What should you do with the money you have available? - Part 1

What to do with your money is always a popular topic. As far as I can see, there is no one good answer. I see four basic choices regarding what to do with your money:

1. Spend it now.

2. Give it away.

3. Pay down debt.

4. Invest it using conventional approaches.

In this post, we will talk about 1 and 2. In later posts, we can talk about 3 and 4.

Spend Money Now

If money is not gong to be worth much later, one set of reasoning says, "Spend it now." I can think of quite a few options:

1. See the world, while you still can.

2. Visit friends or relatives you have wanted to visit, but put off.

3. Take care of health or dental issues that need to be taken care of.

4. Take a course that might be helpful long term.

5. Buy extra canned goods or other non-perishables.

6. Buy property where you can farm (if you have the skills to do this).

7. Buy gardening related equipment, or soil amendments.

8. Buy books about specific skills you may need.

9. Buy goods to trade.

10. Buy a dog that can be trained as a guard dog/helper.

11. Insulate your house, make it tighter, and/or add some sort of passive solar heating.

12. Buy a solar thermal hot water heater, solar voltaic panels, or wind generating capacity.

13. Install a water collection system. (If water is to be used for drinking, you will need to have the right kind of roof and will need to take proper precautions. It still may not be legal.)

14. Buy tools for a new trade. (For example, wood working or making leather goods)

15. Buy a gun and ammunition (For catching rabbits, if nothing else).

16. Buy a more fuel efficient car.

17. Install a composting toilet (even if it doesn't help the resale value of your house!)

Give Money Away

If money is not likely to be worth much later, and others have need for help now, one possibility is to give more money than you usually would to charitable organizations of your choice.

If friends or relatives are in need, you might want to help them out as well. Giving money may not be the best choice, unless you make it clear that what you are giving it is a gift and not a loan. In some cases, you may want to take a relative into your home if they are out of a job, and not able to get along on their own.


What have options have I left out?

What do you see as top priorities?

If you knew that there was a possibility of suddenly having to move (for example, because you lost your job and couldn't find one locally, or there was an unfixable problem with the city water supply, or a huge hurricane wiped out infrastructure in your area), would this change your mind regarding what you would spend your money on?

What portion of your money do you think you should not spend on these things--save for contingencies, or leave in investments, or whatever?

What do you see as top priorities?

This one is easy and by my rating of importance.

1) Install a water collection system. (If water is to be used for drinking, you will need to have the right kind of roof and will need to take proper precautions. It still may not be legal.)

2) Buy a solar thermal hot water heater, solar voltaic panels, or wind generating capacity.

3) Buy or build an electric car.

As far as the roof is concerned, a metal roof is a good choice for longevity and rain water collection. Standard shingles will contaminate your water supply when you do water collection so stay away from asphalt shingles.

When the s*** hits the fan you will need to have your own energy supply. Solar PV is a good solution, the down side is the high cost. As you say though if cash is worth less each year then things that last like PV panels have more value.

As oil becomes more costly a PV system combined with an electric car is going to be a very valuable commodity.



I agree. Decide what things you need, determine what will last, pay it forward. Passive solar, solar thermal (hot water, radiant heat), PV, kitchen gardens, these are up-front investments that produce for decades. Prioritise, and most of all invest in useful knowledge and skills.

You dont need to have your own energy supply except in possibly some hostile environments. It would be a nice luxury for the future though.

Sorry, no. Fine if you want a warm, fuzzy feeling, but paying down debt (includes taking care what you borrow) has to be the way to go. Coal and gas will be with us for some time yet.

"Accepting less" will be the new paradigm.

Regards, Matt B

I have been thinking of group marriage as a way to deal with coming problems with energy. What would be the best ratio of men to women, 2 women 3 men?

I find your idea of polygamy intriguing, but i think what you are getting at is that extended families don't need to be scattered over multiple households. In leaner times it would make sense for one extended family to settle in one relatively larger house and include multiple generations, adult siblings, cousins, and even close friends in a communal sort of arrangement. this would enable better economies of scale and would also allow for better security (presumably this post-apocalyptic scenario would increase the risk of theft and other predatory behavior). Unfortunately i have already experienced this scenario, as my wife and i are employed and prosperous, but have taken in various family members who have been less prosperous. they have contributed non-monetary compensation such as housekeeping and child care services, so it works (sort of). the downside is that privacy is sacrificed and this tends to put some strain on a marital relationship!

Well, it all depends on what you are trying to do...I have enough projects lined up that I could keep at least four men busy full time...and more if I let my thoughts run wild (no, not that way! well, maybe)... I'm sure my husband wouldn't mind a few more women in the mix either -- one devoted to making breakfast, one devoted to cleaning the house, one devoted to laundry and ironing, one devoted to bookeeping for his business, one devoted to raising the kids and maybe one just for show with polished nails and diamonds.

I think that maybe the next generation might just be a lot more fluid with these relationships. My son tells me of his peers "hooking up" with others; friends with benefits; multiple partners and so on. The 60s planted the seeds and talked a lot about free love, but the 10s (2010s) are living it.

Where do you find them ones with diamonds? Oh, wait. They probably wouldn't want me to sell the diaamonds. My daughter is a nail tech, so I know where they get those pretty nails.

I wonder what trinkets will bring, anyway. They might be worth storing up, just in case.

"What would be the best ratio of men to women, 2 women 3 men?"

This is great...right out of "Dr. Strangelove"! :-)


Definitely 1 woman, 2 men cooperating, not competing.

How do you keep an Amish girl happy?

Two men-a-nite.........

In currently existing poor/impoverished communities, transient relationships are the more the norm. Economic hardship and uncertainty create a situation where men refuse to marry because they are not economically viable participants in a household. Of course, they none-the-less create children and become absentee fathers. Marriage is basically rejected as a viable concept by both men and women in these circumstances. For men in their twenties and thirties, there always seems to be one more mushy-brained woman who will take them into their bedroom. The end result of all the fatherless children produced is a criminal class of semi-professional barbarians who then infect society like a cancer.

I reckon virtually all of these are investments....it's just that the return maybe isn't in fiat currency.

In particular land (6) - after all, they've stopped making it - and 11, 12 and 16 which all have a return in energy.

That is a good point. We have been brainwashed into thinking that all investments are paper, and that they will go up in value. Unfortunately, that doesn't work very well, if it works at all.

What do you see as top priorities?

Constructive selfishness. Invest in yourself first. Put yourself in a position to help others. If your own physical/emotional needs aren't met first you'll be a burden to your community. Develop important skills so you can be a teacher, but always be a good listener and open to good ideas.

On what basis is money not going to be worth much later? As a result of serious inflation, or as a result of societal breakdown - the list seems to be addressing both of these scenarios in a somewhat haphazard manner. And how much later is "later"?

Also - it seems to be cart before the horse ... if you have significant debt (even manageable "good" debt such as a reasonable home mortgage), then you do not have any spare cash, and if you don't have some forms of investment that keep your capital base strong in real (inflation adjusted) terms, then you don't have any spare cash either. A pantry full of baked beans and ammo is not income-producing.

But yes - improving your house (assuming you're going to live in it for the long term), and acquiring useful, practical, rewarding skills, would seem to be good things to do with spare cash.

I don't know about other countries, but in the US the currency is backed by "the full faith and credit of the United States". If you think about that, its the net assets of the government, plus or minus the net assets of the citizenry. At the moment the balance sheet pretty much sucks any way you stack it, and is projected to get worse at an exponential rate. The full faith and credit of the US nets out to squat. Currency backed by squat isn't what I'd plan my future around.

You are right--it would be good to know on what basis money won't be worth much later. I am sure different readers will have different views--and there is always at least some possibility that everything will somehow work out OK, at least for several more years. So we end up make decisions with less than perfect information. But the debt unwind suggests that something is likely to make our money either worth less or worthless.

If things fall apart, we also don't know how things will fall apart. Will electrical systems be a problem early on? If so, pipelines for piping oil and gasoline pumping stations will also not work. So we may have a failure of many systems at once. Or the problem may be a lack of jobs and of social support systems, so that even though electricity and gasoline are theoretically available, most people will not have money to buy them. Or the problem could be what people have long planned for--only one of high oil prices.

The real question is figuring out what our future problems will be, and planning accordingly--either that, or planning in such a way that our plans will work out in a variety of scenarios.

I am sure different readers will have different views--and there is always at least some possibility that everything will somehow work out OK, at least for several more years. So we end up make decisions with less than perfect information. But the debt unwind suggests that something is likely to make our money either worth less or worthless.

Well ... you gotta do one day at a time. Right now the thing to do is prioritize and understand.

What is important and can it be had with cash? What is next important and next after that? That's the priority approach. A lot of the priorities need learning, so getting classes/practical experience is a priority. Taking care of elderly parents or young children will require some means of exchange. What works now - cash - will buy the next means of exchange which will then buy the next. Transitions have been seamless for those who do not wed themselves to old- fashioned ideas, whether it is about gold or farms or living in a city. Everything is up for grabs!

Understand ... that everything has changed. The society - particularly in the 'West' (China?) - could be viewed as a ladder. Persons wheedled their way up the ladder - which is something that everyone had to do - by climbing up upon all the other people on the ladder. A climber would look for someone higher up the ladder who could pull them upward. Anyone who could not pull was stepped on.

This approach is obsolete. Nobody is climbing anymore and doing so at the expense of others is likely to bring real problems to the climber. Only those who can cooperate will be able to make claims against a society that will view climbers as thieves. This is where the tea- baggers and survivalists are completely wrong. They simply whitewash social climbing while continuing to market the so- called 'individual'. Only groups and solid communities will thrive. Individuals will be marooned and will stripped of their assets.

Until the West 'goes off oil' there is deflation without end. Money will become scarce more and more valuable - even paper money - which means more people and remaining 'businesses' will turn themselves toward gaining money by arbitrage and do nothing else. Those with money will gain more of it. Those who rely on money and spend all of it will suffer. Those with some money will eventually run out of it ... there will be a few wealthy and many money- poor.

Being able to 'outmaneuver' money's grasp will be very important. Having this understanding and being able to act on it will be the difference between success and failure. Money is a tool that is also a wasting asset. It may be extraordinarily valuable but if you cannot get it, the idea itself is worthless. The outcome of this line of thinkng means developing new, non- money exchanges, inventing new forms of money and building communities that have the power to tax. Even if this seems a far distant prospect at the moment, it is a good exercise in thinking ahead and gaining understanding.

Good luck everyone!

There was a very interesting conversation over at the LATOC forums a couple of years ago between two people who were living in Moscow during the Soviet collapse. They said that as money became quickly worthless and nobody was sure of the cost of anything, everything became valued in snickers bars. Its seems weird but when you think about it a bar of food energy in such a situation is ideal for working out a medium of exchange. A loaf of bread would be a good alternative.
When something was worth less than a full bar and change had to be given it was paid out by the shop in sticks of chewing gum. One of the two who had lived through it said that he always shopped at the same store because when they gave back chewing gum as change it was always his favorite flavour.

Nothing new under the sun. Just go back to Berlin 1945: cigarettes, augmented by Hershey bars once the yanks arrived. During the blockade/airlift coal brickets to get hairstyling. Potato pealings for farm food.

Essentially bartering with whatever has value.

With our federal government so eager to shift financial burden on to society at large through bailouts, the lesson is that since paper money or data in someone's financial server farm has no intrinsic value, then it makes sense to turn any money surplus one may have into some kind of tangible assets. I like the idea of investing locally or at least regionally, keeping investments as personal as possible. Most people have little or no surplus though, so it is not something they consider a problem. Our present society is one of relatively high complexity and technology, requiring lots of resources and labor to maintain. So another conclusion I would say is that a simpler, lower energy way of living will be in order. For the mainstream, those without a high degree of social leverage, this will not be a matter of choice, rather an outcome of accumulated debt and natural limits. This doesn't rule out the possibility of sustaining a decent quality of life though, since much greater efficiency is possible. Hopefully such a transition will take place in small increments.

