Friday, April 01, 2011

Financial Totalitarianism


A particularly annoying question I am often asked and have come to hate is: “How do I invest my money for it to survive financial, political and commercial collapse?” The short answer is: “Nohow. Money will not survive collapse; not yours, not anyone else's.” But that answer is not acceptable, because accepting it would require a profound loss of faith—faith in money, a profound Götterdämmerung for a civilization based on the worship of money. People want continue to believe all sorts of things: that they can own land (i.e., shares in the Earth), or that they can do good through philanthrophic spending and charity, or that the world with which they have grown up and have lived their lives can collapse all around them, but that if they are informed and prepared, they can survive with all of their middle-class trappings intact. I am told that there is good money to be made in telling them such things.

Those who care to look can easily turn up plenty of evidence that the value of every type of financial asset, not just fiat currency or debt instruments, is unsupported. Its value derives from the goods and services provided by a functioning global industrial economy, which is quickly running out of every type of resource it requires; not just high-EROEI fossil fuels, but also metals, rare earth elements, phosphate, irrigation water and arable land. As industrial activity dwindles, worker productivity will decline precipitously. Many people point to precious metals as the ultimate storehouse of value, but without industrial equipment a man can only put out about 100 Watts of energy—a light bulb's worth—and won't dance any faster no matter how many gold or silver coins you throw at him.

This eventual outcome is the result of long-term physical trends: physical processes that move at predetermined rates and in only one direction. It is not possible to un-burn oil or coal or to un-mine gold or silver. But the short-term political and financial trends point in an altogether different direction: that of the global industrial economy turning boutique. You see, one shoe has already dropped: the level of industrial activity that can be sustained today is already insufficient to provide anywhere near full employment and a reasonable quality of life for vast numbers of people; the solution is to disenfranchise them, to confiscate their savings, to cancel their retirements, to concentrate all of the remaining wealth in as few hands as possible, and to create a boutique economic and financial environment in which the lucky and unscrupulous few can continue to live comfortably, and... wait for the other shoe to drop, I suppose. That will happen once the industrial economy becomes sufficiently disrupted by social and political upheaval that even its boutique version finally crashes.

A feeble (feeble-minded?) counter-reaction to these trends can be discerned: many people want to somehow find an escape from this system while still clinging to their money. This may seem like a contradiction in terms—“fleeing the money system while clinging to the money itself”—but this point seems lost on many people. Most of this counter-reaction is focused on the stampede to precious metals (gold and silver). This train of thought starts out as a smart market play: precious metals have been and continue to be a spectacular investment, and a good way to avoid being robbed blind by the out-of-control printing presses at the US Treasury. But eventually it goes off into ontological self-delusion—that gold and silver are “real” money, as opposed to paper fiat currency, which is “fake” money. Ladies and gentlemen, it doesn't matter whether or not it's shiny; it's all as real or as fake as you are. Some people go straight over the edge and decide to take the law into their own hands and, waving about a dog-eared copy of the US Constitution, set off to coin their own “coin of the realm,” not realizing that the realm isn't theirs. If the realm is financially stable, it will simply change the rules to make such a gambit unprofitable. If the realm is financially distressed and teetering on the verge of collapse, it will panic, shout “Terrorism!” at the slightest provocation, and the result is long-term political imprisonment for the ontologically deluded:
March 21, 2011

WASHINGTON (Reuters) – A North Carolina man was convicted for creating and distributing a counterfeit currency that was very similar to the real dollar, a U.S. Attorney said.

Bernard von NotHaus, 67, minted Liberty Dollar coins in the value of $7 million dollars. The conviction concludes an investigation that was started in 2005.

“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism,” Anne Tompkins, U.S. Attorney for the Western District of North Carolina, said in a statement on Friday.

