Looking at the escalating global credit collapse it now appears to be precipitating global economic depression. I can foresee conditions in the United States getting far worse in the months to come. There is now a fairly high likelihood of a general banking panic, with a large number of bank failures.
The next few years will most likely be marked by significant deflation, followed by a tremendous surge of consumer price inflation. (Much of the $7.7 Trillion in bailout money that Uncle Sugar has promised will be created via highly inflationary monetization.) As the Mother of All Bailouts (MOAB) grows, so does the risk of inflation. In the immediate future, the US Federal Reserve is likely to lower interest rates to absurdly low levels, in an attempt to re-ignite the sputtering economy. This probably won’t work any better here than it did when the Bank of Japan tried it a decade ago. Since interest rates will probably remain low, the profit you would make by leaving funds in passbook savings accounts is pitiful. Returns on stock have been negative for many months, and will likely continue to be. So you won’t be losing much by setting aside cash.
My specific recommendations:
1.) If possible, set aside the equivalent of up to one-half of one year’s income in greenback cash or cash equivalents (including silver and gold coins). If this means divesting more of your dollar-denominated investments, then so be it. You should be getting out of those, anyway. As I mentioned before, under the current economic conditions, they wouldn’t be gaining that much, anyway. A fireproof hidden wall or door cache would be best, but there is little muss and fuss in burying some cash. Perhaps you could use one of those wide-mouthed Nalgene water bottles that are no longer consider safe for use with drinking water. Of course make sure that you aren’t the only family member that knows the location of the cache– just in case for some reason you assume room temperature.
2.) Top off your fuel tanks–gas, diesel, and propane. This is a good time to do so, for two reasons: The recent slump in crude oil prices to around $50 per barrel has made most petroleum-based fuels and lubricants less expensive. Take advantage of this dip! Secondly, if you buy in the next few months, you will be buying winter-formulated gasoline. Of course take the normal precautions with PRI-G or STA-BIL type fuel stabilizer. If you heat your home with coal, then fill your coal bin to the brim.
3.) Catch up on any deferred yet nagging projects at your home and/or retreat. The time for procrastination is over. This means everything from dental appointments and car repairs to having your septic tank pumped.
4.) Take another look at your “list of lists” and see if you’ve overlooked any crucial tasks or acquisitions.
5.) As I’ve mentioned recently, one of your top priorities between now and January 20th (when BHO will be sworn in) should be purchasing semi-automatic firearms in common military calibers, and a large supply of top quality full-capacity magazines. After those are in hand, concentrate on buying bulk ammunition.