How to Position Investments for the Coming Depression?

[Bikerdude]

I don't think people today would stand calmly in a soup line for a hand out like they did in the 1930's. The Fed would drop interest rates to below 0 and the Congress would approve all sorts of make work projects to get people employed.

If the above doesn't produce the desired result then guns and ammo would be a real prospect. Humvee's and tanks would be a common site in our major cities .

[Patrick]

Quote:

Originally Posted by Slarty So, if you were convinced that starting in 2010 we would go through such a hardship and we could see things like the DJIA back around 8,000 and then see it linger there for 10 years and home values could drop by 50%, how would you position your investments today to take advantage of this situation?

Sell everything and use the proceeds to buy shares of DXD (Ultrashort Dow 30 ETF). When the Dow hits 8,000, sell DXD and use the proceeds to buy real estate or REITs.

[Patrick]

Quote:

Originally Posted by maddythebeagle I personally like a well stocked cupboard of spam and ammo...

But should I buy .223 to fit our M16s or 7.62X39 to fit the Chinese rifles? :confused:

[REWahoo]

Looks like this company has the right stuff. Three of the top survival "cures" all rolled into one: Gold, ammo, and location, location, location....

[packrat44]

Quote:

Originally Posted by Patrick But should I buy .223 to fit our M16s or 7.62X39 to fit the Chinese rifles? :confused:

Diversify - 50% in each.

[Jarhead*]

Quote:

Originally Posted by REWahoo Seems to me that fearing anything that threatens your livelihood is a perfectly normal and healthy reaction. Perhaps folks react the way they do because they have seen and/or experienced the highly unsatisfactory results of listening to those who believe in their ability to successfully and consistently time the market. Call it "the total unwillingness to even listen to contrary ideas" if you like. I prefer to think of it more along the lines of sound judgment based on 60+ years of personal experience.

Spoken like a man that has a fair amount of scar-tissue built up over the years, and should be very comfortable in the up-coming slide into "full
curmudgiadem". (I highly recommend it).

Jarhead, who believes that UCLA will be in the final 4, but based on their "cream-puff" schedule so far in the regionals, will get their head handed to them when they play the very good teams. (Final 4).
Not intended to be a solicitation for a wager of any kind.

[haha]

Quote:

Originally Posted by danm My mom tells the story of having to eat a squirrel. Everybody came out fine and did very well afterwards...

That is good to hear.

Ha

[prgsdw]

Quote:

Originally Posted by Bikerdude I don't think people today would stand calmly in a soup line for a hand out like they did in the 1930's. The Fed would drop interest rates to below 0 and the Congress would approve all sorts of make work projects to get people employed.

Sure they would (stand again in line for soup)!!! People will do what they have to do to survive - personally I have stood in line for cheese as a child on more than one occasion. I'm quite confident people will adapt and make do.

[Eagle43]

I suspect the coming depression ain't coming, but that's not the point of the thread. So, let's take a look at some people who made it.

Surviving the Depression -- Social Issues, New York City, Newsday -- Newsday.com

The American Experience | Surviving The Dust Bowl | People & Events | The Great Depression

Attitude seems to be the greatest indicator of what your fate will be. Can you imagine someone you know saying this?:

``He was a proud person. He said, `I'll make the money; I won't go on welfare.' He didn't ever apply for welfare, and he worked his bloody head off. To my father, it was kind of a disgrace to go on welfare, even if he had to work 12, 15 hours a day.''

``I do remember having my father buy us nice shoes for church. We'd wear them until they had holes in them. My mother would put cardboard in the bottoms. We didn't think anything about it.''

My parents survived it. Father actually worked in cotton fields after graduating 2nd in his high school class in 1929. If you were able, you worked, at any job he could get.He never took any government assistance (that I know about). It's amazing what the greatest generation did. Could we do it today? Probably.

[REWahoo]

Quote:

Originally Posted by Jarhead* Not intended to be a solicitation for a wager of any kind.

Jarhead*: "Ain't gonna be no rematch."
REW: "Don't want one."

[maddythebeagle]

Quote:

Originally Posted by prgsdw Sure they would (stand again in line for soup)!!! People will do what they have to do to survive - personally I have stood in line for cheese as a child on more than one occasion. I'm quite confident people will adapt and make do.

hmmm...surplus government cheese loaf... I bet goes well with a slice of "spammo"...I am still thinking that is part of "solution"...learning more basic survival skills esp. if you learned how to live on less growing up if the economy dumped by 50% or more....you would learn to live without starbucks...