“While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country,” she said.
This Reuters story has since been taken down, after being ignored by media in the US (but not in Russia). Von NotHaus is looking at 20 years in jail. This is a lot, you might think, for stamping some politically edgy shiny trinkets, but then Stalin gave out similarly long sentences to millions of people for doing absolutely nothing, so let us count our blessings. Let's get one thing straight, though: in the United States, by law, anyone who, “except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design . . .” faces a fine or imprisonment. It is the same in every other country: the term “coin of the realm” implies that it is the realm that controls creation of all coinage and its circulation. You can wave your US Constitution around, or you can swat flies with it, or you can use it as kindling: the result will be exactly the same.

You cannot create your own global money system, and you cannot change the way the global money system works; either you are part of it, or you are out. Most of us lack the ability to sever all ties with the financial realm, but, as with so many things, having the right attitude is very helpful. To that end, let me drop a Bible-bomb on you. (I do this as someone quite free of any religious sentiment; I just find the Bible to be an interesting and useful work of world literature, filled with highly quotable, pithy remarks.) Here's a particularly nice quote from the Beatitudes: “Blessed are the poor in spirit.” Never has a truer phrase been written. Many of the more recent self-styled or so-called “Christians” have attempted to distort it to mean that it doesn't imply depriving yourself of any worldly goods, and that “poor in spirit” is a special, strictly spiritual sort of poverty. That is, of course, nonsense. You do not have to dig deep for the real meaning: “Poor” just means “poor,” and “in spirit” means “on purpose, not as a result of, say, injustice, misfortune, or being lazy, stupid or a gambler.” Oh, and “blessed” means “not damned.” Accordingly, Christian monks take the vow of non-acquisitiveness, which is a virtue, with the corresponding vices of stinginess (“what is mine is mine”) and greed (“what is yours is mine”). It is rather difficult to embrace such basic tenets while remaining within a culture that has elevated avariciousness and rapaciousness to the status of virtues. But here is a key insight: being poor on purpose is much easier than being poor as a result of suddenly having less than you are accustomed to having. Voluntary poverty is a hell of a lot easier than involuntary poverty.

And so, the answer to the perennially annoying question “How do I invest my money for it to survive financial, political and commercial collapse?” is this: “There is no answer to your question. Try asking a different question, to which there might be an answer.”


55 comments:

Philip Brewer said...

Although your overall point is well-taken, I don't think it's true that being in the money economy is an all-or-nothing proposition. A subsistance farmer might be almost self-sufficient, but still needs to pay property taxes.

It seems to me that the best medium-term strategy is to move some fraction of your essential household activities out of the money economy. Your standard of living will fall, but your household will be much more secure from disruptions in the money economy.

Since that seems to be the general thrust of your advice as well, I'm a bit puzzled by your suggestion that we're either in the money system or we're out. Surely all of us are in to some extent, but many of us let every aspect of our lives turn on monetary transactions, while others do at least some things for themselves.

Noel said...

Wonderful work, as usual, Sir. You possess a profound insight and ability to frame our thoughts and feelings. Thankyou.

urartsux said...

Brilliant! Keep up the good work!

brell said...

No joke! Thanks, as always. We are blessed to read your benignly enlightened screeds. :)

Rebecca said...

Before I lost my job I was saving money for my two sons to go to college (or whatever they chose to do as adults). With that small amount of savings my wife and I have decided to invest in the practical. Apple trees, good hand tools, books and other such things that we think may improve chances of our and our childrens survival. Like the peak oil scenerio forces us to consider life without polymers and fossil fuels, so to the economic peak forces the practical to think of a world without money.

Pinguino said...

Hi I just found out about this site from the Keiser interview and I believe it is fascinating. I'll have to read your book eventually but I am wondering if you've written anything about the future and the nature of the internet post collapse, I am curious about what you think is likely to happen to the net and perhaps there is a blog post or something that somebody can point me towards?

Larkin said...

