Saving Your Money

[beauanderos]

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/10/18_Billionaire_Sprott_Asks_How_Will_People_Survive_Whats_Coming.html

Read this link. Let it sink in. Read it again. Try and understand the implications.

It seems to me that most of the members on this forum view "investing" in precious metals as kind of a lark... one that lends itself to scenarios where we could all become fabulously wealthy, dependent upon the size of each of our stacks. I, for one, at age 62, convert every spare penny into mostly silver, and some gold... as I do not count on my measly pension from 34 years as a fireman to have much, if any, purchasing power in the face of guaranteed hyperinflation. I do not trust that I will EVER receive a dime of social security, because by the time I can draw it in another four years (without being penalized) they will for sure be having it means tested, which because of my pension will mean I will be excluded. Even if this were not true, social security will likely face massive cuts. Even between my insufficient pension, and shaky future SS, my standard of living would not be one that anyone would envy.

This is why I continue to slave (albeit at a job I love) fourteen hour shifts six days a week, and convert what is (at present) any discretionary income. The ant and the grasshopper story. I firmly believe that if you do not construct your own retirement plan (trickling off a bit of silver or gold for expenses as needed, when I can no longer add to the stack), you will be bent over and... well, need I say more?

If you are not NOW converting your current income to "replace" future pension or social security expected funds into commensurate amounts of silver and gold, you will NEVER be able to do so... in the face of bank bail-ins, drawdowns of natural resources, increasing scarcity of physical metals, increasing prices of metals, vanishing discretionary spending capability in the face of ever-increasing everyday expenses, job losses, wage decimations, etc, etc, etc. How many on this site cannot already buy as much silver/gold as they would like due to cutbacks?

What does this mean? How much did you expect to live on in retirement? $5000 a month? Just to throw a number out there... to have $5000 a month would mean holding 200 ounces of silver priced at $25 an ounce.... per month! Do you expect to live forty years after you retire? That would mean you should be sitting on 96,000 ounces of silver... right NOW!

I get the impression that people have NO CLUE regarding what we face in the future, and what I allude to is a matter of survival, not becoming rich. It seems as most view our site as one for hobbyists... while it should be one of continuation of your own existence in the style to which you have become accustomed, for as long as possible. Your savings in the bank? In jeopardy. Your pension? Not dependable. Your social security? Not secure and expendable.

Got Silver? Got Gold?

[68Camaro]

All good points but... think a bit further ahead.

Less than 10% of the population are capable of retaining any standard of living in the above scenario. More than half would literally be destitute, and soon, desparate. The other 40% not far behind them. What will the 90% do to the 10%. That's the real worry.

[beauanderos]

All good points but... think a bit further ahead.

Less than 10% of the population are capable of retaining any standard of living in the above scenario. More than half would literally be destitute, and soon, desparate. The other 40% not far behind them. What will the 90% do to the 10%. That's the real worry.

True... and another consideration usually given short shrift to. Who will buy the metals, consistently, after hyperinflation? It surely won't be the 99% having a rough time surviving. Paradigm shift of the new 1% selling (if needed) to the old 1%... although a good percentage of that old 1% surely have some metals tucked away. The disruption that accompanies the greatest transfer of wealth ever witnessed will surely be immense.

[mtalbot_ca]

Interesting article.

My opinion is that the only way that a country can get out of debt these days is through inflation.

So any past commitments (pensions, past debts etc...) get eroded. Any future income and commitments get inflated, thus commending higher interest rates, slowly bringing the economy to a crushing halt.

PMs and commodities simply help you retain some temporary purchasing power, giving more time to adapt (gain skills, secure housing etc,,) than the other 99% of the population, but in the end, we are all in the same boat.

[NDFarmer]

All good points but... think a bit further ahead.

Less than 10% of the population are capable of retaining any standard of living in the above scenario. More than half would literally be destitute, and soon, desparate. The other 40% not far behind them. What will the 90% do to the 10%. That's the real worry.

