Pay off debt, stash cash, buy gold, or buy supplies?

Login or register to post comments Last Post 17288 reads   46 posts
Viewing 6 posts - 41 through 46 (of 46 total)
  • Thu, Jul 09, 2015 - 07:07pm

    #41

    Aaron M

    Status Platinum Member (Offline)

    Joined: Oct 22 2008

    Posts: 790

    count placeholder

    So…

So should we all max out our credit cards and just refuse to pay because it's likely the system will crash? 

Is it reasonable to believe that those in power will be willing to sacrifice the "debt" owed to them? 

I don't think it's at all reasonable to assume that this is unprecedented. While I acknowledge it was different, the Soviet Union collapsed as well. They had far flung impacts, but the nations that suffered the worst were their puppet governments. The U.S. Still has infrastructure and plenty of interests who will want to see it rebound quickly. I just don't buy the "free for all" worst case predictions.

Aaron

  • Thu, Jul 09, 2015 - 08:36pm

    #42
    Time2help

    Time2help

    Status Platinum Member (Offline)

    Joined: Jun 08 2011

    Posts: 2329

    count placeholder

    So…

I'm not advocating for maxing out one's credit cards. My point is that if we continue to use debt for money (e.g. pursuing endless growth as a consequence) Earth is going to die. Inasmuch as being habitable for us anyway.  That's unprecedented.

So…

[quote]We've never been anywhere remotely near here before. Not at this scale.

None of us has any idea how this going to roll out, globally or locally.[/quote]

This time is fundamentally different (my opinion).

  • Thu, Jul 09, 2015 - 08:59pm

    #43

    Aaron M

    Status Platinum Member (Offline)

    Joined: Oct 22 2008

    Posts: 790

    count placeholder

    No disagreement

T2H,

I don't disagree. It will likely take faaaar longer to occur than we think, so I plan on living within this rotten framework as long as is necessary. But generally I don't see any reason to think this experiment will last more than a few more lifetimes.

Aaron

  • Tue, Jul 14, 2015 - 06:00pm

    #44

    Wendy S. Delmater

    Status Diamond Member (Offline)

    Joined: Dec 13 2009

    Posts: 1433

    count placeholder

    Pay off debt, stash cash, buy

Pay off debt, stash cash, buy gold, or buy supplies? Here is how I look at it: diversify. with most in hard assets, but not PMs.  As this is my own little view of the debate, your mileage may very.

Paying off Debt: Already done. I assumed at an early age (high school, believe it or not)  that our global future was unsustainable and in the USA, at least, we were in debt over our heads. So those banks/government/entities who were gonna be floundering in debt would grab all the resources they could and if you OWED them, when things went south you'd lose everything.  In my book, debt = bad. I was taught to only owe money for three things: tools to make money (including only education that was SURE to make you money–I got a degree in a field with a huge shortage of personnel), basic transportation to get to a job (buy cash if you can). and basic housing (if you could swing homeownership on 1/4 of your income; pay off as soon as possible). My belief systems says "the borrower is servant to the lender," and who wants to be a servant?

Stashing Cash: All of it? No way, Jose. If there is going to be a currency crisis, I think you should have enough cash to get through until things settle down at a new exchange rate or in a new currency.  That's it. Stash too much and your paper cash may no longer be accepted if people no longer use rubles or drachmas, or confederate dollars. Or whatever. (One exception: my husband's 401K is in cash, not the money market funds and such they keep trying to talk him into. He cannot take it OUT until he hits a certain age, but he can keep it in cash. This limits his exposure to a market crash, at least.)

Buying Gold: Or the poor man's gold, silver. Yes, we have a little silver but that is again with the view that some medium of exchange will be needed until things level out into a new system; even if that system is barter,  silver works. And if the SHTF it will be very hard to break a gold coin; they are worth too much at the moment, but silver is like having tens and 20s in your wallet instead of gold being like thousand dollar bills. Again, my religion states that at one point a day's wages will buy "a measure of wheat or three measures of barley." Sounds to me like food will be the new gold. Why do you think I am so interested in agriculture? If I am wrong, I still get to eat well, get fresh air and exercise. If the gold bugs are wrong, well, you cannot eat gold.

Buying Supplies: This is where it's at! And just to quell any concerns about this, I am not advocating hoarding. I am advocating buying supplies to make things: getting tools and learning how to do things yourself. Get seeds and start a garden. Get a rifle and learn to hunt. Get a grain grinder and learn bread making. Get books and learn to forage. Build a pond or an aquaculture system. Get sheep or angora goats and learn to spin yarn, crochet, or knit. Get leatherworking tools and learn to cure hides and make useful things out of them. Get the supplies you need to make homegrown medicines. Get solar hot water, solar power, rainwater catchment, a woodburning stove for heat, fencing and goats or cows, a hen house and hens. Buy beekeeping supplies. Get a compost tumbler and a bunch of tools to fix things. Get a two-man saw and learn to build with wood. If you have the land, get a plow and horses and a barn. Since my husband's retirement 401K is unavailable I took the tax hit and cashed out my entire IRA to do as much of this as we could. As an added bonus, since such things usually get more expensive as time goes by, I bought them when they were not only available, but cheap by tomorrow's standards.