Kollapsnik,
I have been waiting for you to address this issue for some time. I do know your doubtful attitude towards the growing hordes of silver and gold bugs who are frantically trading their fiat paper for shiny pieces of metal.
Philosophically, I am in agreement with you that this may be a futile endeavor over the long run but many are anticipating a transition period. A world turned upside down where the old rules no longer apply. There will be a fearsome scramble and most people only respond to money.
Through careful consideration and analysis of what the post petroleum world would be like, you converted your assets in a direction for survival in this new environment. You took your capital and bought a boat then invested yourself in learning sea worthiness.
I have so much admiration for your brilliant forethought and planning for what looks like inevitable chaos.
You once said that a good investment is to buy something that is basic, essential and will help you to survive under the worst circumstances.
Understanding the raising of chickens?
Repairing bicycles.
Practical health care.
No one can be sure what this new world is going to be like and as usual, humans leave no stone unturned.
Lark

Moo Moo said...

Dmitry, great article. Though I have to say there are some points that should be mentioned.

One, you kind of mentioned this with the second shoe drop. Meaning, the elites are raping what's left of planet / middle class, etc. But, no one talks about the elite. How do they survive after the collapse. If the poor aka the real poor and also the once middle class can't service the elite, how will the elite get by?? And especially when Peak Oil really kicks in. I say they won't. I also say, if it gets that bad in the US or elsewhere, the middle class will kill the elite.

Two, you're right about currency, whether it's fiat or gold / silver. The value is based on what someone says it's worth. When the shit finally breaks the fan, I'm not sure it will matter what you're holding. Though, I'd rather cash out of any stocks / bonds and buy gold and silver. Or at least have cash, like Nicole Foss advocates. And no debt.

Three, money is one thing. But, being able to feed yourself going forward will be job one. Those who can do that, will survive. Those who are tough, and know how to deal with major change will survive too.

The sad thing is, this never had to happen to humanity. If the global population never reached 1 billion, and never went above that, I would not be writing this.

PS - I have no kids, because I saw the writing on the walls decades ago.

Planet Earth is now Planet FUBAR!

subgenius said...

Finally it gets SAID!

Thanks, Mr. O, for summarizing in a way that I can simply point others to!

Lidia17 said...

This blog doesn't have a blogroll, but if it did, it should include John Michael Greer's "Archdruid Report".
http://thearchdruidreport.blogspot.com/

Many of the discussions there deal with the things you are talking about, Larkin.

Chris said...

The timing of this coincides roughly with comments from the Survivalblog editor, who has long been a proponent of accumulating precious metals (namely silver coins and nickels) for use post-Collapse. Recently he suggested it may be a good idea to know when to cash in some of your silver, to use in the purchase of land, essential tools, etc. I think retaining a small store of silver coin may be useful in trade, but anyone hoping to retire on precious metals will be disappointed. (As will all who hope to retire, at least as retirement been understood for the last fifty years or so.) The scene in Cormac McCarthy's 'The Road,' where the father passes over a cache of Krugerrands in a bunker without batting an eye as he searches out the canned goods, was most telling.

Thanks for all you do.

Jane said...

Thankyou for this.
I have been reading a number of other sites and forums discussing the coming collapse and most of them appear to be discussing various means of preserving one's wealth and an assortment of preparations that seem fairly ineffectual.
It might be more useful to look at the ways that people who don't have access to excess energy manage or how our own forefathers managed before they made use of the oil bonanza.
In the mean time, at least there is some sanity here.

Brad K. said...

It seems Rebecca;s answer to your annoying question "how should I invest my money to survive the economic and money collapse" sounds much like mine.

That is, buy the tools of survival. Living in a region that cannot survive intact? Consider moving to a more resilient place. Whether you go or stay - gather what you will likely need to survive. Little things like skills and experience with hand tools and houses and gardens, if possible with livestock. Build your family and community ties so that you are part of a group trying to survive - your odds will likely increase, assuming you choose leaders and communication styles wisely.

And, I think, most of all - abandon ambition. Personal ambition, community ambition, these are artifacts of the era of cheap energy and expectations of every expanding affluence.

The new wealth? Family, community, a trade of value to your community, and tools of your trade. Reasonably secure shelter if such is possible, while planning for what to safeguard if you lose shelter, community, etc. and need to re-settle.

Simple. The money is only good for a start down the road to the 'new wealth'. That is how to invest your money.

