The unraveling of the stock market doesn’t surprise me. My only real surprise is that it’s taken this long to tank. Of course the market could just as easily rise to new heights in the next few days or weeks. Since the market has been unhinged from reality for decades, it doesn’t really matter what it does. For some time I’ve viewed it as a mechanism for the big guys to rob the little guys. The only way for an individual to win is to not play the game.
The fundamentals of our economy is what interests me. Our fiat money system only works in an expanding economy. Cheap oil is what allowed the economy to expand so much for so long. Peak oil happened in 2005. The cheap stuff is gone. Supplies will be harder and more expensive to get. The game has been kept going with smoke and mirrors. Unfortunately, since the downgrading of US credit, the world has seen the wizard behind the curtain.
Currencies have a lifespan. Over time the value gets diluted down to the point where it’s essentially worthless. In the past, when a currency failed, there were other currencies to flee to. Now there isn’t. Almost all global trade takes place in dollars. There’s nothing big enough right now to take its place. Maybe in the future China’s currency might do the job, but right now they have problems of their own.
Plenty of people put their faith in precious metals. To be fair, historically, it’s been a safe haven. If that works for you, fine. I’ve a friend who bought physical gold around $300/ounce. Last I heard he was looking for a big cruising catamaran and planned to head to South America. As for me, my only gold investment is the wedding ring on my finger. Since my wife is a pearl beyond price, it’s been a great investment. My head tells me precious metals are the way to go, but my heart just isn’t in it.
What is really valuable to me is my family and friends. We are there for each other in a pinch. My good water well that can be accessed with something as simple as a bucket is hugely valuable. The trees on my land that can burn in my woodstove are valuable. The fish in the lake are valuable. The game running around my swamp is valuable. A bit of stored grain and beans is a pretty good insurance policy against immediate hunger.
For years my wife and I have prepped to have some basic security in real goods and relationships. With that done, I don’t really have to worry about the stock market. Even if we loose all our stuff, it’s just stuff. We still have family, friends, and the knowledge in our heads.
The real immediate danger is what other people will do. When the guy who’s been waiting for the economy to improve so he can go back to work realizes there is no recovery, there will be hell to pay. When all hope is gone, the smashing and looting begins. It could get ugly. My plan is to sit out the unrest as much as possible. I pity those people who live in big cities.
That’s not to say that rural areas don’t have crime. Robberies and violence are up in the country too. There are desperate people everywhere. At least in the country, there are a lot less of them. Still, there may be a time of wandering robber gangs hitting isolated farm houses. That’s where having some level of community solidarity is important.
It’s still possible to go into the grocery store, spend a few hundred dollars, and have basic food security for some months, depending on family size. You’ve got to shop wisely: rice, dried beans, lentils, dried peas, cooking oil, flour, and some spices. That’ll keep you from starving -if you know how to cook and have backup methods of cooking if the grid goes down. If you don’t have these basics, go out and get them -today. It’s stuff you’ll use anyway, right?
My situation isn’t perfect. Nobody’s is. There are no guarantees in life. All we can do is improve our chances. Make sure you’ve got at least the basics. My guess is that your food stocks will be much more important to you than stocks in the market. Make sure you’ve got at least that basic investment in your future.