More Economic Doom And Gloom

Discussion in 'Money, Investing & Precious Metals' started by UncleJoe, May 18, 2010.

  1. UncleJoe

    UncleJoe Well-Known Member

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    Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

    Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:
    Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.

    Dow Theorist Richard Russell: Sell Everything, You Won't Recognize America By The End Of The Year
     
  2. Vertigo

    Vertigo Member

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    I read the same article, sent it over to my parents. They replied with "Do we really need to sell everything? Will things really get that bad?"

    Keep in mind, they are self-employed, owning a small family business, so its not just something they could do easily. In fact, if we were to sell everything now, with all the investmenst currently going on, this would be a huge loss for them. Any thoughts on this?

    V.
     

  3. sewserious

    sewserious Well-Known Member

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    I never understood why folks urge you to sell everything when they think money is about to become worthless! That makes absolutely no sense. Sell things and use the money to get out of debt? That makes sense to a point. If money is worthless, things and skills will be needed to survive on. I say lighten the load maybe but sell everything/ :scratch
     
  4. Vertigo

    Vertigo Member

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    Actually the author meant, to sell all your stocks, bonds, etc... Basically selling all your 'paper' investments and keeping only gold (bullion) and of course property. Thats what he meant with selling everything.

    V.
     
  5. UncleJoe

    UncleJoe Well-Known Member

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    I've never played in the market so I may have a different perspective.
    If the market should collapse to the extent it did in '29, what would you have left? A pile of paper that used to represent money. I have a friend who, aside from his house, has all assets in the market and is now getting genuinely concerned. He's considering the possibility of losing his entire life savings and doesn't know what to do.
    I don't have any real answers for him but the stock market appears to be a very volatile and dangerous place to be right now. Contrary to what we're being told, inflation is kicking in. A can of veggies at the store is up to about $1.25. The 3lb block of cheese I buy is now $13.49; up from $9.99 just 2 years ago.
    I'm no investment manager, but if I had bought that can of veggies a year ago, I would be realizing about a 30% return on my investment through the power of inflation.

    Vertigo, I also am self employed, in a service industry. No. I have not sold everything. I have trimmed down my equipment inventory form 6 to 3 trucks and sold a couple pieces of equipment that only got used a few times a year. I invested some of that in fuel to power what I kept. A lot has gone into non-powered tools to keep my business and the garden going and increase my food stores. Was this the best thing I could have done? :dunno: Like I said, I'm no investment guru, but I feel more comfortable with tangible assets in my possession than I would with pieces of paper that say I have lot$ of net worth.
    I look at the stock market and compare it to Las Vegas or any other gambling venture. I post articles like this one for folks to read and draw their own conclusions. Not everyone thinks the same way. The things I do make me feel better prepared for whatever may come down the road. YMMV.
     
  6. mosquitomountainman

    mosquitomountainman I invented the internet. :rofl:

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    Getting out of debt is the best advice for about any time in history but especially now with the economy in such shambles. If you must owe money owe it on things you can afford to lose. The only thing keeping our economy afloat is the extensions in unemployment payments. And that is barely working. I fully expect a cascade of econmic events to come crashing down on us in within two years at most. There is no real fix for the world economy.
     
  7. NaeKid

    NaeKid YourAdministrator, eh?

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    Believe it or not, people will "borrow" money to play the stock-markets hoping that they will be able to pay off the interest on those loans with the money that they make from the stock-market. That is the reason why the stock-market is so dangerous!!!

    A couple years ago my bank asked me if I would like to take out a loan so that I could contribute more to my RRSP (Registered Retirement Savings Plan) and just pay them the interest. Then, they would take that "money" that I just put into the RRSP and they can play with it in the stock-market to try to get more money for my RRSP. Can you see where this is going? Fake money to make more fake money and it all ends up on my shoulders if they screw-up and loose all my fake money and I am on the hook for it all.

    That article has sound advice - get out of the fake-money scenerio and get into tangibles. If you want to invest in steel - buy the steel in bulk and store it yourself - not a piece of paper that says that you "own" steel in some mill that hasn't even been rolled out yet.

    That is the problem with "futures" trading - there isn't anything there yet, you just assume that everything will be fine and someday you might own it.
     
  8. horseman09

    horseman09 Well-Known Member

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    Uncle Joe, we have a lot in common. We also live in PA. My wife and I are (obviously) preppers. We don't play the market. We are self employed also. (Do you cringe too when your friends tell you how nice it must be to hunt and fish as much as you want since you are self employed?!!!? Grrr.)

    However, rather than downsize, we are increasing our marketing efforts to acquire more business, knowing that when TSHTF, we'll lose lots of business, but will have more left over than if we didn't expand our business. We self employed folks are probably a little better off than those who work for someone because at least we have some control over the business that writes the checks. In other words, we can...........yup.......prepare.
     
  9. allen_idaho

    allen_idaho Well-Known Member

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    Technically almost all of our money is make-believe. It only exists as a digital number on a computer screen at a bank.

