[deMolay]

Rumour has it that Thursday and Friday will be very bad. A devaluation of the Greenback is underway I think. Barrons

Edit: Converted [url] to hyperlink.-FL

[ReverseEngineer]

Rumour has it that Thursday and Friday will be very bad. A devaluation of the Greenback is underway I think. Barrons

For the small investor in Treasuries, probably good advice, along with liquidating any kind of paper money you have into tangible assets. No financial instrument is safe right now, no precious metal is safe right now even though the Gold Bugs at Barron's promote this. In any event, getting your hands on possesible gold is getting harder all the time. What this means for the typical prepper here is buy food, guns and ammo. Pay off any debt you have and sit tight waiting for it all to blow.

Its not such great or even doable advice for the large institutional holders of treasuries, because if you tried dumping them all on the market the price would drop like a stone, as EVERYBODY would follow that lead. Katy Bar the Door. In order to get rid of said Treasuries, you would have to find someone who would BUY them. If everyone wants to sell them, who would buy them? Well I suppose the Fed would with Funny Money it prints up, but for you the seller, do you really want to take $20B in worthless dollars in exchange for $20B in worthless Treasuries? Its the same Bank really, its a Kiting scheme and if they don't want the Treasuries, they aren't going to want the dollars EITHER.

Anybody who holds a really large amount of T-bills is STUCK with them. They aren't worth the paper they are printed on but nobody can bring themselves quite yet to pouring gasoline over the pile and Flic a Bic Lighter on it. Its like writing down all the bad mortgages, it INSTANTLY turns your balance sheet into a diving board into a pool with no water in it. The reason all the banks are going down? Bad mortgages that will never pay off. The reason governments will topple, Irredeemable Debt that will never pay off. Its exactly the same scenario on yet a bigger scale is all.

The Fed being the biggest bank of all and the issuer of the currency could buy up all the bad mortgages, and so they did. They CANNOT buy up all the Treasuries. They do not have the assets to do that with, they would just have to print money nobody would take. Or if they took it, it ALSO isn't worth anything.

If you are a small investor, to be sure, get OUT now. The big holders of this trash have fewer options. They can't get rid of the stuff, its just Toxic Debt. Heard that before? That is what the subprime lending market was called. The REAL Toxic Debt is the debt owed by Nation States, it dwarfs the housing market. The system is Zombie now. Its Dead, just TPTB won't admit it.
Reverse Engineer

[lawnchair]

Pay off any debt you have and sit tight waiting for it all to blow.

I understood (agree or not) all but this. If you have a debt, say a 4% student loan or a 5% mortgage, and the cash to pay it off, why would you at this point? You'd still have the cash to pay it off tomorrow, even if the dollar goes Weimar. Hell, your lender may not outlast you. In the meantime, you can have something tangible in your hands with that cash.

[ReverseEngineer]

Pay off any debt you have and sit tight waiting for it all to blow.

I understood (agree or not) all but this. If you have a debt, say a 4% student loan or a 5% mortgage, and the cash to pay it off, why would you at this point? You'd still have the cash to pay it off tomorrow, even if the dollar goes Weimar. Hell, your lender may not outlast you. In the meantime, you can have something tangible in your hands with that cash.

Its a Security Measure basically designed to stave off Legal Problems like Foreclosure or Bailiffs invading your home to steal your Preps with Goobermint backing, long as the Goobermint exists.

You can Chance it and run up the Credit Cards if you still have working ones, and if you don't have Cash to buy Preps that is a good idea IMHO. Your best bet right now though is to run a Zero Balance Sheet for yourself. No real debt, no monetary assets either besides maybe a month or two of Cash if you have that much extra.