Being a techno nerd, I particularly like the idea of investing in tools. :-)

Investing in local, high quality agriculture is appealing to me as well.

These are another series of questions whose answers are very dependent on your age, marital status, size of family, and location. There is no "one size fits all" type of answer to any of them. So what are my wife and I doing with our money? I am going to continue to follow the same path I have been on for the past five years, since retiring. I've paid off our house, paid off most of our kids' debts (now they are financially on their own - no more handouts), installed new efficient gas furnace, new roof, etc. We are presently recarpeting the last of our home. We have found that with a wood stove for secondary heat the carpeting keeps our old feet and bodies warmer than hardwood or tiled floors. So we can keep the heat turned way down compared to the past. We have gone with dark, commercial quality carpet and padding that should last the rest of our lives. Simple, but it works.

We are hoping to have enough time to complete a half dozen or more new raised beds before planting this spring. We are also purchasing more fruit trees, cherry and pear this time. There will be blackberry, raspberry, and grape plants added to our yard. We want to put in 20 dozen quart and pint canning jars, along with enough lids to keep us going for five years. I am trying to get enough organic sugar and other canning supplies to last a similar amount of time. Our one-third acre suburban lot will be slowing converted to a total drip irrigation system, and I want to add a half-dozen chickens and a coop in the future.

I'm in my early 60's and my beautiful wife is not far behind. We cannot raise everything we need. Nor can we move somewhere else. We actually don't want to. Our finances will soon be much more limited. But we think between fresh loaves of bread and a pint or two of preserves, we should be able to barter for some of the things we cannot grow, buy, or build ourselves.

We are also contributing a lot of money to charities and our church. Our church membership is our extended family. The charities are primarily local. Oh, and we have always worked on building friendly relations with all our neighbors. We share tools and labor as needed. It's amazing how happy people are when you bring over a bag of fresh vegetables for them.

Hoarding money isn't going to get anyone anywhere. There is no better place to go. Don't be afraid, be aware.

Good thinking all around I see here and it's heartening.

One other thing I'd add to the list of "investing." Invest surplus money in infrastructure that provides "implied" income. . .as higher taxes are increasing part of the cost of transition. The less money you can show the less money you'll have to pay out. The business of living small is something few have written about and would be of interest here I'd suggest. Suffice to say that any minimalist is stuck in an awkward situation of 1)facing the opportunity costs of earning income--as it can cost 900 dollars to earn a 1000 2) Income unless it meets a certain threshold can be as much a liability as an asset. People say, Jay, look, now you get bananas for free! No actually, I don't. I get bananas for free and my 50 banana trees pay me as well a real income in their value, in the cost it would have cost me to earn the money to buy them, the taxes I would have paid on that income, the time I have had to apply to other things and the rest. Implied income can stack up in the back pretty fast even though on paper it doesn't look like much. Which is good.

It's also carbon neutral. LOL. Unless I eat too many of them.

Jay, as a fellow banana raiser, I wonder about how free those bananas might be. We must have about 20+ apple banana plants, and they usually have 2 to 3 bunches coming on at a time. They are growing on mortgaged land that has to pay property taxes, insurance, etc. True, their footprint is small, but growing. They need plenty of water to be healthy, and they love chemical fertilizer. Neither are free here (well, the rain), and the price of chemical fertilizer is escalating. I think it's not an accident that commercial banana farms are located in rainy areas--microclimates, where it's usually also too steep for housing subdivisions. Market prices are rising, and I'm thinking that's tied to the cost of fertilizer, in part, maybe transport costs, also.

I don't what bananas need as far as food goes, but you can grow other plants that suck up those minerals and use them as a mulch/compost to feed your bananas, You'll have know what you need, but there are several other solutions than chemical inputs from outside.

Soils in Tropical climates are not as rich because they don't have a big base of piled on plant matter, and they leach more when it rains.


What you all say is true. However I'm growing bananas in a mixed forest "food forest" setting and they're pretty well self sufficient at this point. I applied trace elements and a lot of bio char early on in the process and all in all it appears to be a sustainable, or at the very least--long long long term affordable way of going about it. The permaculture stuff works if one isn't too dogmatic and tweaks things here and there a little bit.

Again, charing was the historic answer and it really does work. I've found that a pound or two of char per square foot of soil can reduce input needs by 70 percent or more, no matter whether you use NPK mulch or both. That's huge and really worth giving a try to do. The soil health after a year or two is so much higher it's hard to believe it's the same stuff.

Charles, I'm pretty easy where the plant sources of NPK come from, either as recycled plant matter (compost) or long-term recycled nutrients from mines. I know the bananas don't care. Of course, chemical NPK is having the same problem as oil depletion, so soon we'll all be organic by mandate.

Here in the tropics, the soil microbial activity is so large (function of temperature and moisture) that standing crops of organic matter vanish pretty quickly. The biochar that Jay mentions is a way to lock up nutrients in the soil for longer periods so that plants have a chance to grab some before the damn microbes eat it all. Slash and burn worked for a long time for the Maya.

I like the church as the network of people to work with, and to help others beyond that circle. I'd like to believe that long
term relationships make a difference when things are bad, i've certainly seen that in families. I caution people on remodeling
their basements for kids playwhatever, and tell them to think about small apartments for family, friends, kidscomingback or simply
additional income (and maybe a little physical security). There is a subset of the church that is talking about a teotwaki co-housing place in the country, that is probably and ideal situation for me.

I'm thinking that maybe our 2010 church contribution will be in the form of emergency prepardedness for our church- based in a small community. A Big Berkey water filter could supply the wholed town with drinking water and a few cases of dehydrated/stored food could feed the town of 400 for an entire day. Sounds like a good way to use my annual church givings.

If the future is brighter than today, then in 20 years I'll add some shrimp, lobster, and French Champaigne to the dehydrated food and we'll have a community dinner called "Katie's folly."

Hey Dale in Spokane,

I am out in the Valley and I have 6 varieties of seedless table grapes which do well in the Inland Northwest. As I am doing my winter pruning this week, I have cutting which can easily be propagated. If you would like them, contact me at: bryant at icehouse dot net. No charge to a fellow Spokanian!

Hope you check back...this thread isn't dead yet.


Ed, you bet I'm interested! Will PM you immediately!


I don't have a lot of surplus cash, but unlike more and more people these days, I still do have an income, and I wonder what I should do with it while it lasts.

Given the huge number of people losing their houses recently, I have been paying down what's left of my mortgage as fast as I can. This takes priority over many other improvements, 'cause if you lose your house, you will also lose all those improvements.

After paying off mortgage and other debts, I plan to put some money into local coops, though it can be hard to get that out for emergencies.

I was going to put more into local banks, but I understand that many of them will likely have serious troubles/closings with the next wave of foreclosures in commercial real estate.

I also plan on improvement to the house once it is payed off, and I like the idea of investing in neighbors--their future good will will be crucial--but it is hard to know which neighbors will be around long-term.

Generally I have become wary of anything that involves a large expenditure of cash. Too many scams or near scams out there at this point, even (or especially?) in the "green" area.

dohboi, you said,

"I was going to put more into local banks, but I understand that many of them will likely have serious troubles/closings with the next wave of foreclosures in commercial real estate."

This is why I think anyone concerned about the current and upcoming financial crisis should first get their money into credit unions. Investigate, find out what ones are available to you. Almost everyone can qualify for one if they look around.

Now to where my thinking is at this time:
I will deal with the main point of my arguments in other posts and in other ways, but I will tell you that I differ GREATLY with much of Gail the Actuary says. All of my study of finance, investment, money and my own life experience tells me that money is in no real danger due to lack of resources for at least another century. We have seen a massive re-pricing of assets in the developed world, but the assets are still there. We have seen unemployment and underemployment while there is still important work to be done and services to be provided to an ever growing pool of consumers. We have seen the shackles of slavery thrown off nations throughout the world. Freed slaves have a history of joining the economy in a big way. We have seen a "housing bubble" at the same there is still a crisis in quality housing for millions of people, who live in substandard housing while palatial homes sit empty. It is not a resource issue, this is a financial management issue and an issue of outright theft and lack of fiduciary decency and responsibility.

Now, please consider that during this economic re-pricing or restructuring or "crisis" or whatever you choose to call it, there has as of yet been no sign in the real economy of shortages of resources. NONE. So essentially, the assumption that impending resources shortages are simply intuited by the investors, bankers, brokers, etc.? This makes no sense to me. People do not pull in their horns and hoard money, banks do not, brokers and hedge funds do not seize up the credit system based on the intuition of some as yet unseen and untimed event (even if the world runs out of raw materials, when? The guess on timing is as important as being right in principle, this is the ONE great rule of investment...being either ahead or behind in timing makes the investor WRONG.)

So what does this have to do with credit unions. Simply this: This crisis was caused by nothing more or less than idiotic speculation with the depositors money. This had been prevented or at least controlled, "fenced in" if you will, by Glass-Steagall until 1999 when Glass-Steagall was willfully dismantled at the behest of the banking and financial community. Glass-Steagall worked as long as it was allowed to. Like oil in a car engine, it did it's job. It protected the economy from one depression/collapse to the next one. This is so much simpler than people here want to believe it can be that it is considered unacceptable.

If you tell banks they can speculate with the depositors money and be insured against the consequences by the power of the federal government, I ask you for your honest opinion, what do you think they would do? What would you do?

The public must rebuild the "fence" between themselves and their money on their own, the government can no longer be trusted to do this. Credit Unions are one way to do this. To put it simply, we must bleed the big international banks nearly to death. It is the only way forward.

This is the real meaningful movement of our time, not this hokey "tea party" non-sense or Obama's fake populism. He has indicated by the people he has placed around him that he is not able or willing to stand up to the banks, pure and simple.

We may face oil and other resource shortages soon, one day is as good as the next, but we must cut off the infected limb now. The infection NOW, today, is not resource shortage not yet. The infection is the out of control financial community. To protect ourselves as well as our nation, we must cut them loose from our money. Get to a credit union. And for those who discuss "hard assets", they are on the right path if they do not get out of control with it ("survivalist" thinking), but use it as a method to keep their money out of the hands of the banks in every instance possible. This does not mean that I oppose investments in currency and other paper. There is nothing wrong with the paper, it is just a communicator of value and a force for organizing cooperative ventures. If I give you a piece of scrap paper with a promise to pay the written amount, the piece of scrap paper becomes effectively "money" insofar as you can trust me to pay. It is not the money that is the problem, it is the intermediaries that cannot be trusted.

This is the only sensible path forward.


Thanks, it. I understand that there is a growing movement to remove money from the major banks. This is one reason I want to pay down my mortgage with WellsFargo.

And I do have some money in a local credit union. I'm a bit concerned, though, that even these are not completely immune from the current madness...

You bring up the much-discussed issue of whether the recent down turn was due primarily to corruption or to PO.

I think it is undeniable that the developments you discuss were very much central to what happened. I just think that the over-confidence in the markets was partly fostered by our ever-growing availability of energy. Of course, corruption and delusions can become dominant under a wide range of circumstances.

There was an excellent documentary on PBS the other night about how the deregulation of derivatives came about and went on unchecked in spite of clear voices calling for reining them in. Besides Greenspan and Rubin, the main culprits in muffling any voices for regulation were Geitner and Summers, Obama's top economic advisers.

It is noticable that Brooksley Born, who had been the almost lone voice of reason in the 1990's regarding the derivative markets is not one of OBama's appointees, and to my knowledge was never offered a position. To claim she is not qualified will not wash, because she was actually considered for the position of Attorney General by the Clinton administration, but instead Janet Reno got the job.

