Given that honourable mention at the top of this thread, I suppose I have to get stuck in!
Things to bear in mind right now -
1. Recession/depression/turmoil and even war also bring opportunities! Some people got fabulously rich during the hyperinflation of the Weimar Republic, during the 2008-9 GFC and during every war that ever there was. One thing is certain - the establishment and established wisdom get ripped to shreds in such times and
the fleet-of-foot who read the tea leaves correctly will be the winners.
2. Nothing I have written here or elsewhere is a certainty. I always say that I can predict anything - except the future! What I can do is give people the percentages and point to the dangers and the opportunities. The dangers are massive, but then so are the accompanying opportunities!
The trouble with those opportunities is that they mostly lie OUTSIDE the established ways of investing and doing things.
3. Every time that a government has lost control, they have done so because they are incompetent, dictatorial, or corrupt - or usually, a combination of all three (see Kazakhstan today!) However,
when a government loses control, they label that 'anarchy' and send in the troops to kill people.
4. The US and the UK are both governed by mildly corrupt and grossly incompetent regimes. Russia and China are both unstable dictatorships with giant debt and other economic and social problems. Smaller EU counties such as Hungary, Italy and Greece are up to their little ears in debt and have terrible balance of trade deficits. Others like Venezuela and Turkey are collapsing in front of our eyes.
The world is rapidly becoming extremely unstable and dangerous.
5. The banks are out of control. Numerous books have been published with meticulous details of crimes committed by the world's largest banks
Link 1 Link 2 Link 3 Link 4 Link 5 Link 6 Those six are just for starters and only deal with the US banks. They list actual crimes and name the names of the criminals - about which not even an investigation was ever initiated. They and their European counterparts are now so powerful that they no longer bother to hide their crimes, safe in the knowledge that they can bring down any company, no matter how large, by withdrawing their credit and downgrading their stock.
Banks are today more powerful than the dot-coms, the media, or any government.
I am not going to tell anyone what to do or even what I think will happen. Governments and central banks are kicking the can down the road, whilst
the house of cards that is the Western financial system and the stock markets continues to gain height. (Even old hedge-fund manager Jeff Grantham came out of hibernation to warn of the biggest crash in human history.)
But here's what I have been doing for the past 20 years -
1. Debt-free. Apart from some strategic company debt in Germany to ameliorate a 30% corporation tax, we are debt-free. No mortgages, no leases, no credit card carry-overs, nothing. I do not even allow the deeds to anything we own to be in the hands of solicitors.
2. I have long since sold all shares in regular, publically listed companies. PE ratios and far too high and debt levels are even higher. The stock markets are over-leveraged and most shares are bought using margin accounts, i.e. with debt. When (if?) the balloon goes up, good stocks will have to be sold to cover bad positions, so I own nothing in the regular stock markets.
3. Cash is falling in value, but I still need to hold some, so that when that balloon goes up, I have the option of being able to buy good stocks with good P&L accounts and are free of debt. Cash gives one 'optionality'.
4. I do not hold my cash in UK banks as I do not trust them. I have good reason to not trust them: they tried to steal from me before and they'll do it again! I trust fund managers about two meters, as I am a big boy and that's about as far as I could throw any one of the larger ones. No pension funds, no ETFs, none of that "Give us your money!" industry. Indexed, not indexed - it makes no difference! These people do NOT know what they are doing and when the crash comes, their trousers will be around their ankles and in flames. They are not hedged against EVERY asset going down - because if there is a crash, all those margin calls will bring everything down - starting with share prices and commercial real estate.
5. So let's talk about a REAL hedge against inflation and a market crash - gold, silver and farmland. The first two are the only real currencies going and you'll need farmland to survive. Also, if you buy UK gold coins from the Royal Mint, any increase in value is tax-free. And farmland is usually free of inheritance tax. Your grandchildren will thank you! And talking of gold and silver, I did buy shares in eight junior miners (gold and silver) and all in the US or Canada. If only one of those comes in with a substantial find, I'm ahead of the game!
6. I have the basics to make our own food. Land, a tractor, plough, harrows, mower, rotavator, etc. and we have strategic relations with neighbours who are already producing pork, mutton, lamb and eggs.
Things to bear in mind for the future -
If the markets go down, they will stay down for quite some time, so any cash available can be used carefully and after research. It's a good idea to do that research now. Identify good companies with healthy P&L accounts and good IP that others do not have. For example, Franklin Electric (FELE). It owns dozens of patents in water management and in pump and motor designs and it is debt-free. Freshwater will be tomorrow's gold and only Franklin has the know-how to move it around in bulk and in smaller amounts. It has a 50% market share worldwide in submersible electric motors. Right now the price is too high, but when it goes down, it will be golden. Other similar companies are out there waiting for you!
As my old sergeant major,
Ron Vines used to say "Any fool can rough it. It requires intelligence to be comfortable." So learn to make food and drink. Learn how to brew beer, make wine, drive a tractor, plant and mill grain to make flour and therefore bread. Put a wood-burner you can cook on in the kitchen. Keep that larder and the woodshed stocked up. Plant apple trees.
It takes two to three days of empty shops before the crowds start to throw rocks and set fire to policemen. Hungry people will go to any lengths to get food. Living in a town is not a good idea if there is civil unrest - though that sort of thing will probably start in the US.
But this moronic government (aided and abetted by the media) will be stupid enough to whip up hysteria just as they did over Covid.
