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

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ksetchfield's picture
ksetchfield
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Pay off debt, stash cash, buy gold, or buy supplies?

So let's create a hypothetical middle class person with say $25,000 in student loans and another $25,000 in credit card debt and a fixed income with about $1,000 of net profit per month after paying all minimum payments and living expenses.  What's the best thing to do with that money? Pay off the debt aggressively?  Stash cash and or gold? or do a little of both?

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

Well, just to keep things simple here is my take. I'm not a financial planner or broker so I can just tell you what I would do. There are a LOT of bloggers on this site who are WAY smarter than I.

If we get deflation [not my belief] then cash is king, pretty much all you need to make it out, provided you get it out of the bank before there is a bank holiday [where they stay open to collect and closed for withdrawals.]

Inflation vis-a-vis a debased currency. Well if it goes to hyper inflation or if the wages and assets inflate then no worries for FIXED interest debt. A buddy of mine owns a car garage. He went in with me on a dead/butchered cow. If I held a gun to his head he wouldn't buy PMs. We joke that one oil change will pay off his fixed mortgage commercial and residential.

Basically, if I had variable interest debt I'd get rid of that. While paying it down I'd cost dollar average in some silver, not much until the debt was gone. When I went shopping I'd be buying extra until I had 3-x months of food, then rotate it.

I'd be out of equities, taxes are cheaper than a total loss.

Best luck.

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

Here is my take on the matter.  It is all illusion.  You are a slave to that illusion.  The bank, the fiat money...all of it.   My recommendation is to get out of the illusion as much as possible.  That means:

#1  Get out of debt as quickly as possible.  If it means working another job, selling a car, eating rice/beans or dumpster diving for food then do it now!  The car is nothing but a piece of tin - sell it for a less shiny piece of tin.  Cut your living expenses until it hurts.  There are parasites between you and your life energy (money) and you need to eliminate as many as these middlemen as possible to avoid being a donor to these leeches for your entire life. 

#2  Learn to utilize the underground economy.  That means barter.  Use whatever skills and experience you have to earn the things you need.  Grow, hunt, gather, make, beg, borrow or salvage the rest.  Don't steal then you are nothing but a politician who has gotten us into this downward spiral.

#3 Invest in yourself.  Develop your skills.  Develop your yourself physically, mentally and spiritually.  Establish good relationships with your neighbors and friends.  In any end game, we must rely upon each other to survive and thrive.

#4  Maintain your own health with good food and exersise.  I owe my life to the our medical system (cancer) but I can tell you that if not for the other systemic problems in our society I wouldnt have cancer in the first place.  Learn to treat yourself but work with the medical system at the same time.  Question doctors.  When they diagnose, do your homework.  Dont take their advice without THROUGH research into the consequences.  I currently am prescribed 6 different drugs.  I take only 2 of them - because I have looked into the side effects, the research and the history of these drugs.  I found them to be promoted with dubious intent.  Hint:  cholestorol, depression and diabetic drugs are money makers for pharmacutical companies. 

#4 After you pay off your debt, invest in whatever you need to produce your food, water, shelter and security needs.  Rent a plot of land.  Till up the front yard.  Befriend a farmer.  Get some rabbits breeding.  Whatever it takes.  The food system is another shaky illusion which operates thru corporate greed and cheap oil.  Get away from it.

#5 Buy at least one years supply of food then tools/guns/land then silver then gold in that order with anything you have left over.    

Make a plan.  Be aggressive.  Make it hurt.  You will glad you did it later. 

Hope this helps. 

 

 

 

 

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

I don't understand why getting out of debt is such a big priority.  I have been using mu HELOC to pay credit card bills used on necessary medical bills.  I'm still way in the money on my mortgage and I live in a duplex where I rent out the other unit for almost exactly twice the amount of the monthly mortgage bill. 

If the USD is expected to go down, then isn't it good to pay off debt After this happens?  I have physical gold and foreign currencies in a safe deposit box.  Also, I have foreign currencies in an on line banking/trading account.  I don't use leverage and I live well within my means other than these medical bills.  Paying down debt on a regular basis (using an amount I can easily afford to increase if I wanted to) is what I've been doing and plan to continue to do unless or until I hear a good argument as to why I should be using the money I use to buy gold and foreign currencies to pay off this debt in some kind of hurry.