Born was the main focus of the PBS Frontline program "The Warning" in which she described as already giving warnings regarding what we would later see occur in the financial markets due to the inflation and trade of derivatives, even before the collapse of Long Term Capital Management in the 1990's.

Now this is very important: Instead of heeding the warnings of Brooksley Born, or hearing the warning of America's richest man Warren Buffett, who warned that derivatives were the "weapons of mass destruction" in the economy, in 1999 the Congress, under heavy pressure and lobbying by the banking industry, ended the Glass-Steagall Act, which had been the wall keeping the depositors money out of the risky derivatives markets, and essentially hurled trillions of dollars of federally insured deposits into the very arena Born and Buffett had been warning about! It is such a shocking breach of common sense, decency, and fiduciary responsibility by the government that those who voted for it could be viewed as guilty of negligent action bordering on treason. They should be allowed to get away with it.

On Credit Unions, you are correct that no institution is immune from the larger economy. But the operating model of Credit Unions and Co-ops prevent them from being rewarded from the type of activity I have just described above. Since the Credit Union is owned by the depositors themselves, attempting to take huge risks with the depositors money to make extra profit for the owners makes no sense, sense they are one and the same.

What we are looking for as a hedge are institutions that are not rewarded for idiotic risks. These are firms and institutions who are by design conservative because extreme risk and growth are not a part of their mandate. Credit Unions are just such a type of institution. So is the TVA (Tennessee Valley Authority) and it would pay the conservative investor to look at bonds from the TVA. There are some conservative public LLP's who are also structured appropriately.

And then, there is no substitute for hard assets, such as quality land in the right places, and even some quality buildings correctly placed, small tractors, cars of high quality and efficiency (if they are to be used). I am not crazy about gold, because what you want are assets that can be used while you wait, i.e., home, car, tractor, land, and as some above have mentioned, tools.

On the stock market, I do NOT rule it out, but right now I want the stock CHEAP beyond words. We know the floor of the market could easily be some 50 percent down from where it currently is, these are the new facts, and if the really big "meltdown" were to occur it could be some 70 percent risk to the downside. The risk premium for getting caught in such a downdraft must be very high, and now small high risk stocks are probably as safe as blue chips, and you at least have the opportunity for a big run up in prices. But this should NOT be the core of where your "safe" money is placed. There are safer ways to do it. Risk management, which only 5 years ago was an almost unheard word in investing is now for at least the next 3 years, THE word.

Good luck in all you do, and again, everone, not as a political cause but for SELF PROTECTION, get away from the big international banks, NOW. And get rid of those credit cards, especially the ones from the big international banks, this is the other shoe to fall as much as the commercial real estate bubble.


RC, I'm with you on strangling big banking if a way can be found to do it.

Unfortunately , ithink your solution is incomplete.

How do we get ownership of the fed away from the member banks short of a revolution either n the streets, or politically, Ron Paul style?


While I agree on credit unions, I'd have to agree with Gail on peak oil. Resource issues and the TBTFs are intimately connected, and while I think there is no doubt that you had endemic corruption causing the 2008 collapse, I would still contend that a lot more of this had to do with the $140/bl spike in 2007, as there's some evidence that it underlay the CDS counterparty assumptions (greed can make people do many things, but at the end of the day, you still have to have a backstop for each contract).

The economic collapse round one may have actually bought us a few more years of oil than we'd have had before in terms of physical supply, but it's also done incalculable damage to the oil business infrastructure; I don't believe that the $80/bl price that oil closed at today is due solely to speculation (or even that most of that is due to speculation) - far more of it is due to refineries either scaling back or going out of business, to redirected oil flows to China, and to similar factors.

Right now, what's happening is that we're eating away at system redundancy - moving towards fewer competitors, longer maintenance cycles, reduced R&D investment. All it will take is one good hurricane in the gulf making landfall in a heavily populated area and much of the Southeast might be out for weeks or even months, because the infrastructure is decaying. A pipeline being knocked out from Canada, escalating violence in Mexico, or even an oil shock (Cantarell finally running dry, for instance, or Chavez playing games in Venezuela), and this could be enough to break the thinning redundancy in the system.

Having said that, I also think that the potential for social unrest is beginning to climb dramatically, though it's still not at boiler room levels. A lot of companies at this point are stockpiling cash, not in preparation for a new round of growth, but as a defensive measure in the face of the perception of another leg down in the economy, and I don't think that the tick back up in the unemployment rate last month was a fluke or outlier. Commercial real estate is now defaulting as rapidly as residential was in 2008, and there's a wave of ARMs and Alt-As that are now as vulnerable as subprime was earlier, but it's becoming ever harder for the banks to hold these properties off their balance sheets. Personally, I don't think the storm is going to end much before late 2012, and by then you'll have had people who were on, then off, unemployment insurance for 24-36 months, many forced into foreclosure, and in all likelihood ham-handed attempts at attempting to punish protesters will only fan the flames. Right now they're angry, by then they will be angry, hungry and desperate.

One of the biggest differences between the 1930s and today. Most people in the 1930s grew up on farms and could tell cattle breeds and plant types apart when they were still cutting their milk teeth. Today, most people can barely even cook food if it doesn't come in shrink-wrapped plastic in a gaudy plastic box, and the food distribution networks are far more vulnerable today than they were eighty years ago because so many more people depend upon them.

So, while I think that relocalizing, credit unions and the like are an important facet moving forward, I don't think we've seen the end (or even much of the beginning) of this particular movie yet.

I just don't see things falling apart so fast that buying extra canned goods will matter. According to 'Limits to Growth', still the best verified forecast out there, the food crunch won't start until 2016, and will take 2 decades to peak. Likewise with fossil energy, easy efficiency improvements can absorb shortfalls for decades.

The only investment that will truly last until it is needed is knowledge, so how about investing in early stage appropriate technologies? There are lots of startups looking for capital and you might even make some money.

I just don't see things falling apart so fast that buying extra canned goods will matter.

I disagree. Someone who has recently lost their job would disagree with you, too. Having a stocked pantry is a very smart idea. It will provide a mental and physical buffer for what is happening.

Actually, if you live in a natural disaster area (I live in the shadow of Mt. Rainer) it is prudent to stock supplies in the event that that kind of disaster strikes. The beauty of doing this is that if the worst happens in the case of civilization collapse you're still prepared -- at least for a while.

I'm not sure there is any kind of preparation that could be made against a total collapse of civilization in the western world. No matter how many cans of food you stock it won't be enough!

I am somewhat in synch with John Michael Greer in that I think the collapse will be catabolic to some extent. I do think he underestimates the impact of human reactions given our spoiled state of belief in what we are entitled to. The reaction to catabolic collapse might be more violent than he assumes. But this is really anybody's guess.

Question Everything


I spend more time accumulating knowledge than any one other pursuit, but I cannot agree that knowledge is the only investment that will last until it is needed.

Everybody must do thier own planning, and evaluate thier own situation according to thier own judgement.The list of options given is a superb jumping off point as a foundation for planning and evaluating.

Now I am an inflation hawk , but I do not believe inflation can buy prosperity-it can buy some time , once the deflation bottoms out-and I expect it to bottom sooner than most people think.In my estimation the stock market and most "desirable" residential and small business oriented real estate is still seriously overpriced.

I would very seriously think about skipping town and taking the financial lick on the old family castle if I lived in most towns I have visited. Taxes are going to be brutal, and services are going to be skimpy in most of them.There is an excellent chance that you can buy a more livable house with some land in a place with a better climate, etc, with the proceeds.

Everybody needs a cash cushion,and you should not spend all your cash anticipating a crash.

But I am utterly convinced that money spent on insulation , new windows, a new roof, etc, cannot be better invested.Anybody who thinks the real price of energy isn't going to keep trending up is deluded to say the least.

If you have ample safe storage, I believe there will never be a better time than now to buy some top quality consumer goods that will last a lifetime-good blankets, a wool top coat,a stock of nails, nuts bolts screws, hand tools, gardening tools, etc.

A stock of basic foodstuffs is anexcellent idea-especially since it can be built up by buying items sale priced.

You can take this to the bank- food prices are going to be trending up from now on out-just like energy.

If you aren't going to be driving it a lot, and you can use it in place of a car, a compact pickup truck is a very good bet-it will use more gas, but it is apt to need fewer repairs, and the ability to haul a real load occasionally can be priceless.Just hauling leaves already bagged at the curb , free for the taking every autumn almost everywhere, can more than pay for the little bit of extra fuel a four cylinder five speed truck will use, if you are a serious large scale gardener.

You can get firewood almost free for the loading sometimes from tree surgeons working near your home in many towns, especially in the spring and summer.If you want to enjoy a day out in the country, you can strike up a relationship with somebody like me, and get a load of premium firewood for less than half the cost delivered-while at the same time enjoying a country picnic or a day rabbit hunting or fishing.

Many people seem to think they are going to start small businesses welding,repairing small engines, or doing woodwork, etc., after they drop out of the rat race.Mostly it won't work -it generally takes years to develop a following , and these fields are already crowded.I myself am a certified welder with a full complement of the usual equipmenrt, but after five years back on the old home place, and nary a complaint about my prices or shoddy work,I get only a little work-the local people are going to keep right on patronizing the welders they have been using for the last three or four or five decades.I can get to be busy as I want to be when a couple of other local welders finally hang up thier shield and stinger for the last time-most of the work I get now is referred to me by them when they are too busy to get to it promptly.

Look at such businesses as possible paying hobbies, and you won't be disappointed.If you want to work at trades and crafts, you will probably have to be a generalist to succeed.I have a nieghbor who is busy every single day , even with the economy as dead as it is now, because he is COMPETENT , if not necessarily outstanding, as an all around carpenter, painter, plumber, tree man,landscaper,and handyman in chief.

Every body knows him, nobody asks about his qualifications, or his honesty, and he doesn't ask about his customers checking accounts.They pay, and promptly, or else the word gets around quietly, and the next time a problem needs taken care of , say a leaky faucet, instead of it being a thirty or forty dollar cash plus parts at cost job,it's a call the guy in the yellow pages-he charges seventy five dollars just to come look,marks up his parts, and charges extra after five, and Saturday and Sunday.Plus you gotta sign the ticket promising to pay for his lawyer when he sues for nonpayment.

Dennis Meadows has indicated that things are going faster than the group contemplated when the models were put together. So I wouldn't count on a scenario being correct with respect to which particular year something will happen.

Also, as I understand it, the scenarios really don't take into account the debt situation and the impact of peak oil on the financial system. Leaving these out of the models would seem to me to produce "rosier" scenarios.

You should also remember that the scenario you have seen is only one of a fairly wide range of scenarios. Many of them ended in crashes.

I have another of Dennis Meadows talks in queue. In it, he talks a little about the possibility of collapse. I will post it sometime in the not too distant future.

Gail, I look forward to reading another Meadows talk. You do a great job of gathering useful information on this site.

For the time being though, I'll stick with my expectation of slow decline. The potential elasticity in the system is just too big. I see lots of people - myself included sometimes, consuming two and three times more energy than they need. Tiny cars, cogeneration, local food, and living close to work can eliminate 40-50% of total North American energy use, and don't require central planning if people know what to do.

One of the things that Donella Meadows points out in her book 'Thinking in Systems' is the similarities between our exponetially growing population and economic systems. She suggests also that the two would suffer from similar problems. We know that the economic system can and does crash suddenly so then why not population too?

In fact we often see this in other species. Yeast will either use up their energy source or pollute their environments to their own detriment, either of which can singlehandedly produce a rapid die-off.

But yeast everywhere does not die, the world is not one petri dish. Individual countries and continents are. Population reductions could be contained.

