my money is in bonds and euros right now...may move it back into stock as soon as I can figure out which companies survive...it will be a buyers market soon with a lot of things undervalued
Yep!
401K's are getting smacked, no retirement for boomers.
China is now the worlds biggest gold producer, just over took Sth Africa. They are hording minerals. They are not fools and have played the game with a longer time frame than our young countries can imagine. They also know hardship, its just a bump in the road for them befor the next dynasty.
I would suggest you get to know your neighbours, you may need each other. Look after the old folks, they remeber and will have some important advise.
DON'T tell anybody about you food stash. And colect a jar of nickels, they have a transactional value like gold as they have a standard amount of metal in them which has value. For small transactions. If you can Get $1,000 cash out of the ATM, as there may be bank runs and cash will be king for quite a while. Buy some warm rugs, as heating may become to expensive.
Sounds all tinfoil hat like, there are serious rumours about Citi gonng BK, that would start the cascade, Bush looked spooked the other day while anouncing his presidentin stimulatin decideratin package. People look seriously spooked. Read Naomi Kliens 'Shock Doctrine', your next!
If none of this comes to pass, which we all hope, you can eat and sell what you have stored, no great loss.
Tinfoilhat off/
Back to the bunker 
Doc -
While in general I agree with your overall view of how things may shake out, I do have a couple of points. And, yes, bonddad has an excellent econ analysis.
China has resources, but currently their vast, vast natural resources, seem mostly to be coal.
Oil is kaput, basically - well, not kaput, but their domestic production is declining, even though there are reports of large(?) reserves in several local basins. Time will tell if development can occur in enough capacity to offset steeper declines. Although, of course, they seem to be following the US lead and are well on their way to becoming a huge oil importer, so it's not like they're out of the stuff (diesel shortages notwithstanding). So, this could be a thorn in China's side, just as it has proven to be for the US.
With coal, who knows, maybe they will burn it with abandon, or develop "clean(er)" technologies to liquify it and use that as a fuel source. Both Germany and South Africa have proved the technology and China has more than enough skilled technicians/engineers/scientists to figure out how to sequester that damn carbon.
I guess that their current hydroelectric capability is adequate and will rise even more after 3 Gorges fully fills and climbs to maximum output. A-and, apparently more dams are in the planning stages on both the Yangtze and elsewhere.
Forest, fauna, and mineral resources seem adequate, but can be drawn down significantly or squandered.
These energy needs may not be adequate for the Chinese domination scenario that you propose (and I agree with). However, if TSHTF after Beijing 2008 and a worldwide recession/depression develops, I do believe the Chinese central planners would embark on a Chinese "New Deal" type of program that could entail the construction of dams, electric plants, clean(er) coal plants as public work programs, which would position China very strongly when/if the economy regains ground. Not to mention any improvements in renewable resource energy programs that may result (although I'm personally doubtful of the scalability of these).
This is all well and good, and yay China! and all that. Unfortuantely, on my best days, I can only see that an emerging political powerhouse economy like that is going to come to blows with the current "powerhouse" (i.e., the U.S.). And, unfortunately, I think we'd be the "bad guys" in a scenario like that.
Still tho, while I'm on the silver wagon, I agree with you about the generic broad strokes. Now, can we get any put in charge that might see things this way?
One word on moving your investments into cash-make DAMN sure that the money market fund you're using has the money in primarily US Treasury securities. I took a look at my 401K "cash" fund after what happened with GE's Cash Appreciation Fund last year and found out that my "cash" fund was 18 percent in MBS's and 23 percent in "credit" with only 19 percent in US Treasuries. Needless to say I was NOT pleased (and this is one of the big boys), so eventually I moved a good portion of it to a bond fund.
As for the six month supply of food and water, that's a good idea and most folks should have some supply set up even if things don't go completely south (hurricanes, earthquakes, heavy blizzards and power outages, etc). One good link I've held on to is Walton Feed.
And y'all might start thinking about that Second Amendment thingy again. If the economics start going south as I believe they will, your cities and counties may not be able to pay to keep essential services alive in the wake of beaucoup people with no work, including the police. (We had a city down in my neck of Central Florida that decided last year to hand over their fire department to the county because they didn't want to pay for raises to the firefighters and paramedics. When the county said they wanted no parts of the idea and a good portion of the citizenry started making noises about recalling/removing said city council, that slid to a screeching halt. Now, if you get into an accident within the city limits it will cost you a minimum $275 (to call the paramedics out and move your vehicle) to $4000 (if they have to use the jaws of life to get you out of the vehicle)). If things start really going to hell, no civil servant's going to get paid, and why should you work if you aren't going to be paid for it?
