Not to be an alarmist, but this is indeed a very bleak outlook for our economy.
Suggest, if you haven't already started, you prepare as best as possible... There are a thousand things you can do, but at a minimum: Stock up that pantry, buy a gun and know how to use it (to protect your family and that which is yours), have some cash on hand, keep that gas tank full and buy some gold and silver if you can afford it.
Personally, I feel its better to be prepared and wrong than it is to be right and unprepared... I'm even thinking about cashing out my entire 401K while I can (currently in treasuries) and taking the both the tax hit and penalty. Otherwise (I'm thinking) I may be unable to withdraw it in the future and/or it may become worthless - your thoughts on the matter?
Snippets:
Back in February 2006, LEAP/E2020 estimated that the global systemic crisis would unfold in 4 main structural phases: trigger, acceleration, impact and decanting phases. This process enabled us to properly anticipate events until now. However our team has now come to the conclusion that, due to the global leaders’ incapacity to fully realise the scope of the ongoing crisis (made obvious by their determination to cure the consequences rather than the causes of this crisis), the global systemic crisis will enter a fifth phase in the fourth quarter of 2009, a phase of global geopolitical dislocation.
According to LEAP/E2020, this new stage of the crisis will be shaped by two major processes happening in two parallel sequences:
A. Two major processes:
1. Disappearance of the financial base (Dollar & Debt) all over the world
2. Fragmentation of the interests of the global system’s big players and blocks
B. Two parallel sequences:
1. Quick disintegration of the current international system altogether
2. Strategic dislocation of big global players.
It is high time for the general population and socio-political players to get ready to face very hard times during which whole segments of our societies will be modified, temporarily disappear or even permanently vanish. For instance, the breakdown of the global monetary system we anticipated for summer 2009 will indeed entail the collapse of the US dollar (and all USD-denominated assets), but it will also induce, out of psychological contagion, a general loss of confidence in paper money altogether (these consequences give rise to a number of recommendations in this issue of the GEAB).
Link to entire article: GEAB N°32 is available! 4th quarter 2009 – Beginning of Phase 5 of the global systemic crisis: phase of global geopolitical dislocation
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12 comments:
I'm in full support of pulling out of any US dollar-denominated asset or account. I'm totally on the side of the Austrian Economists and Libertarians. I follow the likes of Peter Schiff, Ron Paul, Rick Santelli, Alex Jones, Gerald Celente, manoftruth (youtube), JackNeedles (youtube), missesmakawimaxton (youtube), et al. The taxes and fees may be higher later on, and hyperinflation would've eaten a nice chunk of your $$, too.
Some years ago I took the hit and liquidated my tax-deferred accounts. I've never regretted it. God knows what they'd be worth today, but I'll bet it's less than they were.
I keep only enough dollars to pay my day to day expenses for a few months.
I know there is still a raging deflation/inflation debate, but common sense tells me that all this frenzied bailout activity, with its concomitant money printing, sure to increase as foreign countries shun Treasuries, can only debase the currency.
Dave - Erstwhile Urban Wanderer
Cashed out my 401K about a month ago! I didn't want it to be worthless, and would rather use the money for emergency funds.
I'd also add to that list a fireproof safe to store that on-hand cash...just in case we get into bank run type situations. I'd like to have a generator too, but that's not our top priority. Stocking up of the pantry is a must! Just use common sense, and look for the freshest product (far dated expiration dates) in the canned food variety. Can't go wrong with purchasing some paint buckets and lids at Lowe's/Home Depot, sterilizing them and stoing beans, rice, grains, etc. Cheaper than buying the emergency kits offered at Costco/Sam's. FYI I found canned salmon to have a LONG shelf-life. Some were dated to 2014! God bless!
Personally, I feel its better to be prepared and wrong than it is to be right and unprepared.
Now, there is the kind of common sense that will never come out of a teevee. Worst case scenario: You're wrong and you have a new gun and several years of food bought at a deep deflationary discount. I'm unfamiliar with LEAP/E2020, but I've come to some of your conclusions, too.
I also think that 401k redemptions are going to be restricted for several reasons. I need to look into redemption strategies, myself, because it looks like we're getting down to nut cutting time.
I agree with loading up the pantry, buying gold, cashing out the IRA, etc. But my biggest fear is, how do you protect all this when you are not at your home??
any thoughts?
I cashed out last April. Been buying silver, rice, dried beans, lots of canned goods, basics, clothes, rifle and bullets, a few cases of booze, etc... Tons of info out there folks, do your homework and get ready. Also getting books (for when the Net goes down) on gardening and homesteading skills.