Even yeast that go through a rapid die-off are not all dead. There are always survivors in the leas feeding of other dead yeast cells.

Personally I've become more of a saver, out of spite. I certainly think it's a noble idea to move money into savings accounts in local banks or credit unions, or keeping physical cash on hand, which is of course the most liquid form of wealth and can serve as a hedge against bank holidays. I see cash as king for some time, and a hyperinflation scenario to be exceedingly unlikely.

Other than that, precious metals (physical ownership of gold, platinum, or silver), guns, and ammo are a good way to spend money, as they are not easily manipulated by the financial alchemists and will always have some market associated with them, collapse or not.

This to me forms the new basis of what to do with money-which of course is a limited subject. What to do with life? That's a whole different enchilada.

Other than that, precious metals (physical ownership of gold, platinum, or silver), guns, and ammo are a good way to spend money, as they are not easily manipulated by the financial alchemists and will always have some market associated with them, collapse or not.

Precious metals are often sneered at on TOD but a stash of silver coins makes sense to me. Gold is more problematic because of it's higher value, but silver has been a medium of exchange for millenea and no-one has given me a good explanation of why that will change. I think most able-bodied young men will be willing to do a good day's work for a few silver coins. I've never lost on silver or had a problem converting it.

Ammunition will likely have exchange value if things get really bad. A stash of common ammo: 45ACP, 9mm, 12ga shells, .223, 7.65mm, 30-06, etc. Just pray someone doesn't use them agaist you.

If you have some money you want to "stockpile" in a relatively safe environment, I would strongly recommend purchasing silver rounds. A silver round contains one troy ounce of 0.999% pure silver. 12 tr. oz = 1 lb. They are a convenient size to store or carry, and are pretty well known about here in areas of the west that have a mining history. A couple decades ago they sold for $3-4 each. The price peaked recently at around $17-18, but now has receded a bit.

I personally feel that they are a much better hedge against an unknowable future that paper currency, including the debased coinage that our government produces. I have absolutely no faith in Wall St., and at the same time realize that one doesn't really purchase precious metals with the idea of receiving interest or a profit on investment over time. To me, it is just a safe harbor in which to keep something of value for possible future needs.

Like learning new skills, gardening, etc., if I am wrong, no harm done. my kids can always resell the rounds in the future.

1 Troy oz = 31.103 grams
1 avoirdupois pound = 453.59 grams
1 avoirdupois oz = 28.35 grams

12 Troy oz = 1 Troy pound
I have never ever seen anyone use a Troy pound measurement


I only place I know of its use is in regards to precious metals. What I was trying to point out is that a troy ounce is difference than a standard ounce. I believe it is roughly 25% larger in weight vs. a standard oz.

Having said that, everything else I said stands. A silver round, to me, is a good place to hold some of your assets. Relatively easy to purchase and sell; easy to store, and although it will tarnish (oxidize) a bit over time, still retains its value. Buying certificates in Au and Ag have never made much sense to me because if/when TSHTF how will you be able to redeem them?

Buy these:


Keep them in a safe place.


which answers the age old question: Which weighs more, a pound of feathers or a pound of gold?

Answer: A pound of feathers.

Don't forget .308 and .40 S+W. I am finally starting to come over to silver as a currency.......you make sense.
i am one of the sneerers that you reference but mainly because of the features of gold as you point out.
Better make sure you know the guys that might be buying ammo from you and never have it all in one spot.

Practical education, particularly valuable certifications that allow you to be selected over another in the competition of the marketplace.

(There are certifications that aren't worth much.)

So which ones are valuable and which aren't?

That's specific to each sector. Ask people in the field who hire if it makes a difference for them if someone has a particular certification. Pretty quickly you can find out whether the industry has respect for the certification or not.

The boomer generation as a whole has more capital than any other generation before it. More than any generation is likely to ever have in the future. A case can easily be made that this generation has benefited the most from the mindless exuberance of FF induced prosperity. Therefore it would make sense that this generation has the biggest responsibility when it comes to financing the transition.

This might sound like sour grapes or maybe wishful thinking (delusional dreaming) but I believe that this could be packaged in such a way that this generation would be delighted to spend their golden years (and their gold) jumping into action and being instrumental in saving humanity.

Yeah, maybe a bit melodramatic but I am serious. Anybody up for forming a nonprofit?

Only the wealthy can save us now.

The boomer generation as a whole has more capital than any other generation before it.

Might well be true, but the reality remains that wealthy boomers have the vast majority of that capital. Millions of people born 1946-1963 remain very poor - possibly with negative assets - and very modest retirement prospects indeed, especially women. A class analysis, rather than a simple generational one, might be more useful.

eeyores enigma wrote:

The boomer generation as a whole has more capital than any other generation before it.

cargill responded:

Might well be true, but the reality remains that wealthy boomers have the vast majority of that capital. Millions of people born 1946-1963 remain very poor - possibly with negative assets - and very modest retirement prospects indeed, especially women. A class analysis, rather than a simple generational one, might be more useful.

Thank-you, thank-you, thank-you!!! Everytime I hear a boomer rant, I want to scream for this very reason. I think the image of "boomers" is of college kids who protested the Vietnam war and in the 80s, sold out and became yuppies. I've been meaning to look up what percentage of boomers actually went to college. I know many boomers who grew up poor or working class and have worked hard all their lives. Some were prudent and have small paid off houses, and in the future, I suppose that will be considered "wealthy."

Late boomers, like my husband and me, finished high school and entered the workforce in the second half of the 70s. The beginning of the end of the well-paid blue collar jobs began in the late 1970s and took off with 1980s union-busting, downsizing and later outsourcing trends.

I actually think my dad's generation had some of the best opportunities. Battles to unionize were largely fought and won during the 1930s and 1940s. By the time dad turned 18 and went full-time into the labor force in the 1950s, he got good union wages and benefits - without having to take to the streets and fight for them. (Dad was a union electrician). A blue collar worker in those days could buy a house, car, and support a stay-at-home wife.

Anyway, sorry for the rambling diatribe! Just so glad somebody brought up the social class issue re boomers...


There are actually a bunch of people from the boomer generation in peak oil (plus many younger ones as well).

The question is what should be funded. One thing I would be interested in is some local group (in each area) figuring out exactly how people might provide adequate food for themselves and otherwise support themselves, in a low tech environment. Perhaps the place to start on this might be history books, to figure out what foods were raised in the past, how they were grown, and how they were stored, and how they were cooked, but it might also take into account what people today are having success growing.

From there, it seems like the group would want to investigate what simple farming techniques (like crop rotation and planting crops together) might be used to maintain fertility and to reduce the impact of pests. The group might also look at what crops can be grown without irrigation (unless irrigation can be done easily without fossil fuel support). I expect that some of this is being done already, but I don't know that people are making a conscious project of it, and trying to document what works for their area. I would really like to see some groups attempting to developing a skill base that would work for the long term--things we lost with the oil age.

This might sound like sour grapes or maybe wishful thinking (delusional dreaming) but I believe that this could be packaged in such a way that this generation would be delighted to spend their golden years (and their gold) jumping into action and being instrumental in saving humanity.

Well, speaking from the oddball fringe, I'll note that I have never bought into the notion that money should be kept and amassed, more than is needed for basic functionality, and I still feel that way. A small amount is for living and anything extra is for projects to try keeping the world from getting any more screwed up. It's possible to live quite comfortably on what is now considered a poverty-level income; while generating and spending fairly significant amounts on the world at large, and I recommend it. It means your material lifestyle probably won't change much, even as things get weirder, and that your world can be larger than your own cares.

Personally, I've spent most of my time on other species and habitat, but I'm sure there's plenty of worthwhile stuff to do for humanity if one is more human-centric. The very best investment is preventing the planet from being degraded, IMHO.

Yeah, maybe a bit melodramatic but I am serious. Anybody up for forming a nonprofit?

Adding a corporate symbiote to one's extended phenotype can add flexibility, I use them sometimes.

Re greenish:

"Yeah, maybe a bit melodramatic but I am serious. Anybody up for forming a nonprofit"

The model should be (a) credit unions and (b)The TVA (Tennessee Valley Authority and (c)Rural Electric Coops

As I have made the case in other posts, we must divorce our nations economic activity from the banks and the for profit shareholder corporations. This is not "socialism" in the normal sense, because there would be a real mixed element...of not for profits, profit corporations, and co-operatives, all competing with one another.

The American banking community has destroyed their own credibility. Even such "free market" thinkers as Alan Greenspan have stated under oath that the belief that the market can be self regulating was wrong and led to catastrophe.

The government is now under the control of the worst element of the American banking community and cannot be relied upon to enforce the law or look out for the citizens. Therefore the citizens must use various co-operatives to divorce the banking community from the cash stream of the American depositor and investor. This is THE ONLY WAY FORWARD.

Picture this: A set of enormous solar concentrating mirror installations in the desert southwest. Financed how? By American investors buying bonds, just as they did and still do in the TVA.

The original configuration could be chartered by the government, as it did in the case of the TVA, but the money from the electric power sales would go to the investors...at say 3% or 4% TAX FREE (remember, this is a green facility built to save the world! Don't it deserve the same tax exempt status as municipal bonds? :-)

The assurance of being paid would be incredible, better even than the TVA...based on the premise that over the long term, the sun shines in the desert...no worry about cost of coal or natural gas or uranium to cut into the return. The capital costs would be by far the greatest cost.

So would these concentrating mirror plants cure the energy crisis? No of course not, but a model of how to finance such low carbon/renewable energy projects would be established, and without the use of the big banks, who again (and we must repeat this again and again and again because it is TRUE) the banks of the United States can no longer be considered reliable co-parties in any transaction.

If we make the assumption that the world economy is descending into collapse (as most folks here do) then these type of assured "the sun will shine even when the banks let you down" projects will be the hottest thing since Toyota before the recalls! People will jockey like hogs at the feeding trough for a few percent tax free of green energy in places like the desert of the U.S., Australia, the desert of China and even (dare we say it) Saudi Arabia...because as has been pointed out "Saudi Arabia could become the Saudi Arabia of...solar."

And as any technology always does, it will spread, like a virus, modify itself to other assured green technologies and spread again...
(this is why many folks here hate technology, because once it gets loose it won't stop spreading...and it is already loose in the world.

But let's not get too melodramatic...:-)


In the Netherlands there are people who try the following model

You invest in a wind farm, in return for your investment you get a part of the electricity, but as it is your windmill you do not have to pay VAT or other taxes on it, only some costs for transport and maintenance.

Reasoning, if you grow something yourself you don't pay taxes either

The result would be that instead on 0.21 kWh costs would be 0.10 (for the next 20 years)
However Dutch government does not yet support the matter.

Build a garden even if it is only a small one. I like raised beds.

Learn how to make rabbit boxes. It cheaper than bullets and reusable. That should make all you green people happy. A friend of mine had a dozen when I was a kid and he would check them every morning before school. He sold the rabbits to our neighbors.

Carry your neighbor a cake and talk with your neighbors. Learn who are the good guys and who you can‘t trust.

If you have a weapon buy some ammunition and learn how to use weapons properly.

You can’t change people, all you can do is take care of yourself.

A couple of suggested additions to the list: 1. Spend some money on getting into shape. This can include purchasing basic gear (bicycle, skis, proper clothing, backpacking/camping equipment, etc.), going on hikes into the national forests and parks, paddling down a backcountry river, etc. Money spent on physical exercise visits to the parks and other public lands will pay dividends both in physical conditioning and self confidence. 2. Take a course in survival preparedness skills from a reputable organization/instructor. You will be amazed how much you can learn from those who make survival training a profession.

