The recent news headlines about the investment banking crisis have answered the question that I often get from readers: “Why do you spend so much time talking about economics?” In my estimation, an economic crisis is the most likely trigger for a societal collapse, in the short term. The Lehman Brothers debacle is just a microcosmic preview of the global credit collapse. It is also a good illustration of the derivatives risk that I’ve been warning about for many years. How many times do I have to say this? The entire credit system is broken and it will be a full decade or more before the markets recover. In the interim, we will witness some horrendous turmoil and some potentially huge losses with derivatives, hedge funds, equities and equities aggregations (mutual funds, 401(k)s, and IRAs), banks, credit unions, municipal bonds, insurers, real estate, pension funds, and much more. With shares of the once iron-clad Lehman Brothers now selling at 21 cents each, (down 94%) it is clear that we are undoubtedly entering uncharted waters. The company had a market capitalization of $47 billion last year. But when I last looked, it’s cap was down to a miniscule $144.6 million. Somebody needs to call Richard Fuld and tell him that it is time to cue up the R.E.M. music.
For some details on this recent economic chaos, see the many links in today’s SurvivalBlog Odds ‘n Sods section (below.)
Wall Street is in utter disarray. This past weekend was as painfully traumatic as October, 1929. In today’s economic environment, nobody can accurately predict what will happen. So anyone that claims to be able to accurately predict market moves in this environment is a liar. All that I can safely suggest is that you get out of US dollar-denominated investments and do your best to make substantive preparations for your family. If you have been dawdling in getting storage food, then get on the phone with a reputable dealer, pronto. (There are several trustworthy storage food firms that advertise on SurvivalBlog. I would appreciate it if you would reward them for their loyal support of SurvivalBlog by giving them your business first. And, BTW, please mention SurvivalBlog, when you do.
Why did I make reference to the song “It’s The End of the World As We Know It”? Because of the second key line in the lyrics: “And I feel fine.” Most of SurvivalBlog’s readers are in a tiny minority of the populous. We are the people that woke up this morning, read the newspaper headlines, and yet we felt fine. We have minimal exposure to stocks and the banking system, and we have our Schumer together. We have our Beans, Bullets, and Band-Aids squared away, and even some extra to dispense as charity. Pardon me for feeling smug, but, A.) I told you so, and B.) We are ready. I pray that your family is ready, too.