As for protecting stuff when not at home... hide it, just be sure to tell a trusted friend or relative incase something happens to you so they know where to find things. Good luck all, the times they are a changin'.
Thanks for all the comments and personal experiences regarding preps... Looks like I've got some serious thinking to do.
Randy
I would like to know what GEAB recommends but I'm not going to shell out the 200 Euros for an annual subscription. As far as being prepared - get a good used RV. It's mobile, self contained and has a built in water storage tank. Besides, it's great for recreation, hunting and other fun stuff.
I don't believe the U.S. as a whole is going to collapse into chaos (stupidity yes, chaos no). We are headed for lean years and instead of focusing on a fortress mentality, I would encourage you to consider building community.
In tough times it's friends helping friends, neighbors helping neighbors that makes the world go around. A tight knit community is much safer than a community with an enclave mentality. This will require some organization and leadership skills.
It will require setting up neighborhood policing with regular volunteer shifts, radios and a close relationship with local law enforcement who will be stretched to the limit.
It will require community farm plots and sharing with each other during harvest. Bartering exchange programs (both labor and goods), co-op food pantries, knowledge and skill based community education and other ideas that worked for the Russians when their country collapsed.
It will require learning to be communities again - which really is a blessing if you think about it.
How many of you know your next door neighbors or all the people on your block or within a mile of your house? Not surprisingly many Americans don't know half the people on their block. I think it's time to start to get to know each other again.
We can learn a lot of things about community from the Amish. I visited Amish country this past summer and was impressed with how they help each other and work independently but also cooperatively for the good of the local community.
During the Great Depression it was not uncommon for housewives whose husbands had jobs to share food with less fortunate neighbors. Farmers allowed gleaning after harvest and communities pulled together even in the hardest hit regions.
We are Americans! We are tough, scrappy and resilient! We are also thoughtful and compassionate. No other countries come to our aid when we suffer natural disasters, but who is first on the scene when other countries need help? Americans, that's who, and our great country has been blessed because of that very attitude. We are down, but we are not out! We will survive and be stronger for it. Will we suffer? Absolutely! Have we suffered before? Absolutely! Will we pull through? YES WE WILL!
I've laid my life on the line for this country, and I won't let something like a massive economic catastrophe take it down.
Community linking will be one of the best strategies to get us out of this mess. Don't run for the hills - organize your neighborhoods and communities. Fly Old Glory every day! You'll be way ahead and make a lot of great and lasting friendships in the process. Jim Twamley
In response to Anonymous, I guess you could get a fireproof safe that's bolted onto your house's concrete foundation and is also too heavy to lift out by multiple strongmen. I'm not sure about a biometric entry into the safe b/c an enemy could cut your eyeball out or finger off and use its biometric identity to gain access to your safe. Consider also being held at gunpoint to open the safe (perhaps couple the safe with a surveillance w/ infrared system?). Do some research...there's this article on safes on Wikipedia (https://secure.wikimedia.org/wikipedia/en/wiki/Safe); I guess there are classes of safes that can withstand not only fire but also assaults and explosives.
lol...I saw this on a Duracell ad featuring the Brickhouse Child Locator...
http://duracell.com/powertoprotect/default.asp?jump=child
I know the blog owner here has kids...so do probably some other readers out there. This might help to avoid kidnappings...like they do in Mexico City (per Gerald Celente?). Spread the word; I would not like to see Americans kidnapped and ransomed off or worse...god forbid.
Good advice Jim T. The need for community was something I neglected to mention and was in fact the one silver lining myself and another fellow were able to see in this whole thing; that being a return to the local level interdependentness that characterized times past.
Great blog Randy... thanks for all your work.
Being Community oriented sounds great in theory,in some locals it might be feasible, unfortunately many US metropolitan areas are likely too stratified for that to be plausible. Plus there's just too many people in an area to coexist if economic infrastructure deteriorates past a certain point.
If unemployment gets above a certain threshold or if some event causes the herd to stampede.... then TSHTF.
Yes, I to grapple with the issue concerning to what extent to convert IRA's/401Ks,etc. and take the hit ...I'm leading towards better safe than sorry.
Definitely I second the advice about guns/ammo & food,especially after coming across this article the other day (a very good account of life in Argentina after their economic collapse in 2001).
http://www.frugalsquirrels.com/cgi-bin/ubb/ultimatebb.cgi?ubb=get_topic;f=1;t=044387;p=1
take care all
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