- Why most of those around you will not prepare, despite the obvious risks
- Why the risks are bigger now than most realize
- Positioning yourself ahead of the trend
- The steps for prudent preparation
People Aren’t Rational
Unfortunately, very few people make decision based on logic and/or rational calculations. Most go by emotion. If their pre-existing belief system is confirmed by something they will do it (or buy it, or learn it) but if not, then forget it. Data doesn’t matter.
I am sure you’ve all encountered this in your own lives, perhaps by trying to spread the Crash Course to otherwise intelligent, thoughtful people who somehow just cannot even bring themselves to confront the troubling data.
Not because they are unable intellectually, or even that the data is all that troubling, but usually because their belief system cannot digest the information contained therein. One of the more dominant belief systems out there is that “the government will take care of me/us.”
This is not at all surprising given that we are raised in a very structured and authoritarian educational system. Most of us that is. The repetition of believing that a right answer always exists at the front of the room subtly reinforces the idea that you can trust in the hierarchies present in your culture.
And so it’s not much of a stretch to then invest that same comfort of knowing in the hierarchy of the political structure, or government, too. To attack or undermine the idea that there is a large, benevolent set of public institutions out there is to undermine the very basis of faith in authority.
That’s a biggie for most people, and not easily dislodged. This is why it can be so difficult to get someone to even consider storing an extra months’ worth of food in their otherwise barren pantry. It has nothing to do with cost or space…it has to do with the new belief system that would have to be installed first which is something along the lines of “maybe the system I trust so completely is slightly untrustworthy, and the people operating are not really as in control of it as I like to think.”
And even then, it’s not that simple. Dislodging a belief system and installing a new one is not an intellectual process, but an emotional one. Those are expensive for people under even the best of circumstances but really quite difficult if one lives in a country where emotions are clamped down, not permitted, drugged away, or otherwise subjugated and not allow to flow freely.
The point of all this is to be able to rotate the cube a bit and ask what happens when a mass of people suddenly all decide that their existing belief system isn’t working out anymore?
Well, the North Caroline Wal-Mart example gives us the general outline. People will stampede off in a new direction that will disrupt the existing systems. Stripped shelves is one product, but bank runs, political upheavals riots, and the emergence of brand new ideas are other examples.
And this brings us to the idea that as emotional creatures, especially in the center mass of society, the recent election of Donald Trump has stirred up a hornet’s nest of new and vigorous emotions in a lot of people.
How this will translate into future actions is impossible to predict, except we can note that the risk is higher for a disturbance, or set of disturbances, as a result.
Again, we have a faith based system. If people have faith in the food being there, there is no problem (at present). If people have faith that gasoline will be there at the stations, again no problem. If people have faith that their money will have value, no problem.
The problems emerge when people lose faith, and what Trump has done, more than anything (in my estimation) is merely revealed to a critical mass of people just how frightfully off the rails everything actually is.
But that’s been developing for many, many years. Trump did not do anything except rip the covers off for people who were otherwise not really paying attention or allowing themselves to look the other way about a lot of things ranging from a complete abandonment of the working class by both parties, to a central bank fueled wealth gap that has broken all records, to disappearing bumblebees.
The herd is now skittish as a result of the tensions which are, in my experience, as high as they have ever been across the social fabric.
Rich people are feeling nervous in part because the system might fail them in ways either large or small, but also because they have gotten stupidly rich as a direct result of the central bank money printing, unfairly so some might say, and so they also fear a backlash fueled by this unfairness.
This is perfectly rational for all the reasons we’ve covered here over and over again. It’s grapes vs. cucumbers. Humans simply do not tolerate unfairness for long before they react and rebel.
But It’s So Much More Than That
I think people are right to feel skittish. I know I do. But not for the usual reasons that most people might think. Sure, our monetary policy is unsustainable and will break someday. Yes, the entitlement programs are busted and debt levels are far too high for current and probable future growth conditions.
Add that up and there’s a financial and economic accident on the way and that makes people nervous. It’s part of the reason why I strongly suspect the world’s central banks are propping up the equity markets so aggressively; they know that the signaling function of these markets is critical to confidence. Keep the markets elevated and many people will continue to assume that everything is all right.