From all of the arguments I’ve heard, I think the one for inflation and not deflation is the stronger so why would I make eliminating this debt a priority?

 

 

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Re: Pay off debt, stash cash, buy gold, or buy supplies?
Set wrote:

  I have physical gold and foreign currencies in a safe deposit box.  

Consider those assets forfeited, at least temporarily if not permanently, in the event of a "national emergency".  At the very least, the SDB will be sealed and you will not have access to it when you need it the most.  At the worst, the contents will be confiscated under the Patriot Act.  Don't put anything there you can't afford to lose.

 

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

I think paying off the variable interest debt is first priority.  After that tangible assets, I think interest rates will eventually go up.  Just my opinion but what I would do nonetheless.

My photo kind of represents where I piled into the market (tail end downside of the bull....) so take it for what it is worth.....Smile

ao

What alternative is there to SDB if you don't have a yard to bury your stuff in???

I never thought I would ever be asking that question in my life.  Makes me sounds so rich!

Are there any suggestions for what type of safe, etc... to use?  I hope I am not repeating someone else's question from past posts.

Davos, you are our hero.  Sorry, I have no control over that fact Smile

Thank you

Denise

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Re: Pay off debt, stash cash, buy gold, or buy supplies?
ksetchfield wrote:

 What's the best thing to do with that money? . . . . . . or do a little of both?

Hi ksetchfield- You need a "saftey net" first so I would suggest some stocking up of supplies and some cash while you pay minimum on the debt. Once you have what you feel is a saftey net - then re-evaluate the situation and pick again betsween supplies, paying off debt or buying commodities. Depending on the debt - you might be able to negotiate some down (hardship programs on cards can mean you pay 30% - 60% of the debt . . . and hardship is rampant in these times).  GP

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

Mooselick, I love your response!

I agree on the safety net -- cash, food storage and stockpiling of other true necessities. (Toilet paper, according to my husband's grandmother, who got through the Depression just fine,  is not a necessity. That's what catalogs are for. So I'm not going to fill my guest bedroom with TP after all. :P )

If you feel reasonably secure and happy where you are (you feel you could sit out a long period of economic decline there) then I'd be building up a self-sufficiency infrastructure there -- gardens (takes some experience to know what grows well for you and how to chivvy the pickier crops to fruition, start now!) , a wood-stove for heat, a cargo-carrying/long-tail-type bike (a fossil-fuel alternative and preventative health-care plan all in one! Don't forget the helmet, mirror, flags and lights).

I wouldn't be worrying about paying off fixed debt at all. I have paid ahead on our mortgage the 3 months that our lender allows us, but I stopped paying extra last fall and I won't return to that.

And while I have and like having some PMs, what I *really* want is raw land for growing stuff and building a house by hand on....

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Re: Pay off debt, stash cash, buy gold, or buy supplies?
Denise wrote:

ao

What alternative is there to SDB if you don't have a yard to bury your stuff in???

I never thought I would ever be asking that question in my life.  Makes me sounds so rich!

Are there any suggestions for what type of safe, etc... to use?  I hope I am not repeating someone else's question from past posts.

All I can say, without giving away information of a personal nature, is be creative.  There are ways.  I might use a dummy safe to attract attention and then put it the bulk of it elsewhere, in multiple locations.  The more work you put into it, the harder it will be for someone else to find it.  If it's paper, make sure your hide is fireproof.  If it's metal, make sure that there's plenty of other metal around so a metal detector would be of no benefit.  Good luck. 

 

 

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

 

As a newcomer I would like to offer my compliments to all, especially Chris, on a interesting and informative website. I was immediately hooked when I discovered the Crash Course. I was relieved to see all the fellow 'nutjobs' in the discussion forums. I thought that I and a few (but growing number of) friends and acquaintances were the only ones who were awaiting Armageddon. For the last year I have been secretly preparing to hunker down and would occasionally and sheepishly reveal this to someone for a reality check only to find out that they were preparing too! My, how the world has changed.

