vaults? Those are the unsafest places to keep your Gold, and this time Silver as well.
and if he really has it buried in his backyard, is he going to tell you?
He's giving out very bad advice on where to keep physical Gold and Silver. I was just pointing it out. Once recent example is MF Global. Lots of people assumed their gold and silver was save in the vaults as well. Today JP Morgan has it in their Comex vaults.
Jim Willie: “The Public Will Not Wake Up Until At Least One Million Private Accounts Are Stolen”http://bullmarketthinking.com/exclusive-interview-jim-willie-the-public-...
Actually they didn't. Executive order 6102 was never implemented. Safe deposit boxes were not compromised, although that's not to say they couldn't be in the future..
The people who lost were those who held Federal Reserve CERTIFICATES for gold. They were forced to liquidate at $20/oz and then the dollar was immediately devalued to $35/oz.
Dr Housing Bubble:
It might be hard to believe that home prices have been falling for half a decade now. What some have a harder time grasping is the idea of lower home prices in the defiant face of a Federal Reserve pushing interest rates into artificially low levels. The truth of the matter is many regions especially in California remain in bubbles and these areas are entering a second round correction as more distressed properties are brought to market. We have some troubling data coming out showing a reversing trend nationwide for home prices but also a more significant correction in bubble states. Wishful thinking would like to believe that home prices will simply move up because that is how things were done for decades and some wish to relive the days of Leave it to Beaver. Yet we are truly in a new paradigm and household income in the United States has actually fallen for more than a decade and with interest rates at record lows, the only thing that can give is the price of a home.
http://www.doctorhousingbubble.com/
Very sad.
We don’t have any other tried-and-true monetary systems to dust off and reuse that can do all of the things that we know gold can do, such as assure a balance of international trade and monetary flows and impose a non-evadable limit to what any given country can do in terms of overspending and consumption.
What about just fixing exchange rates again? Bretton-Woods? "Golden Age of Capitalism" etc etc?
Bretton-Woods was a gold standard.
True, but the gold was arbitrary. You could replace gold with anything. What was so important about Bretton-Woods was the fixed exchange rates, so the bankers had no arbitrage opportunity between the different currencies.
the problem with a fixed exchange rate is the fixed exchange rate. that is why the fixed exchange rate was backed by gold holdings to be used as the settlement for current account deficits. nixon went off the gold standard because degaulle asked to settle the current account deficit with gold which might have exposed the emperor without clothes. the usa defaulted essentially and created the ingenius petro dollar to back the dollar instead. the rest is history, as they say, and so is iraq , libya and maybe iran for opposing the petro dollar.
"By this we mean bullion coins or bars stored somewhere very secure that does not place you at risk. I keep mine in vaults and safe deposit boxes"
So all your gold is being guarded by security guards making minimum wage and probably treated like shit by their bosses. Umm, Yeah, sure, I'd sleep soundly.
I have a question I need an explanation for. The value of Gold is actually measured relative to the value of paper currency. If paper currency loses its value exactly how do you measure the worth of Gold? On a conceptual level I'm have difficulty reconciling this. For example let's say the value of gold is $1700 an ounce that number/value is measured according to dollars/currency. If the value of paper currency is destroyed how can we properly measure the value of gold. The inverse relationship still creates a relationship one cannot be measured without the other. In theory or at least in my mind of the value of paper currency is destroyed then so is the value or measure of gold. So I'm thinking conceptually it will come down to how much a counter party is willing to give you in exchange for set amount of gold? Please amuse my ignorance, conceptually I have a problem reconciling this. Neither systems make sense to me since currently both system are in a way dependent on each other.
The 'value' of gold is what the next person is WILLING and able to PAY you for it, just like houses,cars, etc. Furthermore:
Any non-usable commodity (to you) or other "store of wealth" -- no matter what it is -- must be traded to someone (a counterparty) for what you wish to consume.
If that counterparty doesn't have a use for what you wish to trade him, whether it be gold, silver, T-Bills or federal reserve notes then what you have in that instant is worthless. As such all such assets have "counterparty risk."
This is HOW you get to see some houses as 'worthless' and why gold is not the friend you think it is.
You're thinking is wrong. It is not what someone will give you "Now", in the time of crisis... it is what they WILL give you in the FUTURE, after society has resettled and starts to rebuild. It is a store of wealth for when that time comes! It merely a way of transporting your current wealth or purchasing power over into the next reset.
