Economics & Investing For Preppers

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1. Headline: A debt crisis would be good for gold. Let’s work through a potential debt crisis. Some part of the bond market cracks, and investors(individual, institutional, and pensions) start losing confidence in bonds generally. They rush to sell, and bond prices plummet. Interest rates go up (inverse relationship with bond prices). As bonds crash, stocks start to crash as well, as investor confidence disappears.

   Looking to protect the value of their wealth, investors start shifting to gold. The price of gold starts rising. Those who have held gold all along watch the value of their holdings increase dramatically. I believe $10,000 an ounce is possible in a scenario like this.

   Then what? You’re sitting there with a very valuable stash of gold. Your wealth has been protected. What difference would it make to you? Well, that depends on the extent and length of the crisis. A permanent crisis (TEOTWAWKI) would mean you’re permanently wealthy, as long as you’d be allowed to sell or spend your gold.

   A temporary crisis would see your gold spike back down as it ends and bonds and stocks once again gain investor confidence and start increasing in value. You didn’t sell your stocks and bonds, did you? You did? Oops! Now you’re poor, holding few or no assets of value.

   I suggest a two-pronged strategy to protect your wealth over the course of a temporary crisis. The first is to get your money out of stocks, bonds, and mutual funds before a market crash fully hits. You can do this by using out-of-the-market trailing stop losses. You can build your own spreadsheet or use http://www.tradestops.com (note I have no connection with them except as a user.

   Now you have cash from your asset sales. Should you shift it all to gold? Probably not. You should already have purchased gold. The second part of the strategy is to sell your gold at the right time. How do you know when that is? As Baron Rothchild advised someone who asked when to buy French government bonds, “wait for blood in the streets.” And he meant it literally.

   When there are riots in urban areas and lines out the front of coin shops, sell your gold. Use that money to buy assets no one wants (fire sale prices): stocks, bonds, land, rental real estate, businesses. As the crisis ends, you will have a good chance of coming out of it with your wealth enhanced.

   Remember, asset value always depends on having someone to sell it to. Gold is an asset like other assets. It may well be the most real of monies, but any medium of exchange assumes a functioning exchange system and willing buyers.

   If you read Ferfal’s book on his experiences during an Argentinian crisis, he writes about a friend of his who was able to trade a functioning car for a condo worth hundreds of thousands before — and after — the crisis.

   I shouldn’t have to caution you to be very careful how — and to whom — you sell your gold. I believe it’s preferable to take a small haircut by selling to a dealer rather than trying to make as much as possible and selling to someone who turns out to be a predator, gang member, etc.

2. RE: Magpul Sand color mags – all my 300BLK mags – 2 dozen – are Sand PMAGs and dyed Sunshine Orange and have Magpuls – the magazine bottom “ring pull” that gave Magpul, Inc. their name – on them.

   In visible light, a bright orange magazine says “300BLK” and in the dark the magpul provides tactile identification. Helps prevent KABOOMs because even when magazines are kept separate, mistakes can still happen, especially if there’s a potential user who doesn’t understand 5.56/.223 vs 300BLK.

   KABOOMs sounds like an excellent reason to have only 5.56X45 and 7.62X51 in the battery, but supersonic 300 BLK makes a fairly good cartridge for an AR-15 pistol with a LAW Tactical folding stock adapter in “curtilage duty”. With a good sling – I prefer the Vickers, and the LAW Tactical adapter has a lock-in hole for a QD ring – and the stock folded, it’s more portable than anything except a holstered pistol, holds more rounds with higher energy than pistol ammo, and with a RDS (my preference runs to the Aimpoint PRO because it works and battery life allows it to be left on for months) it’ll be more accurate out to “direct threat” distances inside the fenceline.

   As to “a bright orange magazine will let the enemy see you/give away your position” I figure the sound of gunfire and incoming rounds will do a pretty good job of that especially if my aim is good. The biggest problems around here are 4-legged anyway, and they’re more sensitive to motion and scent than colors.

   Please, Magpul. bring back the Sand mags.

   FYI, RIT makes an “undyer” – something they claim will remove whatever dye you used and allow re-dying. Never tried it so no idea if it works, but it’s available.

   1. I personally do not have any AR-10s, but rather AR-15s in 5.56 (carbine rifles) and .300 BLK (pistols). I consider the .300 BLK to be the perfect cartridge to fill the gap between 5.56 and .308, providing the ability to send a .30-caliber bullet while allowing the higher loadout capacity of the smaller 5.56. Since I cannot legally use a supressor here in the DPRK, I prefer the 120g supersonic loads for .300 BLK. A bit on the louder side, but it sends a bullet about the same weight as 9mm downrange at twice the muzzle velocity and four times the muzzle energy, with a very controllable muzzle blast. Me likee muy mucho.

      If a person is concerned about telling the difference in the possibility of a confusing firefight, you can simply mark each magazine containing your .300 BLK with bright orange nail polish. A one-inch-wide swatch of orange on the upper area won’t be visible to any potential enemies, but will certainly stand out to you when you’re holding the mag in your hand (and it’ll be hidden from view anyway when the mag’s inserted into the receiver).