I am posting this in hope of getting some informed opinions on how play my hand. We all have a concern for the future; my concern however is amplified by the fact that I have a wife and three very young children counting on me. Therefore I have been war gaming an economic collapse, as well as other potential disasters such as EMP's  http://www.onesecondafter.com/

My highest priority is to hang on to the homestead. I have stockpiled over 3 months food, 300 gallons of stored potable water, and am currently constructing a 75,000 gallon retention pond to catch rainfall. I also am growing food gardens and tasty critters (rabbits, chickens, goats and sheep) and have a years worth of critter food. My stockpile also contains five years of firewood for the woodburning stove, 200 gallons of gasoline (which is rotated), and 750 gallons of propane.  And I am well armed.

So far so good.

Here is where I'm indecisive.

 I am five years into a fifteen year mortgage with a balance of less than $250,000 on a four acre piece of land in the San Diego area that would even now appraise at $500,000 (or so reliable sources tell me). The original plan was to pay it off quickly. Although I am currently able to make the $3,000/mo. payment, I am concerned that when TSHTF, that may or may not be the case. The current payment is less than $1,400 interest per month, and about $1,600 principal reduction. A re-fi to a 30 yr. loan would cut my monthly payment in half, enhancing my ability to ride out the looming storm, but maybe difficult to accomplish in these times and would likely result in a higher interest rate. What would your call be?

Also, I have a $110,000 balance on a HELOC, but $65,000 of that balance is a result of me pulling out cash last fall before the lender could suspend the account (I beat them to the punch by a week). What to do with that cash? CM says pay off debt. So do I give it back? Or buy gold,  bury it in my yard, wait until TSHTF and then pay it off?

Also, the thought occured to me that in a high magnitude collapse, those who are prepared may be in a position to barter for dollars, which may be worthless for purchases but could possibly be used to pay off debt. Besides, how could foreclosures occur amidst chaos.

Any comments?

 

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

Hi Earthwise,

You are very well prepared. I would love to be in the situation you are.

I think you are in an almost every-case best situation.

- when TS does not HTF you have a good living, and pay of your mortgage (I would prefer rent only, and save the money to pay of after 15 years.

- when TSHTF who will care about a mortgage?

- Hyperinflation => mortgage is payed for by your bartering

Only bad situation: long time stable deflation, without S-hitting the F. That is: What is your profession? How do you earn your money? I am a medical doctor, who is totally aware of the uselessnes of his profession when TS really HTF. Longterm deflation treatens the mortgage(payment)

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

http://www.runtogold.com/how-to-buy-gold-or-silver/

A good article on both buying precious metals and storing them - with great caveat about safe deposit boxes.

I should say also that if you're arming yourself to protect against any eventualities in a potential civil breakdown, you'd be very well advised to seek out training as well.  In fact, I'd advise that a certain amount of your income every month be put towards training of all sorts that you might need.  Firearms/self defense is one (scaring away the neighbors 14 yr old with a big bad gun isn't hard, but when you're facing one of the 17,000 soon to be released convicts in California, for instance, they may very well be able to 'sense' if you know what you're doing or are even willing to use it), but I'd look to other practical things as well (bike repair, non-refrigerated storage of food, survival in the wilderness - I can't say, whatever makes sense to you).

Daniel

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

Thank you for your acknowledgement. Smile

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

Debt = a Claim on Labor.

If someone holds debt over you, they have a claim on your labor.
Therefore, we can logically conclude that if you plan on bartering your skills or fruits of your labor in order to earn a living; someone holding ownership on "their cut" of your earnings will make a bad situation much worse.

While it's "possible" that debt will be absolved, or "ownership" of that debt will dissolve - it's possible that it's not and won't.
It's up to the individual which of these is more likely and assess the risks.
That said, I'm going after my debt like a raging wolverine - but I've been stocking up and working on this for a long time.

So, to answer the original question; all four are essential, and I'd agree with Ivory that there is a fifth investment; your own skillset.

Freeing yourself from the debt will give you a lot more capital to reasonably approach these other "needs" without the headache of worrying about how you're going to pay your bills, or trying to cut corners on your survival supplies. It will also save you a lot of money over the long haul. Interest paid over the lifespan of a loan, you're paying so much that the banksters didn't earn and don't deserve. You do yourself a disservice by allowing the debt to be protracted.