However it is the loss of the bumblebee that I think lurks deep in the heart of the dis-ease that people feel most acutely and troublingly. Let me explain.
Every day science is learning how we are more intimately connected to the world around us, that is to nature, than we previously suspected. This really shouldn’t shock anyone as nature was our cradle for millions and even billions of years. On the evolutionary tree the departure into our indoor environs is such a recent development it cannot really be seen on a geological scale timeline.
We’ve recently learned about the gut biome, and still are a long way from understanding the delicate and careful balance between ‘Us” and “Them” when it comes to the numerous life forms living in and on us.
Even more recently we’ve learned that memories pass between generations as our DNA has the ability to take an adult’s experience and somehow encode it and pass it on to their offspring. This has been experimentally proven in mice and genetically detected in the children of holocaust survivors.
These studies blow my mind and the implications deserve an entire treatment and discussion. For now I want to center on one theory of mine which is that our bodies are, of course, in some sort of more sophisticated and (as yet) not well understood communication with the world around us.
As the web of life snaps and frays, one strand after another, with butterflies and bumblebees disappearing as the sentinel species, or rainforest losses the size of Europe’s landmass, which speak to an iceberg-like mass of losses hidden beneath the waters of conscious perception, people are somehow detecting this.
It is well known that among the peoples most connected to the land, such as the aboriginal communities above the Arctic Circle or in disappearing rainforests, that the rapid changes in their landscapes lead to major depression and other mental health issues. A well-known contributor to depression in people is a feeling of not belonging. So perhaps it’s not much of a stretch to suggest that those of us less intimately connected to nature still register something when the birds and the bees are quietly slipping away from our landscape.
I know of a very spiritually connected woman whose abilities constantly amaze me, and her walks in the woods have become painful for her. The message she is receiving is that ‘life is ebbing.’ I cannot disagree with that sentiment because my own Spidey-senses say the same thing as does all the ecological data on the macro landscape and micro species levels.
I can feel it in my bones. Or gut. Somewhere deep down. Something is very wrong.
It bothers me a lot, and it hurts my heart. It’s time for a whole new approach and narrative.
While there are a lot of different problems and predicaments one could worry about, I truly suspect that a major contributor to people’s dis-ease is the loss of species and how those are registered somehow, either unconsciously for most, or possibly via some mechanism we still don’t understand by which humans are able to detect rapid changes in their surroundings, especially species declines and losses. From a biologist’s perspective, being attuned to the species around you is not a hard sell. It makes a lot of sense.
But maybe it goes deeper than this and speaks to our collective missing the entire point of our human existence. Perhaps it is the loss of the beauty encoded in the other species that we mourn the loss of. Perhaps we truly are meant to be here as stewards, not as tenders of a flock we intend to entirely consume, but as perpetual stewards of this entire ball of life we call earth.
All I do know is that a great upset has been revealed in a lot of people, all across the globe, and I think it has a lot more to do with deeper issues than underfunded pensions and the loss of jobs to robots.
Position Yourself Ahead Of The Trend
One of our great gifts here at Peak Prosperity, as well as one of our burdens, is that we are once again proving to be well ahead of the trend. It’s always acceptable to be a few months ahead, but inexcusable to be years ahead. At least for a lot of people not you fine folks.
So the new trend of being resilient and prepared with respect to food, shelter and security is now a “in” think among a subset of the rich. Which normalizes it for a whole lot of people. You need to be alert to this new trend because it speaks to the possibility of a sudden loss of faith that could itself be the trigger for a change into the next act of this story.
The seemingly perpetual central bank printing and propping has only made things worse. Corporations have use the opportunity to merely borrow and buy back shares. That in turn, along with direct flooding to het “markets” with thin-air money, has only served to enrich the already stupendously rich. That in turn is leading to social and political tensions that can no longer be ignored.
There is also the unknown psychological and social impact of a rapidly changing natural world where entire ecosystems are being upended. My theory, probably years in advance of its time again, is that we are all connected (wired in) to the natural world in ways that the more sensitive of us are noticing as a distinctly uncomfortable feeling of deep grief lodged in our hearts, and the less sensitive are experiencing as an impossible to source feeling of low-grade anxiety.