[packrat44]

Quote:

Originally Posted by maddythebeagle hmmm...surplus government cheese loaf... I bet goes well with a slice of "spammo"...I am still thinking that is part of "solution"...learning more basic survival skills esp. if you learned how to live on less growing up if the economy dumped by 50% or more....you would learn to live without starbucks...

What are "starbucks"? Is that the proposed new US currency now that the dollar has dropped in value?

[walkinwood]

Okay - to indulge in such morbid fantasies...

The original poster made no mention of inflation - I assume it stays close to 0 (he did say deflationary period)

In that case, the scenario is not that scary. A 30% decline in the market (assume that the DOW represents the market) & staying flat from there for 10 years has already been factored into the SWR studies that are often cited here. If you've got a good asset allocation - say 60% equities & 40% bonds, you should be fine! If you're diversified internationally & in even more uncorrelated assets, even better.

Stick to your AA with regular rebalancing, choose a withdrawal strategy that's shown to last 40+ years, be conservative in your spending and get a part-time job if you must. You'll be set for when the market does start up. 10 years for an early retiree isn't that long a time.

[Goonie]

Quote:

Originally Posted by Notmuchlonger Booze probably did pretty good 1933 and on. Bootleggers probably did pretty well the 13 years before that

My grandparents and greatuncles/aunts on my Dad's side of the family, kept the family going throughout the "Great Depression" through their bootlegging operations in the St. Louis area. Booze provided a steady stream of income, when they didn't have jobs or paychecks to rely on.....it also provided weekly "bonus" cash to the local beat cop. My Dad said the beat cop was like Shultz on Hogan's Heros......."I see nothing! I know nothing!" He had a family to feed too.

[Goonie]

Quote:

Originally Posted by danm My mom tells the story of having to eat a squirrel. Everybody came out fine and did very well afterwards, but it was scarring.

Dang! Scarring? We ate a lot of squirrel while I was growing up, and we always looked at as something special! We'd go hunting and bag a bunch of those bushy-tailed tree rats, bring 'em home and clean 'em, then my Mom or Grandma would fry 'em up. Tasty! Same for rabbits (sorry CFB), pheasant, quail, 'coon, and miscellaneous other critters.

There's a sh*tload of bushy-tailed tree rats running all over the place around here.....just waiting for the End of the World "Coming Depression" so they can be pan fried for my dining pleasure.....just hope it doesn't cause any 'scarring'.

[Notmuchlonger]

Heck rabbits,pheasant,quail, turtles all good eating. Never had coon though. Gator isnt bad either. See be at ease worriers lots of good eats running around outside. Look at a Great Depression as a way to broaden your horizons.

[jazz4cash]

Quote:

Originally Posted by brewer12345 You also do not want to have any debt. Good luck with that.

I heard the same thing on a local radio program and I wondered why this is so. I was thinking that I would conserve cash and not pay down debts in hopes of negotiating lower rates. Wouldn't rates be ultra-low in a depression? ...or would loans be called and credit be non-existant?

[Goonie]

Quote:

Originally Posted by Notmuchlonger Heck rabbits,pheasant,quail, turtles all good eating. Never had coon though. Gator isnt bad either. See be at ease worriers lots of good eats running around outside. Look at a Great Depression as a way to broaden your horizons.

My neighbor and his pals go 'turtling' once or twice a year and bring home 25-30 snappers each time. After he butchers them he either give us some to cook up ourselves, or else he has us over to eat. I've got a great neighbor! He also supplies us with venison and fish.

One of my buddies makes the best BBQ 'coon around. He used to take it to church potlucks, and most folks thought it was chicken.

I've eaten a lot of deep-fried gator......and boiled crawfish, jambalaya, gumbo, etouffée, and my favorite (which I had Friday for supper) red beans & rice! It's nice having a Cajun restaurant a few miles away.

[twaddle]

Quote:

Originally Posted by jazz4cash I heard the same thing on a local radio program and I wondered why this is so. I was thinking that I would conserve cash and not pay down debts in hopes of negotiating lower rates. Wouldn't rates be ultra-low in a depression? ...or would loans be called and credit be non-existant?

Inflation is good for debt -- the principal is worth less with time.

Deflation is bad for debt -- the principal is worth more with time, so you wouldn't want to keep debt. Most people associate a depression with deflation.

Frankly, I don't care if it's a depression, a recession, stagflation, slow-growth, deflation, or inflation. I just want my purchasing power to increase with time -- all the time.

[donheff]

If you really believe it and you are not a kid, buy an SPIA. Or, better, research your state annuity guarantees and buy several small SPIAs from different insurers. Better get em now while you still have the funds.