My priority for spending goes something like this:
1. Necessary expenses; Food, Water, Fuel (gag) cost of living expenses
2. Debt
3. Tools, Equipment and Essential Survival items (to include Clothing)
4. Precious Metals

I know that's vague, but that's the general idea.
Also, I view certain debt as absolutely acceptable; for example, Land Ownership - especially if it affords you the ability to grow/produce food that can be exchanged - is definately desirable, and worth the risk. Look for owner carried contracts, and be aware of how they work.

Cheers,

Aaron

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Re: Pay off debt, stash cash, buy gold, or buy supplies?
ksetchfield wrote:

So let's create a hypothetical middle class person with say $25,000 in student loans and another $25,000 in credit card debt and a fixed income with about $1,000 of net profit per month after paying all minimum payments and living expenses.  What's the best thing to do with that money? Pay off the debt aggressively?  Stash cash and or gold? or do a little of both?

I think it's all well and noble to say "pay off the debt first," but I don't think focusing on this exclusively is a practical strategy.  When it will take years and years to pay off the debt, you're up a creek if TSHTF before you get to the next priority on your list.

EndGamePlayer wrote:

You need a "saftey net" first so I would suggest some stocking up of supplies and some cash while you pay minimum on the debt. Once you have what you feel is a saftey net - then re-evaluate the situation and pick again betsween supplies, paying off debt or buying commodities.

I love mooselick's list, but I would not follow it numerically.

Regardless of how you handle your debt, you should not delay in making preparations that do not require money or much money - milking the underground economy is great, developing networking resources for the goods and services you might need, etc. You can "invest in yourself" for free or very cheap - swap lessons or mentoring with a friend, utilize the library for how-to-books, borrow tools from neighbors, organize and/or attend free community workshops, volunteer your time to inspire others to do the same, organize clothes swaps or free sales.  Many, many skills are cheap or free to start learning.  Don't wait - it's worth buying or bartering for a garden fork and some seeds now so you can learn how to grow food, even if you are $25,000 in debt. 

Mine Freecycle or Craigslist or your local barter board or swap shop or thrift shops or free store or even just your personal network of family and friends...we have gotten some amazing things free or nearly free through these channels, including a woodstove, an all-metal sewing machine, a massage table (so we can do home chiropractic and massage), some nice oil lamps, musical instruments (for recreation), bicycles, exercise equipment (yes, we do use it), hav-a-hart traps, a food dehydrator, bike trailer, furniture, gardening tools, all sorts of things.

Now, with regards to debt and where it falls in the priority scheme:

First, if at all possible, I would convert (and have converted my own) variable-rate debt to the lowest fixed-rate available. We converted credit card debt to a one-time fixed-rate home equity loan.  I understand some mainstream financial gurus advise against this - converting unsecured debt to secured debt - but I disagree in this case.  If you have a mortgage, your home is already "on the line," and altering the details of that arrangement is less of a risk than continuing to hold variable-rate debt that could go sky-high at the whim of the lender.

Whether or not you convert variable-rate debt to fixed-rate, the most basic thing is staying up-to-date with the minimum payments on your debt so you don't incur additional fees. 

The fundamental next step is developing a cash and food safety net.  I would do what was necessary to create at least a very basic three-month food stockpile and a reasonable cash emergency fund (anywhere from a thousand dollars to a few months' living expenses). I would do this BEFORE paying off debt (beyond the minimum payments).  If you don't have a cash emergency fund in place, you'll just end up thwarting yourself by accumulating more debt in an emergency - if you even have the option, which you may not.  I strongly believe that a nominal emergency fund and a basic food stockpile are more important than paying off debt.  Whether you held your emergency fund fully in cash or partially in gold or silver would be up to you, your beliefs about the sustainability of the dollar, and your comfort with how immediately liquid your fund might need to be.

Before paying off debt, I would also make sure my household had the essential supplies needed for the near future - for my family this means clothes, shoes, and warm outerwear in at least the next size up (we get nearly everything they need free from friends, but we do buy a few specific items as needed). I have four growing kids and am responsible for the provisioning for our family, so that is where I am coming from - if you're a single adult and you already have what you need, all the better.  I would also make sure we had any tools or materials that would immediately start saving us money in necessary services or repairs. 

If you have $1000/month extra to put somewhere, it won't take you long to accomplish these things. 

