I’ve been thinking a lot lately and wanted to put a few questions out there.
One of the things I see coming is inflation. That makes me leery of stockpiling cash. Gold is already very high, but could keep going? My main business is farming, and we are in a good position with a lot of cash reserves going into next year. I am trying to decide if I should be prepurchasing expenses(raw materials) to protect myself or sit on cash to watch for oportunities to buy and expand.
I also keep asking myself if slow death is preferable to just letting things melt down. I have thought for quite a while that what many in this country need is a good recession/depression to learn from. Would it be painful? Yes. Would people come out of it with a whole different approach to finance and business? Yes. Look at the strength in the generation that went through the Great Deppression. That experience as much as WWII is what propelled us into superpower status in the world.
Another thought I had is: If our going down is taking down everyone else, (Russia’s, China’s, Europe’s, markets are also taking a beating). Who gains ground in a meltdown? In other words, if we all go down equally, our standard of living won’t change relative to others, right? The adjustments will be long and painful, but in the end what will have changed?
Lastly, the prosperity of countries has historically been tied to two things. The amount of natural resources that it posesses, and the stability of its government. We have had both of these things in great quantity, but with prosperity came a belief that we didn’t need to use our resources for various reasons. While things were going great, we didn’t mind being dependent on other countries for our resources, and as a result we are now shifting a lot of our wealth to others. In a resession, this will have to stop and we will have to go back to producing our own energy.
The only real debt that I am worried about right now is debt that I have on a development that I am involved in. If lots quit moving, I start bleeding interest.
My dad sat outside of his finance guys office at Merril Lynch back at the start of these problems and came away sobered. His guy was phoning client after client telling them three things. Live below your means, get out of debt as fast as you can, and hold on tight.