    Take a look in your wallet or stashed around your house. I'm willing to bet that there isn't much cash. Maybe a few bucks here. Maybe a few hundred. Maybe even a few thousand. Now if the computers go down, that will be the bulk of your wealth. In the wake of an EMP or other disaster, there is a pretty good chance that your bank accounts will be erased in the blink of an eye.

    Business accounts. Personal accounts. Savings. Checking. All gone. Poof. All of your digital money vanished.
     
  10. NaeKid

    NaeKid YourAdministrator, eh?

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    True that!! That is the reason why I try to put my money in tangibles instead of into intangibles. My money is spent on "toys" that others wouldn't consider putting money into. Some of the "toys" are "antiques" - castiron cookware as old as 1910, a gas/wood stove, a '77 Chevy drivetrain swapped into an '88 Jeep body, bicycles, x-country skiis, snowshoes, hiking/skiing poles, old hand tools as well as power-tools and manuals (some originally printed in the late 1800's).

    I do have a savings account, but, I also have my matress-fund and my cookiejar-fund. I am back to slingin' drinks (bartender) and my tips land in either one of those funds for a day when I can't access my money in my bankcard. The more ways that I can get a CUT (Cash Under Table) the easier it is to stash-the-cash and forget about it.
     
  11. Vertigo

    Vertigo Member

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    I understand what you mean, but the thing is that our company is in the midst of some really big changes. Frankly we are building up a brand new company. We had and still have a wholesale business in foodstuffs (mainly pet feed, but also whole grain, wheat, rice, etc.) but are now building up a production and packaging facility. And that machinery requires a whole lot of investment. The problem is we are still in the midst of those changes, and we will then have loans running for another 10-15 years if all goes well. Pulling back out of the investments that were already made, and we are now paying off, would be a financial disaster.

    Sure we buy mostly tangibles and do not invest too much in 'luxury items' such as new cars every 2 years and such. But being self-employed means close to no state-pension (In europe everyone is supposed to have a state-pension, and it is very high for employed people, and as a result most workers never save a penny) meaning that we have to save the money for ourselves. Naturally this would be in the form of money in a savings account.

    And since laws and regulation here are so strict, you cannot just start up a farm wherever you want. Not even to begin speaking about property prices... (my parents actually went out last weekend to check out a small farm, for 500,000 euro or 610,000 USD they could buy 0.7 acres of farmland, with some old buildings on them that are actually ruins and would only be good to be leveled)

    There are just not many good options available. Only to work harder today than we did yesterday.

    greetz and thank you for the response,

    V.
     
    Last edited: May 19, 2010
  12. UncleJoe

    UncleJoe Well-Known Member

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    I would view this as a worthwhile investment. :congrat: JMHO of course.
    Even in a total economic collapse, you have in your possession a tangible commodity that will be worth more than gold. If the .gov doesn't confiscate it "for the common good" your family will be in an enviable position. I wish you and yours well. :)
     
  13. BasecampUSA

    BasecampUSA Sr. Homesteader

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    :threadbump:

    Let's revisit this and think about it...

    I think this guy was a 6 months to a year too early...

    I can agree that we are looking for this to happen in 2011...

    ===============

     
  14. Herbalpagan

    Herbalpagan Well-Known Member

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    I agree, he was a bit early. Though I can say that now, at this time, i hardly recognize my country. lol
    It always amazes me just how long the powers that be can stall the inevitable aka kick the can down the road.
     
  15. Sonnyjim

    Sonnyjim Prepping

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    I agree. It has taken a while, but other than my home, I am completely free of debt and I refuse to get back into it in any form. It has also taken a while but my wife has really come around to the same mindset as me. That mindset isn't completely over the top paranoia but certainly one of concern and as a result....preparation. Everybody keeps saying, "we'll just come over to your place if anything 'happanes'." I'm sick of hearing that because it's not going to happen. I think this guy did hit the nail on the head, like many of you I think he was a bit late. The can 'CAN' be kicked, and I think it will be kicked for probably another 2-3 years, who knows, but I agree that I think it's too fargone and a temporary collapse(for how long who knows) is inevitable.
     
  16. greaseman

    greaseman Well-Known Member

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    Interesting posts. I looked at the dates posted, and time tells a lot. Notice that things are only worse. In some cases, much worse. History is a great teacher. If we study it at all, it will tell us what we need to know. people tend to only look at what has happened in their lifetime, forgetting to look ffarther back. The normalcy bias is a killer. Just because something hasn't happened in people's lifetime, they think it can't happen to them. We all know that to be not true. I see nothing to change my mind about things, and just the simple act of looking at the changes in conditions from the first postings on this thread will point someone in the right direction. It only gets worse, does it not.??
     
  17. vn6869

    vn6869 Afraid, very afraid

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    Agree,
    And things are getting better per the BHO administration lackys. :nuts:
     
  18. Clarice

    Clarice Well-Known Member

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    The hole dug by the government and the bankers is getting deeper by the day. Now they are playing tough guy with China, who holds most of our debt and has a very short fuse. I think I'll beef up my preps.