Maybe I'm missing something but I was at Starbucks the other day ago and next to me was this guy frantically making graphs and taking notes from Casey Research. Breifly spoke to him and he's convinced the world (economic world that is) is going to end next year lol. He's all in on Gold.
Maybe I'm out of the loop but I see too many threats that don't generate intellectual debate on WSO, so I'd like to open the thread to hear your global economic views for the next 6-12 months.
Are you putting all your dollars in gold and silver?
Do you spend countless hours a day mentally masterbating to ZeroHedge?
Are you stocking up on canned goods, guns and bullets?
or
Do you look at the world for its true face value?
Holler
Holler
I had a room mate in Hawaii who was completely convinced that the economic world was ending.... Dude has thousands in gold and silver, an entire room stocked up with canned goods, a separate storage space with even more, and guns. Lots of guns. Every night I was like "Sup brah" and he'd just glare at me while cleaning one of his rifles. Word is that he just bought some shack on the Big Island and is moving everything there. I shit you not, dude even has a "doomsday chevelle," this stripped, ratty looking matte black 1967 with a monster engine and not much else. Dude is on a whole other level.
Ever since living with him, and listening to his little doomsday gospel, I have actually started to believe that the economic world is NOT ending soon, and that these crazy fringe people are just that.... crazy. Very rarely are they able to come up with any evidence, or even an inkling of why they think the markets will crash. I would like to hear some rationale, because I am sure it's out there.
I don't know, maybe he'll have the last laugh.
A lot of the reasons are the same as always, really. Hyperinflation, oil shocks, war etc etc. I mean you've seen every possible scenario in a movie or in a book somewhere. In all seriousness if something cataclysmic occurs it will probably be something that all these people stocking up are totally unprepared for. It doesn't matter how many thousands of pounds of rice you have when the Mayan prophecy comes true.
I personally find that I can see where they are going with all of their worries, but I can't seem to find a realistic path to get there. I can see the inflationary worries, and I think there will be ugly inflation, but it is nothing that we can' t fix or recover from. It certainly isn't the end of modern civilization. It would suck to be sure but again, not cataclysmic. Besides, if a plague hits or a meteor hits or something like that chances are you aren't going to be perfectly positioned in your fall out shelter next to your food and stores.
If it's just a deep depression or total monetary debasement etc I still am of the mind that people have so much invested in society and the way it functions that it will sort itself through and off we go. I mean shit, we didn't think we could simply go up and up forever without a rough patch did we? Frankly the only chart that has really ever made me want to horde food is that sensationalist chart that is always thrown around with the time graph of oil versus population. But again, I go back and forth about that whole situation anyway.
I'm also of the mind that it might not be worth surviving the end of the world. I mean who really wants to live in a world where you sit around and eat canned beans everyday clinging to your rifle hoping marauders don't come and steal your shit? Maybe for a year or two it would be interesting but that's pretty bleak.
Loll! I wonder what his views on the Fiscal Cliff are...
Crosses arms "Well.. I DO know that it's steep"...
"It's steep and we're headed right for it"...
LOL
I could not imagine a full economic collapse that of which begins a WROL scenario anytime in this century honestly. That being said I love gold and I love guns, both of which I collect/invest heavily in and would feel very comfortable knowing that a solid portion of my net worth is effectively a hedge against financial collapse. If our monetary system went down/ government went down both gold and guns would shoot up in value making up for loss of value elsewhere (such as bank accounts and investments).
If you are spending all your money to prepare for an economic collapse right now, you are probably pretty crazy. But one can not argue that gold and guns are two very good investments especially with everything going on right now: An Obama second term and a Bernanke Fed...
I'm of the opinion that a lot of right leaning folks are going through the same existential and emotional angst that a lot of left leaning folks were in 2004. Despite the fact that some people just don't like this president no matter what he does, good or bad, the economy, the US, and the world will be alive and kicking next year.
What does concern me is people making extremely bad decisions based on their state of mind: I cringe when I see people buying gold at the top of the market, and I seriously can't watch as the morons in the news basically undermine public confidence in basics such as our currency itself, just because they're pissed off at the current political climate. It's irresponsible, ignorant, and almost criminal. It's easy for some quack (see: Glenn Beck) to make all sorts of wild speculations because if it doesn't happen, they still got paid...but the average person who is being whipped into a panicked state of mind stands to be seriously screwed.
One guy I know, who works in finance no less, even thinks that corporate cash reserves are so high because of QE3. Another thinks that China is going to wreck our economy next month, so they've pulled their entire retirement account out of the market this year...and it's up +/-14%. It's scary to think how incredibly misguided they are, and their judgement is clouded.
Sure the debt worries me, sure Iran worries me, lots of things could go very wrong....but I think a lot of people believe they absolutely will, or already have, and to the extent that they've invested so much in believing this they don't want to think clearly. Make backup plans in the event of disaster, but don't live with the thesis that the world is ending.
