What the heck do I invest in?

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peter445's picture
peter445
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What the heck do I invest in?

Okay, I have read and written about everything on CM's website.  Besides gold and silver, where I've already established a sizable position, what ELSE should I invest in for the near and long term?  Commidities are iffy, bonds are bubbling, my stocks are jiggling, and the nest egg is getting cold (sorry, I REALLY miss Chick Hearn).

Seriously?  What should I be acquiring?  I know you need my goals and stats and all that.  Just general responses will suffice.

Thanks,
Peter

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Re: What the heck do I invest in?

peter445,

Have you really read everything on this site?  Are you a subscriber to this site?  If so, look in the Subscriber Forum and you will have your question answered many times over in great detail.  You will also have access to The Martenson Report as well as Chris' podcast.  Your return on investment will be more than monetary, it will be through knowledge as well, and it will be immediate.

Cat

 

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Re: What the heck do I invest in?

Peter,

Everyone is asking themselves the same question.  I am not sure there is any obvious answer.  Here is a stab:

1.  Cash on hand.

2.  As much as you are comfortable with in PMs and their offshoots.

3.  Buy usable goods.

4.  Pay down consumer debt.

5.  What next?  How about short-term FDIC-insured CDs while you wait and watch?

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Re: What the heck do I invest in?

Peter - Welcome to the site. 

I've been here for 6 months and still haven't read everything so good on ya.

 Probably no 100% answer to your question but here's my $.02.

1. Zero your debt.

2. Start building mutually beneficial relationships that function on a barter system.  The girl who cuts my hair has a customer who does a lot of gardening.  She cuts his hair for free and he brings her fresh vegetables and fruit every two weeks.  Go as far as planning out a community with a range of skill sets.  Doctors, nurses, veterinarians, farmers, mechanics, farriers, electricians - whatever you think you might need.  And be ready to defend it.

3. Zero your debt.

4. Sensible stockpiling.  Ammo, non-perishable foodstuffs, bottled fuel, water purification kits (filtered, not iodine tablets), portable shelter (tents, etc.)  You get the idea.

5. Zero your debt.

6. Gold and silver in small, exchangeable pieces.  If the poop hits the fan, there will likely be some form of emergency scrip currency, but that will take time to implement.  Gold and silver will likely never lose their appeal.

7. Zero your debt.

8. Learn how to hunt, fish and farm at a family/community sustenance level.  A small dairy and beef cattle herd, chickens, ducks, etc.

9. Surround yourself with like minded people - be prepared to be looked at as a survivalist nut job loon by the sheep in society who just know that the goverment will do something to make it all better.  I'd prepare for an event that doesn't take place than be caught unprepared when something that I hoped wouldn't happen does.

10. Take it to the extreme of going off grid completely - active and passive solar, wind, on acreage that can support 2, 8 and 9 above.  Figure out where in the country serves you best.  Front Range Colorado is among the leading geographic areas with the most sunny days per year so solar is a good option there, but you do constrain yourself somewhat as far as farming goes.

11. Did I mention zero your debt?

While this might seem extreme, whatever does happen will likely be different from what we expect.   "The Fourth Turning" by William Strauss and Neil Howe is a fantastic book on human social cycles and crises - the takeaway for me is that whatever happens coming out of the crises is huge and transformational.

 Good luck - welcome aboard and see you around the site.

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Re: What the heck do I invest in?

Thanks, Cat.

 Yeah, I overstated the fact that I've read "everything" on this site.  Good point.  I guess I meant I've watched the CC twice and read the forums and digests daily.

Pete

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Re: What the heck do I invest in?

Wow!  Thanks for your (and everyone else's) thoughtful response!  As a newbie, I completely appreciate it!

Pete

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Re: What the heck do I invest in?

Maybe learn to light a fire by rubbing two sticks or with a knife & flint.  Maybe buy a bicycle and some extra tires & inner tubes.

