Treasury Gain May Falter; Foreign Holders Flee Dollar
September 11th, 2007WARNING: This is not a recommendation to buy sell or hold any financial instrument.
There is going to be great pain here as older, wealthier people wake up to the fact that their “fixed income” class investments are wild ass, risk of ruin gambles.
We’ve been through it over and over again:
Shelter, water, food, security.
Gold, guns, booze, tools.
Compost, livestock, heirloom seeds.
Still, I get about three What-should-I-do-with-my-money? emails per day.
I just walked over to my kitchen/dining room area and took this picture:
50KG sacks of maize (left), 25KG sacks of hard wheat berries (right)
What you’re looking at there is hundreds of pounds of maize and wheat. Becky and I don’t worry about the credit rating of the grains, or whether or not they’re properly capitalized. Those grains don’t have any possible exposure to the subprime mortgage apocalypse or the yen carry trade. Market liquidity isn’t an issue for those sacks of grain. Neither is event risk. We didn’t need to read a prospectus before buying them.
Sounds silly, right, to talk about all of those things with regard to some sacks of grain?
Why? Because those grains have obvious, intrinsic value. Regardless of what anyone else thinks about them, Becky and I are going to eat them.
Your paper investments have no obvious, intrinsic value.
That’s why there are a lot of lawyers and arcane words and phrases associated with them. Above board swindling is made possible by lawyers and arcane words and phrases. These things allow the people behind the swindle to avoid jail if you lose your money. The only reason that you consider stocks and bonds to be worthy places to put your money is because you have been sold a bill of goods that is likely to leave you broke and starving once appearances can no longer be maintained.
Even though many of you understand that your paper investments are part of a collapsing ponzi scheme, the dire nature of the situation still isn’t hitting home.
For me, recognition of collapse was followed by three phases:
1) Denial
2) Depression
3) Paralysis
If you’re a regular reader of Cryptogon, you’re probably past the denial phase. I’ve communicated with many of you who are in the depression and paralysis phases.
You guys already know my story. Maybe some of you who have moved into the “Taking Action” phase would be willing to share how you moved through the bog of denial-depression-paralysis.
What are you doing to prepare? But more importantly, how did you actually start to prepare, to take the action that you’re taking? What was the final straw?
People in the paralysis phase would rather stare at the wall than talk to friends and family about fiat money and debt and, energy and, uh, sacks of wheat. So how did you action takers approach friends and family who are still in the traffic-work-fastfood-tv mode? Maybe you’re like me and had to leave friends and family behind.
Obviously, I don’t share this information with anyone, but through my communications you guys in private, I know that several of you are in extraordinarily similar positions.
You’re not alone.
Via: Bloomberg:
Treasury investors basking in the biggest rally in four years have reason to fear for their profits: The largest owners of U.S. government debt are heading for the exit.
Two-year Treasuries returned 1.09 percent in August, the best monthly performance since 2003, according to indexes compiled by Merrill Lynch & Co. At the same time, holdings of U.S. bonds by governments and central banks at the Federal Reserve fell 3.8 percent, the steepest decline since 1992.
The dollar’s slump to a 15-year low against six of its most actively traded peers is turning the gains into losses for international bondholders, prompting China, Japan and Taiwan to sell. Overseas investors own more than half of the $4.4 trillion in marketable U.S. government debt outstanding, up from a third in 2001, according to data compiled by the Treasury Department.
Research Credit: JW
Thanks for sharing your prep ideas. I
recently cashed out what I could and bought
hard assests. A pantry, loaded it with food,
ammo and some weapons. I also expanded my
sheep pens, bought more sheep, and am
working on a chicken coop.
Michelle
Hmmm, I am glad you wrote this article. I can’t make up my mind if I am in step 2 or 3.
I am really stuck here, I don’t know how to take the next step to start a life like Kevin has chosen.
I don’t have enough money to buy a small farm overseas to support myself and hell, I am a bachalor and can’t even cook. How am I going to grow my own food?! I’ve never farmed in my life.
If someone could put some costs to achieving what Kevin has done I would appreciate it.
Has anyone got any opinions on joining a WWOOF? Kevin?
I DO feel all alone when thinking about the disasters that we face in the near future. Occassionally I speak to people about owning gold and they think I am a bit strange/weird. I can’t even begin to wonder what people will think if I talk about the topics that are covered on this site…
SIGH…;-(
I never spent much time in Denial, because I recognized 9/11 as an act of true desperation by a dying empire. Coming to terms with having little resources while simultaneously needing to build an entirely new life can produce true Depression and Paralysis. However, if you’re willing to sacrifice whatever it takes (abandoning a career, selling your stuff) you’ll find you have a little more freedom than imagined. And sometimes gifts come along that bridge gaps which seem insurmountable.