It's.going.to.be.ok
Psssh I bought a ton of gold when it has been at all time highs. One purchase was an ounce of gold for $600 back in the mid 2000s. It's worth over $1770 today.
An ounce of gold will hold its purchasing power throughout a persons lifetime. Gold is an inflation hedge and has a permanent value. What price you buy it at means very little, unless you are paying a ton of premium for certain types like pamp suisse.
If you are talking about people buying paper gold (gld or similar securities) then I could not agree more.
On another note, I wonder if there are any data points on the number of "the end is nigh" kooks increasing or decreasing. Anyone have any input? I'm seeing less of them downtown, maybe they're camping in midtown?
I'm just glad I played an obscene amount of the Fallout video game series in college, I'm pretty well prepared for everything.
Never understood the fascination with people buy gold and silver for doomsday scenarios. If it truly went cave man status there would be little use for it. I'd take a bow and some arrows over a brick of gold in that case.
Someone is gonna dig up this thread in a couple of years and laugh at our comments.
My biggest fear personally is more of just where is the world going and what does it mean for me. There are a lot of issues that people refuse to focus on, one of the bigger ones being humans over populating the earth, which has a way better chance of being our demise, not inflation or anything financially related for that matter. Some stats:
To take the analysis a step deeper, what happens when the planet reaches critical mass, when agricultural technology and volume doesn't even get us close to feeding the entire population (not to mention medicine and other vital supplies to live). Winners and losers start to emerge, some countries will geographically have an advantage, and have food, others wont. You can see where this is going, when a government has starving people and no other means to obtain food, what do they do...
I'm not one for doomsday scenarios, you can't really prepare for them so there is no point (minus guns, always in favor of guns). Even if I have all my money in a gold fund, unless i got the bars in my basement, if the whole thing collapses I will probably never see it anyway. And even if I have the golden bars in my basement, if something that serious happened it really wouldn't be worth much. If there is one thing we have seen in history though is that when a human being's back is against the wall they will do some pretty crazy things, the earth seems to be on the beginning stages of a path that leads to a massive population correction. It wouldn't be the first time it happens, albeit on a smaller scale (Great Depression leading into WWII, 60 mm people died, 2.5% of worlds population). I guess the scariest part is nobody really knows when it is coming or what it will entail. That is why it is impossible to prepare for. But if there are any Ben Graham disciples out there, like i said previously, we can be tremendously served to learn from history and the cycles of the world (financially or not). And history has showed that the earth resets and goes through major changes (I.e Ice age, shifting of Continents), so it would be pretty arrogant for us to believe that it will never happen again simply because we are human beings, even though this sound selfish i just hope I'm not around for it.
How do you best prepare for a Zombie Apocalypse?
"The Zombie Survival Guide" by Max Brooks
I have a different and somewhat gloomy disposition because of my wife's family. Her entire family was killed during the holocaust except her Grandma and Grandpa. Her Grandparents tried to convince the rest of the family to leave Poland, but they just kept telling them they were crazy for thinking that something bad would happen. The people who survive extreme situations are the ones who are prepared and seem crazy before something happens. The people who said that the mortgage crisis was coming were all belittled and sometimes called nutjobs. Same thing for people who said Greece was insolvent. I am most worried about food price inflation and the desperation and unrest that goes along with it.
We are on the path to a major global war, which is: Economic shock leads to protectionism leads to more economic problems leads to more protectionism and nationalism leads to racism and war.
This time around, the gov't was very effective at mitigating the market crash. Like it, hate it, don't understand it....they did bail out the system before it completely imploded, and we're been doing more trade than ever before and we will continue to. This time around, instead of rallying people around a war...which by the way just allows the politicians to control the debate aka "in these times of war" moral grandstanding...they are forced more and more to find more constructive and more durable means of building this country up. Peace and prosperity are worthwhile goals and those who go against this always fall into ruins, whether sooner or later. Look at the Roman Empire, look at the British Empire, look at our disaster of last decade or of the Kennedy administration. Dealing with a crisis or threat to our survival, such as pummeling Afghanistan, or WWII is one thing, but a permanent war economy for its own sake eventually blows out and if you hadn't noticed, America is teetering between highly engaged with the world and all out empire. One path is sustainable, the other is not, and I think there's plenty of time and resources...and brains...for the restructuring of America's overall strategy along the lines of what worked so well for most of our history.