True... and another consideration usually given short shrift to. Who will buy the metals, consistently, after hyperinflation? It surely won't be the 99% having a rough time surviving. Paradigm shift of the new 1% selling (if needed) to the old 1%... although a good percentage of that old 1% surely have some metals tucked away. The disruption that accompanies the greatest transfer of wealth ever witnessed will surely be immense.

All very good points. But probably just as important if not more important is to also be stacking some lead.

[IdahoCopper]

If you time your play right you would covert silver and gold into real estate that pays monthly rentals. Productive farm land is much better than rental houses.

[TXBullion]

What does this mean? How much did you expect to live on in retirement? $5000 a month? Just to throw a number out there... to have $5000 a month would mean holding 200 ounces of silver priced at $25 an ounce.... per month! Do you expect to live forty years after you retire? That would mean you should be sitting on 96,000 ounces of silver... right NOW!

I think generally speaking this is a bad retirement strategy. Your model depends upon the price of a commodity which you have no control over which can be substantially less or substantially more. In addition to this, your monthly cash flow is the result of loss of your principal or investment. I think it would be better to have a focus on offspring of your financial seeds being planted so your capital/principal remains in tact but thats just me.

If you time your play right you would covert silver and gold into real estate that pays monthly rentals. Productive farm land is much better than rental houses.

What is the logic for this statement ?


If you buy rental housing, and you are confident of inflation then you get somewhat protected because in the event of inflation, there is a high probability that rents will be increasing in this environment so your 5k rents this month are 5,500$ rents next year. Also, did you have fixed debt? Wonderful,then your 100k you borrowed this year is now being repaid with inflationary dollars which is a big benefit to you.....

[IdahoCopper]

Productive farmland PRODUCES FOOD. Your tenant can pay you in FOOD. You can EAT food, or SELL it for other stuff like FUEL to heat your home or drive your car. Your mindset is contaminated with NORMALCY BIAS. If all the above comes to pass, things will NOT BE NORMAL.

[Rodebaugh]

The key is to be as debt free @ retirement as you personaly can.

You should NOT have a house payment, two car payments, RV payment, Boat payment, ect payment......at retirement.

Money coming in should be used for food, utilities, and $5 bills for grandchildrens birthday cards.

[TXBullion]

Productive farmland PRODUCES FOOD. Your tenant can pay you in FOOD. You can EAT food, or SELL it for other stuff like FUEL to heat your home or drive your car. Your mindset is contaminated with NORMALCY BIAS. If all the above comes to pass, things will NOT BE NORMAL.

I disagree with you.

Also if you have housing , your products is housing you can choose if you want payment in jelly donuts ho hoes or iceberg lettuce. Shelter is a basic need.

I assume then you are buying farmland currently ?

Yes I am quite normal

[Rosco]

The key is to be as debt free @ retirement as you personaly can.

You should NOT have a house payment, two car payments, RV payment, Boat payment, ect payment......at retirement.

Money coming in should be used for food, utilities, and $5 bills for grandchildrens birthday cards.

Check,check, check, but its $25.00 birthdays an Christmas an includes Great grandchildren totals 18 Gifts Times 2. Stay with the $5.00 as long as you can tight wad

[johnbrickner]

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/10/18_Billionaire_Sprott_Asks_How_Will_People_Survive_Whats_Coming.html

Read this link. Let it sink in. Read it again. Try and understand the implications. <snip>

what I allude to is a matter of survival, not becoming rich. <snip>

Lets see, "debt free," "rental housing," "productive farmland," "90% vs 10%," "stacked lead," "inflation," interest rates," "PM buyers after hyperinflation."

Both Sprott and beauanderos are implying continued survival. Retirement? This could also be called "what will you do (or how will you survive) after you stop doing what you do for money". Some are looking forward to a "comfortable retirement".

A comfortable retirement can only be had so long as our current system can continue. Our current system is unsustainable. We cannot continue to: Burn oil, use resources, grow food, pollute the earth and expand our human population at the rates we have done in the past. A question I posed in my philosophy 101 class regarding humanity was "are we not just an expanding number of rats in a cage with a limited amount of cheese"? At some point we will have to shift the factors I've listed above.