So much for a new car this year. Guess I will be buying that Rock River Arms M4 variant after all...
Parable Of The Sower, anyone?
Jess
When FDR took office there were loads of factories with useful tools and equipment sitting idle, and loads of skilled labour available. It still took finagling the USA into ww2 to put those factories and workers back to producing.
Today there are some factory shells sitting around, stripped of productive tools and equipment. The ww2 skilled labour force is now mostly dead, the baby boomer skilled labour force is retiring and there are few young machinists or toolmakers or patternmakers or any other productive types around. Lots of semi-educated, college degreed number crunchers and diversity counselors and HR managers and compliance managers but damn few folks who can make anything.
Boeing and weapons are about all the USA makes and exports.
Add to that the factories we do have are old, not cutting edge efficient and costly to run.
America has no savings, no productive investment and a lot of debt. So the fed cuts rates 3/4 % to encourage the USA to buy more stuff that is not made here anymore.
The reserve requirements for american banks are now about 4% ( money multiplier of 25 ) savings rate negative, income earned on savings less than acknowledged rate of inflation which is itself a phony number massaged to keep COLA adjustments low.
China just raised its discount rate and its reserve requirements again.
The USA is no longer China's biggest export market and this is intentional, they hold almost 2Trillion of the full faith and credit debts of the USA. Without them lending to us for the last 6 years GWB would have had to either pull out of Iraq or Raise TAXES.
I cannot figure out where you see China as over-extended. They don't owe anyone anything. As with Russia, the PRC is about as debt free as a nation can be. They are indeed a smart people and also a very cynical one. 4000 years of history in one nation can make for respectable degree of cynicism. So while the fed here tries to emulate Japan's 0% interest rates unlike japan we have nothing the world needs to buy.
I agree with you on gold, silver, platinum, in 1776, an ounce of gold bought one a good suit, 1900 likewise, 2000 likewise. An ounce of gold this morning would probably get one a very pricey name brand suit.
Maybe it was just being a pair of rural kids, but Mr. R and I have always lived this way. Water, check. Guns, check. Extra gas, check. Cash on hand -- no comment.
We got every moveable asset out of the US two years ago, because we saw this coming. Our house is our largest Canadian asset -- the market here is still reasonably strong, and between appreciation and the falling US dollar, we've gained over 60% value on it over the past four years.
Then, a few months before the loony went to par, we cashed out our remaining US investments, and stuffed it all into Canadian banks. Made some money on that, too. More recently, we took that cash and put it into funds that deal in minerals in various parts of the world.
I knew to buy gold, too, a couple of years back, when it was still trading in the low 300s. I set out to make a low-five-figure purchase -- but life intervened, and I never quite got around to it. I'd have tripled my money if I had. Yes, that IS a "KICK ME" sign you see there on my backside.
Our main source of wealth is domestic oil. (Mr. R's family's been in the business since before 1900.) On one hand, the fields are old, and there's been some depletion. On the other: the prices are going up more than fast enough to offset the losses in output. It'll be a while before that capital stream dries up, and we're trying to capture as much of that as we can before it goes.
I'm chary of bonds right now; even the US government doesn't feel like a good enough risk for me. We got out of stocks entirely all the way back in 2003: without an effective SEC, there's no way to know when issuers are lying to you, and our trust just wore thin.
I'm inclined to side with CK on the issue of China. They've got some serious issues, no doubt; but they've also got no debt and a lot of assets in hand; and there are times that having an authoritarian government that can rule by fiat does give you advantages in responding to situations. I've got a few bets there -- not many, but some -- and we'll see what happens.
Survivalist thinking doesn’t seem tinfoil-hat to me. Andy in NZ echoes a thought I saw somewhere recently: mend your fences and cultivate your relations with family and neighbors, because ‘you may need each other.’
Watson: we have those guys down here in lord of the rings country, strange people (they make me feel icky about how they view women and non beleivers). I just think things may go a bit like Argentina like then calm down.
