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Life After the Oil Crash
Deal With Reality or Reality Will Deal With You
I guess when somebody like Senator Chris Dodd, the chair of the Senate Banking Committee says "we may be only days away from a complete meltdown of the financial system" (Source: AP) just as the world's biggest financial institutions are being fed into wood chippers, all of a sudden people realize the information presented here and other "doom" sites has not been an exaggeration or some type of joke. I say this because both my inbox and the LATOC Forum have, for the last week or so, been getting inundated with people asking - often frantically - "what can I do to protect myself financially!?" My guess is that, until recently, lots of folks out there in cyberland looked at this site and others like it as bizarre forms of infotainment. Thus they tended to discount the information presented here as being exaggerated either in magnitude or imminence. That is, until last week. Now, with the financial system clearly lurching towards complete failure, they're taking the information presented here seriously and taking steps to protect themselves. To illustrate, here is a representative email I received from a reader who found out his 401k has been shredded by the recent meltdown:
Financial and Social Collapse Are Very Real
Posted by Matt Savinar, 09/22/2008
It's a real shame that this guy didn't "wake up" even just a year ago. He could have done what a lot of LATOCers did which was to invest their federal reserve notes in hard assets like hand tools, storable food, disaster supplies and anything that would have permanently lowered his overhead expenses.
Those of you who still find yourself with assets at your disposal: my only advice is the same advice I've been giving for five years now. That is to make the best use of whatever time and money you've got left before it's too late. If you're looking to buy storable food but don't know where to start, just go to Nitro-Pak and order up the cans of dehydrated beans and rice in a 2-to-1 ratio and maybe some proteins. Vegetables like tomatoes and carrots are the easiest of foods to produce so you want to concentrate on the calorically dense foods like beans and rice. That way you'll have something to sustain yourself on in between the time the retail level banking system implodes and the time your local systems of local food production get up and running. If you haven't already, pick up some extra warm clothes so you won't freeze when either A) you can't afford heat or B) the deliveries of fuel stop. Get a good bike, a repair kit, and a set of spare tires from your local bike shop. Start getting in shape and getting to know your neighbors. Join some type of a group so you'll have people to turn to for protection as things unravel. Other than that, be thankful for what you've had, get ready to roll with the punches, and develop both your sense of humor and your sense of tragedy as we're all going to need plenty of both.
Best of luck,
Matt
Matt,
Alot of times I come on and say that your warnings about banking are hype. But I had a personal experience with how real this stuff actually is. I had 1/3 of my 401k in the Reserve Primary Fund, the oldest, largest, money market fund in the world. Yesterday it took a 3% loss on lehman bros commercial paper. As someone who has studied finance for years, that floored me that a money market manager would be reckless enough to buy that investment. Its absolutely stunning. I called the 401k manager and they don't have any stable funds to put the money in once Reserve Primary disburses the money in 7 days. So I'm stuck pretty much dumping it into stock funds and unsafe bond funds.
I just wanted to say how real this stuff is. You can wake up and your ultra safe fund is down 3% and your stuck dumping your retirement savings into stocks. If something like this can happen, I wouldn't rule out anything. I can imagine now the FDIC going under and money evaporating or getting hyperinflated away. I really get it finally.
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