By Uncle Mike
History has shown that economic cycles are real. Bust, build up, boom and back to bust are financial life cycles. Financial cycle mirror “The Fourth Turning” cycles mentioned in Part I. It is my opinion that we are in the latter stages of a financial cycle not just in the USA, but around the globe. What can you as an individual or we as a collective group do about this, if anything.
The first step to recovery from anything is to accept you have a problem and define it. The problem we have is the value of money is decreasing. Paper money will continue to have little and eventually no value, thus becoming worthless. In order to mitigate this eventual occurrence, an option is to use the money as valued today to prepare for value that may come next. There will be ‘money’ after a financial collapse. It may not be identified, but there will be some item that will be used to obtain ‘things’. Let’s look at history again.
Throughout time, precious metals (PMs) have been a store of wealth. Now before you stop reading, I am not a “gold bug”, I am not a precious metal dealer, and I am not trying to sell you anything. So settle down! Historically, gold and silver have stored value for centuries. Here’s an example. In the 1920’s you could buy a gallon of gas for a dime. Granted it was a mercury (silver) dime. Today, a mercury dime is worth about $2 because of the silver content. You can still find a gallon of gas in some places for a little over $2/gallon. A similar item would be a gallon of milk. Worth about the same dime at the same time and still a bit over $2/gallon today. Silver (and gold) have maintained value over time. I will be honest with you and tell you I try to keep about 10% of savings in precious metals. Yes, I practice what I preach.
A quick search of the internet will show you that our global adversaries are using resources today to purchase massive amounts of gold to hedge against the collapse of the dollar. What do they know that US leaders don’t? Or are the US leaders actually purchasing gold as well and not informing the public?
If you are not inclined to invest now in PM’s, you can invest in other commodities (defined as: a raw material or primary agricultural product that can be bought and sold, such as copper or coffee. A useful thing such as water or time.) You may want to look at purchasing land, buildings, animals. Anything of physical value that will retain or increase in value. You should overextend yourself by buying a mansion. If you live in the city, you shouldn’t buy a goat. Maybe you’d be better off buying a ‘bug out’ location. If you can’t do it alone, talk with family members or partners. Think now about what you would or could do in a financial emergency. Have a plan.
Another step you can use to be prepared is to learn a trade. Perhaps you have a hobby that is literally worth something. It might sound silly, but I don’t know how to shoe a horse. Will we need blacksmiths in a collapse? Probably. How about a butcher? Pretty sure we’ll need them. How about a bitcoin trader? Hmmm. Maybe. Pretty sure only the top 1% will be trading bitcoin. Wonder how much bitcoin a loaf of bread will cost? If you bake a loaf a bread, will you take bitcoin for your time and that loaf? Depends on whether or not the bitcoin still maintains value if people are starving.
When a financial system collapses, the system will recover. This happens with the re-establishment of a financial system, with new money, new investment. The primary investment will be in the form of time. It will take time invested in creating new items, things of value that are needed and wanted. With the invested time will come a new currency that represents the amount of time invested. Items that can be traded, products that we can’t imagine. The financial cycle begins again.
Certainly, there will be trials as the cycle repeats itself, but if we prepare now, have a plan, and work with like minded people, we will all get through the rough cycle. The “reset” as some might call it starts at the lower level of economic needs. Top driven recovery’s come from authoritarian regimes that are destined to fail.
There is an old quote some attribute to Thomas Jefferson. I believe it was actually US politicians in the 1950’s that goes, “Any government big enough to give you everything you want is big enough to take away everything you have.” It will be no different with a 21st century government.
Take steps today. Save some money, buy commodities, learn a trade, find a profitable hobby. Enjoy your life. Most of all, establish a social network of family and friends that are like minded. Don’t waste valuable time on angry people. You will be much happier. Remember, you won’t be alone in the next financial crisis. We will all be in the same boat together.
Uncle Mike
