For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!
Joined: Oct 12, 2004 Posts: 997 Location: In the suburban sea of strangers
Posted: Fri Oct 15, 2004 12:29 pm Post subject: Where to put put my money prior to economic meltdown?
I imagine one of two things happening in the future. Either a catastrophic loss of value of US dollars resulting in massive inflation or an economic depression induced chain reaction of bank failures causing people to lose their money causing deflation.
Where should I put my savings? I have a sizeable retirement fund that I would have to quit my job and pay a 10% penalty to access any sooner than 13 years from now. Do I risk losing that?
The two safest places for my money seem to be either buying and taking posession of silver and gold or dumping it into lowering my mortgage principal so I will face a lower debt if I become unemployed.
Russia second oil exporter in world.
Has 50 % of all natural gas left ( enough for 60 years ?)
Has nukes operation freedom cannot happen there ( unlike Saoudi Arabia, Iran)
I think you've got several good choices. Try for a mutual fund that concentrates on gold mining stocks for part of your assets, and another that emphasizes energy. I rather like Vanguard's offerings.
I wouldn't put more than 50% of your assets in stock oriented investments. Another 45% could go into high-grade intermediate maturity bonds - say, 1 year average maturity. And 5% might go into a money market investment.
I wouldn't think you'd want to pay off your mortgage just yet. We may see a period of high inflation that would reduce the real-dollar costs of liquidating the debt in a few years.
Withdrawing your retirement money would also involve tax penalties. Plus, by quitting your job, you'd lose current cash flow.
Joined: Oct 04, 2004 Posts: 244 Location: the Village
Posted: Sat Oct 16, 2004 11:27 am Post subject: what sort of armageddon did you mean?
What use would gold or silver be in such a collapse? Unless you own or have access to metal smelting and fabrication, anything involving making useful tools out of metals - even then tho' gold tends to be more useful in electronics only.
Also, esp. if you have guns and ammo, I wouldn't worry too much about paying off a mortgage or that kind of thing - it's not like the company will be sending out any repo men to take your stuff away, and even if they were somehow still trading or in existance (and their employees somehow turned up for work, lol), unlikely they'd get as far as your property.
Have money / assets? Expecting social / economic meltdown? Get a compound and food and water stores then, make sure you are as self-sufficient in the essentials as you possibly can be - food (and water), clothing, medicine, shelter, be very careful about siting - example, better near snowed caps - ice could still be ok for drinking / bathing / crop watering water.
Joined: Oct 12, 2004 Posts: 997 Location: In the suburban sea of strangers
Posted: Sat Oct 16, 2004 9:16 pm Post subject: Re: what sort of armageddon did you mean?
duff_beer_dragon wrote:
What use would gold or silver be in such a collapse? Unless you own or have access to metal smelting and fabrication, anything involving making useful tools out of metals - even then tho' gold tends to be more useful in electronics only.
There are ancient civilizations that are now only paragraphs in history books but their gold and silver coins are still valuable. Human civilization went beyond barter millenia ago. There will always be money, but only precious metals will continue to be recognized as currency of value. When all US paper dollars have long since been burnt by someone to keep warm, US silver and gold coins will still be traded for goods.
Joined: Oct 15, 2004 Posts: 224 Location: Illinois, USA
Posted: Sat Oct 16, 2004 10:03 pm Post subject:
I may be alone in this, but I say repay your depts, and with remaining money, teach yourself some survival skill (skills, like farming, wilderness survival, blacksmithing, herding, etc. that will be helpful post peak), and get any property (land, guns, tools, house, etc.) you will need. If you focus on the stock market or non-personal investments, instead of dept-repayment and personal empowerment, you cannot be sure that you or those who may depend on you will be self-sufficient or safe. Besides, when mass transportation and the creation of alternative powers (like solar) becomes expensive and impractical, you can't be sure that your investments (whether you own the actual metal, or just the papers saying you own it) will retain their profitability.
