patrick.net

NuttBoxer says

What is your plan to avoid financial disaster in the face of a increasingly unstable world economy, built on the largest bubble ever blown in credit history? I see many potential mitigations, but they all require a willingness to separate from the current system.

This never made sense to me. Maybe if you hold fiat currency only and have that imo crazy belief that the dollar will be worthless soon against other currencies (currently it's going the opposite way), you may lose it all, but most people have assets, houses, stocks, maybe precious metals. Any asset of any practical value will sell and convert to whatever the new currency du jour is. How do you see people losing everything? I'm not disputing money printing and debt has debased our currency and that most countries have too much debt (/gdp), but assets will always retain their intrinsic worth, so will services people can provide, if they are able ad willing to work, where's the "collapse"?

NuttBoxer says

rebuild the world on the other side.

Build Back Better?

Is the crash and the turmoil inevitable? Will our world become MORE dystopian? Mad Max?

rhetorical

NuttBoxer says

I see many potential mitigations, but they all require a willingness to separate from the current system.

I think the decoupling from the 2009 past of zero interest rate policy (ZIRP) and quantitative easing is going to happen to the point that the Fed will keep the Fed Funds rate at least at 4.5%. They are willing to see house prices drop at least 20% to 25%.

The stock market already had its pandemic gains wiped out when you account for inflation.

The question is, will the economy barely survive all of this or will the Fed have to come in and lower rates to 0.25% again ?

I hope asset prices like stocks and housing correct without causing a collapse of the economy.

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NuttBoxer says

What is your plan to avoid financial disaster in the face of a increasingly unstable world economy,

Everyone should have yams, ammo, Krugerrands and Claymores ready.

NuttBoxer says

What is your plan to avoid financial disaster in the face of a increasingly unstable world economy, built on the largest bubble ever blown in credit history? I see many potential mitigations, but they all require a willingness to separate from the current system.

It could get ugly. Some years ago I read as much as I could get my eyeballs on,about the Great Inflation in Weimar Germany. Mainly from esoteric out of print books buried in the stacks of the main library. That crisis lasted two years.

We pretty much would have to go off the grid, be self sufficient for water and food and everything else, to be unaffected. And even then with a David Koresh kind of prepper's arsenal we still might not be able to fight off others to defend our hoard.

So that leaves dealing with it the rest of civilization. One thing I learned in the Financial Crisis was that sovereign states made good on their versions of FDIC type deposit insurance: Greece, Cyprus, Iceland. Maybe the daily withdrawal amounts were limited. Maybe (like in Iceland) the purchasing power of the deposits shrunk with super high inflation. But small depositors (ie, not Russian oligarchs who deposited large amounts in Cypriot banks) were made whole.

Regarding hoarding precious metals, the US government already seized gold in 1934. They can do so again. Or else (more likely, in my opinion) they can tax the redemption of it so heavily that it won't be an effective hedge-hoard. Maybe retailers of gasoline and food (and electricity) will accept silver bullion for more than the face value of it on the coins. Maybe. What do you think?

Phillips Curve applies. So Fed was referring to how 2% to 3% inflation will result in higher unemployment.
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ad says

Phillips Curve applies. So Fed was referring to how 2% to 3% inflation will result in higher unemployment.
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Yeah but we do not have an unemployment problem at all in this recession, it's purely inflationary. In fact it's the opposite, we don't have enough workers for essential services as people have left the workforce in droves, moved back in with their parents or stay in a roommate situation forever or found a way to get by by abandoning the quest for keeping up with the joneses and instead focus on exploiting the leftoid welfare/disability state, stimmy checks and section 8. Or just steal regularly under $950 to make a living, tax free. There aren't any mass layoffs and there won't be any, this is a dysfunct economy of the unwilling to work, and some like truck drivers priced out of work, caused by leftoid marxism. Good news is you can always make money if you know how to hustle. Bad news is you are up against 8% inflation pa, few will beat it but it's def possible if you work hard and invest smart.

mell says

. Or just steal regularly under $950 to make a living, tax free. There aren't any mass layoffs and there won't be any, this is a dysfunct economy of the unwilling to work, caused by leftoid marxism.

Yeah,the latest generation is not into the rat race as much and are not looking to impress their high school classmates at their 5 or 10 year high school reunion.

Woke statist groups funded with Chicom and Soros money promote tolerance of substance abuse, freeloading, and mental illness as alternative lifestyles.

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B.A.C.A.H. says

I don't think someone would trade gasoline or food with me for silver.