Land, gardening tools, long term alternatve energy and heat (I live in Pennsylvania not Florida), and some alternative transportation from bikes with trailers to an electric scooter/bike/motorcycle/atv/car, would be my answer to the question. While I realize that many people
are biased towards paying off their mortgage, I wouldn't want to be cash light unless their was hyper inflation. In fact I think there is something to manage here as well, you need to think about taxes. A paid off mortgage with 10 years worth of prepping on site, without
an ability to pay real estate taxes for a couple years (during a SHTF downturn) might not be a great idea. I think taxing authorities will be like zombies, sucking the life out of whatever is left -> "Oh look, the miller's 4000watt solar paneled house, with water pump and 1 acre garden owes $3000, but the johnson's burnt out ranch does too, which one should we focus collections on?"

Interestingly I had someone come to make this week and ask to lease/whatever an acre+ of my 60 acre farm as a teotwaki hedge. I had never
considered that, but they have a very small yard and live 2 miles from my farm. My initial response was "yes, but". My "but" was that
it had to be "active", since i'm working my land either in production, experimentation, recharging/fallow, there is no sense of that piece going to weeds. Anyone have a model suggestion?

I think the basic problem with PO aware community here is that we have no idea what the world will look like because of PO - say in 2015 or 2020, let alone 2050.

Reminds me of internet bubble days at /.

- PO
- ... ?
- SHTF ?
- ... ?
- Collapse !

As Greer says most people are just using apocalypse ideas - not really thinking through how this could play out. It is as if people think US govt will just throw up its hands and vanish overnight.

No one knows when PO will occur. Things like keeping a garden or exercising is helpful whether it happens in your life time or not. I expect to die within this decade so if things don’t fall apart soon I’ll miss it and that’s OK with me. If you are a young person I would prepare for whatever may come. You are right the United States government is not going away. The nation will not split apart as presented in ‘The Long Emergency’ even if everyone converts back to horses. Lincoln with Sherman’s army taught us southerners that much even if some of us would be happy to be on our own again. It ain’t going to happen. Work at taking care of yourself.

I think the U.S. will last this decade. The European Union probably won't.

What exactly would make US collapse in next decade ?

If EU doesn't last this decade it will be because they decide it is better that way - not because of some apocalyptic fantasy come true.

Tainter said in 'Collapse of Complex Societies' that simplification will take place if it is economicaly viable. Otherwise all stops will be pulled out to suport the current system.

Just before coming to this post on TOD, I read Krugman's latest piece at NYT. Krugman thinks there will soon be deflation, not inflation. I am generally skeptical of convention wisdom, particularly in economics. I have no idea what deflation implies at the level of personal planning. What sorts of action are rational responses to deflation?

Everything you need will increase in price and everything you don't need will decline.

I am generally skeptical of convention wisdom

Good idea...because generally the conventional wisdom is that we are headed for hyperinflation due, in part, to all the bank bailouts.

Milton Friedman said that the way to solve deflation is to throw money out of heliocopters.
Such a shmuck, that one.

Milton Freedman was right. Larry Kudlow (who you also may not like) now calls the current head of the Fed "Helicopter Ben Bernanke".

Low interest rates, low fed funds rates, low discount window, the fed buying treasuries, are a way the government pours cash into the economy.

Also, the debt the government has taken on (in trillions/perhaps $200,000-$500,000 per household)is a form of future money (both government obligations). I would bet anyone that the government will have to deal with future problems (untenable debt, unsustainable promises for medicare and social security, future lower demand for the dollar, peak oil) by printing more money.

The problem with helicopter Ben is that he only flies over the financial district.

Cocaine Kudlow is confused--Saint Milty, not Bernanke, said it.
Nothing wrong with the government printing money to get the economy moving. Investors should fear economic stagnation not growth.

Kudlow is not confused. His point is Milty said it but Bernanke is doing it. You are right that investors should fear economic stagnation not growth...which is still another reason why we will see inflation and vastly increased money supply.

I don't think so. Inflation, even hyperinflation, is controllable - jack up the interest rates fast and hard enough and inflation will cool down in a hurry. The problem right now is that the banks are essentially black holes - their capitalization rests upon their assets, but the assets (Residential and Commercial Real Estate MSBs, primarily) at this point can't be priced, because any real pricing will make the banks significantly undercapitalized (even insolvent). What the nationalization of Fannie and Freddie did was to provide a vehicle for the banks to offload at least some of the more dubious assets and get them off the books before such time as they actually have to mark these mortgages to market. Until that scenario occurs, however, the banks are sitting with that cash in fear that there will be another bank run.

Should the economy improve and the banks get to the point where they feel more confident in their own abilities to survive then it's very likely that they will release some of that money, but that a great deal more of it will end up being sopped up in treasury buy-backs. At least, this is the theory. In practice, there is a major open question as to the degree to which the banks will relinquish money once they've received, but it's always possible that in that case, the money will end up being squirreled away outside of the legal system rather than being dumped wholesale into the US economy.

The biggest danger to the bank bailout is interest. The debt that the Obama administration has taken on is effectively subject to interest. The longer deflation persists, (and deflation is extraordinarily pernicious), the more that the US deficit climbs, and the more likely that either there will need to be high taxes or devaluation of the currency to pull it off. PO could also be a big problem for much the same reason - should oil prices rise significantly (and at $80 a barrel they're at the very upper edge of "safe" as it is), then this will reduce the effectiveness of taxes. I see commodity inflation being a real problem within the next 3-4 years, but in the context of generalized deflation.

I agree that we will have splitflation (my term) higher rises in commodities with deflation or at least relatively lower inflation in some assets. However, remember that there is demand pull inflation and cost push inflation. If commodities soar then that will tend to push up the cost of a lot of goods and also could change expectations.

During the 70's (Jimmy Carter energy crisis) interest rates went to 18% and inflation soared. If the Fed raised interest rates (which they will do to fight inflation) than the interest payments on the National debt will also multiply. That is the box we are in now. No easy answers when you are in a position like the U.S.

If you knew that there was a possibility of suddenly having to move (for example, because you lost your job and couldn't find one locally, or there was an unfixable problem with the city water supply, or a huge hurricane wiped out infrastructure in your area), would this change your mind regarding what you would spend your money on?

Mobility in the event of regional disaster is my number one priority. We bought a live aboard sailboat to prepare for this possibility. If we never need it in an emergency that's great, we'll enjoy winter where it's warm.

Ditto! I'm surprised that I haven't heard more about sailboats as a viable strategy for post-peak living!!!

My family lives aboard an engineless 38' sailboat. In addition to the boat itself, we've invested a lot of time, energy, and money over the last couple years in tools, equipment, and training that we hope will allow us continued mobility in a post-peak world. We've chosen a boat that's large enough for comfortable full-time living for our small but growing family. But even a much smaller boat (20'-25') could be valuable as an emergency "escape pod".

I constantly read peak oil articles and blogs about whether it's better to hunker down in the country or the city. Advocates of the former seem to assume that urban lawlessness will be the main danger while proponents of the latter tend to focus on community cohesion and emphasize the danger of relying on a decaying grid in remote locations.

The fact is, while I am certain of the geology of peak oil, I can't predict the geopolitics with any certainty. I don't know exactly how things will play out in my city, and I can't guarantee life will be any better a few hours out of town. But with a sailboat, I do know that within days I can be out of the city, within weeks I could be somewhere VERY remote (like Hawaii), within months I can be nearly anywhere in the world that seem to offer better opportunities for my family and friends.

Rather than committing to the false dichotomy of "city OR country", with a boat we can afford to adopt a "wait and sea strategy" (groan, sorry for the pun) Furthermore, I expect that sailing will be a viable livelihood in the near future as it becomes prohibitively expensive to transport people and goods by fossil-fueled means.

Also, as a side effect of the current peak-oil-triggered economic meltdown, there are a LOT of good boats for sale for very cheap. If approached as a tool/home rather than a luxury plaything, boats can be a great investment.

- Ari


Well, I just got back from the bookstore, adding to my collection on alternative medicine and survival skills. I do not think things will deteriorate quickly into collapse, but we might have a brief spell where anarchy takes over, so it would be good to not be reliant on BAU during that time. I think we will then see a long slide, more gradual, when things and services will become scarce.

I am trying to add more land and work on the water holding capability, even if I have to use successive ponds and a solar pump to circulate from the lowest to the highest and let it flow back down to keep the water from getting stagnant. Also, I keep trying to build on my tool assortment and collection - much easier now without the ex.

After reading the 29 comments posted to this point, it doesn't seem that anyone is biting on the "give it away" part of the thread. Helping family is about as close as it had gotten unless I missed something. I have read (newspapers) that charitable giving is down, and so this would correlate. If I see an impending disaster, whether next week or three years out, I tend to be less generous, and I expect this is what is reflected in this metric. It is kind of hard to worry too much about a church, say one which is the largest land owner in the US, if you think you might get hungry on a continuing basis soon.

THAT'S IT! I am going into the business of publishing doomer books! Cars aren't selling, homes aren't selling, toursim isn't selling, but DOOM is selling like hotcakes! :-)


Don't forget to throw in some zombies, and more importantly vampires. Possibly vampyres with a Y. A lycan if you must.

As a young male with a BA in psych/social science and a Grad. Dip. in primary teaching i don't yet have a lot of cash to throw around.

This said i am not too concerned about saving vast hordes of money just yet, i am debt free and helping my long-term g/f through vet nursing degree.

I am working to get vaccinated against any conceivable threat and getting elective surgery/dentistry done now while the technology and trained professionals are (just)affordable and available.

I have turned a large part of my capital into knowledge and tools to learn and perform a range of different, lower tech lower energy activities that will be useful to future generations. this is in the hope that i am able to cover myself for a range of scenarios, be it enforced self-reliance or having to become the bartering "jack-of all-trades".

As and when i have time i practice these skills to a level of basic proficiency then move onto something new in the knowledge that i have basic skills in a range of trades and competence with a range of materials and tools that would stand me in good stead if i did need to learn a new way to pay my way fast.
I have always kept a cash buffer sufficient for 3 months food rent gas and minor medical or car related emergency.

Until such time as my partner an i are both gainfully employed full time i see no reason to stop spending on education, practice and tangibles and save. When i did i would be saving with full commitment to buy a piece of land suitable for heavy homesteading (long to ultra-long term) and that i can gainfully use to save money and possibly produce a modest supplementary wage, a range of products (if in potentia) and food security.

I am lucky in that my partner is tolerant of my apparent insanity and is a willing participant in much of it
(whether she knows it or not), this is helped i think by her being an ex-Rhodesian so has more of a preparedness and multi-disciplinary mindset - her faith is not in paper fiat or invisible bank numbers, it is in a sound way to live and a place to live it.

To many of my generation who live on credit and in the 'now' i am insane. This is OK to me, because I know that i am insane like a FOX!

Can you please provide a list of the vaccinations you can or would recommend getting? I've recently renewed the basics, but in a collapse like Argentina's, many new diseases became prevalent. For example, is there an effective TB vaccine?

Thanks in advance for any advice.

deleted by author - double post

Get the Hepatitus immunisations, update your tetnus, consider a Pnuovax - pnumonia vaccine, keep flu vax up to date, get the MMR, i would also get diptheria, polio and measles. consider also any disease that now exist in only the tropics, if/when the climate gets warmer their vectors may well spread further the areas in which they currently exist.
There is a TB vaccine available in NZ for at risk infants i dont know how available it is elsewhere.

consider this site http://www.netdoctor.co.uk/travel/vaccines_index.shtml for info about diseases you can get vaccinated for in your area of the world.

Great practical post Gail. thanks.

Many good suggestions re preps.

I decided this year to add in mobility. Gail points to this re an unfixable problem in your area. This was very painful to consider at first as i know i could not take all the 'things' i have purchased/collected.

But eventually i have come to see this 'attitude' as putting security first & accepting our lack of control & discerning needs from wants.

