Tuesday , 18 June 2024

The Choice Is Yours: Get Prepared – Or Become An Economic Casualty

The cloud on the horizon is a flock of black swans. No one can predicthearspeak-see-no-evil when they might land. What can be said for certain is that, at some point, they most certainly will. [Let me explain why that is the case and what you can do about it – or not.]

The above comments, and those below, have been edited by Lorimer Wilson, editor of munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here – register here) for the sake of clarity ([ ]) and brevity (…) to provide a fast and easy read. The contents of this post have been excerpted from an article* by Jeff Thomas (internationalman.com) originally entitled A Flock of Black Swans ‏ and which can be read in its unabridged format   HERE.  (This paragraph must be included in any article re-posting to avoid copyright infringement.)

Band-Aid Solutions

Major depressions do not occur overnight. They go in downward waves, interrupted at intervals by false recovery waves. The first major event of what would become the Greater Depression took place in 2007 with the housing crash. A year later, right on cue, came the first of the stock market crashes. Since then, the U.S. Federal Reserve and the governments and central banks of much of the world, have been involved in Band-Aid solutions to postpone further crashes, in spite of the fact that the economy is, in fact, a “dead economy walking.”

The Band-Aids have been many and various and, at some point, one of them will fail. The fact that they are all Band-Aids and not true solutions assures that, when the first one lets go, they will all fail in succession. Only at this point will the average person understand that we have been in the early stages of a depression all along.

House of Cards

What will happen will be a sudden and unseen event – a trigger that suddenly sends the economy downward, followed by another, then another, as the economy tumbles inexorably downward. Along the way, emergency measures will be utilised to “save” the economy which will be drastic, including confiscation of bank deposits, plus massive money creation, and cause dramatic inflation and very possibly, hyperinflation, but the collapse will continue, unstoppable.

Like any house of cards, once it begins to actually fall, no further Band-Aids will stop the inevitable so what might that trigger be? Well, there is literally no one in the world who can predict that with certainty. The reason is that as so many Band-Aids have been used by so many countries and in so many areas of the economy, no one can say which one will fail first, i.e. which one will be the actual trigger that causes the chain reaction.

…The house of cards is becoming evermore fragile and we will not need to wait much longer before the event occurs. As we get closer, increasing numbers of people are seeing the writing on the wall and, more and more, I’m being asked the same two questions:

  1. “What Will the Fatal Trigger Be?” and
  2. “How Will I Know in Advance?”

What Will the Fatal Trigger Be?

Here’s a brief list of possible triggers:

  • Creditors dump U.S. debt back into the US market
  • Commodity prices spike
  • A crash occurs in the stock or bond market
  • A backlash occurs from countries sanctioned by the U.S.
  • European countries default on their debt
  • The U.S. dollar ends as the petro-currency (causing a sale in U.S. treasuries)
  • The U.S. or EU introduce significant tariffs, diminishing world trade
  • Interest rates rise, as they did in 1929
  • The paper gold market crashes, when the shortage of physical gold is revealed
  • Banks freeze or confiscate deposits
  • FATCA accelerates the demise of the U.S. dollar as the default currency
  • A credit collapse occurs (followed by dramatic inflation or hyperinflation)

Any of the above is capable of triggering a collapse (and, as stated, this is not by any means an exhaustive list). Therefore, it would be wise to keep an eye out for…[any indication] that one of them…appears to be nearing the point of becoming a reality [which] would suggest that the tipping point may occur soon.

How Will I Know in Advance?

Whatever advance warning you may have will be based on how closely you’re following the indicators that any of the possible triggers may be nearing fruition...

Complacency Is Your Enemy

…Investors often say, “Well, if it’s inevitable and I can’t time the event, there’s no use thinking about it. We’re all going to go down with the ship, so why bother?” and, quite frankly, I’m astonished that so many investors are so complacent that they’re prepared to shrug their shoulders and accept their own economic demise, yet this assumption is very common.

[Remember:] The enemy is not the coming events; the enemy is complacency toward those events[You can] either get blindsided by events and become an economic casualty, or be prepared (as much as possible) for the crashes, regardless of what the trigger might turn out to be. [It’s your choice.]

Creating an Escape Plan

There can be no perfect solution – one which allows you to retain your present life, exactly as it is, within the system, whilst the system around you is in a state of collapse. What can be done, however, is to remove your wealth and yourself from the system as much as possible, so that the impact of the collapse is minimised.

As a basic set of assumptions, you might consider one or more of the following actions:

  • Remove all cash from exposure to bank freezes and confiscations by placing your money (other than three months of expenses) in banks in countries where no confiscation laws exist (i.e., outside of the EU, US and Canada).
  • Convert a major portion of your cash into precious metals, to be stored in a minimum-risk jurisdiction, such as Singapore, Hong Kong or the Cayman Islands.
  • Create a place of legal domicile in an alternate country if you’re a citizen and resident of a major country that is likely to be a casualty.
  • Invest in land and/or built property in that country, or similar jurisdiction (property is the most difficult asset for any government to confiscate). Choose a country that has no annual property tax, if possible.

This is only the most basic of formats, but it works well, either in its entirety, or in part.

Many readers may say, “I’m not wealthy. I can’t do any of those things.” Again, this is complacency talking.

  • Anyone with $1,000 can create a foreign bank account.
  • Anyone who additionally has the price of an ounce of gold can begin to remove his wealth, no matter how small, from risk.
  • Anyone with a skill can secure employment in a country where the damage is likely to be lesser than in his home country.

The cloud on the horizon is a flock of black swans. No one can predict when they might land. What can be said for certain is that, at some point, they most certainly will.


Related Articles from the munKNEE Vault:

1. Apply These 6 Military Strategies To the Way You Invest & Win

I was re-reading Art of War recently, and I couldn’t help noticing how Sun Tzu’s approach to military strategy applies to investing. As he said 2,500 years ago, “he who knows them will be victorious; he who knows them not will fail.” Below are 6 quotes well worth applying as a result of the present financial chaos we find ourselves in.

2. The “Gone Fishin’” Portfolio Is the Ultimate Investment Approach! Here’s Why

I can’t predict the future, and neither can you. That’s why I created the Gone Fishin’ Portfolio. It’s breathtakingly simple, works like a charm and has beaten the S&P 500 every year, while taking much less risk than being fully invested in stocks.