I think the key to overcoming Depression is really caring about someone else – it’s easy to lie there in existential angst and say, “fine, let it come.” But when you recall how beautiful a treasure lies in the hearts and eyes of others you care about, and how you have the power to try something, then there is a reason to stand and pioneer something sustainable. Also remember Depression in rooted in extrapolation, while living is about creating and encountering things that are unexpected and new.
I think the ultimate key to defeating Paralysis is realizing things are changing whether you do anything or not and time is an asset. Nothing is going to be perfect, you’re going to take some hits, and the prize is now survival. Use the time you have now, right in front of you, and be willing to take on the risks that go with moving into unknown territory. Your life depends on it.
Here’s a public log of my process of recognizing how the cities are doomed and actually executing a life-changing move.
http://tinyurl.com/2a55kk
You nailed me, i.e., I’m in paralysis. We made the leap (to Nova Scotia, not too far, but out in the boonies, at least), and the wife got cancer and said she had to be closer to friends and family. What could I say? So we moved back. She’s doing well now, but we have 3 little kids, yadda yadda yadda. I know, excuses. I guess that’s how we stay paralyzed, our personal combinations of excuses. I was ready to leave all but my little tribe (nuclear family), but even that didn’t work out. We’re looking at central VT, now, as a compromise.
But I guess, either way — being one of the few survivors, or being in on the big ol’ die-off — we’ll be in good company 😉
How did I move into the “action” phase from paralysis?
It wasn’t pretty, or even logical.
The story starts in 2004.
I’d been reading fromthewilderness.com and lifeaftertheoilcrash.net for a while; I’d seen “End of Suburbia”, attending public lectures at Caltech where I saw David Goodstein (author of “Out of Gas”).
I think you can say “I got it”. Yet, I didn’t feel the impulse to DO anything. It was all in the realm of theory, reading, and talk.
2005 arrived, and with it, a minor personal meltdown. A relationship fell apart, which spurred me to take drastic stock of the last few years of my life. My long term partner had passed away from Cancer in late 2002. After three years, the realisation hit me like a brick:
During those three years, none of my “friends” had called. For three years, nobody got in touch for a beer, to see if I was still alive, or how I was doing. If I’d died in my sleep, I’d have lain there for a couple of months until the landlord broke the door down.
THREE F*CKING YEARS…and I hadn’t even noticed. Between the second relationship and loss of the previous, I had a fun time:
I drank half a bottle of Jameson’s whiskey straight, in about half an hour.
Realised, once I got to my feet, that I had made a Mistake.
Ran to bathroom.
Vomited. I remember the floor rising to greet me.
Woke up five or six hours later, smelling of booze and puke. Crawled back to bed.
As I woke up the next morning, I came to the decision that I would kill myself or create a better life with different people…people that might, for example, CALL ME ONCE EVERY THREE YEARS. A life or no life, but no more HALF LIFE. That’s what I did. I began attending local Peak Oil groups in LA, met some fantastic people. Stopped driving, which allowed me to walk, lost 50LBS, bought some gold, began to garden, slowly began to correct my diet by removing junk, and began taking life seriously.
None of this is motivated by a selfish desire to merely survive; I just don’t want to get caught with my pants down when TSHTF.
EVERY ONE of those steps has made me happier, healthier, and, strangely, popular (for the first time in my life, I think). I believe that people can tell on some level when you’re more concerned about something other than your own hide – in my case, PO has become an equivalent of a religion. It gives me a reason to get out of bed in the morning and work.
Anyhow, the process was painful. Not to sound melodramatic, but I had to reach a point where everything I loved was taken away from me, AND then to be offered the illusion of getting it all back, and then to have that illusion yanked away in a very abrupt manner.
I wouldn’t wish it on anyone. I’d like to think most people could move past paralysis without the emotional landmines and vomiting.
I finally moved into the action stage. a week before I was due to move out of my old apartment and into a new one I decided to leave school for the time being. I got an internship on a sustainable farm and will be heading out there shortly [I did sign up for independent study credits to appease the parents].
I gotta thank you all for encouraging me, too. I [drunkenly] complained in a comment back a while about how tied down I felt as a college student during this time. You guys talked some sense into me, it was the proverbial straw & camel. After some searching I found that there are plenty of alternatives to sitting in my apartment drinking coffee, reading depressing news, and skipping class. The paralysis allowed me to inform myslef on many things, but this goes only so far.
Thanks again, it was exactly what I needed.
-POBookman/bookman/bkmn/matt
I live a dual life: the “normal” world where I hold an important, very well-paying job and seem to be vitally interested in it.
The other life is reading sites like this, watching mind-expanding videos on YouTube, buying gold, becoming prepared mentally, emotionally and community wise with whatever disaster is coming.