It hasn't changed most of my plans/purchases but it added multiple 'dimensions' to everything i do. For example i get the foodgrade buckets from a local bakery; & and apart from using them for grain/foodstuff storage i now have enough to store and organize many other items that could then be moved readily. This is for me contrary to my 'piles' organization that is typical and it is a lot of work. However this also helps solves the mildew problem in my basement which could be serious if power is out much in the summer.

We bought another property + building [cheap- 3 grand]in a village a couple of hours away & i plan to use it as a camp/ retreat, but it could be a place we could go if necessary.

Re money as mac says some cash aside but i am very aware as he is that in the last decade most items i use tin, nuts/bolts, fencing, etc. has almost doubled in cost. I fact we might not have bought the place nearby, as it immediately needed about a- 1000.00 for the tin alone- roof repair. I already had a good quantity of tin purchased at 75% less 3 years before.

We have about emptied the ira's- paid off our place- and reinvested in items/preps like Gail listed & I have mentioned. For about a year I think as I make these purchases; we may not ever be able to afford again this; fencing, bolts, etc.

The most important aspect of this 'mobility' for me has been psychologically to accept this 'bad' possibility. Actually now though I say we have a summer place we go to to boat, fish, etc.[it is on a large river]. We never thought of a second place as a possibility, for fun or otherwise.

Money is a marker we use to describe the value of various things. If a person has lots of money I would invest in mostly low tech skills and live somewhere I'd like to live anyway, and develop some community there.

The chance of making choices that result in one's survival are pretty low at this point, it seems to me.

Peak Oil will not kill us. We are already doing that job very well, and we will use worse weapons in worse ways as the Global Resource War intensifies.

Here's a summary of mine from the lithium battery discussion:

Instead of "Who Killed The Electric Car?"

We need to ask: "Who killed the Homo Colossus?"

(Homo Colossus being William Catton's term, I believe.)

Homo Colossus did it. First ecocide, then massive homicide within the species fighting over diminishing resources, then suicide as the complex systems needed to support Homo Colossus completely disappeared.

Question: will some sort of Phoenix arise out of the toxic ashes?

Will homo sapiens survive or evolve somehow?

Only time will tell.

I don't see the rather obvious option of simply holding onto your money. This implies, to me, that Gail does not even consider the possibility of serious deflation, in which money actually gains value, to be a serious possibility. If you are going to consider possibilities, it would be wise to consider them all.

i think from Gail's writings she does consider a serious deflation likely, & soon.

For me I hope for such relative to a central bank, deceptive inflation which has been going on all my lifetime; a more current successful inflation would I guess be some stronger but allow attributing the rising costs to China, etc.

Investment wise I agree that real estate & financial related items would be less, but if global trade halts then items like fencing might not even be available; & i think these items would likely continue in increasing costs anyway, after perhaps a brief stagnating cost wise.

Waiting until the price is best seems imprudent, as practicing skills, getting 'settled in', building connections-personal/social, etc. seems to me much more important. Also i expect a war or some type of focus to keep the system a semblance of BAU as long as possible. Any of these latter effects could go 'out of control' & cause some kind of 'inflation' as well. As i said I actually think overall a deflation would be less destructive socially; i expect whatever to be horrible-eventually.

Pay down debt, so that I have more wriggle room.
Upgrade my yacht.

Stall for time.
I'm guessing China's real estate bubble will burst in two years.
That's when we,(H.Sap.)use up the surplus oil that has been created by demand destruction.
This will cause a nasty spike in the cost of fuel for the Chinese motorist.

Does anyone know how much mortgage debt the average Chinese Joe gets into?
It doesn't matter, money is a fantasy.

Club of Rome says 2016 we have a sharp per capita industrial output decline in 2016. I have more faith in their predictions than they have themselves.
I'm betting I am wrong.
I'm betting on Chaos.

Gail, the course of action any individual should follow will be very dependent upon individual circumstances. Age, wealth, family circumsatnces, socio-economic-educational class, location, health, strength etc.

The main advice I'd give to anyone here is to deploy resources in a way that will suit a number of different outcomes. We do not know for sure how the future will unfold. You know that I have become as gloomy as anyone else on TOD staff - but I am still mainly happy and have one track of my life plan that is bau for the foreseeable future - got 1 son at university and the other who is off to university this year - I have one track to my life that sees them completing their education.

Its ill advised to suggest that folks should give money away - this is what crack pot religious organisations do.

A movie I'd suggest is worth watching is "Blast from the past":


Shows what can happen when one gets obsessed with an idea of a future that does not come to pass.

Personally I think we are looking at a 1930s style depression. Those in work will be OK. The unemployed and disenfranchised will suffer badly. Energy will not be a problem again until OECD tries to emerge from the other side some time post 2014.

I'd agree that sitting on too much cash is a bad idea and best convert to diverse, hard assets.

PS its well established that optimum ratio of men : women is 1:5 (men are useless - so I'm told on a regular basis:-)

"Shows what can happen when one gets obsessed with an idea of a future that does not come to pass."

Oh my goodness, truer words were never spoken!

That is why HEDGING and FLEXIBILITY are the guidewords of the era.


I initialy sold me house to go travelling off of the money. I didnt get far though after my girlfriend in Holland became pregnant! It turned out to be the shortest trip round the world ever :)

After making some abrupt adjustments I rebuilt my life debt free, took 4 years out to understand the situation and invested a fair bit of my spare cash into educating myself on subjects such as basic medical knowledge, water purification, foraging, hunting, gardening etc.

Something simple:

Plant disease-resistant fruit trees. Plant nut trees. Plant blueberries, raspberries, blackberries, asparagus, rhubarb, etc. All these are relatively cheap but can take years to reach maturity. A $10 blueberry plant should produce 10 pounds of blueberries in 5 years. And they are fairly easy to maintain especially compared to a yearly garden.

Warning, this post is about buying a farm.

Back about 6 years ago in a cowardly move to abandon the CA real estate market and make tangible the "over-exuberance", prepare for the future and retire - at least from the get-it-spend-it life, we sold out and bought a farm in Missouri.

We have spent all our money on improvements, from roofs to insulation to fencing. Most of our time we spent learning how to grow food out here (it is very different from CA's central valley) and make a little money from the land.

So from that experience and my belief that the more-or-less downwardly mobile economy punctuated by small dips like the current one is what we have in store, I'd say spend your money in whatever way you must to not need much money and be happy to boot.

Before you say you don't have equity let me just say if we had waited we not only wouldn't own a farm outright, we probably would have lost the place we DID own. The lesson, if one can be drawn, is if you willingly move when you are fat you are migrating but if you're forced to move when you are skinny you are just a refugee.

Here is a tip for the very few of you that will actually DO something about PO instead of just tapping platitudes into the air, whatever you do, don't forget to plan for what to do if nothing happens.

Something is only really an investment if it is going to produce a return.

Planting fruit trees is genuinely an investment, because they will produce fruit for you. Similarly, getting set up in beekeeping with a couple of hives will supply you with annual supplies of honey and a little beeswax. You'll get a return of eggs and meat from chickens, milk and meat from a cow or milk goat, meat and some fur from rabbits. Investing in digging up and amending the soil for a garden, and acquiring the necessary tools to do so, will provide you with a steady return of vegetables.

The real return on the investment one makes in one's housing isn't going to be the capital gain on its value (which is in the process of becoming a capital loss for most people), but rather its value in providing shelter. We all need shelter, especially those of us living in temperate climates, but we truly don't need very much - a place to get out from under the rain and wind and blazing sun, to keep from freezing in the winter, a place to fix food and eat and sleep. I'd venture to guess that at least the largest half, and maybe the largest two-thirds, of the housing in the US could be modified into multi-family housing, or at least be remodeled so that they have one or more accessory apartments. The owner will still have minimal shelter (actually, probably still a good deal better than that), plus rental income.

There are good opportunities for a signficant return on investment in insulation and other energy efficiency retrofits; the return is realized in the form of lower energy consumption, and thus money saved, in the future. Calculate payback periods, and start with the investment with the shortest payback period, then work down from there.

I don't have the time to carry this line of reasoning further, but my point should be obvious: think in terms of the real return you are going to get in your investment. Our affluenza-infected culture has misled a lot of people into thinking that many expenditures are "investments", when they actually are nothing of the sort. Unless the money you put into something is going to provide you with a steady stream of money in the future, or a steady stream of money savings in the future, or a steady stream of something non-monetary but of tangible (physically measurable) value, then it isn't really an "investment" at all.

And forget about "capital gains". Given the likelihood that we are entering an era of long-term economic decline, those will not be very common, and given the uncertainties as to how this will all play out, it will be almost impossible to predict what sort of "investment" would actually end up producing any real capital gain. One might just as well place an "investment" at the horse track. Will such an "investment" generate a return? Maybe, for a few people, but not for most people, most of the time.

A good water filter system could be essential in the future. With infrastructure failing all around us, if you are on a public water system you are likely to be getting "boil water" notices more often. Even a small unit for drinking/cooking water will be useful. Look for reverse osmosis and good UV filters with sub-micron filters. Buy extra filter mediums and UV bulbs. A smaller UV filter uses just a few watts and can produce enough drinking water for several people every day. A properly constucted filter can even make raw water safe to drink. One of the big box home centers was changing it's water filter vendors last year and I got two nice filter systems, new in the box, for 60% off, along with extra filter cartridges and UV bulbs. Keep your eyes open for good buys on this sort of stuff and add it to your stash.

Note: Most RO filters have a shelf life and can waste a lot of water, but they make pure water.

Reverse osmosis units are for desalanizing very hard or salt water or water contaminated with heavy metals or other toxins and are not necessary unless you have any of these issues.

I have come to use Orlov's 5 Stages of Collapse as a planning guide to allocate my spending and efforts.


Stages of Collapse
Stage 1: Financial collapse. Faith in "business as usual" is lost.
Stage 2: Commercial collapse. Faith that "the market shall provide" is lost.
Stage 3: Political collapse. Faith that "the government will take care of you" is lost.
Stage 4: Social collapse. Faith that "your people will take care of you" is lost.
Stage 5: Cultural collapse. Faith in the goodness of humanity is lost.

It seems we are well into Stage 1 with Stage 2 knocking at the door. To me, it makes little sense to prepare for anything more than a stage away because there are too many variables to plan effectively. Therefore my efforts are focused on mitigating the effect of the financial collapse and preparing for the commercial collapse. That said, positioning yourself to be able to react to the later stages (if they occur) is a good idea. So, my extra money is spent preparing for commercial collapse. I am looking at being able to ride out disruptions caused by breakdowns in the infrastructure or distribution channels. My efforts have been concentrated on a FEW things (Food, Energy, and Water). Again, I am not necessarily trying to be self-sufficient, just be able to ride out disruptions.

If things go really south quickly, then it will be time to leave my suburban home and go to my family's rural location (plan B). Because we have a doomstead, I am not investing heavily in trying to make an unsustainable suburban home sustainable. We've improved the energy efficiency, but I do not have plans to put in a PV system or the like.

"It seems we are well into Stage 1 with Stage 2 knocking at the door."

I'd say we're barely cracking the surface of Stage 1, but it could be like glass, a small crack appears and then before you know it - whoosh, it's in little pieces. There are still plenty of people that have faith in BAU and it's going to take a little while longer to shake them out of it.

Stage 5 is interesting though, because I think many Americans have skipped ahead on that one. In tiny bits it's still left, but there's definitely an attitude that EVERYONE IS OUT TO GET YOU. The government is out to get you, your best friends will stab you in the back to get ahead, your wife just wants to divorce you and take your money, your husband wants the money/house so he can run off with the 20 year old, pre-pay at gas pump 'cause you might just drive off, cameras everywhere because everyone's trying to steal everything, checks not accepted - only credit cards, lock your doors tight, get a safe to keep your passport in, etc ad nauseum...