If you gots lots of money? I would establish work and trades for good, honest, dependable workers. That, I think, is the best investment. Maybe build a multi-generational family home you intend to occupy for at least the next three generations.

Iron Rye said...

A very well written article, still there is no such thing as in or out--wealth is ability to influence other people, not accumulation of debt notes or even golden coins.
You do not have to have those in order to make someone dig potatoes for you or rub your feet.

xbornstubbornx said...

My family lives in a year 2003-2004, like there's still a college, career and retirement at the mortgaged McMansion ahead of our next generation. All my "run like hell" kind of preaching falls onto deaf ears. I guess, I'm gonna give up trying to explain anything if they are so damn blind not to see anything around them. It's sad, but our breed is not the one determined to survive. On the other hand, it's an interesting experience to clearly see what my/my folk's death most likely will be like.

Archivist/Cultural Liaison said...

I guess Disney dollars aren't a problem for the fed~

Unrepentantcowboy said...

Yes.

Hard to hold onto your humanity while sitting on a pile of treasure while people all around suffer.

It's also hard for those that grew up under the protective umbrella of America to understand what real poverty looks like.

Lisa said...

Thank you for a great post.
As a former soviet citizen I know perfectly well how money can mean next to nothing in a broken economy. And it is almost funny to watch how financial market lives its own life having nothing to do with the reality. They trade what? They invest in what?

Once I read a phrase (I don’t quote, because I don’t remember the precise wording) but it was a description of a man who “mistook his good luck for his constitutional right” And now the good luck in form of cheap resources is over.

hawlkeye said...

Perhaps the idea of money is so culturally embedded in who we think we are, that in order to live without money, I have to actually become a different person. Can I find a cultural role model these days that doesn’t run on avarice and entitlement? Not on television. But there was one in the news the other day: Obama giving a medal of honor to farmer/poet/visionary Wendell Berry, my hero.

I’ve found that the folks who invest in gold are more likely to think they’re “changing the way money works” into a new(ish) money system, and are unlikely to imagine much else beyond their illusory security.

But those who obtain silver are thinking more along the lines of “barter-able increments” to trade for whatever real goods local economy we’re muddling (or plopping) into. Turning cash into usefulness requires the recognition that cash will soon be worthless, and that’s a stretch for too many, unfortunately, as we all wait for Godzilla.

And in the same breath, we must mention seeds; non-hybrid, heirloom, tried-and-true, localized varieties of everything that everyone likes to eat. Invest a few hundred bucks here if you have it, while we still have seed companies and big brown trucks.

Really, what a miracle: beep-beep a few digits into a phone, and here comes life support dropped off at your doorstep. It’ll never get any easier. Well, the set-up part, anyway. Then comes the hard work of feeding ourselves, re-learning how to do all that.

I don’t think I could ever abandon ambition, any more than I could abandon my dog. But I know what you mean, Brad, because I’ve had to radically revise the hopes, dreams and goals I can’t help but build in this life. Abandon dreams of college and a good retirement, that sort of thing, yes, but it’ll take all the ambition I can muster to fill the pantry, finish the fence and keep the house warm!

But I don’t think the middle class will ever kill the elite; they hope to become the elite. In the end, they are the elite, and the desperate poor might just kill them both, indistinguishable as they may become.

And though we’ve made a colossal muck of things, the earth has been astoundingly resilient for eons, so I don’t ascribe to the notion that humans can snuff it all. However, most of us, the coast-line dwellers and natural gas eaters especially, await our various tsunamii.

Planet earth FUBAR, yes, but not “beyond all repair”… “but amazingly resilient”. Lots of humans are toast, but the planet’s the toaster, not the toastee, in the end.

bluebird said...

Excellent post today. I too came to the conclusion about money (none!) some time ago. Since then, I've been stocking up on canned goods, seeds for the garden, hand tools, and learning basic skills. I have tried to discuss the future with family and friends, but they think I'm crazy and off they go to buy the latest techie gadgets, cars, and take exotic vacations.

