In God We Trust

21 June 2008

Preparedness

Posted by Joy Bischoff under: Emergency Preparation .

Guest Blog by Peter Anderson

For the thinking person, uncertainty begets contingency planning.

James McFarlane
http://www.safehaven.com/article-10556.htm

What To Do?
All we can do is hope for the best and plan for the worse. As a point of reference I will share with you the best advice I have run across.
• Lighten up on equity investments (securities)
• Buy gold and silver
http://www.discountgoldandsilvertrading.net/main.htm
• Buy food
• Become a farmer
• Stock up on the basics
• Keep some cash on hand
• Take some security precautions
• Buy a super-high gas mileage vehicle like a motorized bicycle
http://cgi.ebay.com/Bicycle-Motor-Kit-Honda-Motorized-Bike-Scooter-Moped-NR_W0QQitemZ310059552393QQihZ021QQcategoryZ7295QQcmdZViewItemQQ_trksidZp1742.m153.l1262
• Conduct a “disaster preparedness test”

Securities, once a safe bet, are not so secure anymore. A number of things could bring about a bear market, with many reasons listed throughout this article. Many believe we are already in a bear market. Several likely events could cause a sudden, precipitous drop in the markets. The reverse is less likely. The best take on the stock market I have heard is that we will undergo a stair-step drop in prices over the next few years; i.e. a sharp drop in stock prices, a sideways consolidation process, then another stair-step down. So, you may want to think about allocating a portion of funds, including any retirement funds you have direct control over, to alternate investments. There are a couple of thoughts below, but if you have a substantial nest egg I suggest you seek out a financial investment counselor not wearing rose-colored glasses.
When paper money loses its value people turn to real money. This means gold and silver. History teaches us this. Buy gold. In fact, I was speaking with a fellow investor a few weeks ago, and we both agreed that if we could only invest in one single vehicle, it would be gold/silver. Repeat, although a bit contrarian even with today’s relatively elevated precious metals prices, gold and silver are probably the safest investments you can make. You will preserve your wealth, and possibly multiply it. So. Did I mention . . . buy gold.

Stock up on food. Fill the pantry with foodstuffs that have at least a 1-3 year life span. Fill the garage if you want. What will it hurt? If it’s business as usual over the next few years, your car gets a little oxidized and you have a bunch of food to eat. But seriously, I often hear advice that at least a six month supply is wise.

Plant a victory garden. There’s a novel idea. I remember moving into a new house in suburbia as a six year old, and noting that my parents went to great lengths to keep down the various vegetables that would sprout up through the backyard lawn each year - in a prior incarnation the back yard had been a vegetable garden. Everything old is new again.

It would also be wise to stock up on staples in general. Toilet paper, candles, soap, gasoline, propane, medicine, water. The stuff you take camping. Solar panels and solar battery charges are a great idea.

Also think for a moment about the security of your family. If there is an interruption of power and/or food for more than a few days, there are unprepared people who will begin to get desperate. Desperate people do desperate things. In the event of a disaster, the local authorities and rescue centers will be overwhelmed and can’t be counted on. And don’t assume you can get cash out of the ATM. Keep some on hand.

Finally, think about conducting a disaster preparedness test. Take a weekend home and see what it is like to go without power and transportation. Yeah turn off the lights. The purpose of the test is to see if you have all the stuff you need to survive off the grid if need be. It seems weird to talk about power interruptions but the electrical power infrastructure is in a precarious state. The more self-sufficient you become, the better you will weather the coming storm.

You should also know that a key piece of legislation put in to law by FDR after the Great Depression has been systematically dismantled. The ‘Glass-Steagall Act‘ kept mortgage banking and investment banking separate in order to mitigate the chances of another depression. The law was mostly dismantled under the Clinton administration.

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