The Practical Action Tips for Economic Crisis Thread

[Andreuccio]

Re: The Practical Action Tips for Economic Crisis Thread

Tell me, how can produce cost more to produce while people are starving?

If you can answer that question, then you know what's coming, if you can't answer the question, then you have no clue about the calamity that's about to strike humanity.

-Sapiens

I'll take a stab at it:

The starving people have no currency, and thus have no impact whatsoever on prices. The people who do have (lots of) currency benefit by keeping prices low. If prices are low enough, the farmers will fail and there will be acres and acres of farmland available for purchase at blowout prices. The only worry is open revolt by the newly bankrupted farmers and/or the starving people.

Close?

[c1ue]

Re: The Practical Action Tips for Economic Crisis Thread

I'm already implementing my plan.

Move 50% of money out of US and US dollars (check)
Found businesses based on upper middle slice of incomes with pricing power (check)
Avoid all debt (check)
Be fully liquid as much as possible in case it is time to board the last helicopter out (check)
Have 2nd and 3rd options on where to live should GDII really come (in progress)
Have 2nd and 3rd employment options out of country should GDII really come (in progress)

[Andreuccio]

Re: The Practical Action Tips for Economic Crisis Thread

I'm already implementing my plan.

Move 50% of money out of US and US dollars (check)
Found businesses based on upper middle slice of incomes with pricing power (check)
Avoid all debt (check)
Be fully liquid as much as possible in case it is time to board the last helicopter out (check)
Have 2nd and 3rd options on where to live should GDII really come (in progress)
Have 2nd and 3rd employment options out of country should GDII really come (in progress)

Great plan. I wish I were in a position to implement any of it. Good luck.

[Spartacus]

Re: The Practical Action Tips for Economic Crisis Thread

a year's worth of preserved meat (not needing refrigeration), stored in a pest-proof area, before prices go through the roof ... depending on how bad you think the social situation will get.

Move out of an expensive looking house in the "best" areas into a cheap house, where no one knows you have much money, sell the expensive car

Or move into a gated community ... if you can afford to stay there for the duration (and buy a cheap car for when you have to go to work or go outside the gates to get groceries)

I don't understand what additional preperations one could do that would need to be discussed in secrecy to prevent "central planning" from finding out what your doing and stopping it. Unless the amount of money you have is so large that you could shut down a bank or move markets by withdrawing all your funds.

[Spartacus]

Re: The Practical Action Tips for Economic Crisis Thread

Just to pass along something I read - Marc Faber claims the industries and companies producing goods and services for upper and upper-middle income groups in Japan have been the hardest hit (job losses, fewer companies) since the collapse.

Companies catering to lower income and frugal types have done comparatively much better.

The reverse of what we've been seeing in the US the last 5 years - the high end doing much better than the middle & low.

Or, I suppose by extending what Faber wrote, those people who managed to keep their jobs in the companies that survived in the high-income sectors have done the best

I'm already implementing my plan.

Move 50% of money out of US and US dollars (check)
Found businesses based on upper middle slice of incomes with pricing power (check)
Avoid all debt (check)
Be fully liquid as much as possible in case it is time to board the last helicopter out (check)
Have 2nd and 3rd options on where to live should GDII really come (in progress)
Have 2nd and 3rd employment options out of country should GDII really come (in progress)

If we expect massive inflation IMHO doesn't it make sense to be in debt up to one's ears in long-term fixed rate debt (NOW, while the yields are still at historic lows), then later buy long term bonds when the yields are at historic highs.

This WILL happen (historic high yields) soon after the social security captive bid disappears, especially if foreigners stop buying the treasuries at the same time.

[metalman]

Re: The Practical Action Tips for Economic Crisis Thread

I guess Sapians is in the deflationary camp.

For the record, I follow EJ's old thread.... dis-inflation followed by lots and lots of inflation.