Yep, an average person nowadays has no experience to tell real silver from some other alloy, so they most probably won't accept it.

mell says

This never made sense to me. Maybe if you hold fiat currency only and have that imo crazy belief that the dollar will be worthless soon against other currencies (currently it's going the opposite way), you may lose it all, but most people have assets, houses, stocks, maybe precious metals. Any asset of any practical value will sell and convert to whatever the new currency du jour is. How do you see people losing everything? I'm not disputing money printing and debt has debased our currency and that most countries have too much debt (/gdp), but assets will always retain their intrinsic worth, so will services people can provide, if they are able ad willing to work, where's the "collapse"?

The US dollar is the reserve fiat paper that backs all the other fiat papers. If it goes down, they all do.
Do you really own your house? No mortgage, no taxes? If not, and your ability to make those payments is wiped out, how will you keep it? A collapse of the fiat is really a collapse of the system, an unwinding of all the debt. Every business that borrows goes under. No more Ubers in the red for years but still operational. Unless you work for yourself, your job likely will be gone, or you'll be competing with more people than ever for what's left. Are you in the top 1% of your field? And that's assuming your field isn't wiped out entirely.

Assuming the company you hold stock in doesn't go under, the re-valuation to non-inflation levels will still likely cause you to lose 90% of the value. Unless you are Warren Buffet, you lose everything.

But you don't need my opinion, read for yourself how people have fared during currency collapses. History is lined with examples.

B.A.C.A.H. says

One thing I learned in the Financial Crisis was that sovereign states made good on their versions of FDIC type deposit insurance:

And if all they have to give you is Weimer style wheel barrels full of paper?

B.A.C.A.H. says

Regarding hoarding precious metals, the US government already seized gold in 1934. They can do so again. Or else (more likely, in my opinion) they can tax the redemption of it so heavily that it won't be an effective hedge-hoard. Maybe retailers of gasoline and food (and electricity) will accept silver bullion for more than the face value of it on the coins. Maybe. What do you think?

They don't need to seize gold and silver, they just need to roll out the CDBC's, and for force everyone to use them.
If you're "redeeming" metal for paper in a crises situation, you're going the wrong way. If you're talking post-crisis, a high tax would just keep all the action in the black markets, and cause their markets to collapse. They need our labor, our time, our abilities. They can't do shit without us.

I think people will barter in what has value, and the more easily divisible, the better. There was such revulsion against paper money after the Revolution that the idea had to be buried until people had forgotten. This will be worse, and the stigma in people's minds will be far sharper, and last far longer. After this collapse, I don't see paper money or central banks having any place left in this world for at least a hundred years.

Hugh_Mongous says

Yep, an average person nowadays has no experience to tell real silver from some other alloy, so they most probably won't accept it.

Those of us who do are the same ones who've been stocking up. It will be our market, and because we know the value, they'll learn it because that's the only way they'll be able to get what we have.

NuttBoxer says

Those of us who do are the same ones who've been stocking up. It will be our market, and because we know the value, they'll learn it because that's the only way they'll be able to get what we have.

And the rest of us will keep collecting the interest you pay in taxes and loans, and the dividends you pay when buying services and stuff, including even the mining companies, the gun companies and whatnot.

NuttBoxer says

I don't see paper money or central banks having any place left in this world for at least a hundred years.

So you see that much of an economic collapse within the next 50 years to result in this ?

Milton Friedman wrote about how both parties of a transaction have to believe they got a fair deal in order to maintain a healthy free enterprise system and economy.

If there is that much of a Mad Max style collapse, then economy will be based on bartering to the lowest level of survivability which is potable water, food, shelter, housing, and medical care.

It will be interesting to see how so one barters with a medical doctor to get urgent care for a wound based on them only having 10 egg laying chickens.

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NuttBoxer says

The US dollar is the reserve fiat paper that backs all the other fiat papers. If it goes down, they all do.
Do you really own your house? No mortgage, no taxes? If not, and your ability to make those payments is wiped out, how will you keep it?

No it won't go down, all fiat currencies debase from money printing, but some more than others as they print more which causes the current run on the dollar you're seeing. Your wages and assets go up, as long as there isn't a supply problem of goods and services how can there be a collapse? Your mortgage is denominated in the same fiat so it will adjust. Once the majority of earth's inhabitants don't want to have anything to do with the greenback then we'll have a problem. Currently it's looking like the opposite. Doesn't mean what the Fed is doing is ok or good in any way, but the dollar's demise has been called too many times with nothing to show for. The Euro is worth 98 cents right now, you can live very well in Europe drawing an American salary atm, almost like a king.