What I am still trying to determine, is whether we keep devolving slower and slower, or whether everything implodes all at once, rendering all financial institutions frozen, because of course, there is no more money.

Hagbard said...

>> “Poor in spirit”

Great to see you quoting this intelligent bit.

To me "poor in spirit" means "having no desire to keep up with the Jonses", "determined to not let greed guide oneself".

To extrapolate, if we read the Scriptures carefully, without paying heed to interpretations, the world would be a much better place, where everyone is responsible for her own decisions.

Jerry McManus said...

And to think we are still gliding blissfully along at, or near, the all-time peak of industrial civilization. We have never had it so good! And it will never be this good again!

Considering we have not even begun to taste the troubles in store for us in the decades of stair-step collapse ahead, then imagine how desperate people will become for someone, ANYONE, to tell them "Follow me, I know what to do..."

Next time someone asks how to thrive Meta Collapsus, politely suggest that they get on a podium and scream at people EXACTLY what they want to hear, all the while ruthlessly exterminating anyone who gets in the way. Sure, they may end up in a bunker under the rubble preparing to meet their date with destiny, but imagine what fun it will be getting there!

Chris said...

am I alone in my interpretations of the precious metals "bubble"?
Very very few actually "own" gold or silver. They are trading one piece of paper for another. If you don't have the metal under your bed, you don't "own" it.

I'm surprised Dimitri didn't reflect on the fact that their is a lot more gold/silver paper in possession than metal backing it up. Isn't that just another bubble people will be caught in?

Robin Datta said...

The last time we had an engineer for president, we got Carter's MEOW (Moral Equivalent of War) speech.

We should have had a series of engineers in the Oval Office, but it is now perhaps too late.

Mrs. Clark said...

Nice, the last part especially. You know, it helped me re-evaluate things. Thank you.

Lee said...

After over 40 years of voluntary poverty, I have this to say about that. Voluntary poverty can lead to a lot of involuntary poverty. It is not the lack of things so much. It is the insecurity. A child's broken arm can set you back months. A case of the flu is more than an inconvenience, it is not affordable. If the work is there you have to work, sick or not.

I'm not moaning though, and I had biblical passage that consoled me while I was watching the cheaters prosper. “The meek will inherit the earth.” Don't know if it is true, but it does make some sense. In a system in collapse the sociopathic types will be useless parasites. Maybe they will be kicked out of the gene pool.

P.S. My definition of meek is not timid. It is more like humble. 1: not proud or haughty: not arrogant or assertive

Elise said...

Excellent post,
please keep your keyboard fired up. Humans find comfort in the familiar,
and change is extremely distressing. So they try to cling to the old para diam or propaganda such as buy low, sell high, if you are smart on this one you can make money. The best thing you can invest in is your family and people you can trust, and I am not talking about a monetary investment

jon last said...

I worked for a farmer who pays his workers in product, a bag of food stuffs for a day of work, and asks for all payments to him in the form of matterials. While I was there he did land clearing for a company that payed him in old phone poles that he then used to build a log cabin for his growing family. He payed me in a mix of food (jars of jam, salami, rice, etc.), wool skins from his sheep, and wood so I could buld myself some furniture for my home. He also gave me workshop access so I could do the building. He has succesfully moved a great deal of his economy to material and service currancy and away from, as he put it, "worthless promisory notes with the face of a queen or president on them". He even pays some of his property taxes by clearing roads for the municipality in the area of his farm.

agtefc said...

Well Said. :)

The paradox of value can render the marginal utility of fiat money and PM's zero relative to the infinite marginal utility of durable goods and life necessities.


Thanks & Cheers

Tom said...

Dmitry
Great article, very sane and in a way aniexity relieving. There is the great story of the zen monk who was rob of everything in the middle of the night who looks at the full moon after the robbery and says to the affect "to bad they could not steal the moon". It is amazing our not knowing how much we all already have.

DeVaul said...

"I am told that there is good money to be made in telling them such things."

That's a priceless comment! So true!