One thing for the tin foil hat types here, seeds. the old fashioned kind not the monsanto kind. The USA exported a lot of cereal grains and soybeans but imports more foodstuffs that we all take for granted. Veggies and fruit, coffee, spices and flavourings. Ag land is being moved from cereal for food production to corn for ethanol production. There is much profit for the farmer in ethanol and much subsidy too. The result will be much further increase in food prices and eventually a falloff in cereal grain exports and soy exports.
The rest of American exports are pretty much third world stuff, scrap metal, hides, some coal, entertainment. Autarky may not be possible, keeping production and productive labour within ones borders does have some good points when times go bad.
Just north of me is Bethlehem PA. The steel works are gone. Not just closed but gone. Multiply that by thousands of communities and thousands of businesses and you have the outlook for the USA. There will appear some stocks and bonds that appear to be bargains during this bear market. Remember that when you think of buying into these bargains, someone who is probably smarter than you is dumping them now because he knows they will be worth less later.
Here is a worthwhile site for information that China wants the world to know http://www.xinhuanet.com/english...glish/
index.htm
Better than any of the MSM for starting the day.
CK: grains, and hops, don't forget teh hops. the ability to brew beer is goign to be precious if things go far south...water may not be very drinkable, the alchohal will help that. also grow a yeast colony (we allready have one) againg, beer good and bread gives you a protable, quick way to eat that grain. I would also lookinto home chesses makeing. good way to store proten.
I have the advnatage of being a foodie, so we have allready been doing a lot of this (as well as meat preserving. home made veneson sausage is good stuff). if you can get a smoker and a sausage stufer now...may also look into learning how to roast coffe (have been home roastign for years, most major brands...starbucks...overroast teh beans.).
I live in central IL, we allready got a group together that knwo how to survive, between the hunting (most of us can bow hunt, we got two guys who can make bullets until smokeless powder runs out, I do black powder hunting, and can make my own). the small farm, the fishing, and the cows/goats we are set if things go very south.
I don't share your opinion on China at all. Outside of the coasts - the country is still in many cases dirt farmers. As Mrs. R mentioned above, ruling by fiat allows the central party to change the economic direction as required. There's no debt to tie them down and there are tendrils around the world in oil & minerals (see all the Chinese 'support' in Africa).
Global decoupling from the US economy is not yet something that has been 100% completed, but it is at a much higher level than before.
Citing a Canadian economist (can't remember who right now), it used to be that when the US got a cold, Canada got pneumonia. Now Canada just gets the sniffles.
I think that the world outside of the US will get the sniffles. But for those of you in the US, unfortunately the financial day of reckoning has arrived. The Rust Belt has spread across the country. The rest of the world will be bargain picking over the carrion in the US over the next few years.
Hops? Those weird relatives of marijuana? Apples for applejack
barley for scotch
hemp for almost everything useful.
Moon, the ability to do anything productive or make something especially tools is going to be very useful.
Bicycle repair strikes me as being high on the list of useful skills for the longer term.
I have noticed the prices of old hand tools have skyrocketed in my area in the last two years. Way beyond the norm for collectibles and antiques overall. A dealer I know scored a mint Emmert Patternmakers vice for $600 that two years ago would have sold for $200. ( I know this because he scored it out from under me by about 10 feet ).
Nails, screws, nuts, bolts fasteners of almost any kind are no longer made here.
CK advantages of being and old school SCA and renfair geek, we include a lot of blacksmiths. and one barrel maker. as well as a few fletchers.
as for the hops, I jsut prefer beer t ogrog, and you need somethign with more water tehn alchohal...apple jack would work as well, but then what do you drink with teh veneson brats.
Venison brats would require a red wine but not the strongest unless your venison brats are well larded with garlic ( which most aren't).
A good Hungarian red right now maybe a pre 1993 Egri Bikaver or a Nemes Kadar if you can find one.
Or
( this is truly evil ) huge mugs of Retsina. Nothing goes so well with venison as the aroma of dewy piney woods in a fine crystal glass.
Envy you for having quick access to a barrel maker.
Watch the venison, people. There's a deer-borne variant of mad cow that's rampant in the US now, and which can infect people.
Mr. R loves venison, but won't eat it any more. It's just too dangerous.
Rates will be going down on cash reserve loci - CDs, money markets, etc.
The flip side to all the giddiness in the stock market/real estate industry about the Fed's 0.75% rate cut.
We've got a bit parked in cash so less interest is not good news for moi ... or those on fixed incomes.