NuttBoxer says

Hugh_Mongous says

Yep, an average person nowadays has no experience to tell real silver from some other alloy, so they most probably won't accept it.

Those of us who do are the same ones who've been stocking up. It will be our market, and because we know the value, they'll learn it because that's the only way they'll be able to get what we have.

I don't see how are you going to persuade somebody who has something real like food, energy or clothes you need that these old worn coins are worth more than what is written on them. "Son, it says 25 cents right there on the coin you gave me so why should I believe you that it's really $10? I'll just keep my jerry can of gasoline thankyouverymuch".

B.A.C.A.H. says

And the rest of us will keep collecting the interest you pay in taxes and loans, and the dividends you pay when buying services and stuff, including even the mining companies, the gun companies and whatnot.

Why would you get a cut of the taxes? As far as loans, if you can't afford your lifestyle, you should make changes before you start investing. There are a number of people who have operated outside the financial slave system for some time now, and that is only going to grow. Those people won't be contributing anything, but even for those who do, how does any of that benefit you?

ad says

So you see that much of an economic collapse within the next 50 years to result in this ?

Not years, months, and way under 50.

ad says

If there is that much of a Mad Max style collapse, then economy will be based on bartering to the lowest level of survivability which is potable water, food, shelter, housing, and medical care.

Three to six months is how long you'd need to be supplied for at minimum. Yes, it could resemble those movies in some ways, but it won't last for years.

mell says

Your wages and assets go up, as long as there isn't a supply problem of goods and services how can there be a collapse?

So we're living this now, are your wages keeping up with inflation? I've gotten some pretty sizeable raises that have kept me ahead of the curve, but not the case this year. As to supply problems, these are well documented for the past several years. Guys I talk to from a variety of industries all have trouble getting parts now. I'm a little mystified you don't think there's supply chain issues.

mell says

Your mortgage is denominated in the same fiat so it will adjust.

You're right, but you didn't address the no income scenario I posited, or the disparity in inflation vs wages.

RWSGFY says

I don't see how are you going to persuade somebody who has something real like food, energy or clothes you need that these old worn coins are worth more than what is written on them. "Son, it says 25 cents right there on the coin you gave me so why should I believe you that it's really $10? I'll just keep my jerry can of gasoline thankyouverymuch".

For sure. But if you aren't buying silver and gold, how likely are you to have the food, clothes, off grid energy and gasoline? Maybe you have everything else, but again, if you want to come out ahead after an economic collapse/reset, you better have some real money too.

NuttBoxer says

Why would you get a cut of the taxes?

You pay federal taxes, we collect interest on the treasury debt.

NuttBoxer says

As far as loans, if you can't afford your lifestyle, you should make changes before you start investing.

That's right. Folks borrow, we collect interest on the deposits (brokered CD's).

NuttBoxer says

There are a number of people who have operated outside the financial slave system

Yeah you're right about that. Can't win them all. But for those of them who hoard silver, we collect the dividends of the mining companies.

B.A.C.A.H. says

You pay federal taxes, we collect interest on the treasury debt.

Ahh, you're holding bonds. Those aren't paid by taxes my friend, taxes haven't been enough to cover even the interest on the national debt for at least 10 years. I hope your following the bond market, and have an exit strategy.

Have you ever adjusted for inflation?

Your dream of other people paying you ended decades ago man. We are leveraged so far out the taxes only serve to give the appearance of credibility to the system. At least through taxes and paper markets. The only payment that's still real in this system is our time, and what we produce. And even on that end most of us work a fake industry that doesn't produce anything other than services, that no one will really need in the future that's coming. Yes, I'm talking SW.

I don't know about you, but what I earn I want to come from honest means, not by stealing poorer people's time. Just waiting to collect my stock payout and my bonus, then I'm going to a company with some morals.

NuttBoxer says

Yes, I'm talking SW.

What is "SW" ?

Since around 2008 the economic system has been on life support based on ZIRP (zero interest rate policy) and QE (quantitative easing). The Fed waited until the last year of Obama's admin to turn this around and raise rates. It should have done that right after he got re elected and in small increments like 0.25% every other quarter.

Its made it easy for borrowing especially for the federal government.

I agree as we need to understand as a society as far as what is value-added services and goods. As we tighten our belts in the downward segment of the economic cycle, a lot of wasteful economic activities will cease to exist.