Only after that would I make the effort to pay down debt.  When you're at that point, you might consider splitting your money several ways - some goes to debt, some to plump up your cash fund, some toward precious metals, some toward supplies or "investing in yourself."  How heavily I focused on the debt would depend on the terms of the loan(s) and my overall financial strategy.  If you're putting your money into something that you expect to have a higher yield than what you lose paying in interest on your debt, that may be a wiser strategy. 

For example, saving up for land so you can get out from under your mortgage and live more cheaply in the long run seems to be a better strategy than paying down a mortgage on a house you don't intend to keep, when real estate values continue to drop.

I will not allow the presence of debt in my life to overshadow my responsibility for maintaining my family's basic needs, and this includes having a healthy emergency fund and extra food in the pantry and warm clothes for the winter.

But the most important remaining issue is to not accumulate additional debt, and that is a whole separate strategy, involving reducing your lifestyle expectations, developing self-sufficiency and frugality skills, etc.

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Re: Pay off debt, stash cash, buy gold, or buy supplies?
Aaron Moyer wrote:

My priority for spending goes something like this:
1. Necessary expenses; Food, Water, Fuel (gag) cost of living expenses
2. Debt
3. Tools, Equipment and Essential Survival items (to include Clothing)
4. Precious Metals

Hi Aaron,

Regarding your priority list... I would agree with it except I would exchange the positions of Debt and Precious Metals.  If the main reason to buy PM's is to protect against a meltdon of the USD or inflation, why not wait until this happens and then sell your Pm's to pay off debt at a cheaper rate?

Thanks for your input.

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earthwise

I personally am leaning towards a long-descent scenario at this point in the evolution of these crises, and expecting that the system will remain stable enough to collect its debts for the foreseeable future. I've been reading on these boards and elsewhere with an eye towards buying more PMs and I'm holding off, for now. Silver's price is appealing but its weight is apalling, and both gold and silver markets seems to be subject to more manipulation in the short- to mid-term than I feel comfortable with.

If I were in your shoes, I would set aside, and be determined not to touch, as many years of mortgage and HELOC payments as I can, in cash, and be nimble about changing strategies if the on-the-ground situation changes dramatically.

FWIW,

Sue

ps. Sure you want to stay in SoCal? Your set-up sounds wonderfully thorough and lovely, but you're in a near-desert and awfully close to a country with a lot more economic pain than ours....

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

Been meaning to respond here for a while but every time I log on I get distracted by all the great info available on the different threads. It's like a kid in a candy storeLaughing

Woody wrote:

Only bad situation: long time stable deflation, without S-hitting the F. That is: What is your profession? How do you earn your money? I am a medical doctor, who is totally aware of the uselessnes of his profession when TS really HTF. Longterm deflation treatens the mortgage(payment)

The potential threat to the mortgage is my chief concern. All other preparations could go down the tubes in a foreclosure. As a landscape /irrigation contractor my income stream is diversified enough (residential, commercial, agricultural, and service) to not be completely eliminated as in the loss of a job. Also my skills and tools would be quite usefull, but I suspect would command a much lower price in a deflatioary cycle.

Aaron and Set have touched upon the heart of the matter and really the point of this thread: How best to divide limited resources. AAron ranks debt repayment higher than PM, where Set is the opposite. Set's is the best solution for an inflationary cycle, but what about deflation?  What happens to PM's in a deflationary cycle? Does their price also decline?  Does owning gold help then?And what about buying PM's with what is essentially borrowed money (debt)?

 

Thanks SueSullivan for:

If I were in your shoes, I would set aside, and be determined not to touch, as many years of mortgage and HELOC payments as I can, in cash, and be nimble about changing strategies if the on-the-ground situation changes dramatically.

FWIW,

Sue

ps. Sure you want to stay in SoCal? Your set-up sounds wonderfully thorough and lovely, but you're in a near-desert and awfully close to a country with a lot more economic pain than ours....

That's pretty much what I've been doing, just like to get more informed opinions to ease my doubts.

ps. I considered relocation, but replacing an income in a new community in these times is a considerable issue. I think I've got the water issue covered; proximity to the border doesn't worry me too much either. We are well off the beaten path, and have a good defensible space. Anyways, with a bad economy, the flow north has diminished considerably and in the event of a collapse I suspect it might reverse course entirely. Like rats deserting a sinking ship.