For those who wonder what will happen to the internet, here is a hint: it runs on electricity. I don't think it will run well during rolling blackouts, but then again, I might make more money by telling you that it DOES!

I don't recommend canned goods unless you belong to a religious cult and have ten children employed as stock clerks. With a shelf life of about two years and not really edible, you'll be feeding that compost pile more than it really needs.

Bicycles? All parts are made in Asia, which will become known again as the "Far East". Learn blacksmithing first if you want to repair bicycles with something other than ducktape.

Chickens? Good idea. That is what most backyards were for before 1940 -- that, and hanging laundry. A garden would be good if you have enough sun. If not, then try mushrooms. That is what we did.

Horses? Great idea! You can ride past the people walking their bikes over the broken pavement of a collapsed society (or one that is just bankrupt). They don't stall either.

Goats? If you are deaf, go for it! Just make sure your neighbors are not armed. Mine are, which brings me to the "get to know your neighbors" idea. Please reread Mr. XstubbornX's comment on that.

Me? Well, I bought a water purifier, a rain barrell, freeze dried food for 2-4 weeks (enough time to get to know your family and play some mean parchesi), firewood, a solar battery and solar panel, and a long range rifle for that inevitable trip to the pharmacy (or whoever ransacked it).

Best maybe to just wait awhile after the collapse, then look out the window. If you see a guy sitting on a sofa reading a book while he burns the other half to stay warm, get to know him.

zhozh said...

I studied the Bible for years. This is the first time that verse has made sense. Of course, Jesus advocated voluntary poverty! As did Buddha, and many other wise folk.

I have been paring down my income and possessions for several years. Never been happier.

Jeff said...

Pre-industrial society had money, so there is no reason the future pre-industrial society won't have money. Money will be what the system says it is, but is separate from wealth storage. Any producer who has excess production will need a way to store it, and gold is the best way to do that.

Gold should not and will not be money; it will be the perfect wealth storage mechanism, as it has been for thousands of years.

It is a mistake to measure 'wealth' in GDP. GDP measures nothing but the expanding fiat money supply. There are too many "claims" (credit money) versus the amount of real goods in the world. Any attempt to cash in more than a few claims for real goods will result in driving up the price of real goods (hyperinflation). Thus we say money has value 'at the margin' only. Hyperinflation will destroy the value of money, creating a monetary reset.

Gold will be fine during this transition, but don't call it money.

Karlo said...

Actually, anybody in the U.S. is free to create their own currency: it just can't resemble U.S. currency. Small communities have been creating and using their own currencies for years.

souperman2 said...

Only problem with your article is that you dismiss money as being this benign thing that one can take or leave.

Money is your ticket to live...no ticket...you die!

Money is the cheese in the maze of life. The way people act, their behavior is 100% determined by how the experiment is structured, just like in any lab experiment where you set up the controls and log the effects.

We have allowed a small group of people to determine the outcome by giving them total control of the tickets. They decide who gets them, what they must do to get them, how much they must give back to the ticket issuers, the (constantly declining) value of the tickets, in short they have 100% control and therefore know the outcome of the experiment.

Money is how the population explosion will be addressed. Those with lots of it will live, and those without will die. This is 100% guaranteed. And don't talk about dollar collapse or whatever as an argument against this. The ticket printers and those who are blessed with access to large flows of said tickets will always make sure their tickets guarantee life for them and death for us. What the monitary unit is is unimportant it just has to have value and thats what they have control of. If it means switching over to something else...no big deal.

The point is as long as the top 1% controls 80% of the worlds assets they will live and we will die.

Under this system of organization, voluntary poverty simply means you have accepted all this and you are ok to die.

The only way for any semblance of humanity anything other than the worst possible outcome for what the world is facing is to end this system.

And you can take that to the bank. With force.

hexsquared said...

Kollapsnik, this reminds me of your strategy of letting hard cases live in your home for protection, only turned upside down.

http://www.thisislondon.co.uk/standard/article-23938105-gurkhas-hired-to-keep-squatters-out-of-billionaires-row.do

DeVaul said...