BUT who cares? Gotta keep corporate America and the big pockets happy.
Container garden on the patio, water barrel, sprouter ... and a town that understands the word "potluck."
Low interest may keep people borrowing; but it won't induce them to invest. I gotta think that those of us now sitting on cash are going to be in a position to buy some very sweet treasuries and other bonds in the medium-term future.
The first Mr. R (there have been three) got through an expensive private university on scholarships and his mother's cascading 6-month T-bills. She had six of them, $15K each (a lot of money in 1980), one of which matured and got rolled over each month. She was getting 17% interest on those suckers -- about $1200 bucks a month in interest income -- which she used to cover his college living expenses, with enough left over to make the payments on a new Lincoln Continental every two years. (She also bought some rental property, which they're evidently still getting income off of.)
This craziness only lasted for a couple years, but she sure made hay while the sun shone. Not bad for a shrewd little Puerto Rican mama who was the shop foreman on an electronics assembly line and bought her clothes at K-Mart. (I've two fabulous mothers-in-law. Dora simply rocked the world of everybody she touched.)
Somewhere down this road, I think we may see opportunities like that again. Which is why you get the cash in hand now, and wait. Interesting opportunities will emerge in time.
You all have me nauseous, for real.
We never got sucked into the market in the 90s. Made good money and used it to pay off real estate. We've got strong equity in three properties, one of which features water rights n the desert SW, and another in the rural Midwest with a well. Good cash flow from an evergreen service business that as long as the phone rings and the email goes out, we can keep milking for whatever the new version of money turns out to be.
So we're better positioned than almost any American. But one little problem remains: We have no disaster prep in place. None. Aside from a 6 month supply of water (solar filtration of a backyard swimming pool has our little family covered) we have no plan for how we will eat if our local CSA and regional meatpacking and cattlemen's coop break down on us.
I should learn to hunt. And fish. And grow vegetables. Is it too late?
PhoenixRising: no kidding!
Yesterday's and today's hullabaloo of the world markets inspired me to write the blog post of my (albeit short) blog career.
Think X files meet pompous ass and you have my blog
The first Mr. R (there have been three)
There's a reason why I like you
Been saying I was going to do the Master Gardner program for years. This time I will make it a reality.
Gardening is key.
My worry is that we're a family of 2 adult women and 3 little women. If the SHTF then we're easy targets.
I'm not a big fan of guns but I've been toying with the idea of buying one (or a few) and practing at a gun range or securing a machete...something.
Yeah but as soon as my financial situation pans out a bit it's all about the 6 month supply of food. We've got some greedy little girls who will not understand the concept of food shortages.
JJ you think you got it bad if here are food shortages?? I'll trade ya my 15 year old autistic eating machine son for two of the "little women" and I'll even throw in "future considerations" 
LOL @ Bubba Bo Bob Brain
I assure you you'll send the little women back.
Not only are they greedy but they are the most strong willed little girls God ever put breath into.
They think they know EVERYTHING and you...absolutely nothing and the oldest is only 7....lol.
Phoenix, the fact that you've already made the transition to dependence on a CSA and other regional food sources is a huge investment in your own food security. Building up a thriving local farming infrastructure is probably, in the end, even better than being able to grow it yourself. (After all, these people are already producing, so no wait; and they're professionals; so there's much lower risk of failure.)
All of us who buy local are doing the single most important thing we can do for our own long-term food security.
That said: if you're serious about feeding yourself off your own land, the place to start is with one of Seeds of Change's seasonal seed collections. Three seasons' worth of seeds plus a helpful book is $72. This, a composter, a canner, a few basic tools -- and you're in business.
Some thoughts:
You can do worse than borrow some of the Mormon ideas on preparedness.
Notice how the Palestinians blew the fence and then PEACEFULLY went into Egypt this week and bought stuff.
Fences won't work in the long run, having stuff or skills will work.
Guns are fun to look at, a lot of work and practice to get even close to adequate with, and there is still a huge difference between blowing holes in paper targets or tin cans and willingly blowing away another human being. About guns, talk is way cheap. That said, there are enough gun blogs and websites to confuse anyone on what is an adequate weapon for which situation and how much ammo you need of which types.
http://www.survivalblog.com/ has been around for several years and has loads of information.
