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How to Survive a Worldwide Financial Depression

Is the worldwide financial crisis a recession, or a depression?

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The difference between a recession, depression, and global financial crisis lies mostly in the scope of the localized effect. (update: some interesting fi-cri data visualizations can be found here, and a recession pictorial of citizen-pictures of financial crisis from the times here.) With the World Bank forecasting doom, recent global Asian, European, New York, Japan dow market drops, AIG “too big to fail” reaching a bailout (government takeover) total of over 150 billion as their quarterly loss hits 62 billion $$$,  and world wide financial stock market selloffs, with the DOW now below 7000, fears of deflation on the horizon, commodity losses, VIX Volatility Index, currency market swings, federal workforce services hitting 20 million, credit default swaps, the Fear index, drops, spikes, jobless rate at 6.7% and climbing to 10%, the National Bureau of Economic Research FINALLY tells us whats happened.. a year ago… joblessness, and falls out of recession territory into depression territory and wall street stock indexes fall into panic selling, when Japan is in recessionary fall, toyota loses after 71 years 1.7 billion, when the dow plunges precipitously, european stock markets slide into recession, when global chaos in India Mumbai hits local markets, tech industry slumps, the united states of American express bank bankruptcy, Germany in recession, the Eurozone falls into recession for the first time ever: automakers paulson buyouts, GDP consumer confidence, citigroup layoffs at 52,000 amass, more layoffs, consumer credit card debt, john paulson and his 4.5 billion, black friday sales drop off, or local markets retreat from global markets, when insurance companies fail and go bankrupt, when treasury bill spreads widen, and government owns the banks, and you dont know how to survive financial problems, walmart trample death, when even the advice on my retirement fund has been wiped out, food stamps hit 30 million people, 800 billion crisis stimulus package, unemployment and world panic, when credit card companies retract their consumer credit lines that people depend on because salaries are too low because unions were destroyed, although it may get better before it gets worse, its time again to gather up those short sellers depressed tickets and convert the paper to panic paper: as in, lists.

wtf, u may say? u maw sk. afaik, omfng tf: will the United Nations or the IMF be stepping in?

It might be assumed that an internet list about risk curves, yields, and derivative GDPs would yield such things as adorable pictures of kittens hitting doors at high speed. But no, its just a simple list, divided into three domains: effects of worldwide financial depression, what to do with my money, and what is needed to survive a worldwide banking collapse. This list was started amongst friends and colleagues, but is slowly growing along with the gestalted and zeitgeist worries. See also the timeline of the global financial meltdown crisis disaster. If you see something missing here, plop it into the comment area below, and I’ll run it through the authoritarian, hidden bureaucracy: currently numbering 4. You are number 2. When number 6 is reached, we’ll see you on the Island.

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Worldwide Panic Effects to watch out for

  1. Second World degenerates to Third World – generally, governments go down one level point: anyone in the second world will get a government from the third world, etc. This is because destabilizing barely stable economies even a little brings out the military dictatorship in us all.
  2. Urban areas degenerate to crime zones – this is a no brainer. steel plate your doors and get the panic room ready. beware of anyone entering your building with a burning mattress. pour boiling oil on anyone, or anything, that makes you afraid, especially if theyre your own kin: this increases hysteria, giving you the upper edge.
  3. Gas and Rice prices increase astronomically – this is a no brainer part deux. But dont use the gas for driving: use it for cooking.
  4. Hoard gas and rice – this is a no brainer part troix. when prices increase, hoard, hoard hoard. Food hoarding is of particular importance. See food survival below.
  5. Moped and motorcycle theft increase – the preferred method of transportation in the second world will invade the first with a vengence, mod style.
  6. Infrastructure Failure – cities and urban areas will retreat to the 1940s in terms of infrastructure. Roads will decay, clean water will become scarce, religo-fundamentalist extremists will hoard food and women, and possibly convert the entire world into WaterWorld. Ok, maybe not that last one: just the flooding parts, and mostly in the deserts.
  7. Communications Breakdown – the internets? whats that? the “tubes” will become restricted to localized, mobile networks based on short-range wireless or cellular transmission, as the hardwired transmission lines like fibre and cable breakdown. Impromptu Mesh Networking will grow: Its hard to maintain jurisdiction over all the mileages required to communicate with the other coast. Stick to communication with the next town over. The postal service could become a stronger option only if its easier to ride a horse to the next town than figure out how to manufacture a router.

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Where to put my Money?

  1. Zero Percent U.S. Government Debt or Treasury Bills – Yes! Zero Percent! Just what youve been waiting for! (or just see mattress option below). Although by the time you read this it may have all sold out, at least in this round. The demand was apparently 4 times the 30 billion offered in the most recent sale. Three month treasury bills were also available for, like, 5 minutes.
  2. 4.5% Mortgages – Hot on the heels of the zero percent treasuries are the 4.5% mortgages. Buy down a couple of points and sink all your debt into one of these puppies. Just like the housing boom, except all over again!
  3. Memorialize it – a good idea… just mourn it! This site has started a Dearly Departed Dollars Memorial service… bcheck it out.
  4. Art or Antiques – always a good temporary storage place for floating capital. Especially if people are particularly eager to sell cheaply. History has a way of valuing the past, especially if its a disastrous one.
  5. Convert Money to Cattle Feed – [anonymous] add water to currency to convert to cattle feed. When cattle feed market is Bullish, buy food from sale profits. When the feed market is Bearish, you can just eat it yourself.
  6. Farming Equipment – keeps the seed stores going.
  7. The Old Fashioned Mattress – Generally a bad idea. The prevailing wisdom about saving your way out of a depression is somewhat misleading. Money only has value when its used. You dont necessarily have to spend your way out of the recession, but you can certainly spend it in such a way as to highlight your local economys strengths. As in, avoid luxury fashion or anything that depreciates, and spend on the best possible future, as much as you can.