Since most of this site is Republican, I'd like to offer two GOP presidents as a comparison: Teddy Roosevelt and Nixon. Roosevelt ran some engagements, but they were very limited campaigns, and his involvement with the rest of the world was groundbreaking: he was much more focused on building America up than beating other people out. Shine by excellence, not by skullduggery. Nixon, on the other hand, was a tyrant who specifically wanted and often spoke about a permanent war economy; yes because there are some benefits, but moreso because he was all about controlling people. HE KNEW he couldn't win in Vietnam but stayed in anyway, largely because he didn't get a good hard kick in the ass until it was too late. Poor LBJ inherited his mistakes. Again, we can get lost in details or just look at the overall direction.
The actions of the two approaches look similar at first glance, especially in the early stages, but the endgame is completely different. You can make up your own mind where we are headed, but my understanding is that there's a shift towards the first view, and the other view landed us in trouble a few years ago is being tempered with the realization that a decade of war, our longest ever, just digs a huge hole for us to patch up. Even within the Bush administration, both schools of thought are evident: his first few years they reacted well to an economic crisis (Enron debacle) and ran (originally) a military campaign with a very specific purpose(Afhanistan). Then they switched to imperial mindset and all hell broke loose...and we'll be cleaning up that mess for the next decade at least. That's when I left the GOP and I'm frankly shocked at the sheer stupidity and/or opportunism of the people still supporting those decisions. Clearly, one strain of thought won over, but it destroyed itself. How this isn't acknowledged is a testament to the failure of the educational system in this country.
It goes far beyond partisanship, it's more a reflection of the values of a generation and what projects/industries they sink their efforts into. I'm comparing the boomers to us, and frankly, I think the 40 and under generation is the smartest yet in our history, so I'm relatively optimistic. But the debt, well, yeah, that. It's kind of a bummer. If the zombies come, I hope they're engineered to eat deficits instead of brains....
This sounds pretty on point to really be honest
I can't say that the doom and gloomers are all crazy lol. The survavilists maybe a little ecentric. But I think the pieces to the puzzle are kind of in front of us. In regards to odds of shit hitting the fan and how things play out over the next few years who the fuck knows. It's safe to say that there is a large skew though towards negative outcomes (the question is how negative could things really get). It's interesting to see that the majority of everyone who has posted so far isn't dismissing the possibility of shit "hitting the fan"
What I wonder is how many people are completely out to lunch in regards to the actual global economic situation
sorry that's so long, I made no effort to edit and condense, sue me
Sure thing bro. You'll be hearing from my lawyer.
UFO INSIDER: First off, you are awesome and an obviously independent thinker. Now my counter-tirade...
You are correct; we are responding differently to this market crash. Bernanke is a student of history and a subscriber to the Princeton school of economics. He does not want to repeat the same mistakes. However, all the stimulus measures have caused serious long term problems. He has not fixed the problem, just made the initial shock less severe. Look at this chart http://stockcharts.com/freecharts/historical/djia19201940.html from 1920-1940 and count out 4 years from market bottom that is where we are. They have created moral hazard and they have eliminated creative destruction from the finance industry. In order to have long-term prosperity you have to kill off failing industries, not encourage them.
We have enacted a series of tariffs against China since the crisis and we are vilifying them in the elections. Look at Huawei, look at the auto parts manufacturers, look at the solar industry. We are pressing them hard, and by the way remind me how China taxing their citizens to lower the cost of goods for us is bad.
For Nationalism, look at the fight over the Senkaku/Daiyou or the resurgance of neo-nazism in Europe. However, war starts over resources usually. Japan attacked Pearl Harbor for oil. They needed the oil in the Phillipines and they knew that if they invaded it would trigger war with the US. So if they are going to attack us they might as well hit us hard. Now we are Japan's army and have declared that Senkaku belongs to Japan. The only reason anyone cares about the islands is for the nat gas off the coast and the likely oil that goes along with it. Syria is also about nat gas. In order to pipe nat gas out to the middle east to Europe you have to go through Syria. If you remember last winter Russia was squeezing Europe on gas.
I hate the assertion that WWII got us out of the depression. Since when does massive death and destruction lead to prosperity. We were well positioned because we were the last into the war and it did not damage our industrial capacity whereas Europe was destroyed. Look at Britain, the other victor of WWII, they had a dismal economy for decades to come. God I love a good rant!
As far as war being used to our advantage, or anyone's advantage, I'm with you. I see that approach as being extremely poor judgement and in today's nuclear climate...insane. In the past, and Europe is a good example, tough times called for a dictator and dictators tend to call for war: I'm actually ok with financial chaos as opposed to actual chaos. If it boils over and everyone goes to war, then so be it, but I do forsee a better negotiated future. Ultimately, the energy thing is huge and I can't for the life of me understand why the two priorities in politics aren't (1) debt and (2) system energy production.
And that's enough out of me
I don't think they're crazy. If the human population keeps growing as it has then we'll be in trouble. I don't want this to happen, but the only way we can shrink the world population is through a good old fashioned world war, like our grand parents use to have! They sort all kinds of problems out. Long WWIII
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