 Don't invest any money in stocks that you will need in the next 5 years.   Make sure you have savings besides your investments.

I like gold mining companies, agriculture companies  and oil companies.  From the reports it sounds like Oil can be down around this price for a few more months.  By the end of the year it is expected to go back to the $60 range.  I believe in Peak oil and that I expect oil to go back above $200.  If you buy oil stocks now you will have to wait it out.  I like the Canadian Energy trusts that pay 15% to 20% in annual distributions - that pay me to own it.  I see them as a store of value for my wealth that is not denominated in dollars.  Also the Agriculture co's I like are fertilizer companies like Agrium, Potash and Mosaic.  As for gold & silver mining, there are several good companies out there also. 

When buying any stocks in this environment I suggest you focus on making sure they have low long term debt and healthy cash flow.  Also, anticipate this market may tank again and take out the November low.  That would be a good time to buy, however the market may trade sideways for months to come after that.  That's why it's good to own high paying dividen stocks.  The only thing that will make this market rise would be money supply inflation or anticipation that Obama's stimulus may work. There 's no guarantee that the money will flow into stocks first.  Therefore, don't expect stocks to be a hedge against  inflation.  Also, when the traders realize that all this stimulus by new money creation and debt does not revive the economy the stocks will tank once again.

When investing in today's market keep in mind that everything that the gov't and Fed Reserve are doing today to help end this recession are exactly what you should not do to quickly end and recover from a recession.  I expect this recession to last several years because of the gov't intervention.  Therefore you should focus on companies that produce necessities.  Also, the commodities haven't been compromized with gov't stimulus and bailout (except for credit creation) and therefore I believe they may have a healthy recovery someday.

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Re: What the heck do I invest in?

bearing -

Nice post.  I offer the following observation and caution.  Be careful how much of your portfolio goes into "companies" - especially gold, oil, ag and other commodities.  If the crisis is very bad (subjective) there is a risk that those companies could be nationalized.  If so, your investments in them are poof, gone, you are not a winner - thanks for playing, next.

If it doesn't come to that, then your strategies are on the mark with zero down-range/cross-range error.

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Re: What the heck do I invest in?

I read the post and comments and i read many times 'zero your debts', 'pay your debts', etc.

When you expect inflation in the near future and possible high inflation would it not be better to just keep up with your debt and pay it down later with 'cheaper' money. At least when your interest rate is fixed, otherwise a rise in that rate will kill you.

 

 

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Re: What the heck do I invest in?

Brainless -

For a short answer - Umm, no.

What happens when inflation becomes hyperinflation?  Who cares that your minimum VISA payment is $35 when a gallon of milk or loaf of bread costs $100 or $1000.  Do you think your paycheck is going to be inflated too?  Doubtful.

You're posturing a roll of the dice I'm not willing to play.  I think zero debt is the safest approach.  As was mentioned in a recent post, there are only three options regarding debt:

1.  Pay it off.

2.  Default

3.  Print money and inflate it away.

2 out of 3 in this case is bad (unless you are a second baseman - .667 gets you into Cooperstown)

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Re: What the heck do I invest in?

I think it depends on what you expect.

1)High inflation then why spend money now to pay down your debt when for instance you can buy gold for it. Gold is more save when inflation happens and then you would be able to pay off the debt with cheaper money you get from selling the gold.

2) If you expect SHTF then why pay off the debt now when you can buy food, water, oil, etc to at least give you a change of survival.

If it is a creditcard debt with a high interest rate and you are able to pay it off while still having enough money left to do one of the above i would agree. But isn't it the problem that people who have creditcard debts have no money at all left. In that case i would pay the minimum and do one of the above.

I am from europe and credit cards are used much less when compared to the USA. I never had one and i will never have one. I got the offers, but i never felt comfortable to spend money i don't have. I have a mortgage though, but that is just an alternative to paying rent which would be the same or even higher amount.

My 'investments' are now in gold and cash. The cash is looking for something stable (wealth preservation) and usefull (now and if SHTF).

