Economy musings

Originally published at Notes from the bunker…. You can comment here or there.

Being prepared requires, for good or bad, that you maintain a certain amount of awareness about what goes on around you. Sure, this is meant literally…as in making sure no one is standing behind you at an ATM, etc. But it also means being aware of what is going on around you on a larger, broader scale. To me, that means having to stay on top of the news. Not parked in front of the computer 24 hours a day hitting the ‘refresh’ button every thirty seconds….just taking a few minutes a couple times a day to view US and, especially, non-US news sources to see whats going on in the world. The problem with this is that, as a wise man once said, when all you have is a hammer every problem looks like a nail. Meaning, when you’re gearing up for the end of the world every news item looks like a portent of the apocalypse.

Current frontrunner for being the catalyst that throws the world into chaos is the current economic crisis that is dominating the news. I was rereading some of my earlier (like 2003) posts and I pretty much said that the big threats that would be coming would more likely be economic than terroristic. I might have been right on that one. This debt ceiling debacle is dominating the headlines and the way people carry on you would think we’re going to devolve into a Mad Max-ian dystopia if we don’t borrow more money that we cant afford to pay back.

I’m not sure I’m all that concerned. Raised or not, there’s going to be unpleasant economic consequences either way. They won’t appear overnight, and they won’t appear as grand and dramatic sudden changes, but the consequences will exist nonetheless. (I’m reminded of Rand’s statement “You can ignore reality, but you cannot ignore the consequences of ignoring reality”) Higher taxes, unemployment, currency valuation issues, etc, etc. It’s looking like a choice between a death by a thousand cuts or a death by two thousand cuts. Really, there’s absolutely nothing I can do about it so I’m simply going to follow it just out of curiosity to see how it turns out, and instead focus on mitigating, if possible, the consequences.

A trip through CostCo the other day showed that prices continue to rise on many items and on the items that are ‘holding the line’ you can see tricks to keep prices static. My ice cream costs the same, but now it’s 1.5 quarts instead of a half gallon…same size container though, so you dont notice. Toilet paper that used to be 500 sheets to a roll? 400 sheets. Same price. Five pound bag of sugar? Four pounds. It’s subtle, and you may not notice it, but these are the tricks and gimmicks going on at the moment to keep you from noticing that prices are going up. More than ever, you need to do the math at the supermarket these days and see just how much youre paying per unit/pound/ounce/gallon.

I’ve mentioned it before, go read The Alpha Strategy. It makes the argument, much better than I can, that one of the most sensible things you can do is to stock up (heavily) on things that you’ll always need and will likely be more expensive later. I was rereading some posts from 2004 and apparently back then I was buying 7.62×39 for $90 a case of 1000. That warm, nostalgic, ‘gosh I wish I had stocked up’ feeling that youre having right now when I talk about $90/1000 ammo? Imagine that exact same feeling about disposable razors, toilet paper, sugar, socks and car tires.

I started this post about having to stay aware of things by watching/reading the news and, as usual, it evolved into something else. Well, writing is an organic process…you never know where it’s going to end up.