Cheap energy from oil is but a mere blip in human history. The first commercial American well was drilled in 1859, first gasoline powered vehicles 1886, cheap portable energy has a history of 150 years out of a human history of 10,000 years. We have been lucky that we live during an anamoly.
CK: sugestion, if you don't mind us crazy reinactors get in with teh local SCA community (every areas has them) a lot of the mideval skills are practiced...blacksmiths and furriers, adn barrel making, and fletchers and what not. besides if you are tryign to survive an civlization colapse haveing people around who have been drillign for years with sowrds and pikes, and bows may not be a bad thing.
if you are going to buy silver then buy pre-1965 dollars, half dollars, quarters, and dimes. Do NOT buy silver bars (who knows what is in them).
Gay Vet - what about Silver Maple Leafs? Is it a better deal to get the old US coins?
Moonglum:
I did SCA some years back for a while, will probably indulge again this year.
Re coins: nickels of any era are worth more as metal than their face value of 5cents. Pennies prior to 1982 were 95% copper since then they are copper clad zinc 2.5% copper.
It is illegal to melt coins for the metal content. It is impossible to prove that a melted ingot of nickel or copper came from coinage and not scrap plumbing pipes or scrap chrome plate.
There are 181 current pennies in a pound. 91 nickels in a pound.
Dimes minted prior to 1966 ( dated 1964 and earlier ) were 90% silver.
Since then they have been nickel clad copper.
http://www.usmint.gov/
about_the_..._specifications
Dammit, now I'm depressed. I got no skills I could market to anyone, and not enough money to buy gold or huge stores of food.
Y'all remember me, a'ight? I'll be one of those bodies in the gutters. :/
Scott: again go look up your local SCA chapter, make friends with them now..these are geeks who liek to relive the middle ages, and keep medeivle skills alive....sure you may have to farm the feilds aroubnd the castle, but at least you will survive (there may well be a large gathering at the castle in iowa if things go to hell....yes there is a medeivla castle in iowa...well a replica)
Most humans for most of history had no marketable skills because there was no market and no money because the rulers took their 30% cut in stuff ( pigs, wheat, corn hemp whatever ) and because there was no money as we knew it for the first 150 years of the US's history. Real money that had something of real value behind it. Yet those same humans could and did grow stuff, make stuff, raise kids ( ah kids a pure economic drain right? For Americans today that is a 21 to 24 year drain, for Americans less than 100 years ago that drain time was a lot less, for 3rd world countries today that drain time can be 7 years max, then the kid starts contributing to the family's economic well being.) Adolescense: a permanent leisure class consisting of 14-21 year olds.
Anyway Scott, so you don't have any skills in your inventory today, you could study something useful. Soldering pipes, welding, learn to run a lathe or a milling machine ( most high schools offer some sort of manual training courses for adults ),
Appliance repair will be a hot topic over the coming decades especially now that china is letting the Yuan float upwards against the dollar. Those cheap electric and electronic goodies are not going to stay cheap.
The Chinese have watched while the Japanese faked a 25 year domestic recession and used the carry trade in yen to turn America into a colony of Japan. Now the Chinese will turn both Japan and America into useful colonies without ever expanding one iota of manpower to do it.
50 years from now, it will be widely recognized that China and Russia won world war two and that everybody else lost.
If all of these survival skills really do come into play in this country, forget deer for food. Too many damn people know how to kill the things and stocks will dry up quick. A better source of survival food is acorns. There are varieties of oak in nearly every corner of North America, and your average forest has many more calories available as acorn meat than it does as deer meat. Kill and eat any squirrels as well because they are excellent acorn hunters. There are dozens of other wild plants that are edible (dandilions anyone?) that will get you through hard times. These food sources will not be as well picked over because fewer people know about them. Also you don't need a gun. Also, all the acorns in my neighborhood are belong to me so back off!
Growth Factor you still need protean. more over you need to farm. can't sustain more than a person or two on hunter gatehre crap...acrons may feed you, but they wonte feed your nabeighor also...when he gets hungry enough he will kill you for your food.
"How to Serve Man."
It's a cookbook.
CK: well long pig dose take care of your proten issues...Id watch the sodium and chloresteroal counts though
We will sweat out the sodium and metabolize the carbs instead of storing them. Health will improve but life expectancy will fall.
Add some brook and rainbow trout to the diet and the cholesterol becomes a non issue ( cod liver oil will be a rare and very expensive delicacy ).
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