Until now i bought some land with it, and some equipment, tools. The gold is for the high inflation situation, the land, equipment, tools is for the SHTF situation but is usable right now too. I am thinking about water filters, solar panels, generator, those kind of things. Highly usable now and of tremendous value if needed.

I am not looking at stocks and bonds at all. I had those and with stocks i got a big hit, fortunately i had some put options (as a cheap insurance) that saved most of it.

I do just a little (day) trading in options for the fun of it. There is a lot of volatility and that is good for option premiums.

 

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Re: What the heck do I invest in?

Have you paid off all your debts...?  I'd worry about doing THAT before worrying about investing in anything.....

IF you are debt free, then invest in learning survival skills like Permaculture.

Mike 

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Re: What the heck do I invest in?

To Bearing,

Thanks for your answer.  I had never heard of Canadian Energy Trusts, so I googled it and found this recent Investipedia article.  Does this change anything?

http://tinyurl.com/8ynmf3

Thanks again,

Pete

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Re: What the heck do I invest in?

Dogs_In_A_Pile,

If these companies were to be nationalized then that would suggest we are turning into a socialist country.  When/if that happens then all hope is lost.  Just as well pack up and find a good job in China.

Also, the individual companies I invest in are primarily outside the USA (In Canada).

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Re: What the heck do I invest in?

Hi Matrix,

Yes, aside from my mortgage, I am completely debt-free.  I toyed with paying down the mortgage, but I arrived at the same conclusion as Brainless.  To avoid deflation, Bernanke will drop dollars from B-52 bombers (not his famous helicopter), the dollar will inflate, I'll sell some precious metals, THEN pay off the mortgage with cheap dollars.

Pete

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Re: What the heck do I invest in?
bearing01 wrote:

I like gold mining companies, agriculture companies and oil companies. From the reports it sounds like Oil can be down around this price for a few more months. By the end of the year it is expected to go back to the $60 range. I believe in Peak oil and that I expect oil to go back above $200. If you buy oil stocks now you will have to wait it out. I like the Canadian Energy trusts that pay 15% to 20% in annual distributions - that pay me to own it. I see them as a store of value for my wealth that is not denominated in dollars. Also the Agriculture co's I like are fertilizer companies like Agrium, Potash and Mosaic. As for gold & silver mining, there are several good companies out there also.

Sorry, I totally disagree....

IF/WHEN the economy totally collapses, what makes you think oil will be in demand?  I used to believe oil would go to $200+, but obviously it never needed to do that to break the debt economy's back.  Oil COULD go to $10. 

Mining companies and oil companies are firing people.....  people without jobs don't buy gas and gold bars.

Learn skills.  Learn to grow your food WITHOUT fertilisers and potash.  As people switch to self sufficiency, demand for chemicals will drop right off too.

And Pay off your debts, because if you haven't got a job, it won't matter whether we go into hyperinflation, you won't have any money to pay your debts with...

Mike 

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Re: What the heck do I invest in?

And what makes you think there'll be demand for gold? WHO will buy that gold? Won't it be worth millions of dollars an ounce in a hyperinflationary situation?

Once the Matrix implodes, it won't be money, or gold, or shares that you will need.  You'll need food, water, and shelter, and you're gonna want it NOW.

Post TSHTF, it's a whole new ball game..... 

Mike

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Re: What the heck do I invest in?

If armageden does arrive as you are predicting, where all faith is lost in paper money, gold will become the new/only accepted currency for exchange besides barter.  It may be worth millions... or whatever... but in 1922 an oz of gold could buy a nice suit of clothes at $22 and today it can still buy a suit at $800/oz.  My guess is that a new suit would cost millions of $ in a hyperinflation.

