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Friday, March 6, 2009

Preparing for Anarchy

Yesterday's post I listed some "lottery tickets" for a market pop. Today I'll post what if, the world economy spirals out of control. (we haven't seen anything yet, this is an opening act)
What can you do? This is MAD-MAX territory. Before you start spreading rumors I lost it and have gone "off the reservation", I am NOT prepared for MadMax scenario. So I haven't transitioned to this as my reality, but I have thought about it.
  • First off, if your considering Anarchy to be possible, you should NOT be invested in any stock, money markets, corporate bonds, etc. Money should be in federal treasuries or resources. Also have primary savings in two radically different companies. Like a local bank AND an international stock trading account, etc.
  • Have significant physical cash on hand. Either is a security deposit box or "buried" someplace. If things spiral, banks are now allowed to run out of physical cash BUT remain solvent/open. This was changed with the bailout law in 08.
  • Sell your home, rent. Be nimble for change.
  • Stock up on food. Having 4-6 week food supply that you rotate not only gives some cushion, but actually saves you money by having bulk-buying of food. Alternately, you can buy big-quantity long term storage food by clicking here.
  • Apply for a gun permit ASAP and buy a gun...or two. If it comes to the point where you "need" a gun, laws will be changed that you cannot have a gun.
  • Consider buying commodities to store wealth for an economic reset or dollar crash. Short-term crash buying commodity stocks/etf's helps. Complete disaster collapse you need physical ownership of resources. Ideally you want valuables to barter with. There are places like goldmoney.com to own gold and have them store it in or out of the USA. Also can buy physical commodities gold coins, such as land, etc. Remember, in the last Great Depression, the US Government rummaged the safety deposit boxes and confiscated everyone's gold. So consider where is "safe" to hold resources.
  • Consider having a secondary place to live, whether its a relative in a rural area, or moving out of the country. Unfortunately, who knows what country if any will fair better. But the USA is itching to re-invent itself, and probably for the worse. Alternately make sure passports are valid, but don't count on being able to leave.
  • Consider putting your trading account in a place like Interactive Brokers. This will allow you to transfer wealth "on a dime" to any other investment, such as currency trading, futures, foreign stocks, foreign bonds, etc. If mad-max happens, it may be mute, the exchanges degrade, and/or the clearing houses or other institutions have issues
Yes, this post is a bit tongue in cheek, but it does have a serious side. Think of how LESS crazy some of the above sounds compared to just 6 months go. And consider how much LESS crazy it unfortunately may sound in 6 more months if the market plummets to DOW 2K.

GREAT Video below, thanks Happy John!


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  2. Though you're just stating a hypothetical, I do want to put some perspective on this because I hear it a lot these days. The world did survive the Depression, as hard as it was, without anarchy. If people in Zimbabwe and North Korea still haven't risen, if people by the millions subsist in slums for decades in India, if WW1 and WW2 didn't rip apart civilization, and if decades of apartheid didn't lead to a violent revolution but a relatively democratic one, I do not think we're heading down the anarchy path so easily, even at DOW 2000. The markets are just as swayed by emotion as they are actual balance sheets. It will get harder for everyone but it won't fall apart that easily and that completely. Even during revolutions we have maintained society. The one power we have proven to have as a species is the one where we maintain some kind of civilization regardless of the circumstance. So protecting your family makes sense, hedging your bets makes sense, but let's not get caught up in apocalyptic ideas.

  3. There is social anarchy and financial, I was looking more at "financial" anarchy :)