It just occurred to me that I forgot to mention gold, silver, and dollars (as well as digits).

Dollars are just the right size to roll up, tie with a string, dip in wax, and then use as firestarters. I learned this in Boy Scouts. Actually, that is pretty much where I learned everything useful during my childhood.

As for gold, it looks really nice on dark skinned women and also as decorative trim and lettering for leather bound books, but only if the books are worth writing in the first place. You can also bury it so that someone else can dig it up and yell "Eureka!" a 1,000 years from now.

Silver is actually useful as a kind of antiseptic when you don't have anything else. It also makes for nice jewelry on pale skinned people. It also has reflective properties that can be used for mirrors and handmade telescopes.

Computer digits will disappear with the internet, as well as our ability to speak to one another without being in each other's presence. Keep that in mind.

That being said, Dmitry is right. There are no good "investments", nor anywhere for your dollars to go other than into the fire (assuming you try to hold onto them forever). Even gold cannot go anywhere. Ghaddafi has 144 tons of it. How is going to move that? The rich are busy right now trying to move their gold somewhere "safe". I love that.

I actually have a few old gold coins, but not for investment. I plan to show them to my sons someday and explain to them that this is "blood money". Rivers of blood ran wild in far away places so that someone could mine this, stamp it, and then use it to increase his social status.

Even now, people still do this.

Robert said...

Cuba survived peak oil. They started gardening (organic) everywhere ... rooftops, balconies, public parks, along the highways, and the government supported them ... even gave them seeds. Instead of starving after all oil imports were shut off, Cuba has thrived. Even if the tourist dollars were to cease today completely, Cuba would be organized, self-sufficient, happy, and still as poor as ever.

Watch this documentary: "The Power of Community, How Cuba Survived Peak Oil".

I would like others to respond to the idea that socialist countries might be better prepared to deal with sudden or gradual collapse. (Please don't allow past examples to cloud your vision (USSR) because the global capitalist economies were still booming, relatively, whereas the next collapse will see the end of globalist, expansionist, corporatist capitalism.

Regards,
Robert

Lee said...

@ DeVaul

Hoard steel, copper, brass, bronze and even some Delrin and UHMW for bearings.

Hoard shovels, marvelous things shovels. If somebody out there doesn't think so, just try and make one.

Hoard useful information, science books, non-revisionist history and seeds.

Go out dancing often.

Patrick said...

Adding to Lee's remarks above:

Learn to make your own music. Preferably on something that can be carried around and will fit under, say, a bed. Buy lots of strings (or reeds, etc.) for yourself and your musical friends, against the time they become hard to get.

Jetgraphics said...

I would augment the post with the concept of prosperity. Prosperity is not measured by wealth, or with money tokens. Prosperity is the creation, trade, and enjoyment of surplus usable goods and services. Making more with less, so more can enjoy, is one of the recipes for it.
Therefore, instead of seeking "preservation of wealth", one might better seek the means to produce the necessities of life, in sufficient quantity, beyond subsistence level.

hexsquared said...

If y'all have all this gold and silver you don't want, I'll take it off your hands. I'll even give you, say, $5 an ounce for it, just as a token gesture.
You can't eat it, it's dangerous to hoard it, give it to me.

Loveandlight said...

I always appreciate your dry, laconic sense of humor. Way too many collapse-bloggers think that checking your sense of humor at the door is a requirement of the calling.

Archivist/Cultural Liaison said...

I am totally with Patrick here. I have a whole ensemble of instruments that can be played anywhere since one needs no power.
What brings a village together more than music, and no one kills those they do music with. enough of the lone wolf survivalist.
the predators are the first to die off in nature.

Kevin said...

I find I'm getting rather desperate to enter the money economy at least a tiny bit just in order to be able to acquire the tools and materials necessary for future survival. Freecycle and scrounging have their limits.

Love the photo. Burning one's sofa for light to read by seems about as good an energy investment as most officially on offer these days. Once it's reduced to embers he can trade it as biochar.