I believe we could see very high inflation or dollar devaluation maybe 60% or more, but not hyper-inflation.  The Fed isn't that stupid.  To avoid hyper-inflation all you have to do is raise interest rates and stop expanding credit.  It will bring an even larger recession/depression (due to the increase in malinvestment during the inflation and destruction of savings) but it will be better than the all-out ruination of the dollar.  The dollar is the blood of the economy.  Destroy the dollar and you destroy the economy.

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Re: What the heck do I invest in?

Invest in yourself.  Learn new things.  Study how things were done without hydrocarbons.

Get out of the investment paradigm.  Investment means growth.  Growth means consumption of materials and energy.  How about saving instead?  Is making a killing in stocks really going to solve your problems?

Learn about your local environment.  How does energy flow through it?  How is the biomass structured?  Is it conducive to local agriculture, forestry, fishing, hunting, pastorialism?  If it isn't, you might think about paring down your pile of stuff and relocating.  I am.

Meet new people.  Make friends locally.  Find out what other people have in mind, not just on the web.  Form alliances as the situation dictates.  Pass books and publications around.  Some people will think you're crazy.  A few will take you seriously, if you aren't too shrill about the pending disaster.  Don't waste time trying to convert people.  Be polite to the curious.

When talking to the newbies, keep to the best set of facts you can find.  Be ready to name your sources so they can check up on you.  When you speculate, make sure everyone knows your making a WAG (wild assed guess).

 Lead by example.  If you want to wean yourself off hydrocarbons think carefully about the things you want to surround yourself with.

Ask questions.  Find out what other people are thinking.  Some people have some really bizzare ideas.  Might want to steer clear of them.  Some others may simply have very little idea of what's coming and how close we are to it.

Have some fun.

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Re: What the heck do I invest in?

So let me get this straight......  If Armageddon comes, you want to buy a suit, and pay for it with gold?

If you came to me wanting some tomatoes, and offered me gold, I'd tell you to go away.  If, on the other hand, you knew how to get my rotary hoe going again, I'd not only give you some tomatoes, but some chicken to go with it, and goat's cheese for dessert...

You can take the gamble that we will still have an economy.  Personally, I have zero confidence in this happening.  Economies rely on growing sources of ever cheaper energy sources.  The party's over.  It's time for lateral thinking, as Durangokid I notice is also expressing.

Mike 

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Re: What the heck do I invest in?

Mike,

Quote:

You can take the gamble that we will still have an economy.

Why wouldn't there be?

If there is no more currency as we know it, it won't be long before some other medium comes into its own. I think this was even mentioned in the crash course.

Gold and Silver will always have value. In the onset of the crisis, it may not, but it won't be long before things "settle" enough to once again have currency. Personally, I think gold and silver are an intelligent investment, when kept in proportion to other practical goods.

The "best" advice was already given, and I'd be amazed if anyone could argue the points made by DIAP.

Get rid of your debt so no one has a claim on your labor, and buy items that co-incide with your level of skill and knowledge. Build skill, and learn.

Cheers!

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Re: What the heck do I invest in?

I think all the basic are covered here.  I second the debt elimination thought.  It is psychologically liberating and is arguably the most defensive position.  To me, anything other than that and a person is still trying to turn a dime on the situation.  I am more concerned with food, clothing, shelter and physical defense.

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Re: What the heck do I invest in?

I have to second the calls for relationships, relationships and relationships. I am a farmer so I feel secure somewhat in my food source but I want my whole community to survive.  I urge everyone to check out the Transition Town movement. Google it or look on Youtube.  Rob Hopkins started this movement and it is really taking off.

I suppose some gold would be good, but my skill at working horses and growing potatoes may pay off more.

 

Kate

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Re: What the heck do I invest in?

Yeah, um, I'm an English teacher which makes my skill set rather esoteric when it comes to trading!  Yikes.  I have some things to learn...

P

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Re: What the heck do I invest in?

i'm with Durangokid and Workhorse, invest in tangible things.