Let's be honest here. Gold, held as an investment or store of wealth is "surplus"... which means you have gobs of extra money for which you have no current purpose. Most folks that hold gold (hopefully or more accurately should) have already made the other necessary preparations (food, water, shelter, protection and tradeables).
Argentina and Zimbabwe proves you are wrong. When their economy collapsed and it's government fiat paper became worthless people with Gold and Silver setup a scrip system using their Gold and Silver to back the scrip they printed. They setup in a public place and welcomed people with items they wanted to barter. Gold and Silver backed Script was issued and people used it as an intermediate "money" to the days trades in goods and services. At the end of the day the script was returned to the people that produced the script where it was exchanged for Gold and Silver. In essence these people has setup their own Banking system. Very little of their Gold and Silver left their position or in some cases they gained as people with physical Gold and Silver came in and purchased goods and services with nothing else to barter in exchange.
So following that course of action wouldn't the actual value have to be re-evaluated. Let's say the euro and the dollar collapsed wouldn't the collective have to together come up with a new agreed upong value for the gold?
A new currency would be printed and therefore gold would have a new 'value' compared to that currency. What value will then be determined by the valuation of the new currency VS OTHER currencies.
Thank you for clearifying. This is what I was imagining so the value of gold would be in fact re-evaluated. God I just hope on a relative scale it keeps pace, I would hate for it to lose substantial value during that re-evaluation phase.
Banks are insolvent. Central banks have taken over their debts. Do you truely believe they are buying so much gold because they intend to lose money on these massive positions? Isn't it probable, that with lots of gold in their posession, and the ability to set the value of gold at any price they want, and the political collateral of a frightened political system at their backs, they won't drive that price to the moon? They have to offset their liabilities with something or default. The answer to the trade deficit problem and the insolvency problem is gold.
This is not Africa or Argentina - they basically printed a new currency - new currency does not need backing by gold in places like America / Germany, ETC. Right now our currency is ONLY backed by the ability of the US GOV to collect it back via taxes. It can easily be backed by tangible and intangible US assetts which have a MUCH higher value than anything else.
That's price risk, not counterparty risk, you cretin. Counterparty risk means someone else goes bankrupt and your gold just isn't there any more.
Thank you good sir. I am a "cretin" for a textual slip? This is Internet land if you understood what I was trying to communicate (which you clearly did as I meant price risk like you said) you couldn't dismiss my error? You had to insult my character while you corrected me? I am trying to reconcile my current conceptual deliamma. Since I find the members of this forum to be an informed group, I came here to justify why I'm currently holding gold. In the back of my mind gold is no different from everything else valued accept that it has been valued for a much longer period of time. I'm concerned that my current gold holdings will be re-valued much lower then their current worth at which point it would've have been more useful/effective for me to cash in all my gold now and buy up as much non-persishbles as possible. I've grown overly cynical of everything except those things that can directly protect me from the elements and danger (my home, weapons & clothes) and sustenance (food)
another concept that most people have trouble with is what is confusing you. inflation and deflation can coexist. yo can end up up paying a lot more in nominal terms for something that has lost value or is losing value. the realestate transaction in terms of gold posted above is a case in point. the value of your gold can diminish in terms of purchasing power as a function of scarcity(food) even though it's value in terms of dollars can skyrocket because of inflation.
the value of anything is it's purchasing power. when something is sold for fiat money. the seller is not exchanging something for money as much as they are buying money(i know it is called a medium for exchange). gold and silver are considered a store of value because they have historically always been accepted as payment or something worth purchasing. you can bet , however that someone can buy the same thing you buy for less gold or silver than you can but only dummies will not take it as payment because they know everyone else will take it as payment. the same can't be said for a broken down car. the only thing that rivals gold and silver is foodstuffs.
You've just achieved the first realization of the Austrian school of economics.
deleted
double
arable land-check
gold and silver-check i have been buying scrap gold jewelry in case the feds take coins and bullion.
credit cards ready to max out-check
local survivor network of friends and contacts ready to help each other including someone with horse and wagon-check.
Many folks are making the mistake of valuing gold in FRN (dollars) which is being quickly debased, and not recognizing it as an historical store of wealth.
We should rather value gold in the form of "other" assets, for example: In the fall of 2008 you could buy gold at $800 an ounce. Let's say the average home was $300,000. It would have taken 375 ounces of gold to buy that house.
Today, the same home is likely valued at $200,000 while gold can be had for $1700 an oz. (there abouts)... therefore same house today can be had for 118 ounces of gold.
