01-22-07, 03:05 PM #1
How to prepare for/survive a recession.
Hello fellow sciforumites, I would like to hear your views (some of them surely experienced) on how to prepare for a recession or if in the process, survive one. I feel there is an upcoming recession. People here will ask "why"? I won't go into that, that will consume alot of time. That can be explained in another thread. You are welcome to debate the current state of the economy and indicators. All I want to answer is the former question above.
Does it mean living a frugal lifestyle? Or can you invest in something, like T-Bills, and Bonds to have a steady flow of cash? Historically how have people made money off of this "economic purgation"?
Last edited by Businesswiz; 01-25-07 at 10:24 AM.
01-22-07, 06:34 PM #2
buy metal, or a currency pegged to metal. that way when your paper currency becomes devalued, you will still have x$ worth of metal to trade.
become more agrarian, have the ability to feed yourself without having to trade for food.
get a job. when recessions occur, the labour force doesnt change, the currency does, and therefore all service sector 'jobs' that dont actually produce anything go down the drain.
01-22-07, 07:28 PM #3
Pay off land, pay off taxes upfront for few years ahead, buy everything that could be of the practical value (forget finances&investments), buy a big (machine)gun or two and pray that landless folks who couldn't prepare for a big one wouldn't hang you on a big tree. That's one of the few ways common Joe could crawl through a big crash. Sure, you could become a criminal lord. The life is going to become pretty "informal" and corrupt. Read everything you can about the collapse of USSR, those folks survived somehow a huge crash. For example, Post-Soviet Lessons for a Post-American Century
01-23-07, 01:23 AM #4
Follow the Mormon disaster preparedness process. Find a local Mormon church and show up one Sunday...
Buy gold coins in 1oz, to 0.25 oz size.
Remember people have to eat and need their medications.
Pay off debt and have a alternate plan for income in case your job is at risk. If you work for the government,school, college....your job may be safe
01-23-07, 10:14 AM #5
Invest in seeds and learn how to grow and tend them; buy a flint and practise making fire; find out where your water comes from; and think how you can help your community adapt to the demands of the time...care for the elderly for they are wise...keep your children happy for they are the future.
01-23-07, 11:49 AM #6
Isn't gold at historic prices now, I know that gold prices have an inverted relationship with A boom. Do you feel gold prices will hit a $1,000 mark? BTW, the recession I'm talking about will occur in the US, where I live. I feel it will occur fairly soon.
01-23-07, 05:12 PM #7
Yes, the recession is given in US.
Here is a recent quote from the speech of our Federal Reserve Chairman, putting America on notice of a fiscal collapse.
"Official projections suggest that the unified budget deficit may stabilize or moderate further over the next few years. Unfortunately, we are experiencing what seems likely to be the calm before the storm. In particular, spending on entitlement programs will begin to climb quickly during the next decade. In fiscal 2006, federal spending for Social Security, Medicare, and Medicaid together totaled about 40 percent of federal expenditures, or roughly 8-1/2 percent of GDP.2 In the most recent long-term projections prepared by the Congressional Budget Office (CBO), these outlays are projected to increase to 10-1/2 percent of GDP by 2015, an increase of about 2 percentage points of GDP in less than a decade.
"The second cause of rising entitlement spending is the expected continued increase in medical costs per beneficiary. Projections of future medical costs are fraught with uncertainty, but history suggests that--without significant changes in policy--these costs are likely to continue to rise more quickly than incomes, at least for the foreseeable future. Together with the aging of the population, ongoing increases in medical costs will lead to a rapid expansion of Medicare and Medicaid expenditures."
The only time in U.S. history that the debt-to-GDP ratio has been in the neighborhood of 100 percent was during World War II. People at that time understood the situation to be temporary and expected deficits and the debt-to-GDP ratio to fall rapidly after the war, as in fact they did. In contrast, under the scenario I have been discussing, the debt-to-GDP ratio would rise far into the future at an accelerating rate. Ultimately, this expansion of debt (this is just one red flag) would spark a fiscal crisis, which could be addressed!
Armed with this information, prepare yourself. Gold is a good bet to 30% - 50% of your expenses that you expect during the period of recession.
01-23-07, 06:44 PM #8
I wonder: If the recession is in the US, would it also be a good idea to store your wealth in a foreign currency? I realize that the world would be negatively effected by the US's recession, but perhaps some currencies would still do well.
Originally Posted by kmguru
01-23-07, 09:07 PM #9
Under these circumstances, it is necessary to have some liquid assets for trade for survival. Keeping all paper currency is risky. So you have to hedge your bet by having some currency, some gold, some silver coins and other demand products to exchange food, medicine etc...
The reason I brought up the Mormons is that they have a good disaster plan as to food, water, fuel etc. You can buy dry good in bulk in Utah. They normally prepare for a year.
If the transportation is disrupted, think about where you are going to get food, water, medicine, communication etc for atleast 6 months...collect some good books and a solar power to charge your laptops....
Following their disaster preparedness process wouldn't require that I join the church, right?