I expect the paper is telling him all about how great the stock market is doing and about the continuing promise of manned space flight privately funded by internet billionaires.

Lee, I'm saving copper in the form of used tuffy pads. As I may have mentioned before, I want to make a solar furnace capable of small foundry work, perhaps using the shiny interiors of old food packaging as reflectors. My ambition is to melt bronze with discarded popcorn bags.

Gafa said...

For the worst scenario case, it's interesting to learn from the fall of Rome and the formation of medieval societies, the feudal system.

DeVaul said...

You know, Gafa, it is interesting that you bring that up because I already believe we are living under a feudal system. It just looks different on the surface, but underneath, it is still an aristrocracy at the top and a mass of peasants at the bottom whose meagre wealth is continually siphoned off by those on top.

At least initially under the feudal system, you could rely on the local warlord to protect your village, but just like in our own country, even that agreement died so that the aristocracy could have everything they wanted with no responsibilities.

I believe we will have another feudal system develop after our collapse, and it may be as straight forward as the original ones were. It seems to work for most people in times of distress.

x said...

I have a bag or rice. You have a gold coin. Both of us are hungry.

I also have a gun - take your starving ass and worthless piece of metal out of my sight before I pull the trigger.

Get it?

Lee said...

@ DeVaul,

Being a Guild member seems like the way to go in feudal systems.

Being a musician is good also. Everybody needs to party and music is the key to synchronizing people into a group mind state.

I wonder if any of these neo-feudal wannabes remember the part about all the stabbing hacking poisoning hanging and beheading that went on in the aristocracy during feudal times.

David said...

Get as much gold as you can!

Because it might take a krugerand to buy a potato.

Move somewhere warm!

Because freezing cold climates don't grow anything but do increase the desperate hunger of the MZBs.

Reason's Whore said...

Brilliant. But very difficult to put into practice.

Meanwhile, I do think if you are interested in preserving wealth, the best things to invest in are those that will be valuable after collapse. Weapons, livestock, arable land. Precious metals may be useless when everyone is starving, but will likely retain some value down the road when the money economy revives.

Better still, make a lot of friends. But then again, it's hard to say how good those friends will remain when everyone is struggling to survive.

hexsquared said...

It's pretty startling how crazed the American establishment sounds regarding the recent silver coinage case,

http://www.politico.com/blogs/bensmith/0311/US_Attorney_calls_currency_minting_terrorism.html#

and resonates a little with what the UK government said about the Icelandic people. For their refusal to cough up what the British government says they owe the UK, Gordon Brown labelled them terrorists.
I never felt terrorised by an Icelander, no matter how bad their economy.
It really sounds like a severe panic reaction on a government's part when arguments over money are pushed into the realm of terrorism, and makes them look psychotic and badly in need of a good dictionary.

Justin Kase said...

New here, and just saw this. Overall a good dose of reality for us all, and more so for goldbugs.

I don't know the future, and cannot predict how long property taxes will be collected, or what will be required in payment. It seems likely that the need to pay taxes will outlive money income for many. Saving both paper and metal for this purpose makes sense to me, but a focus on these is unlikely to get us through a collapse and having too much may be dangerous. Excess gold may store value for grandchildren if hidden well, or not; but land, livestock, food production, tools, skills, relationships, knowledge, and a low profile will be more important soon. Should this fail, and you have the skills and resource, a spare rifle or two might be cached with full kit(s) in several discreet locations, in case you survive the failure and wish to respond.

Boris Epstein said...

Dmitry,

Did I understand you correctly that you expect there to be no currency of any kind following what you refer to as collapse?

kollapsnik said...

Boris -

I expect there will be lots of currencies, of sorts: taped-together bricks of 100 USD Federal Reserve Notes; packs of cigarettes, condoms, razor blades; junk silver, worth its weight in silver (a little more, perhaps). A gold coin or two might still buy you passage on a ship or a parcel of land. But there won't be any office anywhere inhabited by clever little gnomes who "print money" by pushing buttons.