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

On the subject of debt I am personally a believer in hyperinflation so I am stocking up on debt as it will be easy to pay off when inflation takes away some percentage of value from the dollar.  I was recently reminded that after the inflation of the early eighties civil service employees in my city were given 9% raises for 3 years back to back.  Think about the guy who bought a house in 1980 and by 1985 he was making over 30% more making it much easier to pay his mortgage.  Now I realize that it will be tough for a few years with prices rising squeezing us financially, but right now I have 0 debt and I have already taken care of Survival supplies and food so a decent sized house with a decent piece of land seems reasonable.  Also need to buy gold and stash cash, but house comes 1st. 

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

Can you explain what you mean by "stocking up on debt as it will be easy to pay off when inflation takes away some percentage of value from the dollar." (I'm not sure how to put your quote in a little box like some do.)

It's been suggested that I take out money from our home equity line of credit, but I'm hesitant to spend that even on prep stuff if it will just make our mortgage less manageable. Are you saying taking on a debt to purchase, say PMs, will be worth it because when TSHTF it will be easy to trade in the PMs to pay the debt?

I'm new and haven't made it through the entire crash course yet - I'll probably understand more once I do, but I appreciate your getting me up to speed faster.

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Re: How to display the quote box
Shireen wrote:

(I'm not sure how to put your quote in a little box like some do.)

Shireen,

Welcome to the site.  Every comment has a "quote" button on the bottom line.  If you click this you'll see the text included in your response, and when you save it, it will have the "quote" box around it.

If you're wanting to just add a quote that is not related to what someone wrote, use the icon on the top bar of the text editor that looks like a quotation mark (next to the smiley face).  As soon as you click it you will see the special box displayed.

Ron

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Re: Pay off debt, stash cash, buy gold, or buy supplies?
ainnle wrote:

On the subject of debt I am personally a believer in hyperinflation so I am stocking up on debt as it will be easy to pay off when inflation takes away some percentage of value from the dollar.  I was recently reminded that after the inflation of the early eighties civil service employees in my city were given 9% raises for 3 years back to back.  Think about the guy who bought a house in 1980 and by 1985 he was making over 30% more making it much easier to pay his mortgage.  Now I realize that it will be tough for a few years with prices rising squeezing us financially, but right now I have 0 debt and I have already taken care of Survival supplies and food so a decent sized house with a decent piece of land seems reasonable.  Also need to buy gold and stash cash, but house comes 1st. 

Your strategy relies on two high risk criteria

  1. Hyperinflation actually occurs, which is not guaranteed.
  2. You have fixed non-negotiable interest loan contracts (you'd need to check the fine print and microdot to confirm that the loan holder cannot increase your interest rate under any circumstances, most loans even fixed rates often carry riders where the payment can be increased under certain circumstances).

If you have one but not the other you're screwed. For instance you have hyper-inflation but not a fixed rate non-negotiable loan, well then that financial institution is going to increase interest (like it or not) where you might see your loan payment balloon to 3-4 times it's current rate, if your income does not or cannot maintain this increase you'll default (hyperinflation is bad for those who are employed since most companies don't increase wages in line with inflation, and not in a timely fashion). Now conversely if you have the loan and hyperinflation does not happen, then you're stuck with the payment and the hope interest rates don't increase to a point where that fixed rate will not be negotiated by the holder.

I opted to clear debt by dropping my credit rating (since I won't be needing that credit rating anyway) and allowing my house in Seattle to be repossessed, then relocating to my undeveloped Alaska property where I'm currently, with my wife, building a homestead. Most of my investment is in hard goods, food, commodities, the property value, some precious metals, and a whole heap of experience and training.

Anyway YMMV.

 

negator's picture
negator
Status: Member (Offline)
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Posts: 14
Re: Pay off debt, stash cash, buy gold, or buy supplies?

i'd pay off the debt until it hurts, buy metal which you hold, as others have said, all the while stockpiling food as best you can.  divest from the machine if possible, to whatever degree you can.  here is something else which i feel is critical:

seek out the advice of people who lived through the first great depression.  their first-hand knowledge is priceless, and it is vanishing in one way or another.

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Romans12.2
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Posts: 227
Re: Davos-this thread was what made me love you!

