As The World Continues to Burn…

Burning WorldI wanted touch on some of the themes Charlie discussed in Charlie’s Plan B. At this point in time it should be obvious to even the most skeptical reader that a complete meltdown of the world as we know it is far past the point of no return. Protesters are flooding major cities world wide and more than occasionally these protests are turning violent (usually it’s the police brutalizing the protesters though). The end of the Euro and multiple sovereign defaults are discussed openly in the mainstream media. More wars seem to be on the verge of erupting, in the Middle East, Europe, and Africa. Most of these things are events that the average Westerner would have dismissed as impossible just a year or two ago. Financial chaos in most of the developed world is looming, along with the accompanying totalitarianism of leaders desperate to maintain power. Who are the retards that still think everything is going to be fine and what planet were they born on?

The end is growing nearer and you are running out of time to cover your ass. Now is the time to be amassing gold, silver and other real hard assets that will have some value with or without stable currency. It’s also time to get out there and start scouting out a number of potential Plan B hideaways. Nobody can forsee where the safe havens will be with absolute certainty so you better have a few options on the table that you can live with. It’s time to get your bug out bag ready (see Emergency by Neil Strauss if you don’t know what a bug out bag is).

While generally Charlie and I frown upon unnecessary debt, the time is growing near when it may make a lot of sense to incur as much debt as you possibly can, first in Euros and then Dollars – especially if you can get it at a fixed interest rate. The serious downward spiral in the value of these two currencies has yet to begin, despite what has happened to date. You will be able to pay off those loans with much cheaper Dollars and Euros down the road. But don’t do some stupid shit like go buy a new car, or a bedroom set or more flat screen TVs and video games. Save that shit and invest wisely in something that will move inversely from these two doomed currencies. Later you can buy all the toys you want. At the height of the panic all non-necessities will be available at fire sale prices. Be patient! Don’t be a premature ejaculator with your personal finances.

Do you have shit that you don’t really need? Sell it. You can buy it back later for less. Now is the time to live frugally, in most cases rent real estate don’t own it. Stock pile your precious metals and keep some cash on hand for bargain hunting. Find 5 or 10 cheap beautiful places that can be your paradise and your bunker for a few years while all this shit blows over. It’s going to get real ugly just when you least expect it. Be prepared.

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  • Aristotle

    I think borrowing money is one of the best hedges you can make against inflation. These are historic times in terms of cheap financing. Borrowed money has such a black eye right now that people are overreacting to what are otherwise bargain conditions (NOW).

    That having been said, and even if you have the relative means, I dont think that you take this opportunity to upgrade your house. Overspending on non-productive assets is always a bad decision then and now. If your house is too big, if your car is too big, if your vacation is too big these are all things that will drag on you. And at best have flat to modest appreciation in value and end up limiting your future options. Because that is what it is really all about. Money = Options = Freedom. On the otherhand taking measured risks, investing in income producing real estate (for example) is a wise decision in this market.

    Of course each deal stands on its own merits and there is probably a 5 – 95 ratio between deals and crap and it take some doing to recognize the difference. But lets say you overcome that hurdle. If your absolute net return on real estate year over year is 12% you are killing it. Assuming you finance that 4 plex at 3-5%, you are putting away fat stacks or shiney bars or whatever. Assuming still that if the world unravels, which to be honest could actually happen (I am not putting any odds on it) at least from the standpoint of people who have saved their entire lives. There may come a point where the dollar and new dollar (before it is redemoninated) will present an opportunity to people holding postions in gold and other hard assets (and existing cash )to redeem mortgages before redenomination of debt into new dollars.

    But perhaps the biggest advantage is that if you borrow money, ultimately it is the lender’s money. The lender is taking much much much greater risk than you are. And if you have seen the way the real world works you will know that your going to be alot better off if there is a bad turn in life (forget about global meltdown, I am just talking run of the mill failed business) with a shoebox full of anonymous money than you will be with X dollars of the same in equity that cannot be eaten. Anyway, connect the dots on this last point. If you still don’t understand ask your neighborhood bartender to interpret.

  • dag mastr

    I’ve heeded yours and others warnings a while back, and as the old saying goes poor planning on your part does not constitute an emergency on mine. I really don’t look to government to help me when their the ones who’ve put us here. When the day comes you’ve got rioters surrounding your home its too late. Might not happen but just look at Greece, if Lehman Bros. could make as big a mess as it did what will happen when a country goes under?

  • Matt

    Where do suggest places to hide out in?

  • Anon E. Mouse

    What hyperventilating horseshit.

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