I have out my disco ball and trying to get the wife to put on some hot pants, because 70's stagflation here we come.....

ok, i'll play the jerk again. the diff between sapiens' position and ej's is that ej's is stated in dozens of understandable articles and analysis over many years. most of them have turned out to be accurate. sapiens, on the other hand, speaks in riddles. as lukester said, no expository. he doesn't really take a position. and as far as i can figure a position from the riddles it's that some pack of dudes somewhere is manipulating everything and their plan is to indebt then starve the masses into submission. that strikes me as just a tad paranoid. another 1930s mellon event? "liquidate stocks, liquidate farms,..."

i've done well following ej's ideas. wonder what sapiens was saying back in 2001. deflation coming? most thought so. mish et al thought so, too. heck, even the central bankers were saying that. but that ain't what happened.

[jk]

Re: The Practical Action Tips for Economic Crisis Thread

If we expect massive inflation IMHO doesn't it make sense to be in debt up to one's ears in long-term fixed rate debt (NOW, while the yields are still at historic lows), then later buy long term bonds when the yields are at historic highs.

yes, that makes sense as long as you don't lose what you have in the markets' roller-coaster ride.

[zoog]

Re: The Practical Action Tips for Economic Crisis Thread

ok, i'll play the jerk again. the diff between sapiens' position and ej's is that ej's is stated in dozens of understandable articles and analysis over many years. most of them have turned out to be accurate. sapiens, on the other hand, speaks in riddles. as lukester said, no expository. he doesn't really take a position. and as far as i can figure a position from the riddles it's that some pack of dudes somewhere is manipulating everything and their plan is to indebt then starve the masses into submission. that strikes me as just a tad paranoid. another 1930s mellon event? "liquidate stocks, liquidate farms,..."

i've done well following ej's ideas. wonder what sapiens was saying back in 2001. deflation coming? most thought so. mish et al thought so, too. heck, even the central bankers were saying that. but that ain't what happened.

Sometimes my image of Sapiens is the Oracle at Delphi. Are those cryptic, obfuscated mutterings really words of wisdom, or merely incomprehensible ramblings induced by hallucinogenic vapors from the Castalian Spring?

Other times my image is Scrooge McDuck. Alone in the Money Bin, gleefully counting his wealth, yet paranoid that the Beagle Boys will steal it away.

[c1ue]

Re: The Practical Action Tips for Economic Crisis Thread

Move out of an expensive looking house in the "best" areas into a cheap house, where no one knows you have much money, sell the expensive car

Spartacus,

I suggest buying a place in the foothills and spending 3 months a year there getting to know the neighbors.

When TSHTF, low income equally bad. The low income areas is where the riots will start, then move to the high income areas.

As for the 'cheap house' hiding your money - it is REALLY tough to conceal above average resources from people with little money.

They have very little else to do but spy around them for opportunities...

Just to pass along something I read - Marc Faber claims the industries and companies producing goods and services for upper and upper-middle income groups in Japan have been the hardest hit (job losses, fewer companies) since the collapse.

This is absolutely true. However, context is everything.

In Japan, there was (is) a very strictly defined system where manufacturers get x%, a single distribution layer gets y%, and the retailers get z%.

This is completely different than the US and most other countries where there is a mishmash - possibly no distributor, possibly 3 layers, and all areas with negotiable prices.

Thus Japan had a huge number of middle players catering to the upper/middle income groups.

However, relatively recently the big brands are now globalized enough that they are grinding down the other players via Toyota-like branding: not a monolithic series of cars, but a giant range of cars and brands extending the full spectrum.

This is how Shiseido ultimately comprises 4 of the top 10 cosmetics companies in Japan; the other 3 are different range brands.

But not to cry: I work with even smaller types: top 20, top 30 types. This is why they're hungry to go out of Japan - and the good news is that they have the packaging, quality, and financial backing to possibly make a go of creating extra-Japan brands though not world-class.

[touchring]

Re: The Practical Action Tips for Economic Crisis Thread

The reverse of what we've been seeing in the US the last 5 years - the high end doing much better than the middle & low.

The rich got too much money.

[Sapiens]

Re: The Practical Action Tips for Economic Crisis Thread

Sapiens -

Why not also offer your own posts as clear, simply laid out, and expository, rather than post in the form of oracular riddles and hints with suggestions readers here pursue copious amounts of your further recommended reading?