Anyone who has kept up with current events knows humanities' ability to obtain and produce oil, remove and use many natural resources other than oil, and grow food has peaked while population continues to grow. We will only be able to live our current concept of retirement so long as we (humanity) can continue to play the game (think Monopoly money). I can't tell you when the shift or change will happen but it will. It might happen quickly. Our rulers hope they can slow the process. When it does happen, a lot of rats will die. A lot of rats are already dying. The process is already happening.

You can continue to play the game and I sincerely hope you will be able to enjoy a comfortable retirement. Isn't that the American way? Work hard all your life and enjoy a comfortable retirement? But for me yes, at some point so long as the game is still going on I will have to do something resembling retirement. As was said in an earlier post, "we are all in the same boat". Well, not all boats are built the same and I intend to continue to build my concept of lifeboat. What exactly I do in retirement will be a continuation of what I do now only more so. That being doing what is meaningful will resemble a well thought "community lifeboat" and continue to educate young people regarding the shift. They are our future.

When the shift happens the region in which you live had better be producing it's own local food, local energy, and using the local resources and living in a sustainable way. Bottom line.

[Engineer]

Emotions aside, our race would be much better off if 90% of us died off. In that case, we wouldn't need everyone crowded together in cities eating fake foods grown with oil-based fertilizers, and could simply spread out so we don't overwork the land.

As for retirement, I'm enjoying it. My expenses are nowhere near the $5K a month Ray mentioned, and yet I'm comfortable. Still putting away PMs, though...because I don't trust the current system to last as long as I do.

[IdahoCopper]

I assume then you are buying farmland currently ?

Not yet. As I said,

If you time your play right you would covert silver and gold into real estate...

There will be a point in time as the collapse accelerates when silver will be grossly overvalued as people clamor to buy it and get out of fiat. That is when you will get the most bang for your TrOzAg, for buying real estate ... like productive farmland.

[AGCoinHunter]

Diversity is the key. Have a little in lots of different investments. No one knows what the road ahead is exactly going to be so you have to invest for every scenario. As NDFarmer also said, lead is also going to be necessary to protect what remains after the government plunders what you have. The 99% are going to be looking for blood. An investment that doesn't cost you anything but time is also key here, invest in your community. Strong bonds between neighbors and friends is huge. No one will last being the lone wolf.

[Rodebaugh]

The key is to be as debt free @ retirement as you personaly can.

You should NOT have a house payment, two car payments, RV payment, Boat payment, ect payment......at retirement.

Money coming in should be used for food, utilities, and $5 bills for grandchildrens birthday cards.

Check,check, check, but its $25.00 birthdays an Christmas an includes Great grandchildren totals 18 Gifts Times 2. Stay with the $5.00 as long as you can tight wad

[theo]

Emotions aside, our race would be much better off if 90% of us died off. In that case, we wouldn't need everyone crowded together in cities eating fake foods grown with oil-based fertilizers, and could simply spread out so we don't overwork the land.

I have to say I'm surprised that you really believe that. So by extension you would argue that life was better when the population was 10% of what it is now. That would be about 800 years ago; during the middle ages when life was "nasty, brutish and short." Of course you would prefer 10% of our population along with today's modern advances. Unfortunately economics argues that advances in knowledge and technology is actually animated by population growth. Why? Because humans ARE a resource. Two of the four factors of production (Labor and Entrepreneurial ability) involve people. This is why Malthus was wrong 200 years ago and his followers are just as wrong today.

Of course if humans are to be used to their full potential, they must have a certain measure of freedom. All of the problems that we face (overuse of land, overcrowding, lack of access to water etc) have solutions that don't involve genocide if we have the freedom to explore them. However with the government grabbing more power by the day and the Fed running the largest price fixing scheme in history, those solutions become more difficult to come by much less implement. In fact sometimes I wonder whether this economic bubble (and inevitable crash) is being created by people who wish to engineer a reduction in population for the "sustainability" of the human race.

[beauanderos]

Emotions aside, our race would be much better off if 90% of us died off. In that case, we wouldn't need everyone crowded together in cities eating fake foods grown with oil-based fertilizers, and could simply spread out so we don't overwork the land.

