Originally published at Notes from the bunker…. You can comment here or there.
The economy, unsurprisingly, continues to sit at the top of the “Biggest Threat” list. Theres a saying that theres no situation so bad that it cannot be made worse by government. Unfortunately, I think that’s going to be exactly the case. Its hard to miss all the we’re-here-to-help-you programs that the .gov is lining up. And while the powers that be are quick to proclaim that they’re there to “help the working class” and that “People are hurting now” theyre awfully quiet about the financial repercussions of throwing all this money around. It’s a bit dated, but Hazlitt’s book “Economics in One Lesson” says that economics is the study of “looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups”. Simply put, Hazlitt says economics is saying “Yeah, but what happens AFTER that?”
I wonder if anyone is examining the consequences (or fallout) of some of these actions that are being undertaken. I know that there are folks far more learned than I who have a better handle on whats going on and what the consequences will be, but to me it looks awfully discouraging. All of these programs, these benefits, the bailouts, the subsidies, the ‘rebates’ and ‘stimulus money’….they have to be paid for somehow.
Whats this got to do with the price of ammo in Montana? I just don’t see how the economy can do anything except either stay the same or get worse for the immediate future. (Immediate future meaning the next year or two.) And, of course, being convinced that things are going to either stay the same or get worse means that, for me, the obvious thing to do is keep working on the assumption that at any moment there could be a bout of unemployment, bank holidays, inflation or similar tumult.
Best defense? Keep spending down, hold onto cash, go long on durable goods and long shelf-life items, stock up on food and anything else you wouldn’t want to spend money on if you lost your job.
I originally had a post I was working on about the state of the economy and why a person needs to take precautions against it and the more I typed the more convoluted things seemed. Im a big fan of teaching by example, analogy and parable so lemme just go with that. I figure most folks are smart enough to get the idea with having it spoonfed to them.
Not often, but once in a while, when we’re out shopping the missus will ask “Why are we getting that? Don’t we have [amount] of that already?” After all, we have some fairly large amounts of toilet paper, paper towels, soap, toothpaste, cleaning agents, rice, pasta, meat, canned goods, fuel, ammo, blankets, etc, etc. stocked away. Do we really need more?
Every item we have on hand, right now, is one less item we have to buy later. And if later is a time when our incomes are severely reduced or wiped out then all those things we have stored up will be one less thing we have to buy with the precious dollars we have left. The 50# of chicken in the freezer, the extra pair of shoes in the closet, the hundred rolls of toilet paper in storage is less money to spend when you don’t know where the next dollar is coming from.
(The notion of stocking up on the durable and long-term goods to beat price increases, infaltion, etc. is covered in “The Alpha Strategy” which is worth reading.)
Simply put, the best defense against the uncertain future is to have the things you need in place and in quantity so that you aren’t faced with ugly decisions later on about eating versus paying utilities.
