What if

What if I am not chronically depressed and things are going to get far worse? I recommend you actually read all this for your families' sake. Indeed, if things really crash and you have prepared, you will profit by the collapse, though that is a hard way to look at things.

I gathered some notions as to how to create a plan, if you are so inclined to panic. What is the point of predicting gloom - just for the hell of it?

It is easy to mull over my grumpy observations as going overboard. Hope so.

What if they are not?

On the right is our money supply. Go here for definitions. However, note the out-of-control M3 that was no longer reported after 2005! I guess we didn't need to know what the banks and brokers were doing. As you suspect, the people who knew what was going on were working hard to hide it in the hope that it would, somehow, go away.

The green part is the real money. That is where we are heading.

First, read over what the Elliot Wave people say.

Excerpted from The Elliott Wave Theorist, January 22, 2009

"As we have long argued, because the current bear market is of one larger degree than that of 1929-1932, the depression it creates will be deeper, which in turn means that the unemployment rate will exceed that of 1933. The peak rate in 1933 was 25 percent. Therefore, unemployment in the U.S. should rise to about 33 percent at the trough of this depression. Fitting this expectation, U.S. job losses in the fourth quarter were greater than at any time since 1945, when World War II ended and defense factories shut down to re-tool. Even after this plunge, however, the 'official' unemployment rate is just 7 percent. But the true unemployment rate, as it would have been measured before the era of government support payments and statistics-fudging such as omitting the number of people who give up looking for work, is currently 17 percent. (This figure is courtesy of John Williams’ Shadow Government Statistics at http://www.shadowstats.com.) So we’re halfway there.

"Here is an excerpt from Conquer the Crash [Prechter's New York Times best-selling book]: 'When the bust occurs, governments won’t have the money required to service truly needy people in unfortunate circumstances.' It’s starting to happen: Agencies administering state governments’ 'unemployment benefits' are swamped and running out of money. In a depression, taking funds from healthy companies to pay people out of work is a scheme that cannot endure. Serious suffering will occur when reality strikes and governments are forced to rescind their promises to the unemployed and stop paying them."

Second, Mark S. Watson's blog:

10 Feb

Bullion Sales Hit Record In Rush To Safety - FT
Investors are buying record amounts of gold bars and coins, shunning risky assets for the relative safety of bullion amid renewed fears about the health of the global financial system.(end excerpt)

The key here is that we are not talking about 'paper gold' or ETF's. We are talking about put it in your hand and walk away with it gold. Now I don;t know if you can really get gold at the 'trading price'. I rather doubt it...

Third: From a Watson piece in Freedomwriter blog: The causes of our troubles, putting aside the charts and numbers, are

• Decreasing democratic input into national decision making

• Reduced or non-existent law enforcement on the rich and powerful

• Mental laziness on the part of the general population

• The increasing use of propaganda techniques in national news reporting.

• Plain old graft, theft, fraud and corruption.

These trends are accelerating and the wise should prepare for the coming economic shocks ahead.

Watson is a long-standing voice of warning. I used him because of his prior work.

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Things that must be done now for salvation, if worse goes to worst:

1. Delink from the "system." Assume you will have little to no money, soon. Now, you know how to delink because the entire problem is brought on by debt and consumerism. We are servants to mortgages, loans, and taxes; no, not servants - slaves. Time to throw off the chains. Now, as you know, the price of houses do not always go up.

If you can get out of a debt with a small loss, do it. Don't think about waiting because that small loss is like the treasure the bad guy would not release in King Solomon's Mines. It dragged him under. I could go on with detail, but if you just live each day like you will be broke in 6 months, you will get it.

Bank locally. The central banks are the tipping point and will continue to tip. You do not want your credit and debit card to stop being honored, one day.

If you are stuck in a mortgage, better start planing on turning the garage into an apartment. Sorry, but it may come to that.

2. Put away food, water, and items for barter. Recall, money may become irrelevant, as inflation skyrockets and you may lose your income. Seriously, store these items carefully.

Think about reality. What are the real needs, the real luxuries. A chocolate bar could be very valuable if all hell breaks loose, as would rifle ammunition. After food, think heat and power. Think hyper green: insulation, woods stoves, etc. Get that wood, etc. Perhaps, a water filtration system if you do not have your own sources.

3. If you have money, get rid of it. (If you don't - SAVE IT) At least get rid of American money. Buy any silver or gold, if you can find it, but it may be too late. Or, buy Swiss Francs and deposit them, even at 1% you are ahead of the game. Look for silver dollars, etc. I tend to think a nice gold mine stock makes sense. I think one can get Canadian precious metal coins.

You can argue that paying down debts in the future is better because money will be cheaper, that is assuming you have a job to make the payments. Even if this scenario works for you, why keep deteriorating currency? When the government tells you there is a 3% inflation, they tell as though it is the prices that are going up ----- the truth is the money is going down.

4. An interesting item I read all the time is: build your community. Get to know your neighbors as a tight community will hold together. Good time to plan a community cook out. I started watching the TV series Jericho on Joost.com, a sobering look at post-apocalyptic times. Today's Road Warrior.

5. The car is the big matter to deal with today. If there is a big debt, time to sell. If not, it may be time to become a mechanic.

Diesel is a better technology in the Third World. Be aware, if things go south, car insurance will become dear. It is mandated and an easy source of income. So, having extra cars may not be good idea. In all events, don't take out a loan. Buy crap that runs, if you think things are going to be bad. Even if you have cash to buy - wait a little while. Again, only secure a loan if you don't need a job to pay it (probably, the only time a bank will give yo one); then you will be paying down the debt with cheap dollars one hopes is in silver.

6. Change the mindset, the paradigm. It is not easy to be Scrooge McDuck while things seem to be just a little slow, but it may just be time to put off what others think. We do not believe in a collapse. It doesn't compute. Just doesn't happen, which is exactly why it can. The illusion of security and constant growth is secure in our minds and is our enemy. Do what you have to do and do so with a firm purpose.

If you live frugally, the worst that can happen is you save money for use in the future. Not a bad trade off for security.

I am off for a beer.