Just to let you know, I actually LIVE my theory here. I have Zero debt, I keep only about 2 months worth of money, about half in the bank I am prepared to lose and the other half in cash I am prepared to spend the minute the ATMs go down. Most of my "assets" are in mobile preps. Food in storage containers I can move out of my Cabin at the drop of a hat, portable PV Panels for producing electrictiy to power up car batteries to run my power inverters. When TSHTF, I have no intention whatsoever of trying to defend my Cabin and my Preps alone. I have a plan with Suzie Homemaker to start, and then a further plan with my Organization to get together in stages for Protection as necessary. I don't even have a lease to worry about on my Cabin, I go Month to Month. I can walk out tomorrow and owe nothing, and lose nothing. This is nothing new for me really, I have been a Nomad my whole life, I like the FREEDOM of being unencumbered by furniture to move about and so forth, much less the encumbrance of owning a house. When I drove the Big Rig, I learned to live out of about 5 suitcases worth of stuff, my personal possessions that are important to me. I still do, although now I have containers of food I have to move about besides that when the time comes. However, if Martial Law was declared tomorrow, I could be on my way to Suzie's in about an hour. It would take a few trips to move all the stuff, but by the end of the day it would all be moved to a safer place. And then the next time, I could move it again just as fast.

Basically, I have what I can carry. For my long term security, it comes in what I KNOW. I can do many things, but more than that I know many things more than that to teach others. Its how I made my life. It was my gift. It will always be my gift, no one can take it from me, nor can I lose it. Mobility and the lack of encumbrance or obligation to others in debt or any other way makes me a Free Man. As free as you can be anyhow in a society such as the one I was born into.
Reverse Engineer

[IslandCrow]

If you have a debt, say a 4% student loan or a 5% mortgage, and the cash to pay it off, why would you at this point? You'd still have the cash to pay it off tomorrow, even if the dollar goes Weimar. Hell, your lender may not outlast you. In the meantime, you can have something tangible in your hands with that cash.

I can read this two ways. One is that you will use the money to buy something tangible, in which you no longer have the money to pay off the debt. Is that the way you meant it?

Also you may outlast your lender, but that doesn't get you off the hook - someone else will buy the debt (probably at a discount) and you will still have to pay it back.

[ReverseEngineer]

someone else will buy the debt (probably at a discount) and you will still have to pay it back.

Only for so long will this be true. On the grand scale, NOBODY is buying the debt anymore. Municipalites ffer Bond auction, and nobody shows up to buy the debt. Even discounted they won't buy it. It is IRREDEEMABLE debt.

Its a Cascade Failure also in the debt collection business. The very companies that make their money thru debt collection go out of business as they no longer can collect even discounted debt. You cannot bleed money from a stone.

If you choose the route of upping your debt, you make the gamble that those who would try to collect on the debt will disappear before you do. These days, there are more bad debts than there are collectors. You can lose yourself in the masses here of bad debtors. If you are a small debtor, by the time they get around to you, the sytem is all toast anyhow.

Its a crapshoot of course. However, if I was in the position of having no preps or tangible assets and could use debt to buy some, I most certainly would do that. I am not in that position though, so its just a hypothetical for me. For many others though, its a real quandary that they have to decide on for themselves as to which approach to take.
Reverse Engineer

[lawnchair]

I can read this two ways. One is that you will use the money to buy something tangible, in which you no longer have the money to pay off the debt. Is that the way you meant it?

I was thinking of a hedge. I've taken out, say, far more in federal student loans than necessary. They have a 30-year payment window at a silly-low fixed rate.

I have cash currently to pay off 2/3ds of that.

To me, at least, the answer is to keep, as bank cash, enough to pay eight or so years worth of payments (1/2 of my current cash). And use the other half of my cash on preps. But, not to pay more than the minimums.

Three percent interest is a fine premium to pay for my paranoia.

If things don't improve within the next eight years (which they may not), they aren't likely getting better after that.

Even if I have to hit that socked-away savings, I'd gladly trade you bankruptcy in five years for bankruptcy today. Human nature, I guess. Plus, I could be hit by a bus in year four.

And, if you think there's even a lottery-ticket's chance of Weimar hyperinflation, betting against the house, when the house is giving you 3% money, is not an expensive bet. Pay off the loan with a silver round.

[patience]

I'm trying to figure out what a bond crash means to retail prices. To solve that problem, I must decide what will be the relative prices/values of US$, other currencies, and commodities, both imported and domestic. This is too much for me. (And many other people, it seems.) I think imports to the US will go up, or become less available, so I'm long instant coffee, and every other import I could think of.

My answer has been to go for lesser-risk over the past couple years. First, we dumped stock funds for money markets, then cashed those. Then, we dumped stocks for US Treasuries in another fund, then cashed out the Treasuries last month, to pay off our kids' mortgage. Now sitting in cash, in 3 banks, and wondering where to go from here, as the world crumbles around us.