Buy the coins from the Mormons? Or is this a separate piece of advice?
01-24-07, 01:33 AM #10
01-24-07, 10:39 PM #11
01-24-07, 11:43 PM #12
01-25-07, 10:23 AM #13
Thank you kmguru for your charity in information. You mentioned restricted rations for Gas and such. What about safe deposit boxes, is that a loop hole? Will they restrict that as well? I was also thinking, how will the trading of gold be viable? I'm 19 and have never traded with gold. What will it's intrinsic value be quoted as? i.e 1 coin for 1 chicken.. I hope I'm being clear here.
Also, Historically, have citizens actually relied on rivers for water and hunting for food in a modern society? In recent history that is. Will for example, water producers (companies) be in such demise as to lead to drought on their part? I'm actually only now researching this.
Thank you for any information.
01-25-07, 04:55 PM #14
If money isn't flowing normally, the employees of the water company might not get paid and the infrastructure might not be maintained. This could result in a total lack of water, polluted water, diminished amounts of water, etc.
Some essentials I would buy (should have at hand just now) - a good axe, a few flints, a few good knives, large amount of matches (dip them in melted candle wax to waterproof) stored in a few seperate containers, a few big tarpaulins, spade, water purification tablets, salt, flour and sugar.
01-25-07, 06:09 PM #15
I've thought about this very subject quite a bit recently. Some of the major supplies that I'm trying to acquire include:
A pair of strong knives for hunting, cutting, etc.
A lot of matches and a few lighters.
A hearty supply of bottled water and non-perishable foods.
A metal mess kit.
Comfortable warm clothing, including hats, gloves, boots, and blankets.
A sturdy tent or two.
A fishing pole.
Basic medical items like aspirin, alcohol, and who knows what else might be needed.
A couple of guns and a good supply of ammo.
Two-way radios, a set of watches, and an LED flashlight.
A map and compass.
A good bicycle.
This is just off the top of my head and is meant for a severe recession where survival is the day to day objective. If it's about inflation and investing, then I'd go for the gold and oil.
01-25-07, 06:31 PM #16
Nice list there, original. I'm interested in survival/bushcraft as you never know when you might need those kind of skills.
In some ways it's pleasant to think of a 'survival of the fittest' type situation, but I wonder how possible it is in our lifetimes.
I might try to write a story about a depression that never ended, but I'll need to get clued up on the politcal aspects first.
A good bicycle is an interesting one. I can't help thinking of '28 days' type scenarios. You're cycling along and you're jumped by a couple of guys intent on stealing your bike and whatever you have on you. Anyway, I'll try not to derail the thread with my thoughts
01-25-07, 09:15 PM #17
01-25-07, 09:27 PM #18
I live in Louisiana and have my concealed permit. The whole family have gone through gun safety. We have plenty of ammo and multiple firearms with laser sights. But I am slowly stocking up on ammo. We do expect the national guard to patrol the area...because we are surrounded by super rich people ( I am the poor one here) but better be prepared than sorry.
We are also stocking up with empty pool chlorine containers with pinto beans rice, pasta etc. Just putting a small chorine tablet will keep the bugs away for many years. We have some canned goods that we rotate every two years. Luckily we have a water well on the property that has an electric pump. When bad time comes, we will use the swimming pool water for toilet and use the well water for drinking. While we tested the well water for quality, we were told that if we plan to use the well water, drop some chlorine tablets and wait over night to use it.
The only item missing is the cooking fuel. I have only two gas tanks for the barbecue grill. I want to stock up just before we get in to trouble.
I want to do something about electricity to keep the refrigerators running. Standby generators are not the answer due to the need of gasoline. I am thinking a 3000 Watt solar panel. Or get a large propane tank and use a propane fired generator. This is an area I need to think through.
The only communication that will work after electricity goes out is short wave radios. But I expect electricity disruption will be temporary due to demand. That is because, we use coal and natural gas to power the plants and that is domestic supply. The national guards will make sure the power stays on.
So, think about no gas at gas station (disruption from middle east) that reduces truck delivery of goods and supplies. Intermittant electricity depending on where you live and collapse of the banking system so that the government is forced to print special money for the duration. Then figure out what you are going to do.
Now if we are talking about an asteroid strike...nuclear explosion or some other super disasters....then all bets are off...
01-25-07, 09:33 PM #19
01-25-07, 09:52 PM #20
The US relies on Canada for 15% of natural gas. If North America was facing some kind of problem I can see Canada cutting off the supply (it's 50% of their natural gas).
Over an extended period, gas is not a safe bet to use for cooking/power. Not just the Canada thing, but sporadic or no supply will leave you enough time to empty the tanks and wonder what to do. Living in or near the woods would make sense, fuel wise. Replacing the electric well pump with a manual pump and somehow concealing it might not be a bad idea. Also, electric lighting might intrigue people and bring unwanted visitors ready to dispose of you for a more comfortable style of living.
Instead of a refridgerator, you could make a larder/cellar or maybe keep food in a container lowered into the well and retrieve it with a pulley.