Converting your govt money to something useful in the future is the key.

In Weimar Germany employers were paying employees twice daily.
At lunch they'd go out to try to buy something physical with the money before the value of that dose of money wouldn't buy anything at all. Do it again after work with another wheelbarrow load of bills.

Just think of the opposite side of that deal- why sell now when you can get double for the same potato tomorrow? But what will the potato farmer trade the bills for?

Not a stable situation.

Yes, I believe there is a ceiling to the escalation, and if we hit it, it could get bad all over. I was thinking progressively, but if global economics do go that foul, well, that's why a good portion of my investment portfolio is in blued steel, copper jacketed lead, a cadre of like minded and capable partners, and 40 acres out somewhere not on a map.

Besides, even in desperate times, there's a market for some items. Money may be worthless, but as long as there are resources to be collected, processed and distributed, there will be trade of one form or another. It pays to diversify a little.

LED, the banks say they ARE willing to lend it out to small businesses, but the small businesses aren't applying. And that makes sense to me: why get a loan and put your collateral in danger with the economy as unstable as it is?

The small business person can't control economic conditions, but they can be victimized by them.

The crazy politicians keep saying that if only they can provide enough jobs, it will fix the economy. They're holding a tiger by the tail and trying to force him to walk backwards, and don't see a problem. I would say they need to fix the problems with the economy first, and all the other improvements will follow more or less naturally. Presidents Hoover and Roosevelt tried the same thing that they're trying to do now, trying to create 'artificial' jobs to stimulate the economy. It didn't work then (they tried for 14 years with no success), and it won't work now.

"Those who cannot remember the past are condemned to repeat it" is something they must think doesn't apply to them. They probably also think they can repeal the Laws of Physics.

Sue

Okay, Ben, I get it. It's always best to have a backup plan.

I was thinking that I was misunderstanding something. I am suspect that if things do get worse, they are apt to hit bottom with a very sudden THUNK! I would hate to think that you couldn't get home from China...

Sue

Because I don't know what's really going to happen, (there is an incredible amount of manipulation going on in the markets), what makes sense is maybe not on their agenda. I see inflation coming like a freight train with no brakes cresting a hill. Those in charge have ruined the economy by taking us up this hill with uncontrolled spending by the trillions; once they run out of wiggle room and gravity takes hold, that train is going to accelerate out of control.

From what I hear, commercial real estate is next. (Apparently due to the way these loans are set up there is some stuff coming due and it's going to get ugly.) That may be the crest of the hill.

My crystal ball has been wrong so often, I keep my assets diversified hoping that some of those choices will work for me. I don't expect to win them all. It's about survival, not winning.

edited to remove a lot of unimportant trivia.

The only reason that I went with the 401k was that the company matched every dollar I put in with 50c. With the tax benefits at the time, there really was no way to lose. As the economy cooled recently, my company quit matching, and I quit contributing. I have the money split between funds of various risk levels in an attempt to minimize risk, and maximize returns. My fear now is that if taxes go way up, it will erode all of my gains (and even some of my contributions) in the 401k as I withdraw the funds for retirement. I'm considering converting it to a Roth IRA and pay the taxes now, at the current tax rate that I believe is lower than future tax rates.

The manipulation by the Greedy Controllers makes it hard to know which way to jump. I think that's why so few people traded in their clunkers for high car payments, and why small business loans are available but businesses are scared to get them.

Sue

I think the best insight into the future is to study the past. The same forces were at work in the 1920's and 30's and again in the late 70's as now. Having a working plan is a great comfort, but everyone's situation is different, due to geography, age, family considerations, occupation, etc. Here's what I am doing:

1. Prepare a (semi-portable) four week home survival outfit. We keep AA batteries, radios, AA lanterns, dry food, candles, 30 gallons of water, tarps and tents and other camping gear with tote bags and plastic tubs available. This covers long term weather, power outtage, and bug-out concerns. All of this fits in a space the size of a big closet.

2. Prioritize future economic needs. I think the easiest way to think about this is to imagine that your take home pay was suddenly reduced by half or more. Look at your durable goods: your home, your car, stove, refrigerator, shotgun...... With your reduced income, what would you fervently wish you had purchased, payed off or replaced when you had the money? Do it now.

3. What skill or hard goods would you have to barter with to obtain goods and services that you needed if your income was reduced? A lot of people buy gold for this purpose, but it is too expensive for me. Farmers have it made in this category, as they can barter with food. People who don't have access to land will have to decide on a commodity that will be in short supply, affordable now, is portable, and of value to anyone, and stock up on it. World War II economic conditions in Europe provide a lot of insight into possible future scenarios.

We payed off the mortgage here due to the uncertainty of the next few years. Neither of us liked the way the economy was going and even with the theory that during inflationary times it is best to take a loan and pay it off with cheaper future dollars, what if the economy tanks and you can't make even the cheaper payment?

We decided that this could be the rainy day that rainy day funds are for and we payed off the mortgage. Major hit but monthly expenses immediately dropped and the future foreclosure threat is now gone.

A little light reading for a current events update. IMF Gold Sales, Fed Rate Hike, China, Soros and Inflation. IMO this is good analysis of what has happened recently and to where it points.

What if?. . . China could easily take a few $billion of the U.S. Treasuries they are holding and buy the IMF's 191 tons of gold. That would draw a solid support line under the price of gold in the neighborhood of $1100/troy oz.

If China accumulates the amount of gold they indicate, they will have a recently documented holding of >/= the U.S. Treasury's supposed 8000 tons (no independent audit since before Nixon was in the Oval Office). They may be attempting to replace the dollar as the reserve currency -- really not good. Hold on, the ride could get bumpy.