At ILR, we try to stay ahead of the time and tell readers what to expect and what to do before the stampedes begin.
We did that by calling the RBI’s taxpayer funded bail out of the banking system.
We did that by calling the three phase economic disaster that Uday Kotak and his cronies were scared of.
We are now doing our best to help our readers plan and look out for the next big depression caused by the Coronavirus mayhem.
Some of the articles here have been published many years ago. But that does not mean that the strategies that were suggested are irrelevant.
What to expect
Let’s start with what Doug Casey had to say on this :
“(…) the number of people whose eyes have been opened seems to be growing, and many of them are asking what the collapse will look like as it unfolds. What will the symptoms be?
Well, the primary events are fairly predictable: they would include major collapses in the bond and stock markets and possible sudden deflation (primarily of assets), followed by dramatic inflation, if not hyperinflation (primarily of commodities), followed by a crash of several major currencies, particularly the euro and the US dollar.
The secondary events will be less certain, but likely: increased unemployment, currency controls, protective tariffs, severe depression, etc.
But, along the way, there will be numerous surprises—actions taken by governments that may be as unprecedented as they would be unlawful. Why? Because, again, such actions are the norm when a government finds itself losing its grip over the people it perceives as its minions. Here are a few:
- Travel Restrictions. This will begin with restrictions on foreign travel, including suspension/removal of passports. (This has begun in a small way in both the EU and US.) Later, travel restrictions will be extended within the boundaries of countries (highway checkpoints, etc.)
- Confiscation of wealth. The EU has instituted the confiscation of bank accounts, which can be expected to become an international form of governmental theft. This does not automatically mean that other assets, such as precious metals and real estate will also be confiscated, but it does mean that the barrier for confiscation has been eliminated. There is therefore no reason to assume that any asset is safe from any government that approves theft through bail-ins.
- Food Shortages. The food industry operates on very small profit margins and survives only as a result of quick payment of invoices. With dramatic inflation, marginal businesses (suppliers, wholesalers, and retailers) will fall by the wayside. The percentage of failing businesses will be dependent upon the duration and severity of the inflationary trend.
- Squatters Rebellions. A dramatic increase in the number of home and business foreclosures will result in homelessness for anyone whose debt exceeds his ability to pay—even those who presently appear to be well-off. As numbers rise significantly, a new homeless class will be created amongst the former middle class. As they become more numerous, large scale ownership of property may give way to large scale “possession” of property.
- Riots. These will likely happen spontaneously due to the above conditions, but if not, governments will create them to justify their desire for greater control of the masses.
- Martial Law. The US has already prepared for this, with the passing of the 2012 National Defense Authorization Act (NDAA), which many interpret as declaring the US to be a “battlefield.” The NDAA allows the suspension of habeas corpus, indefinite detention, and the assumption that any resident may be considered an enemy combatant. Similar legislation may be expected in other countries that perceive martial law as a solution to civil unrest.
The above list is purposely brief—a sampling of eventualities that, should they occur, will almost definitely come unannounced. As the decline unfolds, they will surely happen with greater frequency.
But the value in projecting what the collapsing governments may do to their citizens is not merely an exercise in speculation. By anticipating the likelihood of any of the above, the individual may find that it would be prudent to turn off the game on television tonight and spend his time musing on the possibility of what he would do if any of the above events were to take place. (And, again, these projections are not mere fancy; they are actions typically taken by governments as their declines play out.)
Most importantly, if the reader concludes that there is a significant percentage of likelihood that any of the above are coming his way, he would be well-advised to assess whether they are developments that he feels he could live with. If not, he might wish to assess how much time he has before these events become a reality and what he may do to sidestep their impact on him.”
What To Do
Here’s a brief list for starters, from SHTFplan.com :
“According to Nicole Foss, the 9 steps to take to prepare for an economic depression are:
1) Hold no debt (for most people this means renting)
2) Hold cash and cash equivalents (short term treasuries) under your own control
3) Don’t trust the banking system, deposit insurance or no deposit insurance
4) Sell equities, real estate, most bonds, commodities, collectibles (or short if you can afford to gamble)
5) Gain some control over the necessities of your own existence if you can afford it
6) Be prepared to work with others as that will give you far greater scope for resilience and security
7) If you have done all that and still have spare resources, consider precious metals as an insurance policy
8) Be worth more to your employer than he is paying you
9) Look after your health!
In the original article, Nicole Foss further explains these recommendations better than I ever could. Below, I give you my take on these steps and what my family is doing.
1) I don’t care if you want to start a business, go to college, or buy a house- “debt is not a tool!” Pay off your debt and do not take on new debt no matter how low interest rates may appear to be. It took us 4 years but we got rid of our mortgage and paid off $60,000 worth of debt. We may not have a fancy house or nice cars but we are better off than 90% of the Americans out there.
You mean renting is better than having a mortgage?? Yes. According to Foss,
There is no safe level of debt to hold, including mortgages. For those who are not able to own a home outright, most would be much better off selling and renting, as real estate becomes illiquid faster than almost anything else in a depression. By the time you realize that you need to sell because you can no longer pay the mortgage, it may be too late. Renting is essentially paying someone else a fee to take the property price risk for you, which is a very good bet during a real estate crash.
2) In an economic depression, “cash is king” as average joes like you and I will not be able to depend on credit to get the things we need. Instead of focusing on debt and credit, pay attention to your liquid assets. What are liquid assets?
Be cautious holding short-term treasuries though. The Federal government defaulting on its promises is not as far-fetched as one may think.
3) Our banking system is in trouble and worse, is based on fractional reserve banking. Don’t think bank runs can’t happen- they can. Proceed with caution.
4) This piece of advice is applicable in a pure deflationary scenario only. While the point of this article is how to prepare for a deflationary depression, predicting future economic conditions is difficult; diversifying may still be wise.
5) Foss talks about stockpiling the basics and items like solar cookers and water filters but we’re taking this step a bit farther. We hope to have a paid-for homestead, full garden, and farm animals for independent food security as much as possible. After that, we plan on experimenting in solar power and off-grid living arrangements (composting toilets, etc.)
6) In my opinion, this is the hardest to achieve but probably the most rewarding piece of advice to follow. If times get tough, you’re gonna want like-minded people to work, trade, and barter with. Don’t rely too much on internet “prepper groups.” Instead you’re going to turn to family members and friends you already know and trust. Invest in relationships with people who actually live near you and will be able to physically lend a helping hand when you need it.
7) For those who wish to preserve their wealth, investing in precious metals is an option but like everything, comes with its own risk.
8) Do you think you’re worth more than your getting paid? That may be a good thing. Employers are strapped for cash and as the economy gets worse, you may NOT want to be the highest paid employee on the payroll, if you know what I mean.
9) My family’s health is something I’ve been focusing on since we became debt-free. I think proper nutrition is paramount and follow the principles of the Westin A. Price Foundation. I strive to cook traditional foods using traditional preparation methods. We try to eat organic, non-GMO, local foods as much as possible.
As with everything, do your own research and come to your own conclusions. But whatever you do, don’t rely on the lame stream news or the government to warn you about economic upheaval and collapse.”
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