Our income is, unfortunately, mostly Social Security, in which I have little faith, but we'll get what we can, trying to recoup a bit of the pile they stole from us over a lifetime. Have a debt-free, well-stocked small business, but trade is waning each day. Have preps, of food, fuels, tools, home/gardens/orchard, etc.. Now working on getting our kids' place set up to farm with horses. Done all we know for preps.

Have paid taxes for the year, phone/internet, insurance (may drop all that except medical next year), and have enough gas for cooking for 10 years. Now putting in 250 gal. gasoline farm tank, while gas is down (going up here-$1.55 up to $1.75 now), and stashing a barrel of kerosene for lamps. Solar PV ready to go to work. Wood heat almost ready, wood on hand.

NEXT: Trade goods? Need some way to preserve liquid cash for future taxes/needs. Tax man won't take PM's. Banks aren't safe. Uh, ideas, anyone? I hear crickets. It's very quiet out there.....

[vision-master]

If I had the means to pay off my house , even if it left me with no reserves, I'd do it today!

[patience]

We were fortunate to be in a position to pay off our home, but we only have a one acre lot and a modest home. My last purchase was a set of horse driving harness. I'll build a light wagon next. Daughter has access to horses for using those. If shortonoil's analysis is correct, in 2 to 5 years, we will need that. Anyway, NO MORE paper "assets" for us. Disposing of FRN's as we speak.

[shortonoil]

patience said:

We were fortunate to be in a position to pay off our home, but we only have a one acre lot and a modest home. My last purchase was a set of horse driving harness. I'll build a light wagon next. Daughter has access to horses for using those. If shortonoil's analysis is correct, in 2 to 5 years, we will need that. Anyway, NO MORE paper "assets" for us. Disposing of FRN's as we speak.

My advise, put some money into silver and gold coins; don't tell ANYONE that you have them and bury them in the back yard. Exchange them into the local currency ONLY as needed.

Next get some chickens. The dam things can eat anything and dump out a really delicious egg. There are about a million ways to prepare an egg, and they are a trade good anyone will accept. Chickens will also keep the bugs down in the summer.

You'll need a good shotgun for foxes and vermin (4 and 2 legged types). The rest, it sounds like, you have figured out.

[patience]

shortonoil,

Thanks. The chickens are on the way next spring, materials lying in the backyard for the henhouse, have a feed grinder, and have some grain put away for them. Done that before, but it's been a while.

Yeah, I'm thinking US junk silver coins. Hate to take the transaction haircut, but it could be worth it if things go like I expect, a sort of "Iceland Moment".

edit: Got a line on a dog, too, a German Shepherd/Akita mix. Other security measures are in place.

[Cid_Yama]

<i>I believe that what is to come will most closely resemble Europe during the Thirty Years' War.</i>

The major impact of the Thirty Years' War, fought mostly by mercenary armies, was the extensive destruction of entire regions, denuded by the foraging armies. Episodes of famine and disease significantly decreased the populace of the German states and the Low Countries and Italy, while bankrupting most of the combatant powers.

So great was the devastation brought about by the Thirty years' war that estimates put the reduction of the German states population between 15% and 30%. In the territory of Brandenburg, the losses had amounted to half, while in some areas an estimated two-thirds of the population died. The male population of the German states was reduced by almost half. The population of the Czech lands declined by a third due to war, disease, famine and the expulsion of Protestant Czechs. The Swedish armies alone destroyed 2,000 castles, 18,000 villages and 1,500 towns in Germany, one-third of all German towns.

Much of the destruction of civilian lives and property was caused by the cruelty and greed of mercenary soldiers, many of whom were rich commanders and poor soldiers. The war caused serious dislocations to both the economies and populations of central Europe.

Pestilence of several kinds raged among combatants and civilians in Germany and surrounding lands from 1618 to 1648. Many features of the war spread disease. These included troop movements, the influx of soldiers from foreign countries, and the shifting locations of battle fronts. In addition, the displacement of civilian populations and the overcrowding of refugees into cities led to both disease and famine.
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<i>A major change in agriculture occured as a result of the Thirty Year's War and persisted afterwards. Due to the widespread pillaging and burning of crops, farmers switched to below ground crops which could not be burned and were difficult to steal.</i>