I have to say I'm surprised that you really believe that. So by extension you would argue that life was better when the population was 10% of what it is now. That would be about 800 years ago; during the middle ages when life was "nasty, brutish and short." Of course you would prefer 10% of our population along with today's modern advances. Unfortunately economics argues that advances in knowledge and technology is actually animated by population growth. Why? Because humans ARE a resource. Two of the four factors of production (Labor and Entrepreneurial ability) involve people. This is why Malthus was wrong 200 years ago and his followers are just as wrong today.

Of course humans must be to be used to their full potential they must have a certain measure of freedom. All of the problems that we face (overuse of land, overcrowding, lack of access to water etc) have solutions that don't involve genocide if we have the freedom to explore them. However with the government grabbing power by the day and the Fed running the largest price fixing scheme in history, those solutions become more difficult to come by much less implement. In fact sometimes I wonder whether this economic bubble (and inevitable crash) is being created by people who wish to engineer a reduction in population for the "sustainability" of the human race.

the sustainability of the remaining ten percent

[Engineer]

Emotions aside, our race would be much better off if 90% of us died off. In that case, we wouldn't need everyone crowded together in cities eating fake foods grown with oil-based fertilizers, and could simply spread out so we don't overwork the land.

I have to say I'm surprised that you really believe that. So by extension you would argue that life was better when the population was 10% of what it is now. That would be about 800 years ago; during the middle ages when life was "nasty, brutish and short." Of course you would prefer 10% of our population along with today's modern advances. Unfortunately economics argues that advances in knowledge and technology is actually animated by population growth. Why? Because humans ARE a resource.

Life in a ghetto tends to be nasty, brutish, and short. Life in a cubicle is nasty, brutish, and long. Life in an Indian or Chinese slum is no picnic, either...

All I'm saying is that each acre of the earth has a finite carrying capacity, and once you breach that capacity, you start to drown in your own poisons. If you don't like my number, feel free to propose your own...maybe you want more people badly enough for everybody to eat pink slime burgers processed from feedlot cows stuffed with corn grown with frac gas fertilizer, along with a side of GMO corn or whatever that white powder is that they process into the stuff in the box with a list of unpronounceable chemicals...and don't forget the "artificial cheese food" topping. You can serve that up with some melamine milk on your plastic coated fiberboard furniture in your apartment constructed with poisonous Chinese drywall.

I happen to like a nice steak cut from a pastured cow, a salad, and some broccoli, all fresh from the fields...and a log cabin would suit me just fine.

[IdahoCopper]

There sure are a lot of resources in the solar system........... Earth is only a closed system because of lack of foresight. Now if we would only stop the useless and pointless "Quest for Life", and "Pure Science" space missions, and focus space activities on PROFITS and Resource Extraction, our future would be a whole lot brighter than what theo writes about.

[theo]

Life in a ghetto tends to be nasty, brutish, and short. Life in a cubicle is nasty, brutish, and long. Life in an Indian or Chinese slum is no picnic, either...

All I'm saying is that each acre of the earth has a finite carrying capacity, and once you breach that capacity, you start to drown in your own poisons. If you don't like my number, feel free to propose your own...maybe you want more people badly enough for everybody to eat pink slime burgers processed from feedlot cows stuffed with corn grown with frac gas fertilizer, along with a side of GMO corn or whatever that white powder is that they process into the stuff in the box with a list of unpronounceable chemicals...and don't forget the "artificial cheese food" topping. You can serve that up with some melamine milk on your plastic coated fiberboard furniture in your apartment constructed with poisonous Chinese drywall.

I happen to like a nice steak cut from a pastured cow, a salad, and some broccoli, all fresh from the fields...and a log cabin would suit me just fine.

I tend to think that slums and ghettos are born from oppression which stymies the innate human ability to solve problems. You seem to feel good about your situation and its vast superiority to the lot of the "slim eating cube dwellers." Good for you!

Although there might be truth in what you said, your writings betray a certain over-confidence in your understanding of the world. Have you considered the unknown unknowns? Malthus certainly didn't.

