Preparedness for when

GreyQueen

Morning all.

Interesting discussions, as always. Like daz, my council rent is 100% higher than it was in 2005, and I.m also waiting for the letter any week now telling me what it will be come April. Then, in September, I will hear about the service charge increase, to be applied in October. So, two events which I have to leave slack in the budget for, and have no control over, and which are inflationary on my personal micro-economic level. Whatever they are, they'll have to be funded, and that means money won't be spent elsewhere.

One thing which is interesting me, over and above the US dockers, is the Baltic Dry Index. This is rates for bulk shipping of raw materials, everything from wheat to steel. The very building blocks of industry. And I believe it's at a 30 year low, which suggests industries globally aren't ordering up the raw materials in the quantity they were. The Baltic Dry Index is a lot more relevent than happy talk off the main stream media. Tisn't a very good time to be in shipping, atm.

Re gold coins for portability in a crisis, I often wonder what would have happened to one branch of my family who ended up at Zeebrugge in Belgium, with the German army advancing, trying to get ship back to the UK (Brit citizens resident in a European country). They tried to get ship for 3 days before having to give up and go home to what was about to be an occupied city. There were a lot of people trying the same thing at the same time, and a limited number of spaces on vessels. Doesn't take much imagination to see that a fistful of gold sovreigns, or similar valuables, could have greased their way aboard. It would have spared a lot of hardship, fear, and two late-teen children being taken to Germany as forced factory labourers.:(

But yes, Frugalsod is correct, people promoting gold as an investment usually have a commercial interest, so must be taken with a pinch of salt. I believe the traditonal percentage of gold as part of a balanced investment portfolio was 5%. It's what you have left if everything goes wrong.

I have just got the book When Money Dies, the nightmare of the weimar hyperinflation by Adam Fergusson, from the library. I have read a bit about this period in history before, but not a whole book, so this will be interesting. It's one of the recommended reads for people who'd like to know how money works, and what can go wrong.

[Deleted User]

'S OK PP we've both got wellies too, do I have to be standing in front of them to clout the bad guy hard enough to fell him? or be wearing them???

maryb

My daughter has a good job which is as secure as any job can be these days and can put down a good deposit - we saved for her university costs from the time she was born but it makes more sense atm to not repay her student loan and to use the money as a deposit.

As Winston Churchill said - "saving is a wonderful thing. Especially when your parents do it for you!"

But prices for flats anywhere commutable are just plain crazy. And some people selling really need a reality check. Property is beginning to stick and estate agents are having to work much harder, instead of treating househunters with barely disguised disdain. But it is not yet translating into price drops. We went to see a conversion flat with her last week which was frankly dirty, not to mention the avocado (as in original 1970s) bathroom suite. And I don't think the grouting was originally black. They were asking more than the cost of an equivalent new build flat.

But a new build doesn't seem to be the answer either. Apart from the fact that most of them are arid little boxes for living a Magic Roundabout existence ie come home, heat up takeaway(because there's no room to cook properly), sleep, shower, go to work and repeat. We went to look at a new development which hasn't even been built yet so you are expected to buy off plan. But half the entire development has already been sold to one investor - probably foreign - who is bidding up prices, then releasing a few flats at a time and enjoying tax free capital gains.

I would love to see people like that get totally fried in a property collapse, if it weren't for the innocent who would suffer.

For myself I would not care if our house were worth no more than the amount we paid for it 30 years ago. It was less than the inheritance tax threshold then and I wish it was now. Because we paid that mortgage off with packed lunches taken to work and treats passed up and I didn't do it for 40% of the house to go to the government if we died tomorrow

Frugalsod

Perplexed_Pineapple wrote: »

I totally agree but you only have to look at the varied claims made by professional economists (which change all the time anyway) to see that no-one can really foresee what will happen.

I disagree. The current main school of economics (neoliberalism/monetarism) has really missed the cause of the crash and the reasons why it will not recover. That is debt. The data is out there if you analyse it correctly. The fact that France and Germany are going to be in trouble soon was clear back in 2008 the data was on Zerohedge back then. The fact that no one else saw it is down to their own biases. Economists that work for banks or governments do not see debt as a problem because their incomes depend on it. So cognitive dissonance is rampant in banks right now.

While I do not know when the markets will turn I do know that eventually they will revert to mean and that means big falls and deflation. So while governments do everything to maintain the bubbles they only further enhance the imbalances. I only look for the general trend and not worry about the timing. That is why I am prepping for a downturn I know is coming but have no idea when. So I use the time to get more done.

So while the data is there the majority of people actually analyse it incorrectly. For example this post on zero hedge is right but for the wrong reasons.

http://www.zerohedge.com/news/2015-02-13/qe-and-zirp-are-deflationary

In the response it claims that reduced interest income has caused those with savings to cut back, especially pensioners. The problem with this is that the numbers who depend solely on investment savings are insufficient to cause deflation. Also those who will be impacted by lower future pensions have not massively increased their pension provision to make up for any shortfalls as they should have if this report is correct. Many pensioners will also get state pensions which are not directly impacted by QE or ZIRP.

What they missed completely is that QE has flowed into speculation in commodities and these are the things that make up the basis of everyday items like food and heating, the things that are not counted in US inflation figures. So the increase in commodities has lead to price increases of food. Also the cutbacks by governments has impacted personal incomes as they raised taxes and cut spending to balance the government budget. Economies rely on government sectors to provide surpluses otherwise the private and household sector have to cut back. Since businesses have all the economic power the entire rebalancing is being met by solely by households. So when they have to cut back because of rising prices of basics and dropping income the end result is pretty obvious in that there will be lots of goods left in stores and only deep discounts are the only way to clear them, which show up as deflation. So when most economists fear deflation because shoppers hold back because of falling prices they miss the point that they are already cutting back because they are skint and not because they are hoping for better prices. It is a chicken and egg situation and they missed it. It is rampant in the commentary and comments on Zerohedge. If you do not identify the problem correctly you cannot fix it.

