Surviving a Financial Meltdown

patience · Expert Joined: Jan 04, 2008 Posts: 1405

Right, Pops,
Mine's gonna go to a new root cellar, or half a beef, whichever comes first. IF Congress can get their collective heads out of whatever orifice they put them in this time, long enough to pass this handout. Don't hold your breath for it to happen.

goodmaj · Tar Sands Joined: Feb 01, 2008 Posts: 23 Location: Utah

patience · Expert Joined: Jan 04, 2008 Posts: 1405

goodmaj,
You hit it on the head! Just in Time delivery will become the bane of our existence! A semi truck at 55 mph is NOT a substitute for a warehouse. Any major interruption of delivery services would have mind-boggling results. I've lived though that in industry, and an economic dislocation could make it happen fast. Shortages of everything.

Anybody here remember the Teamsters' Union strike in the early 1970's? Empty grocery shelves within 24 hours. Violence on the Interstates, and mad rushes to hoard rapidly disappearing goods. This is maybe the best reason to keep some of what you need on hand.

elocs

So, this thread started on 20 January 2008 and 10 pages later it ends on 3 February. Today is 29 February. What has happened the last 26 days? Nothing left to say? No new news?
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"No matter where you go, there you are."

patience · Expert Joined: Jan 04, 2008 Posts: 1405

The dollar took a dump yesterday. to 74-something. Comments on TF indicate more of a drop to come, and money running to commodities, possibly as a last-ditch safe haven.

FDIC rumor of gearing up for bank failures this year is now confirmed as getting ready for 50 to 150 failures this year, but the rumor was saying 300. Maybe they want to soft pedal this....

How to survive it all? I dunno. Bubbles , bubbles, everywhere, and some imploding already. WOULD SOMEBODY PLEASE TURN OFF THE BUBBLE MACHINE? (Lawrence Welk, ca. 1962)

I bought steel for our machine shop yesterday. Rolled sheets are cheapest /lb, and flat bars are next. I paid $53.40/hundred lbs in early Dec. for flat bars, now $83.00. 55% up in in less than 3 months. My retail margin is around 30%. I don't think my customers will like this much, and will seek alternatives, so I hunt for salvage steel diligently, and pay $20.00/100lbs. for that. Scrap is back up to $160 to $190/ton. But incomes are going down....

I haven't found any good ways to hedge. Anybody got some ideas?

patience · Expert Joined: Jan 04, 2008 Posts: 1405

I've already begun to see out-of-stock problems, as suppliers are letting inventories run down, reducing their carrying costs. That happened in the 1970's--shortages of everything as stagflation took hold. Here we go again. The causes and some details are different, but shortages are goin to be the order of the day. Some retailers are jacking prices on what they have on hand, exploiting this trend.

tick66 · Coal Joined: Apr 23, 2005 Posts: 19

Seems everything is going up and in every business. Chemicals for textiles is going up as well. Cotton Yarn prices are all shooting up. Prices changing every day on this stuff. Very hard to keep track. Also very scary as the economy slows down. Guess i'll be going to aldi's to stock the second cabinet....... Scary time to have 2 kids and no land of your own save for 5 acres in NM. (I'm in NC)

Revi · Fusion Joined: Apr 25, 2005 Posts: 3112 Location: Maine

We're starting to stock as well. I think it's not a bad idea. We are buying rice and dry beans. There are lots of other things to get as well, but those seem to be the simplest. We just ran out of maple syrup, but if we can dig our lines out of 3 feet of snow we'll make some more soon, hopefully.

I feel that with the dollar tanking so hard it might not be a bad idea to have a bunch of tangible assets again.

I wish we had a pantry to put the food in. That was a really nice feature of old houses. Ours was converted into a bathroom.

What did people do in the old days? I think most people had a store of food in their houses so that hard times weren't that hard.
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Deep in the mud and slime of things, even there, something sings.

patience · Expert Joined: Jan 04, 2008 Posts: 1405

Here's a condensed version of Nouriel Roubini's 12 steps to a meltdown, with a discussion/LIST of "What-do-we-do-now":http://www.tickerforum.org/cgi-ticker/akcs-www?post=31798

It has some financial thoughts. Variations on buying US Treasuries, and thoughts on food.

