Doomsday Prepper Thread

Ok bro. So, that's another thing that is just wishcasting and is not going to happen.

Honestly, do you even realise how completely unrealistic your scenarios are on so many levels? If society ended up in anarchy tomorrow, you'd get something along the lines of Mad Max. It's not going to be a ****ing Utopia. The "society going to ****" part is low probability, but is literally the only wildly realistic part out of anything you've said, by orders of magnitude.

Ok we will get mad Max then because I promise this debt path is unsustainable, regardless of how much you think I'm the unrealistic one.

I think you don't understand how "debt" works at macroeconomic levels. Hint: it's not like your credit card. Imagine a world where 2+2 is not 4 and 2-2 is not 0, and that's a good starting point.

I think the main mistake he does is a very common one of not understanding that debt has to be compared to gdp not looked at in absolute terms.

An ever growing number can actually be sustainable if gdp keeps growing as well.

Ofc there can be debt trajectories which aren't sustainable, and / or sustain some levels of debt can carry costs, even significant ones, but debt as a % of gdp is stable last 3 years in the USA it's not like it is spyralling out of control.

The pattern has been one of stable debt to gdp in good times, and huge increases in bad times. I agree that's suboptimal as in good times the ratio should decrease, but that's not a claim that public debt is going to cause an implosion of the fabric of society even if it is managed suboptimally like it is currently.

The European central bank is directed to take corrective action when debt is up to 60% of GDP. Currently the USA has a debt to GDP ratio of over 130%. The bubble has to burst sooner or later. Back in 2001 I binked a bad beat jackpot for $20k and bought Krugerrands for $265, now they are 10x that which means our money is worth a tenth of what it was in 2001.

Investment advice: Canned food and ammunition.

Currently the USA has a debt to GDP ratio of 95, the debt the government owes to itself shouldn't be counted for any purpose.

Check the "debt held by the public" stat not the notional debt stat without that correction.

I remember in business school I asked a professor if $14 trillion of debt and a $2 trillion social security trust fund was another way of saying $12 trillion of debt with no trust fund, since it's just an accounting entry different. If you want to exclude "debt we owe ourselves" such as this, then you should also record the other side of the journal entry and acknowledge the social security trust fund is worthless. If "debt we owe ourselves" includes debt for which no honest buyer could be found and thus the Fed had to monetize it, you are making a case that the dollar, and thus bonds payable in dollars, will ultimately become worthless, which I agree with.

I actually own a tee shirt that says 1+1=2 because this isn't the first time I've encountered people willing to dispute the fact in an attempt to support their ideology. Unfortunately, 1 plus 1 does equal, just like 2 plus 2 equals 4, a fact that has been stated on every twoplustwo book, despite its inconvenience to some.

GDP is a spending-based measure that has no real relationship to the strength or growth of the real economy, because it includes government spending. They could print a hundred trillion dollars today and distribute it equally throughout the population and GDP would soar, but it wouldn't mean they've done anything to help the real economy as the currency would quickly collapse and producers would quickly stop exchanging their goods for the worthless currency US consumers could offer.

You do realise that people have been predicting doomsday like this since the beginning of time, right? Even when the doomsdayers came closest to being right in living memory, which was the 2008 crash, nothing even remotely close to your predictions of the breakdown of the very fibre of society came true.

I guess you haven't heard of the hyperinflations in Zimbabwe, Argentina, Venezuela, Bolivia, Weimar Republic, etc. It even happened in America with the continental, prompting the founders to only authorize gold and silver as money in the constitution.

The laws of economics don't change just because the economy is bigger. Sure, the government and Fed papered over the collapse in 2008 with bank bailouts and massive amounts of QE to monetize the sovereign debt and mortgage markets over the next decade, but the underlying structural problems in the economy haven't been addressed, all they've done is create an even bigger and more unsustainable debt bubble.

I don't think we'll have to wait much longer though. Long term rates increased when the Fed started its rate cut cycle indicate the bond vigilantes have returned and that inflation and default risk is becoming a real consideration in their eyes. These concerns won't go away with Trump who supports low interest rates and additional deficit spending. It's nice to think the circumstance of trading unpayable bonds for real goods can exist in perpetuity but it isn't reality.

I'm old enough to have spoken with people that lived through the Great Depression, my own grandmother for one, it wasn't pretty, and it was brought on by the same circumstances we are facing today.

it what?

The Great Depression. It's more than one thing. Government spending, bank failures due to loans not being re-paid, BRIC nations leaving the dollar, production moved off shore, war, unemployment, etc.

Ben Mallah is dumping US commercial real estate due to 'delay and pray' stance taken by big banks. “Shark Tank” star Kevin O’Leary suggests commercial landlords and banks will eventually have to stop pretending and recognize these losses. “These banks are going to fail because up to 40% of their portfolio is in commercial real estate,” he told Larry Kudlow of Fox Business last year.

Good article on just the real estate potential collapse.

https://www.msn.com/en-us/money/realesta...

I know the guy is obviously very successful, but it seems that in the last 10 years or so his main reputation is basically just being wrong about everything he says. It seems that whenever I've seen his name brought up it's pretty much as an object of ridicule.

Yes i know what the Great Depression was.

What i don't understand is how you can claim the years preceding that had anything in common with current circumstances, macro-economically wise.

Debt as a % of GDP was in freefall in the years preceding the great depression, after the accumulation to fight WW1.

It went from almost 0 pre-WW1, to 30-33% at it's peak at the end of WW1, and was back to like 15% in 1929.

Inflation was

1.8% in 1923
0.4% in 1924
2.4% in 1925
0.9% in 1926
-1.9% in 1927 (deflation)
-1.2% in 1928 (deflation, again)
0% in 1929

And the US dollar was under the gold standard.

So the great depression happened with almost no federal debt existing (compared to today) and after 3 years of prices being lower than 3 years before, and with a different monetary system in place.

Commercial real estate is in a structural mess that has already caused, and will cause, pain to entities with exposure to it, doesn't mean it will necessarily be a catalyst for a financial disaster. It's already happening while the economy is good, other asset prices are very high and so on.

the bottom line is 'what do I do with my money?'. Stocks, bonds, metals, ammunition and canned food? Currently in a conservative position but if Warren Buffet is selling into cash maybe I should also, then re-buy when the market crashes.

You (me, nor anyone here) aren’t operating on the Warren Buffett level. You aren’t making strategic determinations of how to manage one of the largest privately held cash piles relative to broader macroeconomic conditions, which may open odd opportunities for someone who can stroke a check for tens of billions of dollars in down cycles.

That isn’t in your ambit of interest anymore than Warren Buffett is worried about the date codes on the spam in his prepper pantry.

John Q trying to coattail the decisions of Warren Buffett is a fool playing a different game who will miss out on John Q type opportunities, often vastly better than anything available to Buffett.