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Actions to help Survive Worldwide Financial Meltdown

  1. Convert all liquid assets to other liquids – invest in personal water, freshwater stills, fuel, evacuated tube solar hot water systems or just learn how to make your own, rainwater catchment systems and greywater recycling are all good places to start. And if the financial crisis doesnt show up, you’ll still be ahead of the curve.
  2. Water filters – learn to use them. as infrastructure fails, so goes the water. otherwise, its drink pee for u n me.
  3. Mosquito nets – this is more of a global warming thing. but everyone should have one anyway.
  4. Get Religion – Religions generally do pretty well at keeping everyone working as a group – until the koolaid. particularly beneficial if the community owns its own farmland, and can defend it against non-believers.
  5. Stick with intelligent people – avoid the strong and stupid. They may have good short term rates, but their long term investments usually get killed off before they can get off the ground.
  6. Dont hold cash: spend it – get rid of cash. the staple of every financial meltdown and apocalyptic book or movie is the sudden uselessness of cash. Guns and food seem to be popular alternatives. and enslaved citizens you can entice to work for food crumbs.
  7. Join the Army – [flazza] This is a better point than it may seem at first. Armies throughout history have been one of the first off the cuff solutions to severe economic problems. Adrenaline keeps the hunger pangs down.. for awhile, at least. Plus, there is free food… if you fight.
  8. Intermarry – [anon] If you are in the survival game for the long haul, this is a very good suggestion: focus on the gene pool.
  9. Food for Survival – now, survival food is a tricky area to manage. The best bet is to follow the example of locavores and locavolts: no, not the trendy yuppie franchise and goat cheese eclairs, but rather, the do-it-yourselfers. As in, get yourself a farm. But the real qiestion is, what type of food will be best in a worldwide financial meltdown? Things like rice, potatoes, grains, and starches are important, because they are big imports, at least in the US, so their availability will decrease. Rice and beans in particular create a full protein when used together, and they last a long time without refridgeration. But dont forget citrus or a source of vitamin c, vitamin d for ricketts, and… well, the list goes on. For best resources, study the journals of explorers such as Shackleton, or the desert explorers, to find out what might be best for you.
  10. Power – it might seem that power is very important to survival, but actually, its a luxury. What is more important is listed above, ie, the all important WATER FILTER. Nevertheless, for radio contact or other small uses, a simple solar panel/car battery setup is cheap, and lasts. Boat liveaboards have used them in some cases even before the early “hippies” did. Wind turbines are also ok, but they are mechanical, and are used best for simple things like water pumping, not electrical generation.
  11. Water heating – lay in a supply of Evacuated Tube Solar Hot Water heaters. These things crank water heat up to 280 deg f. on a Minnesota winter day. Which can be a problem in the summer months. They are fragile, though, and once you run out, the manufacturers wont be around to deliver to your doorstep.

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Top 10 Financial Survival Disaster Reading List

  1. Crash Proof: How to Profit From the Coming Economic Collapse – good breakdown, if you believe there will be an “after”.
  2. When All Hell Breaks Loose: Survival – excellent manual on contemporary urban and suburban disaster scenario planning.
  3. Financial Armageddon: Protecting against Catastrophe – indepth look at hardening your finances in the face of a meltdown.
  4. Financial Shock: The Subprime Mortgage Implosion – an important look at how the depression – recession hit, in order to better understand how to pull yourself out.
  5. Deep Survival: Who Lives, and Who Dies – national geographic explorer looks at the personality traits of those who survive over those who dont. fascinating.
  6. Emergency Food Storage and Survival Handbook: Keeping your Family Safe in a Crisis – handbook on food storage and disaster planning, with other aspects of survival covered.
  7. Power Generation Handbook – THE manual on small powerplant generation. Not so much for solar or pv, but steam, electrical, etc… good if you want to power your small town, like the disaster survival town of Jericho, Kansas.
  8. Solar Water and Heating Design and Installation
  9. Photovoltaics: Design and Installation Manual
  10. Shock Doctrine: The Rise of Disaster Capitalism
  11. The School on Hearts Content Road by Carolyn Chute: excellent author, new book on how small town militia settlement America deals creatively with poverty, banking crisis, financial threats and more.
  12. Jericho, Kansas: Surviving and rebuilding a small town infrastructure, economy, and society after a modern day disaster. – The best DVD series to review about living out a disaster: includes the economic systems getting rebuilt, and a lot more. Jericho is really the best out there in terms of examining the daily life of a small Kansas town that has to rebuild everything, including their economy, and associated survival issues.

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October 10, 2008
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