I'd say Americans have been skipping ahead and prepping for Stage 5 for a while now. Trusting in your fellow American has totally gone out of style.

Money is a future claim on RESOURCES.

From a big picture perspective the question asked here is;

What should the minority of the population who control/own all the resources do with them?

Hoard them, share them, fight for more, let them trickle out at a rate just adequate to keep the masses from revolting before they die off?

The most common comment is to build community. This is nothing more than just using wealth to build a well fortified island where an isolated group can have the illusion of security.

News Flash!!! There is no security anywhere unless this is addressed on a global level. We are wasting precious time and resources focusing on hedging survival for our group, be it self, family, small group of like minded individuals, small community, city, state, nation, continent. No matter how big you think it needs to be to work, it ain't big enough. It just puts up a big flag saying "Hi ya' all, we over here have plenty of what it is you don't have". Then you get something totally unexpected like people crashing planes into your fortress. Who coulda node?

I mean it's ridiculous. It's almost as if we can't possibly imagine any thing other than resource wars and there for must create the atmosphere where they are inevitable.

I have thought this through many times and I have come to a few conclusions:

1) I no longer worry about paying off my debts such as my home mortgage and student loans (I don't have any credit card debt). This is simply because if this great recession continues the banks will have largely vanished under crushing defaults across the country and the remaining ones will have little desire to own worthless suburban homes and or have enough capital left to hire repo men or re-develop the land.

2) Liquidity is a must. I have no interest going forward investing in anything that has a 5-7 year exit strategy or long term ROI timeline such as a private business, commercial real estate, renewable energy, private equity etc. You want to be able to convert your paper gains quickly into cash and ultimately into hard assets like gold/silver or useful equipment. If the market double dips as some predict, you need to be able to move quickly and assets like residential/commercial real estate will be a disaster as credit continues to dry up. As far as currencies go I don't think fiat will go away immediately and you want to hold for now maybe a 70/30 ratio in terms of cash to precious metals. Over time you will want to diversify into more metals and goods. Btw when TSHTF I don't think precious metals will be very useful for small everyday transactions like food, I think this would be more of a barter system. But for large transactions like land or equipment gold would be preferred. I think gold will again become a currency of the wealthy.

3) Get medical procedures now that may benefit you for a long time such as laser eye surgery. I doubt you will be able to continue to get plastic based contacts shipped via 1-800-contacts for very long and glasses will be a burden.

4) Own a durable old model vehicle such as an old toyota pickup, older with less technology the better. I don't believe that oil & gas will disappear overnight and the most likely scenario will be continued recession and economic problems but not immediate supply problems. This would be a useful tool for many reasons.

5) If you have a fireplace in your house buy a wood burning stove. They are cheap and will be much easier to maintain in a deflating economy, in addition to providing a great source of heat you can cook with them too. Geothermal, solar etc. will require upfront costs and maintenance down the road that will present many challenges. Choosing the simple solution that requires less technology will always be the best option. Purchasing water collection barrels that you can attach

6) If owning a farm is not realistic learn a skill that capitalizes on increased societal fear,confusion and meets basic needs in a market where fixing old things is the new norm instead of buying online or off the shelf. This could be a useful trade like auto repair, gunsmithing, precious metals assayer or growing marijuana in your basement/backyard(currently legal in some states like CA,CO). All these skills could be useful in a world filled with confusion. Owning an inventory of firearms and ammunition for trade will be very beneficial as well.

7) And of course become much closer with your neighbors, friends and family, you will need each other and a strong will to survive. Knowing how to motivate and energize people in a dire or poverty stricken situation will be a great skill. Think of an evangelical or motivational speaker type. People will need hope and to know that no matter how bad it gets it will still be morning again tomorrow in America, and a new day brings another chance to survive.

If you have a fireplace in your house buy a wood burning stove. They are cheap and will be much easier to maintain in a deflating economy, in addition to providing a great source of heat you can cook with them too.

I recommend stainless stove pipe or stockpile extra steel (black) pipe. Regular stove pipe needs to be replaced every 5-10 years, depending on what kind of wood you burn. A stockpile of 6" stovepipe will be good for bartering.

solar etc. will require upfront costs and maintenance down the road that will present many challenges. Choosing the simple solution that requires less technology will always be the best option.

It doesn't get any more simple than passive solar (unless you don't do windows). If you are doing a remodeling job on your place, passive solar and adding thermal mass is the way to go if it is an option. We use our solar room in late winter to start our plants for spring. Reliability on our active solar (PV and thermal) has been very high. We keep at least one spare for everything and the modular nature of our system means that one failure won't bring the whole system down.

People should really really really consider putting together a "rocket stove" as a central cook station and heat source for a home It's the backbone of my homestead. They're relatively cheap to build, miserly with fuel, can run on all sorts of waste, generate next to no smoke, and are very robust.

Here's the link to mine: http://sanityandsimplicity.blogspot.com/2008/10/rocket-stove.html

Other plans are available on the web. Send me an e-mail if you want plans. About 300 bucks to build one out of 1/4 well casing. Minimal welding involved.

And with gas installed. I recommend it.


I'm glad to see a lot of advice/thoughts similar to what I've been thinking. I made the investment with my cash in five acres to start a perrenial heavy food suppply. This year I'm getting an efficiency test done but will probably going with new, insulated siding and a metal roof to fill my cistern. Looking into a hand powered well as a backup. Also looking at a masonry heater but am intrigued by the rocket stove as well. Lots of projects.

Elective surgery is tempting as well. Getting lasik to keep my eyes sharpfor the future is something I often think about. I figure we have till 2014-2016 before the decline goes real bad. Till then I figure it will be an uneasy, slow descent and then we'll see large symptoms of PO/climate/etc. You can't not prepare but you do have to be prepared to leave it all behind as well.

Jaywfitz: What specs did you use for the rocket stove? Find any plans for indoor use?

I had lazik done back in 2001. I'd recommend it.

There are a number of plans for indoor and outdoor use. I forget where I got the basic dimensions for mine or if I even followed any, but it works. The stove is scaled to be built of of cinder block packed with some sort of fireproof insulation(I used volcanic cinder.) They draw quite well and I'd have little reservation about building one for indoor use. I'm in Hawaii, however, and since it's mostly used for cooking or heating water I really need the thing outside so I don't bake myself in the warm season. It's nice to cook outside anyway if one lives in a small homestead space, as cooking inside can make a small living area grimy pretty fast and encourage too many critters.

I remember one variety widely used in C. America called the "justa" stove. I've seen one here locally. Mine is built quite a bit heavier than that. All in all they're a very simple concept.

Spending. Depends what you think is going to happen. I don't think we're going to see armageddon, but there are going to be difficult times as economies switch to become more local. The alternative being *much* more nuclear, but even with that, there will be vast amounts of inflation as the existing infrastructure is discarded.

1. Get some land you can use to feed yourself and descendants; Fruit trees, vegetables etc. Fruit trees take 5 years to become productive.
2. Insulate - everything. The biggest ROI you'll make in energy terms. Triple glazing, not just double. (If you have double, add acrylic tertiary glazing).
3. Hire the motorised tools now to get the land into easy to work shape (rotovators, mowers, chainsaws, stump grinders). Start composting etc now.
4. Replace any old heating systems with something flexible. i.e. Keep the gas, add the capability to add a wood burner, solar thermal panels, heat pump, district heating etc. i.e. use a heat bank/thermal store. This is expensive & the ROI is low.
5. Look at wind turbines, solar panels, grid independence. Also expensive with low ROI, (unless you have an electric vehicle) but handy on blackouts.
6. Build yourself a library including reference books on all sorts of things.
7. Get an electric scooter/other electric vehicle.

Build a barn or outbuilding to house all that equipment and "stuff". I built or rather erected a fabric covered barn that measured 30' wide x 72' long and 15' high. I live in heavy snow and wind country but these things do stand up here. They are the cheapest way to go sq ft wise and they have another possible advantage - they're considered a temporary structure and may not add to your property tax.
On top of that you can put the thing up yourself. Just pick or prepare a level site and go to it.
Lots of space for lots of things. This winter I built an aviary in mine and my flock of chickens had a pretty nice winter in there.

Haven't seen this mentioned here yet, and I'm surprised.

Verrry carefully now, invest in and learn how to grow quality cannabis. If you live in California, you already know this. It will eventually be either legalized or disregarded when times get hard, and those with the expertise will have a head start on a product that is easily bartered.

My mother was a working jazz musician back in the 30's, and she impressed me with the knowledge that people, especially during hard times, will spend their last dime on having a good time just to kill the pain. And just like in that last depression, the moonshiners were king of the hill.

The Volstead act was repealed in 1933. I expect the Controlled Substances Act of 1970 will soon follow the same course.

Time to break some ground.

I don't think it'll be repealed, maybe the government won't be able to enforce some of their laws if it eventually reduces in size. If they aren't able to enforce their drug laws they aren't going to be able to enforce other things, like the National Firearms Act of 1934.

You aren't going to be able to convince anyone that PCP and cocaine are good and should be legalized, especially if drug related crime increases during a time of hardship.

maybe the government won't be able to enforce some of their laws if it eventually reduces in size.

Much of the drug enforcement occurs at the local level. Our sheriff's office will enforce marijuana laws as long as they legally can because it is a source of income for the county. Folks around here call it probation slavery. I know people that have been on probation for years but have done little or no jail time. They work to pay their fines and never get ahead. It seems that as soon as they get one fine payed off, they get busted for some small offense and start the whole routine over again. Most sentences come with a plea that includes anytime warrantless searches of residences and vehicles, and drug testing. The probation officers won't enforce the drug testing for long periods, letting the probationer think it's OK to "indulge" a little. Towards the end of the probation period they'll spring a drug test on the person and, if they test positive, they just add a couple of years to the probation and another $3000 fine (payable in installments). I've seen this cycle go on for a decade or more. Steady income for the county.

#1: Stay out of legal trouble.

Floridian, I might remind you that prohibition wasn't repealed because alcohol suddenly became a benign substance. It was because in difficult economic times it was realized the government was wasting its resources funding a war that could not be won, as well as simultaneously creating more crime. In other words, worse than a waste of time and money.


If you don't believe me, take a look around, read the newspapers, check the statistics.

Unfortunately this is not the 30's. and now we have a Big Brother government that doles out tens of billions of dollars annually fighting this same futile war, the "War on Drugs" (whoa, scary stuff!). And law enforcement is sucking on the front tit, lined up in front of the "defense", legal, penal, medical, alcohol, tobacco and pharmaceutical industries, to name a few. Strange Days Indeed.

I'd wager that on some bright day in the not too distant future we won't have the funds to squander on this counter-productive, de-humanizing nonsense, and all drug addictions will be treated as alcohol addiction is now -- a minor anti-social medical problem. So get yourself ready to plant them seeds, folks!

Alcohol was more of a cultural norm and is fairly benign. PCP and Meth will quickly do damage to you and possibly others. Gangs aren't going to go away because you legalize drugs, they exist because they can make more money by breaking the law than not working at all.

Since we're looking at more and more structural unemployment as time goes on, I'd expect gangs to grow. They'll just resort to racketeering and other crime if drugs are legal.

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Some drugs should probably never be legalized b/c they are unsafe at any dose (PCP, heroin, etc.)and can make the user aggressive and dangerous to other people. Nonethless, there are plenty of "soft" drugs that can --and should-- be legalized for adults. IMO, people should be allowed to do pretty much whatever they want to their own bodies, provided they don't expect everyone else to pick up the tab on medical costs if things don't work out well for them.

