Thursday and Friday saw stocks in the US drop over 5%, the first tangible sign that the cracks in the US financial markets are finally starting to give way. Is this the start of the next big collapse some are predicting? Regardless, I saw this as a good opportunity to examine my own stocks at home – mainly those in the deep pantry.
The Reason for Prudence
Ever since I learned the truth behind where money comes from and the sheer mathematically unsustainable nature of the financial system the world operates under, I’ve become convinced that a big day of reckoning is coming where reality will catch up to society and its reckless addiction to debt. Whether you’re an individual, business, city, state, or country, your debts must eventually be paid. For individuals and business, the length of time you can survive before paying the bills is much shorter than the survival time of an entire nation, but rest assured the bills do come due. Unfortunately for me and you, the debts owed by bankers and governments usually end up getting passed along to the little guys. Whether it’s taxation, a devaluation of the currency, a reduction in services, or a downright confiscation of your funds, history has taught us that the consequences for reckless decisions by the elite few will be passed along to the gullible masses.
The Cracks Beginning to Show
Hidden away in the corners of the blogosphere, many have been warning of a coming crisis on par with or worse than the Great Depression. Now, the cracks in the armor are becoming so visible that even the mainstream media is having a hard time ignoring it. The stock market is massively overvalued and investor risk preference has been shifting towards caution, meaning all that is needed now is a pin to pop the bubble. Thursday and Friday of this week saw consecutive down days totaling a drop of over 5%. Although a far cry from collapse, this should be a wake up call to many that volatility is here and that a trend reversal is looking more likely than not. When ignoring the stock market and looking at actual indicators of economic activity such as the price of oil, copper, iron ore, etc. (the raw materials consumed by the world when things are going well), you find that our economy has been sick for a long time now. Hidden beneath rosy reports of job growth is a shift from full time, high paying roles to part time burger flippers. Overshadowing large companies with raising share prices has been an ever increasing number of smaller companies losing value along with a number of small American businesses being closed that is outpacing businesses being opened.
The only part of the economy that hasn’t gotten the memo yet is the stock market, mostly because the Fed has been conjuring up digital money out of thin air, loaning it to businesses for practically free, where it then finds its way into the stock market to artificially pump things up. This is an illusion of wealth that will quickly vanish once the masses catch on.
So Who Cares About Stocks?
Although the stock market gets all the attention, the carnage that will ensue following a market plunge will be much broader. It will spread to banks that are so highly indebted that they are literally insolvent. When trillions of dollars in wealth suddenly vanishes from thin air, banks will find themselves facing bankruptcy. Unfortunately for average people, legislation now allows banks to pay back much of their bad debt ahead of paying back depositors, meaning many people may lose money that’s in the banks. Even more troubling is that the FDIC system does not have enough money to cover all the deposits that are supposedly protected by the government.
Nothing in this world happens in isolation, and when this bubble goes there is a good chance that a lot of other things go with it. Maybe it won’t. Maybe the can will get kicked further down the road by some last-ditch attempt at printing our way out of prosperity one more time (like what happened following the 2008 crisis that nearly collapsed the whole system). However, there is enough cause for concern in my opinion that people should be taking measures to protect themselves.
Deep Pantry Stocks Going Up
It is for all the reasons outlined above [and more] that I decided to take stock of my preparedness levels at home. Although a true “prepper” would laugh at my own humble efforts as being hopelessly inadequate, at least I have a leg-up that allows me to sleep better at night.
- I have enough fresh water stored to last the family about 20 days.
- I just beefed up the supply of canned goods such as beans, tuna, salmon, etc.
- Although our potatoes are almost all eaten, we’ve added a big bag of rice and oats.
- We still have preserved capsicum from our backyard harvest earlier this year.
- I just put 60 liters of fuel into the backyard shed, enough to give me a full tank of gas for the car.
- I’m planning on buying a portable gas range and propane tank.
Some may call this a bit paranoid, but when you think about it these are all things I could make use of regardless of a disaster, they don’t cost a lot of money, and don’t take a lot of time to put in place. However, if anything is ever to happen that interrupts the supply chain we’ve come to rely on so heavily, I’ll be good for at least a couple weeks if not longer.