This won’t help anyone here, but I was already active in other ways before deciding our family needed to be ready for this. Like all this sort of stuff, it started small and built up slowly. I remember a time when I was too reticent to even leave comments on blogs but a while after I made that mental adjustment I found myself doing an alternative news show on my commnuity radio station.
That period of change was quite exhilirating and occurred at the same time I had left a job in an office to work for myself.
Actually now that I think about it, that was probably the significant factor. If you’re having trouble with paralysis and you’re in some kind of ‘proper’ career get the hell out. The lies you have to tell yourself to make staying in a job bearable are part of what’s holding you back – even a job you think you like.
Failing that, do anything no matter how small that you’ve never done before, if you’re like I was even leaving a comment on a blog for the first time represents a move away from just being a spectator in this life.
The problem is you have to adopt your bosses value system in order to be able survive in their environment and their value system almost certainly won’t recognise anything that involved major change – they only know, and only want, business as usual.
Ironically since then things have stalled, I’ve got a young family and this is definitely not the time of life to be undergoing major changes. We’ve only just emerged from a period when all we were doing was tredding water. What our aim is, is to find at least one other family and set something up together. We may have found one but we’ll have to see how it pans out. I can see this being a lot easier if there are other people to share it with.
What is still missing in most of your reports is a healthy social network. Actually, THEY can take your gold away, eg. if it is declared a citizen’s duty to donate all gold assets to support the war efforts (happened in ww2). If you join a sustainable community, it can be declared illegal by the government.
In my opinion, the only way to possibly survive is to have many REAL friends, being able to do simple things by yourself (things you don’t learn in an insurance company) and not sticking your head too far out! The last one means that if your neighbors, who haven’t eaten properly for weeks somehow realize that you have some gold left and can afford better food which you don’t share with them, you are probably in for a rough treatment 🙂
P.S.: You can’t hide, you can’t run away, BUT you can try to adapt!
Ever since I was old enough to have some awareness of the US government as a fascist imperialist state, and the US economic system as one of wage slavery, I have loathed this system with every shred of my being.
I think many who post on this site feel the same way.
I grew up in a household where both my parents worked for an arms manufacturer–in a town where those were the only decent jobs, if you didn’t own your own business–my happy and secure childhood dependent on the continuation of the conflict du jour.
We have all lived our whole lives in the context (particularly stark in my case) of prosperity on the backs on third-world slave labor and child slave labor. The story is too familiar to bear providing a detailed argument about this.
I have, in some sense, spent my whole life looking, mostly fruitlessly, for the exit–for a means of personal economic survival that would not require the daily, hourly sacrifice of conscience.
The result of such seeking, when you are young, is that you are lured into some strange by-ways, into the occupations that are represented to you as the “good-doing” ones: You try teaching and social work, or maybe you join the Peace Corps, or, if you are a woman, maybe you can get married and let your spouse take the poison bullet. I probably don’t have to tell you that these options are not satisfactory.
The truth is, the exit doors are closed and locked to anyone who is unwilling to shed the trappings of the whole society–or make a plan to do so, and move towards this goal over time.
The price tag on the good life, the satisfactory life, is very high, but at least it’s life.
I read an article recently in which the author commented that the reason so few people believe in an afterlife is because, “having been dead while they were alive, it seems altogether probable that they will continue to be dead after they are dead.”
I see society as being on death ground, and has been for some time. I actually just had a talk with my parents about it 3 days ago. It didn’t go well.
What I do is write down small goals that I need to get done every day, I stay focused on results, and make sure the small actions lead me to my larger goals.
Escapism is nowhere near as satisfying as a well thought out and executed escape plan.
Breaking paralysis was fairly easy for me… I had been wanting to get out for a long while and the place I was renting got sold, the new owners didn’t want to rent it so I had to find some place to go. That turned out to be the wilderness in southern Oregon.
I moved from New Jersey a few weeks ago. I had a stroke of luck and found a place in Oregon that had been part of a larger collective commune of sorts back in the 60’s… apparently semi-sustainable but more geared towards artists. Anyhow, nearly all of those folks have since gone and there were several of the previous dwellings available with land which had been vacant for quite some time. I’m by no means living sustainably myself (yet), my main aim was simply to escape the cities where I am guessing the worst of whatever happens will happen. If time permits I will move more towards sustainability in the next months and away from simply purchasing in bulk and having enough on hand to last a good long time.
The transition was less difficult for me probably because I’ve already been living as simply as possible for a couple of years, more or less because I don’t want to give any of my money to the folks who I consider the enemy. Sort of starving the corporate beast, one consumer at a time.
One thing I miss is a decent net connection, but I’ve turned to gold panning as a form of entertainment (at least while the weather holds).