3. Further comment: In a serious crisis, the mechanisms for seriously negative interest rates are already in place. A negative interest rate would mean that a bond buyer would pay the bond issuer for the “privilege” of owning the bond. Bank account owners would pay the bank for the “privilege” of having their money in the bank. These things already exist in Europe. There are trillions of dollars of negative rate bonds there.

   Central banks are worried about not having policy weapons in the next crisis. One of the weapons they’re preparing is the right to move interest rates to a seriously negative level. Imagine a -5% rate on the money you have in the bank. But wait, you say, you’d just take your money out. They know that, and would restrict the amount you could take out to some small ongoing level. Or, they would simply close the banks and limit how much you could get from any ATM.

   One thing you can do is to keep enough cash for at least 3 months of your basic expenses at home in used bills not larger than a twenty. You can’t keep all your money at home, of course, so your banking options are limited. It might be that credit unions would be a better place to be than commercial banks with large derivative exposures, but a Federal Reserve policy would be implemented by everyone.

4. Re. cryptocurrencies in general.
   Honestly I just don’t get it. We have all seen the attributes of real money. Why in the world would we embrace the use of any cryptocurrency?

   1. Montana Guy, we’ll be forced to embrace Cryptos at some point – but I think the definition of such currencies will change. World governments will not allow for any competition but they will most certainly adopt block chain technology and methods, then work in restrictive policies. The days of anonymous cryptos are numbered but will they’ll still serve as a vehicle for currency arbitrage until full controls are put in place.

      I’m no expert but in my view this is the perfect platform to implement a cashless financial system world wide. The general population has already signaled their willingness to adopt such a system. Imagine – we get the “choice” of adopting whatever electronic currency we prefer based on our social viewpoints and illusions of privacy but in the end they’ll all feed into the same system for a standardized way to value your wealth and allow the government to monitor transactions. Cash and any anonymity associated with unmonitored cash transactions will die.

      In the end what’s the difference from just using your credit or debit cards? Perception of the masses.

      1. Been saying this for years…cash will never, ever die. Shops and institutions that prefer cashless will simply offer incentives to entice people to choose EFT/ACH over tangible cash. Some companies argue that they don’t want to deal with cash because of the inherent risk of being robbed, but electronic accounts are hacked all the time, which is theft all the same. The last time I used an actual credit card for a face to face purchase – a few years ago at a mall – there were fraudulent charges within half an hour of leaving the store. An investigation found that it was the store’s employee(!) who stole my info.

      2. Chris, thanks. Your thoughts makes sense to me. They are much like those expressed by fellow Montanan Brandon Smith. Bitcoin and others will be the bait and globalists will make the switch.

5. Second the purchase of sand colored mags.
   When cammo painting your rifles you always want to go from light to dark. Black is the worst base color. The sand mags are the perfect start to custom camo color mags.

6. The idea of a “KABOOM” is particularly disturbing to me. For that reason, I have avoided the .300 Blackout. But I have been considering the 7.62×40 Wilson Tactical. It is long enough that it cannot be chambered in a 5.56×45 rifle. Just strikes me a a much safer alternative. While I agree care is needed in paying attention to what you load, Murphy is still on the loose. The cartridge just does not seem to get the publicity the .300 Blackout does despite it seeming to provide the same potential capabilities.

   1. Since I live in grizzly bear country, I opted for the .450 Bushmaster as my one “odd caliber” AR pistol that has subsonic capability. (All of my others are 5.56mm.) Similarly, there is no risk of an ammo confusion kaboom.

7. “we get the “choice” of adopting whatever electronic currency we prefer”

   Its the same “choice” they’ll give us when the biochip is forced on us. Of course the biochip will be tied into the crypto system so anyone who refuses to be chipped is outside the system and without the ability to make a living or to buy or sell.

   Let me think…. Seems I’ve read about such a system somewhere…..

8. I am a researcher and have found that Ripple, San Francisco Blockchain company has designed a system called Ripplenet, which banks will use to transfer money to each other in 3 seconds anywhere on the planet. No more Swift system. Donald Trump executive Order 13772 put Ripple into the Treasury – Federal Reserve faster payments system that is being built now. The trillions of national debt will be erased, and all nations of the earth will be on Blockchain in 10 years. The underlying digital asset for them all is called XRP, and is at $0.32 each at this time. When global adoption matures, and trillions in Nostro Vostro accounts is released, XRP will be flooded by trillions in daily velocity, making XRP extremely useful for all nations through the SDR basket of currencies. This is in preparation for global economic meltdown down, and the US dollar losing its reserve currency status. XRP will likely be backed by Gold by all nations, which is why so many countries have been loading up on it for the last 10 years. Get ready for a yuge bull run on XRP. Cash out and move to Redoubt lands, because you’ll finally be able to afford it

9. I agree that cash is doomed. It won’t go all at once. First they’ll tell the public no more $100’s will be printed, and as the bills get to banks they’ll be retired. This is the “frog in hot water” approach. Then they’ll do the same for the $50. They may then wait a while, while people get more used to the new digital payment system. They’ll outlaw large purchases with cash (already done in parts of the EU). After a while, all bills and change will be withdrawn from circulation. They may even outlaw large barter transactions, putting a dollar limit on them. Sound draconian? It is!

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