Sunday, March 11, 2012

It's The End! The End! Aaaargh!

Stansberry Associates has a new TEOTWAWKI vid out; they were pushin' it on the Ijit Tube this morning. I took a look.

Y'know how it's possible to be right in such a way that it looks like you're full of it? For instance, take a real figure, then say, "But if..." and outline a circumstance that's not gonna happen, like gummints suddenly having to pay the same kind of interest rate as you and me on previously-established debt, and then run with it as if it was the actual number? Yeah. Maybe not a real good way to go if the listener happens to be taking notes. They have a history of tellin' the truth a bit costumed; I'm assuming it's simply a bent for the dramatic.

But here's the thing: the sky really is falling. Uncle Sam's greenbacks are less and less obviously the Very Best Choice and their only saving grace so far is that everything else looks worse. The Euro is busy cuttin' itself off at the knees; Iceland's lookin' not Eurozonewards but West to the Loonie for their new monetary base. And the Fed, well, they have the Mint printing more U. $. Dollars just as quick as they can; more dollars chasing the same quantity of goods and services results in-- What is it called, class?

--It could be a whole lot worse than just your house payment turning into the cost of a case of booze; even if your pay chases within sounding distance of the rate of inflation (don't bank on it) and you own a very fine wheelbarrow, there could be worse in the wings. Right now, most international business is done in dollars. This helps keep our own homegrown currency as sound as -- gee, golly, as sound as the dollar. Everyone uses them; everyone has a vested interest in not lettin' 'em go lighter-than-hot-air and float away.

Alas, if way too many are out there, if the dear old $ gets inflated/devalued enough, no bank in the world will want to be left holding it when the music stops; no sheik or autocrat will price his $NATURAL RESOURCE in bucks if the value of 'em will evaporate before he can direct-dial Rolls-Royce or Bombardier.

There's still no serious contender for replacement; the next-most-traded currencies (Euro, Japanese Yen) aren't exactly in fighting form. But our old pals in Red China have been busy writing about the tottering dollar -- and wouldn't they just love to have banks of the world cherishing colorful Renminbi instead?

And what would that do to the price of all those colorful Chinese imports, from iPhones to Mall-Wart socks?

The punditry will no doubt advise sellin' short and buyin' gold. Me, I dunno; you can't eat it. Brass and lead and Parkerized or blued steel might be more-useful metals. And instead of stocks, we'd likely be better off with goats and chickens, with a garden and the distinctly non-1337 skills it takes to grow 'em up and turn 'em into food. Me, I'm thinking about getting the house re-insulated.

And we'll be wanting some expert advice before things fall apart. Me, I dunno from Wall Street -- I'm more interested in my street.

8 comments:

Farmgirl said...

Roberta, you know you can raise chinchillas for meat? Rabbits won the domestic meat wars because they have a slightly higher output for the input, and are easier to get big chunks of meat off of, but chinchillas (apparently, I haven't tried one) eat just fine.

Roberta X said...

I'll need to be pretty hungry before I eat rabbit. Maybe chinchillas taste better? --Ill-tempered, if I recall correctly, but I've already got a great big rabbit-bite scar on my left wrist.

Stretch said...

Both Germany and Switzerland are repatriating their gold from the U.S.
That indicates to me that:
1) Germany has no faith in the Euro.
2) Neither Germany or Switzerland have any faith in the U.S. as a safe place to leave their physical assets.

Details at: http://www.economicpolicyjournal.com/2012/03/is-germany-about-to-start-run-on-gold.html

http://www.zerohedge.com/news/switzerland-wants-its-gold-back-new-york-fed

Anonymous said...

The best thing people can get are skills, then tools, in that order. Guns go under the category of "tools."

eg, most people have no idea how to join two pieces of metal. Well, if the SHTF, the ability to fix stuff that breaks, then build new stuff tailored to your requirements, will become rather important. Knowing how to weld and having a basic "buzz box" (AC-only welding rig, which can be found used for between $100 to $250) and a supply of various rod is a pretty good investment. Likewise a gas-ox torch setup, again found at reasonable prices in the used markets.

Second item that's very useful: Metal files. Machinist files. There's all manner of things you can do with a good set of files, and I don't mean just sharpening your lawnmower blades. Most people have no idea how many hand files there are - all they've seen are the forlorn, cheap-assed files in Home Depot or some other big-box store. They don't know that there are literally hundreds of types of files out there, each with varying levels of cutting aggressiveness and purpose.

Earl said...

Breeding rabbits, don't take too much room. Oh, just read your comment on rabbit. Well, chickens aren't bad.

Blackwing1 said...

The big issue with inflation, even if it's only Jimmah Carter-era style rather than hyper, is that it adversely affects those who were prudent, lived below their means, and actually saved money. Inflation chops into savings like rats eating stored corn; each bite isn't a lot, but it adds up over time until what you were storing is worthless.

Debtors are the big winners (as you noted), since you can pay off a debt you incurred in real dollars (and got real things for, like a ginormous house) with inflated fiat dollars now worth a tenth as much. Even if your pay rate is going up at half the inflation rate, you still win if you were massively in debt.

To the central-planner-types attempting to micromanage our lives (and the economy), that's a feature, not a bug.

jed said...

Well, I can only say that the more I learn about what it would take to feel really prepared, the less prepared I feel. That Katrina story that Claire Wolfe linked to last week gave me pause for some more thought. I suppose it depends on what flavor of disaster you're trying to be prepared for.

Just recently, it hit me (why not sooner, I dunno -- too many other things on my mind, I guess) that if I have to bug out, I really want to take my tools with me. Uh ... crap. I don't even have them all in one place, to say nothing of fitting them in the not-so-decrepit Ford (I should really have kept decrepit Volvo, sigh) along with everything else.

Gold would be somewhat nice to have some of, if I'd bought it when I thought it was overpriced in the high 300s. Well, I'm sure you've seen the t-shirts at the gun show; "Ammo is the New Currency".

It's all looking like a big house of cards. I remember a while back Ahmadinejad was talking about starting an oil bourse running on the Euro. Not sure what happened with that, but it wasn't very prescient. China has their share of troubles too.

I not a complete gung-ho fanatic about specie money, but as you said, the alternatives all look pretty shaky.

Stansberry CS said...

If you have any questions about Stansberry and Associates, please do not hesitate to call customer service at 1-888-261-2693. We would be happy to assist you. We are open Monday – Friday 9-5 EST.