Fears of Financial Apocalypse
There is always a contingent of the financial punditry that is screaming at the top of their lungs that a horrible recession / depression is “imminent” and that we’re all screwed.
Some of these guys I actually like, and make really good points that I agree with. Peter Schiff and Doug Casey are two examples, but there are others. Other guys are just insane and are being irrational.
Indeed, in the last 30-60 days or so, we have seen signs that the next big recession (that we are several years overdue for) is getting pretty close. Could it happen soon? I don’t know, and as I’ve said before, no one knows exactly when this will happen, and if they say they do, they’re lying. It could happen this year, it could happen next year, or it could happen in 2020 or 2021. You don’t know. I don’t know. We just know it’s coming, because it is, but we don’t know when.
However, just because we know something bad is coming doesn’t mean we need to get irrational and leap off the deep end on this crap. It’s not like 80% of the population will lose their jobs or we’ll all be ravaged by wandering bands of zombies in the streets.
It’s possible to be prudent and prepared without turning into a EOTWAWKI sky-is-falling bunker-dweller.
For example, I’ve talked about how it’s a good idea to keep a large portion of your cash in a safe somewhere, either in your home or at a loved one’s home (loved one’s home is better; just don’t give them the combination to the safe). I don’t say this because I think the bank or the government will suddenly confiscate all of your money. It’s certainly possible, but I think it’s unlikely.
I mostly say this because interest rates on liquid cash savings are less than 1% right now. So hell, you might as well store much of your cash personally instead of utilizing the overhead and problems of using a corporatist bank. You’re able to control your own money and you don’t have to dick around with going back and forth to a bank, particularly in a recession / depression where lots of people will be at their local banks pulling money out of their accounts, and you’re really not losing any real money by doing this. (If interest rates were 6% instead of less than 1%, then I’d have a different opinion.)
Yes, have lots of cash hedged by gold. Yes, have your non-cash investments very, very diversified. Yes, stay out of the ridiculously bloated stock market right now. Yes, wait to buy real estate until the crash occurs.
But don’t go all Alex Jones / Glenn Beck and start screaming that we’re all gonna die, or get our homes confiscated by the government, or that all the banks will collapse tomorrow. Yes, the next recession will probably be bad. Really bad. Overly harsh recessions are what happens when society embraces big government. But none of that end of the world stuff will happen (or is at least extremely unlikely).
My advice remains the same: Get your ass out there and make your money now. Work as hard as you can. Take advantage of this temporary fake-good economy before the crash. Take advantage of these great-for-me-but-horrible-for-America temporary Trump tax cuts before the next Bernie Sanders becomes president. Keep most of your money as cash hedged by gold. Then wait for the next crash to come, then invest into things like stocks and real estate so you can buy low, but not before then.
And don’t freak out. Millionaires are made during crashes. You could become one of them.