 If you have some extra money to invest, then find a local CSA and invest in them.  Not just get a subscription for a weekly box of vegetables,(although that is a tasty and good place to start)  but actually invest in the CSA: help them buy more arable land, a tractor, refrigerators, tools, seeds.  IF TSHTF you are more likely to have a friend who grows food who will help you out.  If there is no CSA in your area, then help start one with "seed" money.  Or find a young doctor/dentist starting out who wishes to serve the community and help him/her get going. Invest in relationships that will pay you in other ways than financial rewards.

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Re: What the heck do I invest in?

You or I don't randomly choose gold to be considered money as a means of exchange.  An economy will still exist because there will still be a division of labor and an exchange of goods between people.  Unfortunately, If I can fix your rotary hoe but I want shoes that you can't offer then you and I won't be doing business.  If I accept your chicken then I have to find a shoe maker that accepts chickens or I'll have to find a shoe maker that needs his rotary hoe repaired.  Whatever the new economy will be, some form of commodity will serve as the new money.  Maybe it's cigarettes or maybe it will be tea, whatever will be divisible, durable, desired/accepted by all and cannot be created out of thin air.  In all history the commodity which has been naturally selected by past economies has been gold & silver after tea leaves or sea shells or others have failed.

The suit example was to illustrate that over 100 years gold has been a store of value, while the US dollar has been devalued by 95%

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Re: What the heck do I invest in?

Remember also that if TSHTF, there will be a timeline over which the situation we live in evolves and changes.  The situation we have to deal with (and get through) immediately after TSHTF may differ in important (survival) ways from the longer-term situation, when barter etc may develop.  So keep in mind that we may need to plan/invest differently to meet those short-term needs (1st 3 months?  1st year???) than we do for the longer-term situation.  E.g., it may be fine to become specialized in wine-making as a barterable skill/product to surviive 1 or 2 years after TSHTF.  But don't forget you may not have a stable to community to barter with immediately afterwards, and may need to take care of yourself and your family to meet all aspects of survival.  I guess this again reinforces why building communities NOW is so important!

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Re: What the heck do I invest in?

pinecarr -

Well stated.  I think it is critical for people to understand that the likely timeline out of a SHTF scenario will have the two elements you addressed - Immediate and Long-term.

I propose we adopt SHTF as the official site acronym for the worst case scenario.

 

To bearing - Going back to your post at # 13.

Some would argue that we are already sliding towards socialism - especially when you couple the President elect's stated desire to 'share the wealth' with the widespread (and unjustified) sense of self entitlement rampant in America today.  I was talking about a SHTF scenario - collapsed economic system, dollar gone to zero, global meltdown - where the government steps in with unprecedented actions - suspension of the Constitution, martial law, all the Bilderberg Alex Jones black helicopter stuff.

Any company nationalized in that scenario is a 100% loss on your investment.

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Re: What the heck do I invest in?
Quote:

Some would argue that we are already sliding towards socialism -
especially when you couple the President elect's stated desire to
'share the wealth' with the widespread (and unjustified) sense of self
entitlement rampant in America today.

I agree with this statement.  However, I believe it's socialism in stealth mode rather than outright direct control of businesses and production.  The gov't and it's control via the central bank (the Federal Reserve) attempts economic central planning and control by reducing interest rates below where they should be with regard to supply/demand of money through savings rate.  The problem is that the Fed can't control where the new money will be spent and what the next bubble will be.  Wherever the money is spent, the result will be investment in the wrong things and a subsequent recession to correct the malinvestment.  The only way the Fed really has control of the economy is to provide new cash to special interest groups (primarily big Wall Street banks)  or to groups designated by bailout programs.  The new money created to stimulate these areas of the economy is through inflation, which is stealing wealth from the many and giving it to the select few. 

While Obama may say tax the rich and give more to the poor, the obvious signs of socialism, when the Fed inflates the money supply the resulting general price increases will burden the lower income brackets and fixed income individuals (retirees) more than the rich.  It's self defeating. Meanwhile, the rich and special interest groups are most likely those who first benefit from gov't bailouts and stimulus packages.

