How to Survive the End of the World as We Know It - James Wesley Rawles [100]
Beauty Salon: Ladies’ styled haircut $1; Revlon manicure 75 cents; shampoo and set $1
Flooring Store: Rubber tiles 12 cents each; inlaid linoleum tile 5½ cents; vinyl tile 7½ cents
Grocery Store: Leg of lamb 65 cents/lb; breast of lamb 15 cents/lb; picnic hams 29 cents/lb; a fifth of Johnnie Walker scotch $6.38; Hills Bros. coffee 49 cents/lb
Car Dealerships: Current-model-year Cadillac convertible $4,395; 1957 Chevy (one year old) $2,195; 1950 Buick sedan, “real nice,” $165; 1954 Ford Crown Victoria V-8 $875
The prices in these ads illustrate the slow but relentless debasement of our currency. Before 1965, our coinage was 90 percent silver, and paper money was still redeemable in silver. Granted, wages were proportionately less, but since that time, any savings held in dollars has been inexorably eaten away by inflation, year after year. It is no wonder that the savings rate in the U.S. recently went below zero. Americans presently spend $1.06 for each dollar that they earn, piling up debt instead of savings. The inflation of the money supply is gradual enough that it insidiously goes without raising public alarm. Because inflation is so relentless, I recommend investing in tangibles—things like productive farmland, gold, silver, guns, and common-caliber ammunition. The dollar will surely continue to plummet in value, but for the most part tangibles will hold their value.
The debt merry-go-round cannot go on forever. When the average consumer runs out of credit, when the U.S. Treasury itself is no longer considered creditworthy, and when the U.S. dollar is recognized for what it really is (nicely printed toilet paper), then things will get ugly. If you stop making the payments on your car, the banks send a repo man to tow your car away. And when entire nations go into default, it usually signals cataclysmic events. Be prepared.
Inflation and Property Taxes
Creeping tax increases is one of the reasons that it is now nearly impossible for someone to “live off the land” on small acreage. Even if you own your house and land free and clear, property taxes are inescapable. Thus, in self-sufficient mode, although you can feed yourself, you still need a cash-earning job, just to pay the taxes. I pray that at the far end of the coming depression, our debt money system—which is the root of inflation—will be replaced by a system of sound currency that is redeemable in specie. That is the only sure, long-term solution to creeping inflation, and corresponding creeping taxation.
Although the chances of a long-lasting deflationary depression are fairly small (since I suspect Ben Bernanke will try to inflate his way out of this mess), it is prudent to do your best to maintain a cash income as a supplement even if you are able to live off the land.
Residential Real Estate
With the recent collapse of the mortgage market, my advice to you is if you have a second home, sell it muy pronto. And if you anticipate moving within the next two or three years, sell your house and rent. The hassle of moving to a rental is nothing compared to the mental anguish of being “upside down” in a mortgage in a plummeting market. The next five years will be a great time to be a renter.
One unusual approach that might be prudent: Sell your house to a property-management company, and then rent it back from them. Let them watch the value of the house go down. Meanwhile, you’ll sleep well.
Depression-Proof Jobs
In these economic times, which are marked by increasing corporate layoffs, many people have asked me about recession-proof jobs. If you get laid off and can’t find work in your chosen field, then you ought to consider taking a cut in pay to take a far less glamorous job. In Japan, these jobs are called the “Three-K” jobs: kitsui (“hard”), kitanai (“dirty ”), and kiken (“dangerous”). If you are willing to take on any of the Three Ks, and you do cheerful, ardent work