Whatever the reasons, it is now becoming entirely normalized for regular, non tin-foil hat wearing individuals to come forward and say “I’m really worried and no longer trusting as much. I have taken direct action to secure my future and that of my family and friends.”
We’ve also been talking about this trend in the wealthy for years, and now it is more solidly out in the open as the New Yorker article makes clear.
Hopefully surfacing and focusing on that inspires you to go another layer deeper in your own preparations. This would also be a great article to forward to your ‘on the fence’ friends and relatives.
Perhaps now that its ‘rich people’ (and Silicon techies at that!) they will listen. For many, the captains of technology are their ‘trusted sources’ and the will more readily heed their actions than yours or mine. Hey, that’s not a knock on either of abilities to influence others, that’s just how this works. We can only influence those for whom we happen to be the trusted source.
The sad truth is that the vast majority of people are not prepared in the slightest, and still have no clue that it would be in their statistical and numerical advantage to become more prepared. There is still an enormous amount of outreach and education to be done in that regard. Here in my own neighborhood, and there in yours too.
A worthy challenge if ever one existed. 🙂
So, What To Do?
Our advice for preparing prudently is to:
- Build cash – It’s not sexy. And it’s not fun to see the dollar price of nearly every asset known to man escalate while you hold cash. But bubbles are designed to take as much as possible from as many people as possible. During the popping of a bubble, the real wealth (underlying assets like companies, land, minerals, etc.) doesn’t vaporize like the high prices do. Those assets are simply transferred at a lower (more attractive) price to those people who still have money. Be one of those people.
- Hold on to your precious metals – I know. It’s painful right now. For most PM owners, just hold onto what you have right now. Those with stronger stomachs should be dollar-cost averaging. Remember, the fundamentals for owning gold and silver have not changed AT ALL over the past few years. Stay largely with physical bullion. Don’t speculate with the mining stocks at this time unless you’re a risk junkie (or masochist?) and then only with money you can afford to lose.
- Scout out locally-based hard-asset investments for the future – Once this bubble pops, higher interest rates and lower prices will result. Look around your local area for assets (businesses, housing, farmland, livestock, etc.) that you would consider holding at least a percentage ownership in. Calculate what price would make you an interested investor. While that price may be years away, when the impact of a market correction hits, you’ll be poised to move ahead of the other savvy investors to secure the opportunities you want (and play a role in stabilizing the community in which you live).
- Design your trading plan for a market downdraft – What steps will you/your financial adviser take if the market starts cratering? If you don’t currently have a plan in place, now is the time to design it. Will you employ stops? What “safe assets” will you move to? (Treasurys, cash, other currencies?) Will you strictly be a sidelines observer, or will you take any active short positions on the downside? Will there be opportunity to generate income using vehicles like covered calls? Whatever makes sense for you, devise your strategy in the calmness of today vs. on the fly while the markets are melting down around you and everyone is panicking. And if your financial adviser is unable to provide you with a comforting answer as to his/her strategy for captaining your money through another 2008-like (or worse) correction, we have a few recommended advisers you may want to consider talking with.
- Build your roof while the sun is shining – So many of the most valuable investments are not financial (emergency preparedness, energy efficiency, community, health – to name just a few). Use the gift of time we have now to invest in expanding your degree of resilience. If it’s been a while, take a fresh skim though our What Should I Do? Guide to identify any areas where you aren’t satisfactorily prepared. These are the investments that it’s infinitely better to have in place “a year early vs. a day late.”
- Increase emotional fortitude – Being “wrong” in the eyes of society is trying. And it’s stressful for many, especially if your partner or others of those close to you don’t share your views. Keep learning by reading this site and a wide range of others, including those with opposing commentary. Develop your opinions based on the data you determine is most accurate – your ability to stand resolute against popular sentiment will be grounded in your confidence in the “big picture.” Seek support from the thousands of other Peak Prosperity readers who are wrestling with the same issue set you are, by participating in our Groups. We created them to help people support each other both virtually and “in person” within their local communities.
