Are you preparing for hard times?

[CanOz]

Chris Martenson is now has Chapter 20 online.
What is the difference between a R E salesman and a Pizza??
A pizza can still feed a family of Four.

I just finished the Chapter 20.

Still a bit shell shocked after reading the last article in the thread about the Cat 5 financial hurricane...good grief what a mess we're in.

I would like to hold some physical GOLD. But i 'm not sure how to do this seeing as i'm in China...Faber reckons about 30% in physical.


What to do?

 

[tech/a]

and keeping 98% of cash in bank deposits.

This is fine provided accounts arent frozen and or inflation becomes an issue---particularly hyper inflation. Then thats the worst you can do!

 

[Pager]

I'm sitting on cash mainly due to I'm a futures trader, only downer has been the falling $A as i have my account squared to Aussie every day, means for any contract i trade not in $A I'm actually having to trade fewer contracts so i'm becoming heavily reliant on the Australian markets which for me isn't ideal.

Not sure why there is a need to hold gold as if the sh#t really hits the fan, IMO that will go down in value as well as who the hell will have the cash to buy it from you

I'm carrying on business as usual, when the cold war was on, there were more than a few who invested in fall out shelters and various other things to survive a nuclear war, couldn't see why and the same with this world problem if it gets so bad, money and our share/property portfolios will be the least of our problems.

 

[sinner]

Not sure why there is a need to hold gold as if the sh#t really hits the fan, IMO that will go down in value as well as who the hell will have the cash to buy it from you

You are correct, if the economic apocalypse comes then nobody will be buying gold.

Those I have seen holding are holding as a hedge against the massive currency debasement currently taking place in the US. I thought silver was supposed to be the defacto apocalypse currency anyway? You can't exactly break off a chunk of your troy ounce of gold but silver coins are relatively abundant and no government in the world can legislate gold or silver into existence (as opposed to several hundred billion dollars written in quicker than I could say bailout).

The US government stopped publishing M3 data a few years ago now but you can figure it out yourself using this rough equation from wiki

M3 = M2 + large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets

A good friend of mine recently valued US M3 at approx 17 trillion.

 

[Pager]

This is fine provided accounts arent frozen and or inflation becomes an issue---particularly hyper inflation. Then thats the worst you can do!

seems to me it may well come down to a case of were will ones wealth be least eroded, were ever it goes its maybe going to be a negative return ?, cash, gold, property, bonds, stocks, all come with attached risk.

 

[numbercruncher]

In worst case scenario gold and silver as dictated by history become currency !

need not concern your self with what you can sell it for but what you can obtain with it - If an ounce of gold buys the same in a years time as it does today its a very cheap peace of mind kind of thing isnt it ? Its just money I guess .....

How long can these sneaky manipulative central bankers keep the masses enthralled by their created out of thin air dodgy fiat stuff anyways ?

My Gold investment has been a solid performer, paper money is just so .... fake and 20th centuary, time for a change !

And gold is just so pretty to boot !

 

[theasxgorilla]

This is fine provided accounts arent frozen and or inflation becomes an issue---particularly hyper inflation. Then thats the worst you can do!

Is it then better to get it into property in you opinion?

I also have cash and the need/opportunity to acquire another property rather soon (3-6 months...not in Aust). Just wondering how big I should buy. I think inflation is a big issue and will likely come well to the surface after all this crisis dust settles.

 

[The Red Baron]

Sure am preparing for the hard times.

Got myself a second job of 20hrs a week. Enough to pay the loan if the Full time job falls through.

Living at home with the olds, i'm 25. Was looking at moving at and renting my $250 a week better off at home. $50 a week board is better than $300 rent.

I also see this as an opportunity to put some hard work in. With the extra money not sure whether to reduce loan currently 8% interest only loan, open a First home saver account 17% interest tax free (4 yr catch but!) or maybe dollar averaging in a managed fund over the next few years.

Just need to try balance everything out and do some research.

My Super have been hit pretty hard but got alot of working years ahead of me. Block of land is no doubt down a bit too. But if I sacrifice the holidays and work hard could be a few opportunites out there down the track.

 

[tech/a]

Is it then better to get it into property in you opinion?

I also have cash and the need/opportunity to acquire another property rather soon (3-6 months...not in Aust). Just wondering how big I should buy. I think inflation is a big issue and will likely come well to the surface after all this crisis dust settles.

In a case of hyper inflation holding a tangible asset is all that can hedge you from the rampages of eroding cash levels.
As the cost of replacement just gets out of hand.
My personal view is to have atleast some hedging in case this unfolds.
So gearing down and holding.
Falling interest rates just place some cream on top in a period of minimum cream!

 

[Pager]

I'm no expert but thinking about it overnight, if inflation starts to become a serious problem particualy hyperinflation then being fully invested in possibly the share market may be the best option ?.

Particularly if you went for company's like WOW,WPL or any large company with a strong balance sheet and a product/service that we all need in our everyday lives.

For those with deeper pockets maybe buying a tenanted farm, unless of course you have expertise in that area then it may well come in handy

 

[numbercruncher]

If hyperinflation occurred those fully in debt at fixed interest rate and invested in physical assets would benefit big time!