[scyther]

Just putting this out there... just because life was a lot less comfortable 800 years ago doesn't mean it would be any worse if the population dropped back to that level. Most of the technology humans have acquired since then won't disappear if 90% of the population dies. It would of course be catastrophic at first, but once things stabilized I think the human race as a whole would be better off.

[theo]

Just putting this out there... just because life was a lot less comfortable 800 years ago doesn't mean it would be any worse if the population dropped back to that level. Most of the technology humans have acquired since then won't disappear if 90% of the population dies. It would of course be catastrophic at first, but once things stabilized I think the human race as a whole would be better off.

There seems to be this idea that after losing 9 out of every 10 people, society would just turn into something straight out of Waldon Woods. This strikes me as naive. There is no template for what 6 billion deaths in a short time period would do to society. I would argue that most of today's infrastructure and institutions would be destroyed along with much of our current knowledge and values. Also, I actually do think that our post-apocalyptic governments would resemble those of the middle ages since oppression and centralized power almost always follow instability. These elites would tightly control any surviving technology snuffing out anything resembling progress for multiple generations.

[Engineer]

There seems to be this idea that after losing 9 out of every 10 people, society would just turn into something straight out of Waldon Woods. This strikes me as naive. There is no template for what 6 billion deaths in a short time period would do to society. I would argue that most of today's infrastructure and institutions would be destroyed along with much of our current knowledge and values. Also, I actually do think that our post-apocalyptic governments would resemble those of the middle ages since oppression and centralized power almost always follow instability. These elites would tightly control any surviving technology snuffing out anything resembling progress for multiple generations.

You sound as passionate as Bernacke preaching deflation doom, but it doesn't have to be an apocalyptic event.

A 90% reduction might be a bit drastic, but if you've ever been stuck in LA traffic, it's certainly nice to think about 90% of those cars being vaporized from the road.

I could certainly live with a 66% reduction, which would put us at late 1940's population levels. Even back then, people were worried about population pressure, but there were few enough workers that they could actually get ahead and eventually retire on one person's salary. With 3x more mouths to feed in 2013, you just aren't as valuable a resource as your grandfather was. And, if population growth continues along it's exponential path, how much will the work of your grandchildren be worth? Will it follow a linear path and be worth 1/9 of your grandfather's wages, or an exponential path, and drop to 1/27 of his purchasing potential?

[theo]

You sound as passionate as Bernacke preaching deflation doom, but it doesn't have to be an apocalyptic event.

A 90% reduction might be a bit drastic, but if you've ever been stuck in LA traffic, it's certainly nice to think about 90% of those cars being vaporized from the road.

I could certainly live with a 66% reduction, which would put us at late 1940's population levels. Even back then, people were worried about population pressure, but there were few enough workers that they could actually get ahead and eventually retire on one person's salary. With 3x more mouths to feed in 2013, you just aren't as valuable a resource as your grandfather was. And, if population growth continues along it's exponential path, how much will the work of your grandchildren be worth? Will it follow a linear path and be worth 1/9 of your grandfather's wages, or an exponential path, and drop to 1/27 of his purchasing potential?

I guess this thread has been officially hijacked Apologies to all. Anyway this discussion has been very enlightening.

So 90% or even a 66% reduction in population "doesn't have to be an an apocalyptic event?" Really? Europe lost about 30% of its population due to Black Death and I'm pretty sure they thought it was the end of the world. So please explain. How exactly do you see this population decrease happening?

I live in an area that has some of worst traffic in the country and it is frustrating to be sure, but I'm not quite at the point where I wish for a majority of the cars to be "vaporized". Also I'm not sure where you get the idea of the decreasing value of labor (decreasing relative to what?).

I know you think that the Earth is at a saturation point with respect to population. This is a view that has been held by various academics and experts of every generation since 1800. Given the fact the they were all wrong, do you think its possible that you are also mistaken? Is it also possible that, with the proper application of innovation/technology, our planet could actually support a population of 100 billion or more?

I think we'll have agree to disagree on our view of people. I see them as a potential source of innovation and wealth, where as you view them as simply more mouths to feed or backs to clothe; a view which is shared by most progressive socialists.