[Ming]

$this->bbcode_second_pass_quote('deconstructionist', 'G')ot married in July. We put some of the money into a CD. I now realize this was sort of a bad move--only will get $650 back on the $5000 in 3 years! We can pull the money out of the CD now and still have about 99% of the $5000... So what's the best thing to do with it?

Things I'm considering:
1. Paying off a bunch of debt. If we can eliminate a credit card or two we'll have more money in our budget each month.
2. Investing in Euros. The future of the dollar frightens me...
3. Investing in gold. Nice and shiny and pretty, but what value is it going to have post-peak? You can't eat it or heat your house with it.
4. Vegas baby!!

Anyone have insights/other suggestions?

Thanks

[katkinkate]

$this->bbcode_second_pass_quote('RedJake', '.')....If you have no debt but no house you are a peasent

If you have debt you are a slave

I'd rather be a peasent than a slave (and that is probably how it will pan out).

[MrBill]

Even during the hyperinflation of the Weimar Republic you still had the concept of private property and a functioning banking system, so I don't think debtors will be let off the hook that easy.

During the Great Depression, some States or Provinces did put a moratorium on bankruptcy proceedings for farms, but it was not a panecea. For one, this also meant the farmers could not borrow against the value of their land for the necessary inputs to put in a crop or indeed to support them from one crop year to the next if their crop failed. Also, private lenders, made many desperate borrowers indentured servants by making personal loans not real estate loans, so even if they defaulted the debt followed them.

As you do not know when this catastrophe is going to happen it is better to be prudent. Pay off your debt, live debt free, accumulate savings, and only after you have accumulated savings start to diversify them into gold bullion or alternate investments.

By the way, many of you are bearish on the dollar, but bullish on the euro. I cannot see your logic? Europe is no more insulated than America from energy dependance and high energy prices, and their fiscal house is not in much better shape than America's. Plus they are more densely populated and have an aging population.

Sorry, you may believe in a dollar collapse, but I doubt the euro will benefit. Look to countries that have budget surpluses, current account surpluses and holdings of non-dollar and no US treasuries. To be honest I cannot think of any? Maybe Switzerland? Russia and some Asian countries come close, but they own US treasuries, too? Will have to look for some alternatives.

With Canada's high national debt, only a few provinces run budget surpluses and with 87% of Canada's trade going to America the Canadian dollar is no more safe than the US dollar.

[Jake_old]

$this->bbcode_second_pass_quote('', 'I')f you rely on your wages to live week to week you are already a slave: a wage-slave. Debt just makes it even harder to achieve personal emancipation.

[katkinkate]

I guess the best you can hope for is to become as independent/disengaged of the 'system' as possible: the safest freedom at this time.

[Heineken]

$this->bbcode_second_pass_quote('Pops', 'B')ut Heineken you keep referring to banks as if people didn’t own them - people who have a stake in their equity disappearing.

People own banks – it isn’t one or two cigar-smoking fat cat we all imagine or the infamous fractional banking system – stockholders actually have equity in those corporations.

Debt IS real because people signed the note – what else is there?


And yea, I think Guido with the crooked nose will be out in force – especially in a collapse scenario.

What is to stop him?

[MrBill]

$this->bbcode_second_pass_quote('', 'I') respect your point of view and that of the others urging people to pay off their debt, and as I said, I myself have none, including no mortgage debt---all merely a product of lifelong habits. But your position is based on the belief in an essential continuation of the system as it now exists. If you think the basic shell game with money will be able to go on, then that position certainly makes sense.

[Heineken]

Good points all, Mr. Bill. I agree completely with your statement that one's position on debt repayment depends entirely on one's future Weltanschauung.

My own view is that ultimately there will be nowhere to run, nowhere to hide, somewhat like in 1918 when the flu infected every single person on earth (although not everybody developed symptoms). Having assets like cash and stocks and being debt-free won't really make much of a difference, although certainly there could be a transition period of uncertain duration leading to that state. We need to remember that money and debt are just human inventions---nature doesn't need them and doesn't operate on those terms. And nature is about to get really nasty.

The vast majority of people are too dependent on the status quo (as dependent as babies, I'd assert) and too interconnected to enable the rich to insulate themselves from the changes that are coming. This is the basic assumption that the rich are making as they systematically loot the world of its natural capital: that they can insulate themselves from the long-term consequences of their actions. They will discover too late that they are wrong, and that will be the last act of true justice in the sorry age of man.

[MrBill]

I am just curious, does anyone know anyone or heard anyone who has been hiding out in their bomb shelter since 1962? How about those that retreated to the backwoods following the first energy crisis in 1973-74? I would like to know?

In preparing for the crisis (Hillary in 2008) I just want to know whether I should sell my worthless hard currency now and buy dehydrated meals ready to eat or whether it is better to buy a .22 and live off rabits? At least I can use my money for toilet paper or to start a fire?

[falser]

Yes, MrBill. You should take your money and buy a leather jumpsuit, a cheap dune buggy, and a one-way ticket to the Australian outback.

[Heineken]

Hey, a large percentage of us POers just happen to be doomers. We make no apologies and have plenty of facts.

[Revi]

In my opinion the best thing you can do with $5000 is to spend it on solar for your house if you own one. If you don't you are going to spend the $5000 on energy in the future anyway. It is something that you can do now, start to save energy, and add to the equity of your house. You know that it'll be worth more whatever happens. I'm not the only one that thinks that way. Look at the shortage of solar panels. A lot of people had the same idea a few months ago. Solar hot water saves the average family 25% of their entire energy bill. PV solar is cheap insurance against disasters and grid collapse, and with an inverter you can pay yourself instead of the energy companies!