And 13 years from now, your retirement fund may not be worth very much at all (inflation and such), assuming that the place you invested it in doesn't just plain go bankrupt, bringing its value to nothing. I say, withdraw it and put it to good use as soon as you got a plan for what to do with it.
Of course, all my advice here is contravercial, so don't just blindly follow my advice, or anyone's for that matter. You have your own personal situation with your own personal details, and only you can make the correct choices.
Joined: Sep 29, 2004 Posts: 2330 Location: Pennsylvania, USA
Posted: Sat Oct 16, 2004 10:31 pm Post subject:
I've been looking into this also and here's what I think:
The first effects of Peak Oil will be related to transportation. Electricity will go up, not because of oil fired generating plants, but because coal fired plants, which make up half the generating capacity need a constant stream of coal. That coal, like everything else will become very expensive to ship. States like Wyoming with huge coal reserves will experience minimal fuel cost increases. Prices of things will go up in proportion to the distance those things have to go to reach market. I think that means doom for China's boom economy. Food will go up in price for the same reason (shipping costs.) Of course driving to work will become very expensive and will hit those who drive the most in big vehicles (contractors, etc.) The transport costs will be the first effects of peak oil because gasoline and diesel fuel rely on light sweet crude, which is the first type of oil to peak.
Meanwhile, the US government will keep the debt monetization mill running full steam. This will produce high inflation of things like realestate, labor and especially oil. I can't see paying off your mortgage because I think that your $300,000 house will soon be worth $1M. You'll have a hard enough time paying for your groceries, etc, with your now pathetic salary to worry about paying down your mortgage.
What to do? Minimize consumption. Get yourself in a situation where you don't have to drive very far for any reason. Get a job or get into your own business selling to or working for the government because since the government can print money, it has a huge advantage over the private sector. Turn your house into a model of alternative energy sources and efficiency. Live near where food is produced. Ideally, live near a coal mine. Get a coal furnace. Unlike oil, coal is ready to be used right out of the ground and the US has a lot of it. Lastly, go back to school and earn a Ph.D. in something related to helping solve the new challenges. Leaders will be needed, as will scientists to find solutions.
Joined: Aug 27, 2004 Posts: 162 Location: missouri
Posted: Sun Oct 17, 2004 6:14 pm Post subject:
Quote:
I may be alone in this, but I say repay your depts, and with remaining money, teach yourself some survival skill (skills, like farming, wilderness survival, blacksmithing, herding, etc. that will be helpful post peak), and get any property (land, guns, tools, house, etc.) you will need.
I'm with you arocoun. Especially land. Land is always a good investment, and if by chance they find enough oil to last for the next 3 generations, you can always sell it, and it will probably have gained in value.
Joined: Sep 26, 2004 Posts: 40 Location: Australia
Posted: Sun Oct 17, 2004 8:04 pm Post subject:
G'Day All,
Be careful with your doomsday thinking - it could be self fulfilling.
Instead be part of the solution -move to a small rural town - it will be currently experiencing decline BECAUSE OF PLENTIFUL OIL - and help them prepare. There you will find farmers that can farm and boilermakers that can fabricate tools etc.
Look to a 1930's lifestyle - no personal vehicles but taxi available - pushbike available - telephone available and WWW!!!!! Food,clothing and accomodation aplenty.
The LocalAuthority out there may actually pay you as an economic development co-ordinator.
This is the AODD MODEL www.artcamp.com.mx they are one of the pilot villages in this program model.
Taxco and Tecalpulco, Guerrero, Mexico
FYI a large delegation of elite bankers and friends will be there on the 24th for a week long internet course, NABUUR.COM a Dutch company received 100´s of thousands of euros to do this.
Are they aware of something we´re not?
the coins of the future will be mined from and laser engraved from this city and others like it around the world among other registered collectibles, body ornamenation, clothes, utensils, soap, corn.
