Tuesday, March 12, 2013

Economic Crack Binge and Coming Effects

The best comparison to our countries economic situation and coming problems I can think of is Charlie Sheen. Our problems with massive deficits are like Charlies problem with crack cocaine and alcohol. Lets call derivatives the Charlie equivalent of prostitutes/ porn stars.

Now I cannot predict the specifics of Charlie Sheen's next breakdown/ meltdown/ fail. I can however confidently say 100% that there will be one. Maybe he will shoot his celebrity fiance, hold a knife to the wife's neck at Christmas dinner, manage to mess up staring in the top rated sitcom on tv, who knows. (These are all things Charlie has actually done;)

 Disturbingly our upcoming economic problem is like Charlies upcoming breakdown/ meltdown/ fail. Just maybe we will manage to kick the proverbial can a ways down the road. Maybe it will be 70's era stagflation. Could be the standard South American currency devaluation/ hyperinflation or an all out Argentina like economic collapse. The old adage that big powerful countries do not go broke, they go to war (a la Germany) could prove accurate again. Maybe a combination of crumbling infrastructure and weakened defense makes an attractive time for an old enemy to attack or just use an EMP to keep us distracted internally. Maybe one of the dreaded black swans pops up in the time we are able to handle it the least.

What can we do about this? Well the usual advice to buy bullets, silver , gold and emergency food is always sound. Things like water filters might become important as infrastructure crumbles or breaks and standards just plain drop. (Yes that is a lot of linkeage in a paragraph. Got to keep the bill payers happy.)

Being as healthy as possible is prudent. Get fit, take care of lingering issues you may have, go to the dentist, order a couple spare sets of glasses and stock extra medication.

Buy food. Yes it is getting more expensive but basic staple food, even the long term stable stuff, is still a great deal. Right now food is ridiculously cheap by historic percentage of income. Most people here can probably make some choices to put a few bucks into food and fill up the pantry.

Learn skills. Specifically learn skills that will let you do things yourself instead of paying somebody else to do them.

Get ready to protect yourself. Things aren't getting better. Have realistic and sustainable (if it's not comfortable you will not do it) plans to carry weapons while still going through your normal life.

Most of these things are not new. In fact they are generally the same stuff I talk about. Best get too them before they are more expensive and harder to do.


Aesop said...

I agree with that, but not in the way you think. Charlie's already had his meltdown. The only thing he hasn't done yet is keeled over dead.

His career is over. He's in the same place Robert Downey Jr. was in when his repeated penchant for the Bolivian Marching Powder became common tabloid fodder. At that point, the insurance companies who bond that they'll fork over the $90 Mil if a tv show or picture crashes have final say on casting (kind of the same reason airlines can't hire pilots with multiple DUIs). And they nixxed Downey for 20 years, until he both cleaned up his act, and some producer was willing to pony up a $50Mil bond out of his own money to take a chance that Downey was going to stay clean and sober, at least until the wrap party. Except Charlie, while a nice guy when he's not juiced, has none of Robert Downey's talent. And he, rather publicly, pissed on the head of a network, an A-list show-running producer, and a major studio, simultaneously. The nearest equivalent is offending the President, Congress, and the Supreme Court, and then hoping for a government job. And his father and brother, who earlier literally perp-marched him into rehab, have basically washed their hands of him. The sadder part is Charlie's residual payments for 2 1/2 Men will keep him in coke and hookers until his heart explodes. If he's alive in 5 years and still coherent, I'll be rather surprised.

Arguably the U.S. is also arrived at the point where we've had our meltdown, we simply haven't keeled over dead yet either. China will no longer buy pour worthless paper. europe wants their hard gold bars back home, yesterday. And the family intervention failed, so the folks who care about this country and have jobs and make it work have basically started looking out for themselves. The only question about the final crash is when exactly it happens, and how fast we're going when we hit.

(Unless we posit the miraculous election of a president and a congress willing to cut all entitlement spending 50% across the board for a century, cuts taxes and regulations by 10-20%, throws everyone with functioning arms and legs between 18 and 65 off any other welfare in perpetuity, and disbands at minimum three cabinet agencies, or more, zero their budgets, permanently end their programs, and fire their employees. And has the patience to wait 5 years to let things bounce back. Anybody who expects that, while you're up, can you grab me the winning powerball numbers?)

I look at it like plane crashes.
Worst case, we do a Flight 93 at 90 degrees nosefirst into a cornfield. Best case, a nice letdown into the Hudson River, and nobody drowns. Middle case, we corkscrew in a flaming fireball in Iowa, but somehow a goodly number of people walk away alive. But in none of those cases does any of the aircraft fly again.

Anybody that can't flap their wings better start investing in parachutes and asbestos underpants, because it's going to be a bumpy ride. It could start as soon as next week, or be like FerFal's Argentine sinkage into the quicksand and happen over a decade or two (in which case we're probably already into year 5).

I second the motion to get busy.

Archer Garrett said...

I'd add to your list - multiple streams of (preferably semi-passive) income.

Your blog advertisers is an example of you making some scratch on the side - scratch that can go directly to savings/bill pay/preparedness items that wouldn't have otherwise been available.

Leverage yourself in the ways that technology will allow you. You DO have opportunities now that people have never had before.

Indie Authors, Filmmakers (Or even Youtubers - see Noir and NRA), Musicians, Graphic Artists, Bloggers, etc. can all leverage technology to better their situations.

Of course, it doesn't have to be technology based, as I know several people who have recently made the dive into a physical, entrepreneurial endeavor that they will pursue on the weekends.

Ryan said...

Aesop, I do agree that SOMETHING is going to happen. At this point the best scenario is isn't pretty.

Archer, I agree and should have included that.

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