As for shares it would really depend on the entitys situation - a debt free company with loads of cash would see the purchasing power of that cash destroyed pretty fast I would tip ...... ya realy case by case stuff!

 

[Spaghetti]

My plan.

Cut down on what we spend, this has been easy once I actually sat down and reviewed expenditure. I mean we found we spent $1,000 a month on phone, internet, pay tv and wine. Pensioners live on that for everything so took the axe lol. Cannot quite stomach cask wine for some reason so maybe just have wine for a treat from now on. Now Telstra have announced 5gb for $90 per month for us stranded without land based broadband net access so that will be a massive saving.

Multiple income streams.

We tried without success to secure any worthwhile work these last seven months. The most common knockback reason for me was too much experience in what I have done, so I am going to start my own part time business utilising these skills to provide efficiency savings to local business.

Seasonal work.

We are working on inexpensive gifts for Christmas, Father Days etc This work is to be done when we are wasting time watching TV or doing nothing. We are going to work 60 hours a week no matter. If we get $5/hour then better than 0$ per hour.

Online income, Have some income from online work though no guarantee it will be ongoing, is a start and am looking at other ways to make money sitting on this computer each morning while I have my coffee.

Trading. Even though have not done much trading this year am studying to be quite expert in a few sectors and will focus only on them and not be influenced by hype in the future but rather on what I have thorough understanding of. Not sure this will be useful in the short term but at some stage I belive it will be valuable knowledge.

Dog trainer. Am considering becoming a dog trainer for basic commands once I have figured out how to train my own dogs not to eat cane toads or protect me from little old ladies with walking frames. They think it is a weapon.

Entertainment. We left the rat race to work on the road for a while and we will do this again for one month a year to subsidise our annual holiday.

Our land. We live in the tropics and have some awesome fruit trees on our land. Instead of letting the fruit bats eat our crop we will actually start harvesting as yield can be substantial. We also plan to plant some trees that fetch premium prices when they are a few years old.

Motor vehicle. We are going to offer driving service so we can cover some of our motor vehicle expenses. We do not want too much work as adds to kilometer reading but a little bit to cover insurance etc. Not sure if this will be viable, still researching but am determined to make this expensive investment help pay for itself in some way.

So basically using our assets to gain income be it the house, car, skills, land, computer etc. I have have about 30 plan B's and actually feel excited about being involved in many different projects. Better than going for job interview after job interview and being knocked back and then wallowing in self pity. Important to have plans and goals and be employed. Then if you do fail no regrets as you did your best.

 

[Spaghetti]

Sorry, did not realise I wrote so much.

Plan C, stop waffling lol

 

[numbercruncher]

Now Telstra have announced 5gb for $90

Im with Virgin its only 39 a month for 5gb including paying off the Modem ( they use the optus network )


Sometimes I wonder how Telstra manages to get customers!

 

[Spaghetti]

Yes noticed Optus have a deal now also. Just do not know how it works. I know when I had virgin mobile could not get a signal in some areas whereas could with telstra mobile. As it is now only get very low signal most of the time and spend half my life walking around trying to get better reception. Reminds me of when I was a kid with TV airiel. If I moved a kilometre away I cold get the same bundles as most of civilisation is offfered, am in some sort of telecommunication bermuda triangle though.

 

[theasxgorilla]

If hyperinflation occurred those fully in debt at fixed interest rate and invested in physical assets would benefit big time!

Yeah, exactly why I asked the question. Wondering if I can buy a quality property for 10-20% of it's '07 price highs, should I leverage to the hilt* if I can also secure 10 years at sub-5%.

*That would be my version of the hilt, since I never leverage to the hilt because I'm a great big chicken.

 

[Pairs Trader]

A lot of the time when hard times hit thats the best time to build a base so when the good times return and they will, you will be best postioned. Just my humble opinion.

 

[MR.]

Our debt “The Australian debts” are held by consumers (not government) and who holds these debts? Banks.... and the risk "their depositors" (However, the Australian government now guarantees the banks) Had to follow other parts of the world in their lead, had little choice....

Government bonds still have priority over banks for me.

Leveraged investors, investing in leveraged companies, selling to leveraged consumers.... ummmm

I guess if one waits long enough one will always be right. Where did most of "our" debt originate? Property. Either direct or from its equity.

Once our home sells we will hold Government Bonds (if possible) and cash for now. Will invest holdings in property and some shares but not yet. Perhaps that will be "still" years away.

 

[MR.]

Have not sold original house yet. Should have done the transition sooner than now but it took some time to find the right acre. But I still think its not too late to sell and it is on the market now. However I am expecting some decrease from all the media down grading property.

Still have not sold original house. Have to take approx 20-25% lose to sell. (water front) Should just do it and move on. If I do interest rate cuts will encourage buyers back. Just my luck of late.

Also Ill add to this thread hairdressing from home by my wife.

 

[numbercruncher]

Still have not sold original house. Have to take approx 20-25% lose to sell. (water front) Should just do it and move on. If I do interest rate cuts will encourage buyers back. Just my luck of late.

Also Ill add to this thread hairdressing from home by my wife.

If you sell you property you will lose 25%?

How long have you had it?