Gangs and other forms of organized crime will probably always be around, but it's also true that prohibition against widely popular 'soft' drugs (incl. alcohol & tobacco) is like rocket fuel for the growth of black markets. Prohibition in all its forms provides enormous revenue streams that could easily be captured by legitimate industry and the state in the form of taxes. Ditto for adult prostitution. Most people prefer to avoid criminal elements and jail time if possible, and will usually pay a premium to do so, so I disagree that this would not have an effect on consumption patterns or income stream for organized crime.

I would be very careful with this. The last place you want to ride out a SHTF event is in a federal prison. And with the drug forfeiture laws on the books, the Feds can take just about everything you own if you are caught with a significant number of plants.

Maybe invest in a few books - not on-line, pay cash. But unless you live in one of the a fore mentioned states, I would keep it as an academic exercise for now.

Pay down debt.

I think it is a truism that:
1. If you owe people money, they have power over you (debt).
2. If you have money you invest, you have power.

The fundamental issue that I have been thinking about is whether or not the U.S. will ever recover from the current recession. Will the U.S. ever reach full employment again, defined for the sake of discussion at 5% with a minimum number of people simply giving up looking for work.

The Archdruid sees us continuing a downward slide to essentially third world country status. In his view, in fact, we already have many of the characteristics of a third world country. We continue to export jobs to Chindia. People don't simply lose their job anymore; they lose their whole industry.

What is it in the current approach or likely approach down the road that will turn this around? That is my question for anyone who wants to address that.

My operating conclusion, subject, of course, to good contrary arguments, is that we are in a downward spiral and we will not recover for a very long time, decades, if at all. Perhaps in the future we will reach some kind of equilibrium but it will be at a very low level of income for most Americans. Ultimately, most wages will be reduced to be able to compete, which means most of us will be living us China type wages and income.

My guess is that, for most things, we will move forward in a flat or deflationary environment. However, that may not include oil, so I am hedging in that area by keeping some money in the oil futures market. I have belonged to a very productive organic community garden for the past year in a very benign climate which means that most of my veggies have been taken care of by that garden. My contribution is mainly sweat with a very small yearly cash contribution. This summer, however, I will be moving, and plan to redouble my efforts on a private garden. I would prefer a community garden but that will not be an option.

My goal is continued downsizing and my objective is to sell my current house and downsize to not more than 600 square feet with as close to net zero energy consumption as possible. Cutting your energy costs to zero is an excellent hedge against increased costs of fossil fuels.

My other goal is to reduce my auto fuel costs as much as possible. I have a Prius but need to move so that I can be in a position to meet most of my needs with the bus, walking, or bicycling. Our options are somewhat limited in that regard because the range of places we can live is small do to the fact that my wife has multiple chemical sensitivities.

For those who are still young, not me, the future is more daunting as no telling how bad it is going to be several decades down the road. Well, in the current environment, there are some good aspects to being in your 60s.

Anyway, good advice, it seems, is to manage to live way below your means, half of your means, if possible. Easier said than done, I know, but a goal worth striving for. Of course, you have to have some means in the first place.

First of all most people don't have any money to begin with.
Media net worth of people reaching retirement age is ~$270k.
A 'high networth individual' has +$1500k according to the SEC.

Hey Gail,
Remember this?
Peak Oil, Try Peak Net Income

I expect our readers are above average. They are certainly more educated than average.

We can talk paying off debt some other time. Maybe those without money will be more interested in the debt subject.

One investment I recommend is a good fire safe for your important papers and documents. Here's a picture of a friend's house that burned yesterday. We heard the sirens and got there when the house was still standing (just a lot of smoke). The volunteer FD did the best they could, but before long all we could do was watch it burn to the ground. It was an upscale home, as you can see from the homes in the background. 2 1/2 storeys. 4600 sq ft. My friends were away shopping. This is what they came home to:


They said that all of their "irreplacables" are gone. It was quite surreal watching a friends house burn, especially when his American Flag erupted into flames (flagpole still standing on left).

Agreed on the fireproof safe. Purchasing one is part of the Session 1 homework in the UnCrash Course (among other homework items).

What to do with money?
I am stocking up on items that will always be in demand, with demand rising as technology levels and transport declines. Namely, knives.
Knives are that most simple form of technology that allows us to manipulate objects found in nature into items we can use (e.g animal -> skin -> leather -> clothes)
My superannuation fund consists of 60 good quality skinning knives - people around here will have to do their own meat production with abattoirs. I've found skinning knives to be suitable for fleshing skins and passable for butchering.
I had plans to purchase a bulk lot of pocket knives, such as the (french) opinel in stainless, however a bit of experimentation led me to favour fixed blade utility knives, which can be bought in bulk very cheaply from places in Finland or Sweden over the net.
Don't forget sharpening stones and steels too.

Other than that, give your money away to kids who are aware of the problems the future holds, but can't get ahead enough even to prepare. Buy them a stash of good knives or axes. Or a few rolls of canvas.

Insullation and energy saving devices can have a tremendous payback.

No promises or guarantees but I still will stay with my investment approach, almost no U.S. assets, the core investments being Canadian oil companies Penn West Energy PWE a leader in technology with 7 million acres, ARC Energy AETUF another leader. Both are oil trusts with large dividends around 8-9%. The tax laws are changing, this year 15% dividend taxation by Canadian treaty, next year depends on U.S. dividend tax. The brokers automatically withhold 15% on the dividends toward your taxes. These are leveraged to the price of oil (as are most oil companies) and pay dividends in Canadian dollars.

Canada is a commodity resource leader and has their social security reserves at about 75 years. If you believe in peak oil, Canadian oil companies will make sense. Other than that recommend primarily Canadian bonds, Australian bonds, a Little gold/silver CEF, and a Little less silver SLV.

Fiberglass insulation is about as cheap as we will ever see it again. Depressed construction market has dropped all forms of insulation and cheap natural gas has made fiberglass even cheaper. Subtract 30% federal tax credit.

Both Lowe's & Home Deport have R-25 or R-30 rolls of unfaced insulation for <$10. (R-13 is oddly more expensive, this is the "loss leader").

I bought 44 rolls of unfaced R-25 from Lowe's (>half still uninstalled) for about $450 (with sales tax) and got a $100 gift card back plus a $135 tax deduction. Payback of my net cost may be just one year (discounting the cost of labor). As NG & electricity costs rise, so will my returns.

Best Hopes for good investments !


and even SLV has some extra danger if the Commodities Regulators CFTC decide on strict rules.

Those 4 options do not make sense at all.

1. Spend it now.
Its a waste.

2. Give it away.
Its a waste.

3. Pay down debt.
If you can likely service it, then this does not make sense.

4. Invest it using conventional approaches.
Its a waste.

The right choice is:
Invest it using unconventional approaches. Buy solar panels, food, land, gold, etc.

Seems to me that over the years lots of people have gotten burned preparing for disasters that never happened (think of those who spent small fortunes preparing for a nuclear war with Russia). I am quite certain that peak oil will be here, and I have been preparing for years. However, I have taken the approach of only investing in things that will still be valuable even if peak oil doesn't affect us for many years. What I have I done:

Installed a wood stove (useful immediately for power outages, and its fun and cheaper than oil)

Installed solar space heating (pay back on this was one year)

Installed solar photovoltaics (pay back will be slow, but I had some cash as a one time payout, and it will lower my electric bill forever)

Bought gold (when it was $250 an ounce, it was a no brainer) and silver (I figure it isn't going down in value, and it has been as good an investment as anything in recent years)

Bought some long storage life food (After Katrina everybody should have this in their house)

concentrated on my wood working, especially with hand tools (fun, and I get nice furniture)

Annually work on expanding my garden just a little bit (nothing like fresh veggies)

Gotten to be good friends with my neighbors (good friends are just plain good)

Joined a farm-share program (more fresh veggies)

Will probably install solar hot water this year (I will get to turn off my furnace for the summer).

Bottom line, all of these things are at least not stupid investments in the here and now, and might prove very valuable if peak oil descends quickly.

I think you've nailed it pretty well, Chas. There can be a good correlation between being prepared and just living smart. Most of my "preparations" are things that fit my desired lifestyle and I would have done anyway. In my case, going solar made economic sense, environmental sense, self reliance sense, and PO/societal decline sense. We heat with wood because we have lots of it. We conserve energy because it's a finite resource. Neighbors and family is a no-brainer.

"They said that as money became quickly worthless and nobody was sure of the cost of anything, everything became valued in snickers bars."

That's wild. In other words, the role of the Federal Reserve is handed over to the Mars Candy company.

Who knows, maybe it's an improvement over our current monetary system.

I'll see you that, and raise ya two Three Musketeers!

How about go for a walk with your family, end up after a few hours in a bar / restaurant and have a few beers and a good meal?

I just watched a presentation on the demise of Detroit. If you want to really, really understand what could happen across our country and the world as things begin to unravel, all you have to do is look at Detroit. From an intellectual point, one can play all these mind games about the collapse of civilization. But at a gut level you don't really get it until you can see how a once prosperous city and many of its neighborhoods slowly collapse into decay and oblivion. Block upon block of homes abandoned, burnt out, and plowed under. Thousands of businesses, theaters, schools, and manufacturing sites turned into hollow shells. The pictures reminded me of Stalingrad after the siege. The horror is devastating and unending. I imagine that those residents of past years could never imagine their jobs, their neighborhoods disappearing like this.

The same cancer is occurring across much of the rural areas of our country also. Small towns are disappearing. Their residents growing old and dying after watching their children's exodus to the big cities in the search for good jobs.

There is no place to run away to anymore. We have the here and now and those around us to help us keep our futures bright.

Let us continue to talk about our plans for the future. Let us share our dreams and hopes. But in the end I suspect that much of what will occur is a matter of chance. How to use your money? In the end, if we don't learn better how to hang to together, we surely will hang alone.

1. Spend it now.

2. Give it away.

3. Pay down debt.

4. Invest it using conventional approaches.

I'm taking an approach that combines #1 and #3. I guess you could call it '#5. Invest it using unconventional approaches'.

I'm having a bit each way.

I'm currently in the seemingly never-ending process of building a house. It's 'large', but doesn't occupy much land area. Passive ventilation, insulated (but where I live, not overly necessary), walls shaded from the summer sun via a verendah (which also provides additional living area). The property itself has enough area to grow a significant amount of food, and has a creek nearby that is far enough away in elevation that the risk of flood is low (I wouldn't want to drink the water, though). The house will eventually have SHW, PV, and massive rainwater storage. The garage will house the cars, bikes etc, and a number of tools and equipment I deem worthwhile. I'm not going to bother with Heat Pumps, because of the generally temperate climate (otherwise, either put on a jumper, or sit on the verendah). Debt is not large.

On the other side of the fence, my Partner (not married/DeFacto, but more than a Girlfriend) and her brother have an olf farm property up in the Ranges. The ground is shocking, but it'll be fine for growing fruit and nut trees and the like. Just need to keep the Flying Foxes away from the fruit trees. The temperature varies quite a bit more out there, so a ground-sourced Heat Pump is on the cards. It's close enough to civilisation that it's not too long a trip either back to 'the big smoke' or to the local town, but far enough out of the way that you can be left alone if you want. Primary activity is to improve the water storage to 100,000L or more, from the current 10,000-15,000L or so. I'd like to construct an earth-sheltered house (pretty much fully underground), but that's a ways off.

I'm often pointing out to my Partners family that they should pay down their debt as fast as possible, but they're still fully wedded to BAU (as is my Partner), so I'm just doing what I can, where I can, and trying to justify it in BAU terms to make it sound more palatable.

So we've got the option of staying put, or bugging out, should the situation call for it. I don't think there's any point preparing for a 'Zombie Apocalypse'. If things get that bad, the winners will be the surviving sociopaths, their yes-men, and their concubines.