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Re: What the heck do I invest in?
Quote:

Meanwhile, the rich and special interest groups are most likely those who first benefit from gov't bailouts and stimulus packages.

I would add "the informed" to the list.  Folks who bothered to educate themselves and are taking action to turn the current environment to their benefit.  Personally, I could care less if the market goes up or down as I will trade it accordingly.  Been squeezing 16-40% out of DIA on the latest downward move in the DOW with focused Put option buy/sell and Naked Call sell strategies.  ( I just love it when option time value decay works for you - sometimes you don't even have to buy the naked call back because it went to zero and the market maker won't sell it to you)

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Re: What the heck do I invest in?

DIAP,

"SHTF" is universally understood. It represents a wide range of situations, and is easy to type.
I concur.

My "SHTF" community has broken down situations into catagories, with appropriate and corresponding levels of preparedness. Each situation represents increasing severity and decreasing probability, and for the most part is "non-specific". For example, The PNW doesn't get hurricanes, but Earthquakes in florida are a true rarity. Therefore, natural disasters can be put in the same catagory in terms of severity and probability, even if the effects and methods of preparedness vary slightly.

1. Minor Disruptions: Storms, small scale flooding, riots, and "small scale", localized problems that bring no permanant disruption to civil services, communications, food supply or power. Events typically last from 3-12 hours, with aftermath lasting no more than 3 days.
Preparations: Fuel for vehicle, Clean water and food for each member of your family for 3 days, standard defensive posture and slightly increased levels of awareness.

2. Intermediate Disruptions: Larger scale disruptions that may effect a region; such as the New York Blackout of 2003, or this years Flooding in Washington State. Situation projected to cause only moderate damage to civil services and transportation, but may last for several weeks. Inconvenient and life threatening events that with recovery efforts or effects lasting for 1-2 weeks. Life lost mostly due to lack of preparedness, frailty or happenstance.
Preparations: Clean water and food for each member of your family for 1 month, depending on availability of communication, HAM protocols may need to be established, depending on nature and posture of violence, heightened defensive posture may be necessary.

3. Serious Disruptions: Serious natural or man-made on a local scale; "9/11" Terrorist Hijacking, San Francisco Bay Earthquake, LA Riots.
An event that causes great loss of human life or damage to infrastructure on a local scale. Rescue and resupply will be seriously disrupted, and will require coordination of multiple agencies and likely federal response. Communications seriously disruptedcellular, internet and landline offline locally, and opportunist violence occuring frequently.
Preparations: Food and clean water stocked for 3 months,

4. Severe/Critical Disruptions: Vast natural or Man-made devastation on a regional scale; Hurricane Katrina, Yellowstone Caldera eruption, Nuclear weapon Detonation.
An event which not only heightens defensive posture, but changes the overall posture of our national policy and mindset of citizenry.
Severe: Events that causes loss of life in excess of 5k or >, Critical infrastructure overwhelmed and stretched to ineffectivity. Federal response imminent, but under-prepared. Communications seriously disrupted; cellular, internet and landline offline regionally. Opportunist violence and looting widespread.
Critical: Civic law and order collapses, currency fails, shipping halts, international shortages on resources cause continental famine and disease.
Preparations: Reliance on food produced or generated locally to suppliment family food stock for 3 months. Heightened defensive posture and communication with community mandatory; HAM radio protocols set in effect, and if necessary, "bug out" plans iniated; including delegation of jobs around homestead and systems of defense and consumption.

5. Extinction Events: Forced migration due to continental devastation; Asteriod collision, Nuclear War. Based on severity; Determinations made for viability of staying put vs going nomadic. Civic law and order collapses, currency fails, shipping halts, international shortages on resources cause global famine and disease.
Preparations: Skill and mindset development. "bug out" plans iniated; including delegation of jobs around homestead and systems of defense and consumption.

Individuals plans may vary.

Cheers!

Aaron

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