Perplexed_Pineapple wrote: »

I've read that the "blitz spirit" was in part a propoganda item created by the government of the time to keep up morale, there was still looting and robbery going on although of course a lot of people gave their time and risked their safety to help others.
Like the video

Yes but I was not thinking of it in terms of propaganda. It was more of a we are all in this together attitude, and not as some spin by the government. Most people are pretty decent and reasonable as long as things for them personally are not too tough or that there is no perceived inequality and injustice then they remain decent.

Mojisola

maryb wrote: »

Because we paid that mortgage off with packed lunches taken to work and treats passed up and I didn't do it for 40% of the house to go to the government if we died tomorrow

It's only 40% of anything you have over £650,000 (if you're a married couple or civil partners) - not 40% of the house price.

maryb

I know, exaggeration for effect, but it could be fairly big money especially if Labour bring back the 10% levy they were proposing to fund care for the elderly.

And I do NOT trust them on the mansion tax - once you earmark it for something like the NHS which can swallow up money with no end in sight, the rate would quite soon have to go up - which probably would not be doable politically - or the threshold at which the tax is levied has to come down. And if there is a softening in prices, it would have to come down quite fast to raise the same revenue let alone keep pace with rising costs. And you end up with the equivalent of a debt deflation spiral in house prices. So before you know it, perfectly ordinary houses in London which are not, by any stretch of the imagination, mansions, would be caught.

1Tonsil

Just a quick update as I have a few spare moments. I have been really busy, taking exams in Holistic therapy, working on the underground sites spreading info from translations, and of course prepping like crazy. Most of you know I live on one of the Greek islands, so I don't need to explain.

Despite various deadlines passing and many dirty tricks being played, there is indeed a blitz spirit at work here in Greece. Ever since the election, the Greeks and others living here have been full of optimism that this government are working on their behalf. I really wanted them to get elected as I thought it was the only chance of changes taking place. At the moment the polls show that 87 percent of the people are fully behind the new government.

I don't know how much of the real news is hitting the UK concerning Greece (or anything else for that matter) so here are a few bites of Greek news.... Our finance minister, the very dishy Varoufakis...agreed to sign a document on Friday, but when he went to sign on Monday the document had been replaced by another, so he refused to sign it.

The Financial times stated that the first document never existed, but since they have been given an original of it....they are furious at being lied to by the EU. Now Greece has been given till Friday to sign it or they get nothing.

Tomorrow the ECB meet to decide about the Greek banks. They are being urged to say no by the Germans. The Germans asked for Greece to remove the new finance minister immediately. Now they are asking for all money to Greece to be cut off immediately with no other countries getting a vote on it.

The Greeks are taking to court all the corrupt Germans implicated in the contract bribes and fraud scandals, including the German submarine and helicopter deals. The Siemens case has been reopened as it was closed by corrupt Greek politicians in the past. The Greek serious crimes squad is chasing tax cheats at high levels and no longer have to go through local offices.

Various French and German supermarkets are being investigated for tax fraud and price fixing, with some items eighty percent higher in Greece than in German and French shops of the same chain.

We all feel like we are in this together and it is a good feeling. Everyone I know is prepping as much as they can given the constraints some have. We are all smiling and hoping:D:D:D

RAS

Thank 1T

Views in the media seem to be divided.

Many seem to believe that the immediate aftermath of Greekexit would be hard and harse but that once the country started trading in its own currency, it would recover better than in the current deal.

So the next 6 months would require a LOT of courage and stamina but beyond that hope.

Frugalsod

RAS wrote: »

Thank 1T

Views in the media seem to be divided.

Many seem to believe that the immediate aftermath of Greekexit would be hard and harse but that once the country started trading in its own currency, it would recover better than in the current deal.

So the next 6 months would require a LOT of courage and stamina but beyond that hope.

Most of the media have not even considered the impact on the rest of the EU. Once Greece leaves the eurozone and presumably the EU the speculators will start targeting the next nation to leave. Presumably Portugal Spain or Italy. If Spain or Italy leave then the euro will probably be doomed. Though has already been demonstrated they can drag out this for many years. At that point the existence of the euro could be in jeopardy and then the EU itself. A Germany without the euro would be hit hard. A new Deutschmark will be very strong initially and the exporters will suffer. Then Germany will have to face the fact that many of the loans that the German banks wrote across Europe will have to be written off as uncollectible. Then Germany will probably impose austerity on themselves and further shrink the economy. The UK will suffer because its biggest single market the EU will fragment and many foreign companies that invested here because of the EU will probably move some of their production closer to their end customers in what ever country that is. The only thing that we can be sure of is that it will be mismanaged.

http://www.nakedcapitalism.com/2015/02/greece-international-creditors-euro.html

Frugalsod

Ryanna2599 wrote: »

Another thing to be mindful of at the moment is the Dock Workers strike in the US at the moment. There are thousands of freight ships waiting to dock...which may lead to shortages of food and other items. If that happens and is reported by the MSM I don't know if people in the UK may start a run on stocking up at the supermarkets leading to empty shelves here...? The other knock on effect may be on items sourced from the US, eg rice - potential shortage or price hikes. Time to add some to my supplies I think...

Such a strike will be relatively short lived, and panic buying will only make it worse. Though I already have a years supply of rice in an airtight food barrel, and several months of flour. So personally I am not concerned. If you are running low on supplies then maybe you should buy now before things get any worse.