- Develop an income loss plan – If we’re correct in our prediction of a major downdraft, a return to deep recession is likely, and with it, a return to higher unemployment. Loss of income is a stressful trauma, especially if it happens unexpectedly and is compounded by a hobbled job market. Take some time to assess your job’s level of vulnerability to another recession. If it’s higher than you’d like, ask yourself what you would do if a sudden layoff occurred. Start doing the work now to at least sketch out the path you would take if that happened. If possible, develop some relationships or related skills now that would give you an unfair advantage should you ever need to head down that route. The first third of our book,Finding Your Way to Your Authentic Career has a number of exercises that provide useful guidance for those looking to do this.
- Develop an income enhancement plan – The resilience that comes with multiple income streams really helps you sleep at night, as you’re less vulnerable to having your entire life upended if a sudden pink slip appears. Also, having extra income to direct to other goals (retirement, education, homesteading, etc.) enables you to reach them faster. We’re all busy, but thinking creatively for a moment: What could you start doing today to secure extra income streams in the future? This is a topic that Chris often helps folks think through in his consultations.
And don’t forget that most of the people around you — your family, neighbors and friends — may not be taking these same precautions. So be ready for them to turn to you in a panic for support if crisis hits. Here’s our advice for those of you wrestling with this thorny task:
- Put your oxygen mask on first — You can only be a help to others if you’re first in a position to do so. It all starts with building resilience; reducing your vulnerability to the highest likelihood threats able to impact your lifestyle the most (job loss, market crash, sustained power outage, natural disaster, health issue, etc). Our book Prosper!: How to Prepare for the Future and Create a World Worth Inhering was created as a manual for doing exactly this. And its companion What Should I Do? Guide provides step-by-step guidance for a making your preparatons (be sure to start with Step 0)
- Serve as a model — Let your actions be visible as an inspiration to others. Allow them to see that preparing for the unexpected isn’t just for the “tin foil hat” crowd. Emergency preparedness investments like stored food and water don’t need to break the bank, can be made over time, and can involve the entire community in activity that brings it closer together. Building Social Capital, improving your health and fitness, learning new skills, becoming more energy efficient, learning to strengthen your emotional health and those you care about — all of these are life-enhancing pursuits.
- Keep your reserve assets confidential — Don’t make ALL of your preparations known. As the above section shows, desperate people take desperate action. The best way to guard against folks coming to take your most precious assets is for no one to know they exist. Beyond that, it often helps to have protective measures in place. Our Personal Safety & Home Defense Guide is full of advice on how to reduce your exposure to the most prevalent forms of invasion and attack.
- Build awareness among friends/family of the risks in play — Forewarned is forearmed. Our video series The Crash Course was created to build awareness of the macro risks we face today, and to explain them in an intuitive, approachable way to people of all backgrounds. Sharing that series (or the more condensed 1-hour Accelerated Crash Course) is an excellent way to open eyes and minds to the need for prudent action today. Again, use our What Should I Do? Guide as a catalyst for helping those who ‘get it’ take their first steps.
- Get folks engaged in the right actions for the wrong reasons — So your buddy next door doesn’t want to hear about your “doomer” predictions? Try a different tact. Maybe he likes the idea of a neighborhood fall cider pressing party, and joins you in planting a few apple trees in each of your backyards. Our Community Building guide is full of ideas for engaging your neighbors in action in ways that make your community more resilient, even if they don’t realize it through the fun they’re having.
- Define your line — Let those whose welfare you’re taking into consideration know of your intentions. Don’t make it a guarantee; just let them know their security is important to you. But let them know now what the limits of your support will be — or even better, give them a more restricted version (which will leave you some buffer in case of the unexpected). Setting these expectations in advance is valuable, even if the folks you’re talking to aren’t really listening. At the very least, you can proceed knowing you’ve done your utmost to be up front about what they can and can’t count on you for. Review our guide on Emotional Resilience; you will very well need it to prepare your heart in case you ever do have to put these tough calls into action.
- Empower the latecomers — Invest in assets and agreements that enable late-arrivals to help themselves (tools, information/education, small jobs, etc). Helping people skill-up and provide for themselves both increases their ability to prosper and reduces the likelihood they drain your finite stores. And you’ll be perceived as a benefactor within your community, which will be motivated to provide for and protect you (rather than abandon you) during times of adversity.