The Coming Curse

Assume, for a minute, that a depression is coming.

We don't discuss this, do we. All our conversations with friends, family, co-workers, not once is it ever brought up. We ignore it, we discount it. It isn't in our vocabularies. It's the uncle in prison for pedophilia.

Our American entitlements haven't allowed us to go there, to think about this possibility. All of our conversations, listen to them, they all hinge around the fragment "when we get back to..."

Well, suppose we never get back to?

I've been thinking about what sorts of things would get us through an economic implosion, and I'm hardly as prepared for it as most of you, but these are my considerations:

1) Carry no debt.
2) Be able to work for substantially less. Be worth more to your employer than you are paid.
3) Gain some control over your necessities.
4) Operate in cash. Concern yourself with the possibility of bank failures, and how would you manage if there weren't any.
5) Manage your health better than the vast majority of Americans.
6) Own commodities that are fungible and that aren't tied to the economic failures of others.

The way I see a depression unfolding is that everyone, everyone!, with any prior "special" condition or grievance will be no different than anyone else. If you're disabled, unemployed, a minority, poor, bankrupt, overweight -- it won't matter. Your ability to adjust to a new paradigm will determine your fate. To be sure, in addition to my list above, likely the most critical consideration I didn't list--

7) Develop social relationships with others you can help, and with others who can help you.

So to delve into each, I think that having no debt would be the most significant thing, as you have the most flexibility to move if you have to. Trying to sell your house that you owe more than its value would be exceedingly difficult when there are thousands of others doing the same thing. Indeed, trying to sell a house at all would be difficult.

If tomorrow your employer said you have to take a 15% pay cut, could you take it? Yeah, you'd bitch and moan, but could you make it? More importantly, are you more valuable than your co-workers if layoffs are coming? A depression would not be the time to be suing for pay discrimination, to remain being a lazy, entitled, pampered, twentysomething.

Gaining control over necessities, well, that's probably the most difficult thing for any of us. We live in a just-in-time America. Imagine a bank run, or a run on the store...in my opinion, our societal norms would fall apart very quickly. It would likely stabilize, but in the meantime, do you have access to the things you need? Medicine? Soap?

Do you have sufficient cash? Cash reserves? Is all your retirement in equities that might evaporate, might lose their remaining 45%? See, here's the rub. Pull your money out now and you'll seriously regret it "when we get back to." Don't do it, the depression comes and you lose it all, well... I suppose this is an argument for diversification, but don't discount the ability to operate exclusively in cash, especially if there aren't many banks or the banks aren't trustworthy.

If you had to mow your own lawn, or pick up your own wood pellets, are you in shape to do so? Could you even ride your bike or walk to the store instead of driving? Could you manage without your thirteen different prescription medications for high cholesterol, blood pressure, macular degeneration, diabetes, what have you? Can you swing your hammer to fix your fence? Staying fit is critical, but lost on most Americans.

Do you own anything that would be worth bartering in a depression? Do you really think you could sell your computer printer to raise cash, at a time when everyone else is trying to off their own stuff to raise cash? Do you have another skill you could trade? Or perhaps gold? silver? If we enter into a hyperinflationary depression, would your cash be worth anything?

Lastly, think about how to develop social arrangements where the people in your circle can all work together to support each other, each with different abilities, but importantly, with abilities. Not bums, leeches, or others as uselss as chocolate teapots who would be a drain on your resources.


Look, I like to thing about these things. While I still continue to believe that hardships might actually result in a better America, I hold no true belief that a depression is coming, but I indeed want to discuss it. I want to be better prepared if it did happen, and I would hope you would too.