The 1 ounce gold coin didn't change; neither did the house.
Thr "problem" is the FRN. Not gold (or silver for that matter) and not the house. Don't mean to be preaching to the choir, but most people just don't "think". I guess it is just easier to watch NFLDancingwitdastarsAMidol.
This are my thoughts exactly. I don't think Gold is properly being valued and I think this will be problematic later on.
Well it won't be problematic for those who hold it when it snaps back to a true valuation, like central bankers who have the ability to push that into an overreaction and have every self interest to do so.
Excellent post, but I had to junk you for writing "an historical." That's an aspirated "H" and should be preceded by the article "a."
Noted. Junking accepted... (too fast for my fingers).
Guns, Gold & Groceries. Thanks, I'm good....
Now I want to watch a really good doomsday movie! Any suggestions that I could google?
The immediate question for most people is What should I do?
Anyone asking that question is FUCKED, there's NO hope for them, they'll go down in flames, don't waste your time trying to educate them either, they're CLUELESS.
prepare yourselves against this: the senate just passed the The National Defense Authorization Act 93-7.
Under the bill the U.S. military forces can operate with impunity, overriding Posse Comitatus and
granting them unchecked power to arrest, detain, interrogate and wage war on U.S. citizens with impunity.
Forbes: The National Defense Authorization Act is the Greatest Threat to Civil Liberties Americans Facehttp://www.forbes.com/sites/erikkain/2011/12/05/the-national-defense-aut...
Wired: Senate Wants the Military to Lock You Up Without Trial
http://www.wired.com/dangerroom/2011/12/senate-military-detention/
Clearly passed by the best government money can buy
manggg of late this place has just been one long and bad acid trip. where can i get some more Kool-Aid?
Silver, gold, beans and bullets.
Don't forget to add earthworms to your soil (after you turn it over with manure of course).
Mulch lightly to keep out weeds and keep in moisture.
Beware of this in a post nuclear war scenario. You need to watch "Tremors".
Does anyone else see similarities?
http://en.wikipedia.org/wiki/Stagflation
CausesEconomists offer two principal explanations for why stagflation occurs. First, stagflation can result when the productive capacity of an economy is reduced by an unfavorable supply shock, such as an increase in the price of oil for an oil importing country. Such an unfavorable supply shock tends to raise prices at the same time that it slows the economy by making production more costly and less profitable.[5][6][7]
Second, both stagnation and inflation can result from inappropriate macroeconomic policies. For example, central banks can cause inflation by permitting excessive growth of the money supply,[8] and the government can cause stagnation by excessive regulation of goods markets and labor markets.[9] Either of these factors can cause stagflation. Excessive growth of the money supply taken to such an extreme that it must be reversed abruptly can clearly be a cause. Both types of explanations are offered in analyses of the global stagflation of the 1970s: it began with a huge rise in oil prices, but then continued as central banks used excessively stimulative monetary policy to counteract the resulting recession, causing a runaway wage-price spiral.[10]
why does nobody every see the markets as and ideological struggle between free markets and planned markets. people in this forum always look at all of this from the perspective of trading and markets and it is partially what it is about. However do you not see the purposeful destruction of currencies and particularly the US dollar. world elites who dont like the US are trying to collapse the $ so as too intentionally lose its world reserve status. Why do you think China, Russia, and most of all the oil producing countries , think OPEC, want oil to break from being valued in dollars. the first rule of fight club is nobody talks about fight club. the first rule of project mayhem is you dont talk about project mayhem. the bankers are trying to hold onto their ponzi scheme will the rest of the world is trying to destroy currencies to make their one world gov't/ monetary system comes to pass. the reason why gold and silver is doing what they are doing is people are waking up. Not enough but enough to have the comex, jpm,cot, et al are trying to keep the free market from working other wise gold would be at its real and much higher price. where are you tyler. SSSSSSSSLIDE! Yes I'm calling you out only because of what i have learned especially from this and other sites that COMFIRMS everything that i have been seeing and feeling in the economy, loss of freedom, and the systematic destruction of the middle class in america who are the people who hire people.
"You grind the middle class between the milstones of taxation and inflation"
Vladimir Lenin
"The problem with the world is the USA because the american people have a vote in congress." - George Soros
What better way to take away the american peoples votes than create a crisis that calls for emergency actions that takes away the peoples vote and sends them on a collapse only to reboot it as a planned economy ala China. Shorting and collapsing currencies is what soros does. this is not an accident