______

Yes, I spent  my retirement money so my "net worth" seems less to financial planners. That was also because one more strategy is to make yourself intentionally "poor," at least in the eyes of the state. If they are going to tax the rich, stop being "rich." I quit a 6-figure job to live a simple life and the state no longer takes half my income in taxes. They can tax your income and then add sales tax to the Barbie you buy your kid at Toy's R Us, but they cannot tax a corncob doll made with materials on hand. They can tax your income and then add sales tax to the meal in a restaurant or food from your grocery store, but they cannot tax the tomato you grow from heirloom seed, the egg you chicken lays, the honey from your hive, or the fruit and nuts from trees in your yard. They can charge you (one way or another) for healthcare costs, a nursing home, etc. Very little of that is a need when you get good food, fresh air, exercise, and have family (old folks at home with the younger family has worked for generations!), and use preventative medicine.  When the wife (that's me, the former engineer) stays home and cooks things from scratch, mends and sews, gardens, and takes care of children you're not being taxed on two incomes and you're not paying for premade food, childcare, two vehicles, and too many other expenses to count.

It always pissed me off that feminists said I could be anything I wanted to be, but what I wanted to be–a homemaker–offended them. Well, I only became an engineer to feed my kids when their father left. I've done my time, Gloria Steinhem, and it stank. I'm back to contributing things to my extended family in a highly traditional way because it just makes economic sense. And it'll really make sense if the SHTF, because I can just keep on doing what I am doing with very little change to my lifestyle. There was a thread recently that said, "Collapse now, and avoid the rush." That's not how to look at it. I'd say we should revert back to what generations know will work in a time of scarce resources – and my experience is that this is very rewarding; the sense of accomplishment is very rewarding. My husband chops the firewood, does the heavy-lifting in the garden, and fixes things to make an income; my lifestyle is more that of a farmer's wife than most. If our society falls apart much of our lives will not change. When the dust settles, if we make it through the rocky transition, we'll be mostly living in a  world we've grown accustomed to,  a world we like very much.

  • Sat, Jul 18, 2015 - 10:51pm

    #45
    greendoc

    greendoc

    Status Bronze Member (Offline)

    Joined: Sep 23 2008

    Posts: 163

    count placeholder

    Are T-Bills as safe as cash?

Hey Wendy, 

I like your above lists. Although I suspect give the overabundance of fast fashion clogging our thrift stores and closets….knowing how to knit a sweater from goat yarn you spun yourself will not be necessary.  Repairing clothes and shoes…that might be more on point.  Learning to knit or crochet does certainly provide meditative/calming benefits.

Anyhow, I was wondering how safe is "cash" held in a 401K or brokerage account?  The only option for holding cash in our 401K plan is a money market fund tied to municipal securites or in our vanguard brokerage acct is tied to our settlement money market fund which is not FDIC insured.  "A money market mutual fund investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market mutual fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund."

Since I have been on the sidelines in cash since 2007, most our speculative money is in a 3 month Tbill ETF.  It seemed to be the safest option out there at the time and still seems to be.   I do have a months-worth cash stashed…more for the event of a earthquake and could increase that. But agree, too much held in physical cash could be problematic.  

 

 

 

 

 

 

  • Tue, Jul 28, 2015 - 02:49am

    #46
    Ranger1

    Ranger1

    Status Member (Offline)

    Joined: Jul 02 2015

    Posts: 4

    count placeholder

    CYA

I TOTALLY agree with you to a point. 

Since neither you or I "Know" the future, we must prepare scenarios for each and every possibility.  Be bold, Be Flexible, Be Creative but NEVER be a Sucker or Mr. Nice Guy because then you will just get screwed in every way possible.

There is no reason to screw others as you (as well as myself) must depend upon others to survive if everything goes south someday.  Banks will make demands, threats etc – – – and when push comes to shove they will take your account and abscond with every penny.  When they start pushing, threatening lawsuits etc….. that is the time to be somewhere else. 

Take the Greeks for instance.  When the market dropped out, they (the bankers) threatened their investors and customers and then they took off for places unknown with what was left of OPM (Other Peoples Money).

Viewing 6 posts - 41 through 46 (of 46 total)

Login or Register to post comments