We'll see how the federal debt to GDP ratio fares over the next 2 to 4 years. Maybe they can inflate themselves out of this and reduce it back to 100% which was where it was from 2012 to 2020.

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Sorry, Software. Wishing more and more I would have gone into farming...

NuttBoxer says

Sorry, Software. Wishing more and more I would have gone into farming...

Are you saying that software (SW) is not going to be needed in the future because society is going to collapse that much ?

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NuttBoxer says

Ahh, you're holding bonds

I said treasury debt, not "bonds". "Notes" are treasury debt with maturities under 2 years. The 3-month treasury yield on new issues is just a few basis points under 4% (annualized), not too shabby for cash needed for 6 -12 months. (No state income tax!).

"Bonds", a word that you mistakenly attributed to me, have maturities >= 10 years. Homie don't hold those, not directly anyways. Retail banks that I have deposits in may have them as capital reserves, but that's their problem, not mine.

The main problem I have with long term treasury debt is not inflation, which I agree with you is a real problem, but default. As a candidate in 2016, Trump already went on record that haircuts could be used to lessen the federal debt burden. So what was formerly unspeakable is not unspeakable any more. Doesn't matter anyway, - as you insinuated, bondholders will lose capital on inflation.

NuttBoxer says

Have you ever adjusted for inflation?

Yes I do that from time to time. That's what the stocks are for.

I reckon due to inflation the purchasing power of my portfolio, even though heavily in stocks, will shrink over time. Come'on, homie, - we all knew this would happen. If we didn't discount the future value of our portfolio and pension income to inflation we'd be like ostriches (heads in sand). I have accepted it and moved on. No use getting torqued up about an unstoppable force.

NuttBoxer says

Your dream of other people paying you ended decades ago

Never had that dream. It's just the irony I see in preppers and hordes of silver hoarders hoarding silver (an industrial metal) assuming that they can trade it for food, fuel, rent, and medical procedures. I did those thought experiments decades ago and decided it won't work. And this was after spending about a decade reading about the Weimar Inflation.

Wish you well. Maybe you will prove me wrong, Bully For You if you do.

ad says

Are you saying that software (SW) is not going to be needed in the future because society is going to collapse that much ?

Decentralization is the future. In a decentralized world, how much of the current SW is still useful? I think it scales way back, like a lot of sectors that aren't absolutely necessary for everyday life. The future needs real products, small-town services, local, sustainable ways of living.

B.A.C.A.H. says

No use getting torqued up about an unstoppable force.

Only applies to assets that do not retain value outside the current Federal Reserve system. Forgetting the paper markets for metals, which are not different than any other paper market, physical coin has not had the same swings and losses. You can still buy a suit in Rome for the same price you could buy a nice set of clothes under Constantine. You won't get crazy upswings in value, just protection against inflation.

B.A.C.A.H. says

It's just the irony I see in preppers and horders of silver hoarders hoarding silver (an industrial metal) assuming that they can trade it for food, fuel, rent, and medical procedures.

Personally, I don't know anyone doing this. Everyone I know, including myself has rations, water, guns, ammo, and a place to go with others for protection. If all I had was coin, what's to stop someone from robbing me, forget about bartering, it won't get that far.

My wish is all of you make similar plans, because I don't want to see anyone in government lines for food with a side of booster. Plan to be able to survive without government, or plan to be enslaved.

I think it will be a depressed standard of living for 90% of the population. But I don't think it will get that bad. The poorer likely won't see much of a dramatic change. The middle class will see the greatest change, and will undergo a drop of 20% in quality of life.

That's already happened.

NuttBoxer says

That's already happened.

Cloward Piven is a winning strategy. Birdbrain Biden plans even more handouts.

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Nuttboxer, what types of denominations for metals do you hold? I've seen those combi bars where you can snap of the scored bars, which look real convenient, but they carry such a price premium. I was thinking of buying a variety of coins so I have some immediate variety, but plan to stock mostly larger bars that I will just cut up if needed.

I'm not yet at the point where I'm buying metals for my preps. I'm still working on higher priorities (last month I got 1000lb of grains from azurestandard, some solar gear, various other stuff). I think precious metals are of limited usefulness in shtf, but are certainly still one of the more useful things one could stock. While I think there will be brief periods of time where the vast majority of people are only seeking to acquire food/water like stuff, and thus wont care much about people offering to trade them metals, that period will pass. And people who have surplus of some resource, or those who are generally secure in their resources, will likely always be willing to take metals as payment to some degree imo.

Buy silver chains and simple rings.