Because of some spoof post this thread popped back up and made me remember my first couple of months on this site.  Last summer was so frightening for me, we had maybe 3 days of food in our house...no supplies of anything.

I read and studied and thankfully put together a plan and can now boast a pretty well-stocked well-protected and more informed home.  Plus retreat property a few hours away.

It's the inflation/deflation that still drives me crazy.  I'm too easily swayed in both directions and we have an even amount of cash and gold in hand.  I would rather have a firm opinion but I'm so easily confused about these things! 

I stumbled across the Charles Hugh Smith blog about 6months ago, and on another thread someone posted his recent post about why our Gov would never allow hyper-inflation and I'm sure somewhere this has been visited so if it has please direct me to where....otherwise Davos please because I so value your direction, tell me why he's wrong.   Thanks, Meshawn

This is from CHS:

why would the Power Elite which controls Federal policy allow its wealth to be destroyed just so the government's own debt load would be reduced? That makes no sense. In fact, as I suggested in The Con of the Decade Part II (July 9, 2010) and The Con of the Decade Part I (July 8, 2010), it is in the interests of the Power Elite to buy Treasury bonds once interest rates rise. The last thing the Financial Plutocracy would want is to see its trillions of dollars in Treasuries diminished via inflation.

The last thing the Power Elite wants is high inflation. Remember this and you hold the keys to the Kingdom: inflation only benefits debtors, not the owners of the debt, for whom that debt is a treasured asset. Deflation is anathema to debtors and a free gift of additional purchasing power to those holding cash.

Davos's picture
Davos
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Posts: 3620
Re: Davos-this thread was what made me love you!

 

Romans12.2 wrote:

Because of some spoof post this thread popped back up and made me remember my first couple of months on this site.  Last summer was so frightening for me, we had maybe 3 days of food in our house...no supplies of anything.

I read and studied and thankfully put together a plan and can now boast a pretty well-stocked well-protected and more informed home.  Plus retreat property a few hours away.

It's the inflation/deflation that still drives me crazy.  I'm too easily swayed in both directions and we have an even amount of cash and gold in hand.  I would rather have a firm opinion but I'm so easily confused about these things! 

I stumbled across the Charles Hugh Smith blog about 6months ago, and on another thread someone posted his recent post about why our Gov would never allow hyper-inflation and I'm sure somewhere this has been visited so if it has please direct me to where....otherwise Davos please because I so value your direction, tell me why he's wrong.   Thanks, Meshawn

This is from CHS:

why would the Power Elite which controls Federal policy allow its wealth to be destroyed just so the government's own debt load would be reduced? That makes no sense. In fact, as I suggested in The Con of the Decade Part II (July 9, 2010) and The Con of the Decade Part I (July 8, 2010), it is in the interests of the Power Elite to buy Treasury bonds once interest rates rise. The last thing the Financial Plutocracy would want is to see its trillions of dollars in Treasuries diminished via inflation.

The last thing the Power Elite wants is high inflation. Remember this and you hold the keys to the Kingdom: inflation only benefits debtors, not the owners of the debt, for whom that debt is a treasured asset. Deflation is anathema to debtors and a free gift of additional purchasing power to those holding cash.

 

Hello Romans 12.2

I'm not a financial planner, broker or anything else, just a guy who reads a lot. I can't give you advice. I can tell you that I can sleep at night. What is right for me may not be right for someone else.

This first chart is a basket of currencies (dollar included) pegged to gold. For me to hold something like that - well I'd lose a lot of sleep.

This is gold.

Snore, snore, snore.

Bob Prechter of Elliot Wave I listen to, he says gold will tank. If there is a boogie man under my bed or in the closet I'll shoot it. Snore, snore, snore. (Prechter's imaginary boogie-man doesn't scare me.) Also the guy doesn't get that dollars that aren't pegged to gold can be devalued. Mexico did it, a lot of countries have done it. Bring us 1,000 old bucks and get your new 1 buck.   

If I was a little older I might do a split, just not to have all my eggs in one basket.

Maybe I read too much, in the olden day many a king fell when the surfs became penniless and the kings and his cronies got too wealthy. I'd encourage you to read this, a lot of history here. I doubt this time will be different. 

