The Crash Course - Chris Martenson [133]
My preparation group is now working outside of our core and exploring ways to help get our larger community into a more resilient position. I’m only as secure as my neighbor is, and we’re only as secure as our town, and our town is only as secure as the next town over. But it all begins at the center, like a fractal pattern, with a core of resilient households determining how the future unfolds.
The sixth concept of preparation is that community is essential.
Protecting Your Wealth
The time has come to put one foot in front of the other and take responsibility for your own financial future. We’ve entered some truly treacherous investing waters, where we must question everything and accept nothing, even (and especially) the base assumption that any given currency, be it the U.S. dollar or euro or yen, will retain its value. If you ascribe to the view that our structural predicaments in the economy, energy, and the environment won’t lend themselves to easy fixes involving injections of thin-air money and more government deficit spending, then you should take steps to protect your wealth from the likely consequences of those ill-fated efforts.
What follows are the initial steps that I undertook when I first became convinced of the depth and the seriousness of the predicament we’re in. Whether you choose to do something similar or very different is entirely up to you. I only offer these suggestions for your edification and consideration, not as specific investment advice.
1. Get out of personal debt. This means paying down what you can and taking on no new debt, especially if it won’t increase your future cash flows. During the Great Depression, debt was a killer. During the 1990s and 2000s, credit (debt) advanced the living standards of many and became to be viewed benignly as “something to manage,” but the ultimate price was high. Being in debt severely limits your options during good times, and it’s a positive destroyer during down times. Less tangibly, being out of debt feels really, really good, as if an invisible weight has been lifted. During stressful times like these, removing a nagging source of worry has a value all its own, which should not be underestimated.
2. Get some inflation protection. We can be fairly certain that we’ll see inflation over time, especially as resource constraints appear while electronic money presses are working hard to conjure up an economic miracle. But there’s another potentially concerning source of inflation in the trillions and trillions of dollars in U.S. debt held by foreign countries that would wreak havoc on the dollar if their holders felt it necessary to cash them in all at once.
So what does it mean to have good “inflation protection”? It means holding non–paper-based assets. Gold, silver, oil, grains, and base metals are a few examples that will suffice to help navigate the first period of transition away from paper and toward things. My personal choice has been to hold gold and silver, but there are many other reasonable vehicles. For those who are interested, there’s a short document available on my web site that details the hows and whys of gold/silver purchasing (www.chrismartenson.com/buying_gold).
On a longer-term basis, moving funds out of paper wealth and into productive assets will certainly be the way to go. In this regard, holding titles to productive sources of energy such as gas fields, oil reserves, woodland, and electrical production (such as wind towers and other alternatives) offers the best chance of return, regardless of whether your local currency holds its value or bursts into flames.
3. Diversify out of U.S. dollars. Many residents of European countries consider holding all of one’s assets in a single currency to be a sign of madness. Of course, Europe has a history of repeatedly and violently supporting the validity of this viewpoint, but you may also want to consider that the highly wealthy in the United States traditionally handle their affairs with assets in multiple currencies and countries.