Originally published at Notes from the bunker…. You can comment here or there.
Being President is, in a few ways, much like being a survivalist. For this discussion, Im going to focus on one particular way in that the two are similar. Being President requires an enormous amount of expertise on a myriad of diverse topics. We can agree on that, yes? Knowledge of economics, foreign relations, geography, various cultures, historical precedence, international law, labor relations, etc, etc. It really is a rather lengthy list. Same thing for survivalists…ideally, we want to know as much as we can and be practically experts in food preservation, cooking, medicine, tactics, carpentry, electronics, plumbing, animal husbandry, farming, gardening, self-defense, auto repair, personal finance, etc, etc.
Both people, Presidents and survivalists, quite likely, are never going to master every single one of these disciplines that they need to know, even though it would be desperately useful if they could. So…what is the next recourse? You surround yourself, or make available to you, people who are experts. You have foreign policy experts, economic experts, etc. When its decision making time you pick their brains because they are the expert that you cannot be.
Same applies for survivalists. In this case, its the economy. I know a tiny bit about economics. Very tiny. I can have a grasp of fundamentals and maybe even connect the names to the policies, but thats about as far as it goes. What I do have, however, are friends who are far more savvy on the subject and whom I trust to give me good information. (The problem with bringing in an outside expert is always that you never know if theyre right or not…after all, how would you know? Youre not the expert, right? Solution? More than one expert.) So in the course of my day-to-day interactions I’ll say “What do you think about [economic headline]” and then listen carefully to the answer.
In addition to close friends who are knowledgeable on this subject I can also observe what goes on around me and scan the internet for more information. I may not understand why all the business are boarded up and the job centers are full of unemployed people, but I can certainly use that to gauge that, indeed, ’something is up’.
My opinion, which I freely admit is worth exactly what you paid for it today, is that things are, as they say, doubleplus ungood.
Our .gov is manufacturing money on a scale that is literally unprecedented in the history of this country. You know how we’ve been tsk-tsk’ing over the antics in Zimbabwe where they have something like 89.7 sextillion (1021) percent inflation? Our .gov is doing the same thing, just not on as blatantly a wholesale basis. As I understand it, its pretty simple: more money means that money is worth less. When one piece of green paper equals a loaf of bread, suddenly doubling the amount of green paper means each piece is now worth half a loaf of bread. (Or, if you prefer, a loaf of bread is now worth two pieces of green paper instead of one.) Thats inflation – an increase in the amount of money in circulation.
So, in the last couple months, our .gov has been creating more of this stuff at an amazing rate. According to economic theory that means that as they keep making more of it, each piece of it is worth less and less. When .gov says theyre going to spend a trillion bucks on ‘infrastructure’ and ‘creating jobs’ where does that money come from? You think you can raise a trillion dollars in taxes during a time like this? Nah…you simply create the trillion dollars with the stroke of a few keys and the support of the political establishment.
Thats all great, but whats that got to do with the price of tea in China? (or ammo in WalMart?)
It means that inflation is a real likelihood. The kind of inflation where the $600-every-two-weeks that used to pay your mortgage and groceries will now only pay your mortgage. It means that the $5000 you scrimped to save because that would cover you for a couple months of unemployment will now only cover you for a couple of weeks. It means that you are working 40 hours, getting the same money, and that money buys less than it used to…you are, in effect, taking a pay cut.
Now, lets couple this with you losing your job. You’ve been nervous about that so you’ve stuck $5000 in the bank. Yeah it only draws 1.1% interest, and with inflation running several times that you actually lose money by having it in the bank, but you feel safer knowing that when you log in to your online banking theres that magic “$5000″ staring back at you from the balance line. One day the boss tells you not to bother taking off your coat…plant is closed, heres a weeks salary and good luck. Youre concerned but not panicked…you’ve got $5000 in cash if you need it. But…milk moved up twenty cents a half gallon. Gas is up twentyfive cents a gallon. Utilities are up also. And wasn’t ground beef and chicken cheaper last month? Suddenly that $5000 umbrella is covering less and less. Your dollar is buying less and less…and you don’t have nearly enough dollars.
Two thoughts on this subject:
First, this is the scenario that seems to favor the ‘precious metals’ (PM) devotees. Thats right…you can’t eat gold, you can’t burn it as fuel, and it won’t grow into food. Therefore it is worthless, say the detractors. And, if you were living amongst the bushmen of the Calahari, they would be, mostly, correct. But, we arent talking about living in the Mad Max world. We’re talking about living in the world that comes right before the total collapse of society. The world of hyperinflation, wheelbarrows of cash, economic desperation moves, IMF emergency meetings and market turmoil. When you have lost your job and that $5000 in the bank will only buy you the safety that previously cost $3500, well, thats when that PM starts looking mighty good. If I could afford it, I’d have a nice little stack of gold and silver in the safe. As an investment? No. As a way to buy the things I need when the green paper in my pocket becomes worth less and less.
Secondly, after being reminded about it over at TSLRF, Im reading ‘The Alpha Strategy’ by Pugsley. (Free online). Part of what is advocated in the book is something I’ve been saying all along – stock up while things are relatively cheap and available. You know those guys that have 200 rolls of toilet paper in their basement? The case of 50 toothbrushes? The 55-gallon drum of laundry detergent? Theyre following that game plan whether they know it or not. You know that youre going to use ‘x’. You know ‘x’ will cost more later. ‘x’ will keep indefinitely in storage. Therefor, wouldnt it make sense to buy as much ‘x’ as you think you’ll need while you can still get it affordably? (Odds are youre doing it right now with ‘high capacity’ rifle magazines.)
I’m the most self-deprecating paranoid survivalist you’ll ever meet. I’ve no illusions about my ability to understand, much less forecast, the maelstrom that currently is swirling around our economy. Maybe I’m just one of the millions of people who get caught up in media-driven hysteria and fear and things just aren’t really as bad as they seem. Maybe Im a lemming who parrots the media and is easily manipulated. So…I won’t tell you “Hey, we’re in deep doggy doo…here’s what you need to do”. Instead I will respectfully urge you to take, say, an hour and do some investigating online. You dont even have to get out of your chair. Get a cup of coffee, turn off the radio, and open your mind. Go do as much research as you can on what the results are of this uncharted territory that we’re in regarding this sudden generation of ‘money’. Check out what has happened historically when someone fires up the printing press and starts running the stuff off in the figures we’ve been told. Check out what inflation will do to the ‘buying power’ of what you have socked away ‘for emergencies’. Play ‘what if?’ and put yourself into various scenarios. If you do that and you are convinced that youre going to be okay, then Im happy for you. I hope youre right. Maybe you’ll decide that perhaps a bit of caution is called for ‘just in case’. Maybe you’ll spend this weekend buying blue barrels and filling them with wheat and rice. But I urge you to find out for yourself. I think that we’re heading for some interesting times and I think that if you look at the information thats out there you’ll agree.