So I don't buy into this. My last write and here also was about how insanely greedy these (V don't read this next word) morons got. What gets me is one of them goes around professing to be doing God's work. Putting people here

is NOT doing God's work. Bleeping devil worshiper!

This guy was on CNBBS and King had him on here. I'm NOT a GATA fan, but I think, and I've pounded this drum before, Gata did open a lot of eyes. There were a lot of folks who believed that the LBMA gold certificates and some other stuff was allocated. I think Ben Davis is correct, this thing will snap like a pencil. Sprott went to the IMF with his checkbook in hand to buy gold. He was sent packing. Sprott's money is no good? Don't think so! Maybe the IMF's gold isn't the IMF's gold, or maybe they want to keep it in the banks hands. In any event this says, loud and clear that these (V, don't read this next word) morons aren't worried about deflation. Also, gold the banks can treat as a non commodity, there is a reason for this. I don't think all this gold paper trading is all done by choir boys (read: Don't think Bernanke was ever in a choir.)

By the way, Jesse's Cafe had a piece here on gold doing well in a deflation, this is something I have heard Mish say.

Do whatever you got to do to sleep well. Don't worry about the kids hoping for the Big Guy to come, you'll be their savior when your preparations (read: the food you've put away) feeds them "should" TSHTF. 3,800 currencies have bitten the big one. Dead and buried. We can't pay our bills, China just downgraded our debt.

Other countries have overtly devalued their dollars, which makes the rich richer if they have insurance and the poor poorer - but the debt has to go. These morons (sorry V) can tax us with VAT, they can go to 100% tax and it can't be paid. We don't make jack so we can't have a surplus.

The gig is up. How long till the end, I don't know. But I'm at 98% (dead) cow capacity.

Snore, snore, snore. 

 

 

 

 

 

 

 

 

 

 

 

 

Romans12.2's picture
Romans12.2
Status: Silver Member (Offline)
Joined: Jul 14 2009
Posts: 227
Re: Pay off debt, stash cash, buy gold, or buy supplies?

Really not very snore, snore.  More like my heart goes pound, pound, pound.

I love all of the info. Thanks I'm going to read now.

Davos's picture
Davos
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Posts: 3620
Re: Pay off debt, stash cash, buy gold, or buy supplies?
Romans12.2 wrote:

Really not very snore, snore.  More like my heart goes pound, pound, pound.

I love all of the info. Thanks I'm going to read now.

I sleep well, usually 8-10 hours. Did the best I could, have faith it'll work out. Even at 50/50 you are probably 50% better off than the average person who get's their financial feeding from CNBBS and wonders what in the world the Shciffs, Fabers, Rogers and a like are talking about.

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
Re: Pay off debt, stash cash, buy gold, or buy supplies?

Davos,

May I suggest another 'M' word since these ?people? are anything but morons.

Malevolents.

I doesn't roll off the tongue like morons but it's a more accurate description.

Romans12.2's picture
Romans12.2
Status: Silver Member (Offline)
Joined: Jul 14 2009
Posts: 227
Re: Pay off debt, stash cash, buy gold, or buy supplies?

The gold makes me sleep well not the cash. 

The cash makes me nervous, makes me feel almost criminal and sneaky. I cash our paychecks and the bank manager is suspicious.

I would feel better to spend alot more on gold.  Do all the gold people think that this new below 1200 number is the pull-back?  Or maybe lower like 900 or 1000? 

 

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Pay off debt, stash cash, buy gold, or buy supplies?
Romans12.2 wrote:

The gold makes me sleep well not the cash. 

The cash makes me nervous, makes me feel almost criminal and sneaky. I cash our paychecks and the bank manager is suspicious.

I would feel better to spend alot more on gold.  Do all the gold people think that this new below 1200 number is the pull-back?  Or maybe lower like 900 or 1000? 

 

Gold is moody. I think gold will get moodier, one day we will probably see drops and spikes of several hundreds, for starters.

 

For now:

Thanks AO, I'll stick to the moron word, I know they are smart, but anyone who ruins lives, blows up the world for greed is still a moron in my simpleton book.

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2259
Re: Pay off debt, stash cash, buy gold, or buy supplies?
Davos wrote:

"...how insanely greedy these (V don't read this next word) morons got....

Thanks for the laugh, Davos!  It's good to get some [comic] relief from the stress of the times!

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