I am in a similar situation as you Neo having a fairly sizable retirement account and agree with you that as I am also running out of ideas for future investments for the next bearish business cycle. About 50% of my assets are invested in oil related sector. I am now heavily invested in mid and small cap oil companies operating overseas mainly in Kazakhstan/Russia . The macroeconomic scenario out the next decade and a half looks bleak.
I agree that Russia is probably a great place to invest some money and be rewarded in the next 5 years if you can tolerate the "Putin" risk in them which can be reduced.( ie make sure your company's management has no political asperations). I think Russia (like Chinese stocks in 2002) will do well especially following an inclusion into the WTO. I know a company called Tatneft NYSE: TNT is trading at about 60 cents per bbl of reserves which is about 20 times undervalued its current value compared to the US oil majors in present value reserve comparision. I also China will be a safer place to invest as the country has a huge trade surplus and pays their labor about 25 cents an hour.
As for future inflation I think it will continue to be rampant in the basic needs area like food and energy and the value of our currency will erode faster than usual as our trade deficit soars. However, I also eventually see a major deflation coming in other areas like wages and housing prices as unemployment soars from a shaky future economy in the next decade and a half. The standard of living will definitely go down during this time.
I think precious metals will outperform the dollar but underperform the price of energy commodities. One industrial metal I do like though is titanium.
However, eventually, I believe there will be a major attempt to change the energy infrastructure with alternate energy sources which will lead to another spending boom and a temporary economic recovery but the world will have to pay more for energy in the future.
Since the stock market has typically operated in 18-20 year cycles My guess this next stock market boom will begin to occur late next decade to 2020.
Meanwhile, the US government will keep the debt monetization mill running full steam. This will produce high inflation of things like realestate, labor and especially oil. I can't see paying off your mortgage because I think that your $300,000 house will soon be worth $1M. You'll have a hard enough time paying for your groceries, etc, with your now pathetic salary to worry about paying down your mortgage.
Mabye it will and mabye it won't. Where is the pressure for wages going to come from? If you're job is being outsourced to China or India at $1 per day how are you going to petition for additional income, even white collar work faces dim prospects for wage increases.
Say the world reduces it's purchase US securities and interest rates have to go up to attract foreign money? The foreign money is required to buy energy and manufactured goods from abroad.
Ouch suddenly 25%-35% of the US economy gambling on whether a line on a chart goes up or down does not look so comforting.
The US have some very unplesant medicine to swallow in that type of scenario.
If you take the hyperinflation scenario, who loses out? Mainly people who already hold significant sums of money. The people who are running the whole show. I think there is a greater chance of interest rate rises causing financial turmoil rather than the hyperinflation scenario.
But I agree with you on the proviso that really anything can happen. _________________ "Once the game is over, the king and the pawn go back in the same box."
-Italian Proverb
Posted: Wed Oct 20, 2004 12:04 am Post subject: Many good thoughts
So many good thoughts --
CEF is a Canadian fund holding physical gold and silver; not sure if it's approved for USA IRAs etc.
Pay down mortgage? Not sure, as the first priority is "Get liquid, stay liquid". In other words, have access to money to pay your monthly mortgage; otherwise, having half of it paid down doesn't help you if a repo situation comes upon you eventually. Your equity goes pfffft! quite easily under the sheriff's gavel. (By the tens of thousands during the 30s)
Physical metal safely stored IS liquid money.
House to $1 million? I know you're not counting on that, but either way, it's time to think of your home for its physical and living qualities and not as a monetary investment.
If you do not play the deflation hand by selling, and renting to buy back into house-owning later, then you should go into this holding the home that you LOVE whether you make or lose money on it. The home where you hope to make friends of neighbors who are now strangers. The home that you can make your 30-year stand in, and the one you would want to pass on to your kids, as they take care of you while living there. All of the above should go into it.
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cannot happen there ( unlike Saoudi Arabia, Iran)