I am sure many people here would be quite grateful and appreciative of you sharing your insights in a clear, easy to grasp exposition, so they can quickly gain the essential points you are making. Reducing complex ideas to extremely simple terms is probably the very best part of iTulip. I'm sure you have many significant points to offer, but they seem often couched in the form of hints and clues, rather than simple exposition, which presume upon the time of readers to chase down those hints.

Your own appreciation of a succinct, actionable post by Finster is a great example!

Respectfully.

Lukester,

To those that lack a firm foundation of the fundamentals of money, my posts may read and seem cryptic.

Unfortunately, the only way to acquire the knowledge to understand the fundamentals is to edify yourself by reading the great body of knowledge left to us by the many individuals that came before us and left their discoveries in writing.

I could write something simple, but then I would do you a disservice if I didn’t first point you to read something someone else has already written that is clearly simple and easy to grasp, yet nevertheless fact, incredible to believe.

http://home.earthlink.net/~cadman777/aeonic_money.htm

[World Traveler]

Petroleum-based Fertilizers

Spaiens,

It's not a complete answer to your riddle, but a partial one. "How can it cost more to produce farm goods and farmers lose money while some people are starving?"

Most modern agriculture is based on petroleum-based fertilizers. Including the "Green Revolution" in the Thirld World. These fertilizers significantly up productivity of agricultural fields and farmlands. These fertilzers are heavily used almost everywhere, U.S., India, even poor Mali in Africa (read recent article on use in Mali).

AS PRICE OF PETROLEUM GOES UP AND GETS SCARCER, IT IMPACTS PRICE AND AVAILABLITY OF THESE FERTILIZERS.

It is possible, to wean farmlands off petroleum-based fertilisers, but it takes experimentation and ingenuity, since now one has to reckon with natural, cyclical depletion cycles in farm fields. Cuba did just that after fall of Soviet Union in the 1990's.

[Andreuccio]

Re: Petroleum-based Fertilizers

It is possible, to wean farmlands off petroleum-based fertilisers, but it takes experimentation and ingenuity, since now one has to reckon with natural, cyclical depletion cycles in farm fields. Cuba did just that after fall of Soviet Union in the 1990's.

From what I read, Cuba survived this disaster by planting gardens everywhere, including backyards and street corners. It may come to that here.

[dbarberic]

Re: Petroleum-based Fertilizers

Jim Sinclair's list of action items to survive the upcoming storm:

THIS IS IT!
There is NO PRACTICAL SOLUTION to this problem outside of an immediate recovery in real estate conditions representing the average prices that existed in 2006. The chance of that is zero.
THIS IS IT! My vision for 2011 is ugly beyond your wildest imagination. Are your prepared?

1. Do you have paper certificates for your shares?
2. Are you still significantly in involved with Internet financial entities?
3. Are you in debt beyond your fully paid physical gold?
4. Are you in an ETF in precious metals where you cannot take delivery of paper certificates?
5. Do you have significant funds in time deposits at your local bank?
6. Do you have Federal T Bills in the non- dollar Cando and Swissy?
7. Have you seen to it that your family is in a strong position?
8. Have you protected your company treasury?
9. Have you, to the best of yours practical ability, eliminated agents between you and your assets?
10. Have you taken delivery of your coins from your coin dealer?
11. Have you withdrawn your cash balance from all banks and brokers? Do not forget Citi restrictions on the amounts of outgoing bank wire money transfers.
12. Are you charting your liquid net worth on a weekly basis?
13. Have you studied the simple TA I have offered you? When the world wallows in complexity the only defense you have is to return to simplicity.
14. Have you seen the DVD, "The Secret"? The greatest wealth you can have is self confidence, which is confidence in the SELF.

Last and most important, do you have insurance against the failure of the system to function? Gold is that insurance policy you pray you won’t have to collect on, but you will. Gold is going to $1050 and onward to $1650.

Not sure I agree with the DVD The Secret being a critical survival item....