Don't buy rounds. The gangs from the underground market that act as security will follow the guy with a roll of Walking Liberties home to kill him, rape his family, and steal all his preps.

Better to hand off the single silver ring or chain and say "I need that amox/Let me pass, take this chain my Aunt brought me as a kid." Rather than dig in your pockets and count out rounds: "Git 'em, he's rich!" and fight off 6 guys.

AmericanKulak says

Buy silver chains and simple rings.

We haven't had a good thread on the virtues of yams, clear fields of fire, and belt-fed lately.

Cannibal Anarchy is closer than ever.

Hircus says

Nuttboxer, what types of denominations for metals do you hold?

Whatever gives me the most ounces. Junk has gotten ridiculous on premiums due to scarcity. Rounds never seem to attract as many buyers, so they're usually a good way to go. And it depends on the ratio. Until it drops back to around 30, will be staying with silver.

AmericanKulak says

Buy silver chains and simple rings.

Don't buy rounds. The gangs from the underground market that act as security will follow the guy with a roll of Walking Liberties home to kill him, rape his family, and steal all his preps.

Better to hand off the single silver ring or chain and say "I need that amox/Let me pass, take this chain my Aunt brought me as a kid." Rather than dig in your pockets and count out rounds: "Git 'em, he's rich!" and fight off 6 guys.

I assume this is not serious. If you haven't prepared your defense, you are buying for someone else.

NuttBoxer says

RWSGFY says

I don't see how are you going to persuade somebody who has something real like food, energy or clothes you need that these old worn coins are worth more than what is written on them. "Son, it says 25 cents right there on the coin you gave me so why should I believe you that it's really $10? I'll just keep my jerry can of gasoline thankyouverymuch".

For sure. But if you aren't buying silver and gold, how likely are you to have the food, clothes, off grid energy and gasoline?

I don't see the correlation. It's perfectly normal to have shelter, food and means to defend yourself but no precious metals (not counting the wedding ring). It is burdersome to check precious metals for purity now, it will be exponentionally harder to do so in the preppers dream world of "who was nothing will become everything".

I'd also argue that in such a dystopian world the value of precious metals go DOWN relatively to essential goods, not up. Proven by Russian revolution and civil war of 1917-1921, Holodomor in Ukraine in 1932-1933, various occupied territories in WWII, etc. when someting that used to be worth a small fortune before SHTF was being exchanged literally for a loaf of bread. So the time to AMASS precious metals is AFTER SHTF, not in preparation for it.

RWSGFY says

a dystopian world the value of precious metals go DOWN relatively to essential goods,

That is what I figured in a Mad Max Road Warrior type world, or something like out of the movie The Road. What is of value that is tangible are based on basic survival like canned food, drinkable water, water treatment chemicals, egg laying chickens, first aid kit, bullets and guns,etc.

Intangible value are skill sets like being able to fix things in the homestead, micro farming skills, medical skills, etc.

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NuttBoxer says

I assume this is not serious. If you haven't prepared your defense, you are buying for someone else.

Read Selco, the guy who survived a city in the Yugoslav war with massive shortages, blockades, and gangs running the show.

https://www.amazon.com/Dark-Secrets-SHTF-Survival-Violence/dp/1792159226

Seeds, canned food, cleaning supplies (!!!), water containers.

RWSGFY says

I don't see the correlation. It's perfectly normal to have shelter, food and means to defend yourself but no precious metals (not counting the wedding ring).

I don't know many people capable of being self-sufficient, or in possession of a place they can easily defend. The ones I do know aren't stopping there.

RWSGFY says

It is burdersome to check precious metals for purity now, it will be exponentionally harder to do so in the preppers dream world of "who was nothing will become everything".

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This is literally half the reason they serve as the only real currency, precise measurement. The other half is inability to create. And again, the reason you hold is for rebuilding the world, not surviving economic collapse. Although there are certainly scenarios that make sense when shit is going down, quickly obtaining transportation, bribing your way through checkpoints. Before chaos really ensues.

RWSGFY says

when someting that used to be worth a small fortune before SHTF was being exchanged literally for a loaf of bread.

So you've got the defensible shelter, the ammo, the guns, the rations, the water, the clothes. Now what? Just keep amassing paper you know will become worthless any day? Why is it so hard for you to conceive some of us are already planning past survival?

RWSGFY says

So the time to AMASS precious metals is AFTER SHTF, not in preparation for it.

With what? My paper currency won't be worth shit, so I'm not fucking holding that. And I've already prepped for the rest. Why are you against people wanting to do better than just survive?