Revi,
My parents lived through the 1930's as a young married couple. When I was a kid in the 1950's there was another downturn, so they traded for a farm, grew all their own food, except for flour, sugar, salt, and such. Had me building shelves in an unheated spare bedroom for canned goods, and tending a 1/2 acre garden. I picked wild blackberries and persimmons, and helped the neighbor pick black cherries in exchange for some of the fruit. We had a milk cow, a well with a hand pump in the kitchen, an orchard, wood heat, and raised beef, pigs, and chickens. I box trapped rabbits for meat and sold hides, hunted squirrels for meat with a single shot .22, and smoked meat in a walled-off area of a shed. They had an old 20 cu. ft. deep freeze. When the price of eggs dropped badly, Dad sold the 1,200 laying hens, but in the week before they were picked up by the meat processor, Mom and I FILLED that freezer with chickens for our own meat. (I'm past 61, and I still don't care much for chicken.)

Dad had done well financially from the mid 1930's up to 1950, but went back to "survival mode" almost overnight, when the post Korean war slump hit. For the first half of my life I heard, "Use it up, wear it out, make it do, or do without."

Revi · Fusion Joined: Apr 25, 2005 Posts: 3112 Location: Maine

My grandparents had a small farm, and had to sell it and move back to Sweden during the depression. They moved back to NYC, but never got back to where they were before the crash. My parents both were brought up during the depression, and it may have colored their attitude towards money.

I remember a couple of severe recessions. In the early 80's I graduated from college and it was a very tight labor market. I think it could get bad again really soon. I think I agree with your post, but I think that Defcon 1 could definitely happen.

http://www.tickerforum.org/cgi-ticker/akcs-www?post=31798
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Deep in the mud and slime of things, even there, something sings.

rostov

Well, I'm f**ked. I'm out of debt, renting (this will go up), and have shored up (except the NV stuff) for a hard crash with lots of sealed food, water, fuel, tools. Up to my storage max on ammo.

For 8 months I've gotten the hang of trading, and my puts are ITM, and ready to ride the current 3 of 3 wave down, and will continue to swing trade as far as possible. I've done a series of major but silent bank runs and spreading the cash all over. And get this : I've re-entered the workforce in preparation for this just yesterday : the day we broke down hard on all the indices. Nothing more than using my spare time (trading is during my sleep hours) to generate as much cash as possible when there's massive unemployment. Govt and enterprise ops. But still, every cent gets drawn out immediately leaving enough for expenses, and I expect this to increase for a moment.

Those that I can buy against hyperinflation, I have done so. The current arrangements are against deflation.

No buying of land or anything yet. I'm already being called regularly to consider farms for sale around my corner (please take a look and see if you're interested). When the PAIN on the realtors get so bad that they cycle them out and I get calls from new ones, I'd know that I'll start to consider then (asset deflation)
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regards,
Rostov
"Some {} are more equal than others"

patience · Expert Joined: Jan 04, 2008 Posts: 1405

Revi, and all,
Another Depression slogan was "Better to have it and not need it, than to need it and not have it." Yeah, I'm thinking we need to prep for the worst, and hope for the best. I'm full of platitudes tonight....

Revi · Fusion Joined: Apr 25, 2005 Posts: 3112 Location: Maine

I like the idea of tangible assets. I have decided that the next precious metal is cast iron. I have bought over 20 pieces of cast iron cookware which I have for sale now. I like Wagner and Griswold. We've scoured all the shops from New Hampshire to the coast of Maine. I have found some great ones.

I think it will be a lesson in simplicity, when the meltdown comes. We have lived very simply before, so it shouldn't be that bad.
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Deep in the mud and slime of things, even there, something sings.

HEADER_RACK · Heavy Crude Joined: Feb 15, 2007 Posts: 435

Revi · Fusion Joined: Apr 25, 2005 Posts: 3112 Location: Maine

If you season cast iron it is a non-stick surface. Some of the old stuff is really good casting. It is smooth and will work perfectly even if it's a hundred years old. Here's a site about it:

http://www.griswoldandwagner.com/

I figure that I can sell some, and keep some and come out ahead whatever happens.
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Deep in the mud and slime of things, even there, something sings.