[falser]

$this->bbcode_second_pass_quote('Heineken', 'H')ey, a large percentage of us POers just happen to be doomers. We make no apologies and have plenty of facts.

[deconstructionist]

$this->bbcode_second_pass_quote('Revi', 'I')n my opinion the best thing you can do with $5000 is to spend it on solar for your house if you own one. If you don't you are going to spend the $5000 on energy in the future anyway. It is something that you can do now, start to save energy, and add to the equity of your house. You know that it'll be worth more whatever happens. I'm not the only one that thinks that way. Look at the shortage of solar panels. A lot of people had the same idea a few months ago. Solar hot water saves the average family 25% of their entire energy bill. PV solar is cheap insurance against disasters and grid collapse, and with an inverter you can pay yourself instead of the energy companies!

[frankthetank]

My list would be

1. Pay off debt

2. Take a trip you've always wanted to.

[MrBill]

Australian Outback? Well, as we have a family farm in N.Alberta, I think we will be fine there. Poor farmland for commercial production at current low commodity prices, but adequate for growing a garden and lot's of fresh water and firewood. No where near any big cities and not even close to the next town. And, we own it free & clear, so no mortgage and no banks to deal with.

By the way, Rita has struck and oil is 8% lower this morning, so it looks like I may have some time between now and post-Peak Oil.

Here is a thought, $5000 will buy you $62.500 equivalent in oil futures with 8% down in a margin account. That is about 1000 barrels or 42.000 gallons of gasoline equivalent. If you really think we are going to Hell in a handbasket, just take the $5000 and invest in oil futures. If you buy 1000 barrels and the price goes from $62.50 to $300 you will make $237.500, which will subsidize your fuel costs or you can take physical delivery and have those 1000 barrels/42.000 gallon equivalents for your own home use?

That is not a bad return on $5000. About 4750% over whatever time horizon you expect peak oil to occur. By the sounds of it, many think it is just around the corner, perhaps even this winter, so it would be the only sensible investment for such people.

[Dukat_Reloaded]

[/QUOTE]1. Paying off a bunch of debt. If we can eliminate a credit card or two we'll have more money in our budget each month.
2. Investing in Euros. The future of the dollar frightens me...
3. Investing in gold. Nice and shiny and pretty, but what value is it going to have post-peak? You can't eat it or heat your house with it.
4. Vegas baby!! Wink[QUOTE]

If you have acouple of credit card debts, what are you doing with $5000 to invest in government bonds?. Pfft government bonds, if the government goes, your money goes to the toilet. If I could invest my money and get the same returns banks get on credit cards (12-20%) I'd do that, I would never owe debt on one though. Investing in euros? all countries will be effected by peakoil, not just the USA. Gold is a good idea, also remember to buy bullion, not just stocks in mining companies, as when po hits, those companies could go out of business. My view is, if it cost 20x more money to extract gold in the future, then the gold thats already mined will be worth 20x more. Don't goto vegas, the whole economy there is built on customer service jobs.

[GoIllini]

$this->bbcode_second_pass_quote('marko', '
')
Eventually, I believe that US government insolvency will lead to a round of hyperinflation, but I think that this is several years down the road and that something will be done in the meantime to indemnify the financial interests from the effects of this hyperinflation, perhaps by allowing them to charge interest on private debts that would compensate for the effects of inflation. (I am potentially talking about million percent interest rates here.)

[jdmartin]

While I tend to be a doomer, I find it somewhat disturbing that basically no one recommended the following (strider mentioned it for themselves):

Since your original post did not state that you had any kind of significant living expense money saved up, I say you save the money. Since you've already stated you have debt and a mortgage, then it's obvious that you must have some kind of job to pay those things. So think in reverse order. What is more likely to happen first, someone shows up to break your legs to kick you out of the house, or you lose your job?

Well, obviously the job loss is more likely to happen first. Because unless you just don't care about paying your bills, it's likely that your mortgage would still be paid up on time if you still had a job.

Whether you're a doomer or not, everyone should have some kind of contingency plan to get them at least one year down the road. Now, for some people with no debt, or those that plan on going on the "lam" from their debt, as it were, that plan might be move in with someone, or live out in the woods off the land. If, however, you don't fancy yourself a king survivalist, you might want to live in your home as long as possible. A year's worth of expense money set aside at least buys you time to figure it out.

Most people end up in deep shit because they have a lot of debt, no savings, and when a crisis hits, they have no way to deal with it.

Some people here might say saving the money is dumb because inflation will eat up it's value. That doesn't matter - as long as it provides you some kind of cushion, that is what it is there for. Keep it in something that is unlikely to go broke overnight (savings account, cd, money market) and you should be OK.

If you already have a year's worth of living money, I say pay off debt. The interest is almost certainly higher than you can earn from a CD.

[JBinKC]

First I would invest the money in improving the heating efficiency in your home. ie geothermal heat pump system in a urban setting and a dual fuel energy system in a more rural setting or perhaps in energy saving sytems where the payback is high and immediate energy saving light bulbs then I would pay nondeductible high interest debt second.

Looking out the next 6 -9 months I think those two will beat returns hands down against 95% of the potential investments out there with no risk.

If I had to put money into the market I would be inclined to put the money in the Russian oil sector or Kroes Energy and stay patient with it. The reserves are very undervalued in both cases and I feel a big jump in value in those areas from a WTO inclusion in the Russian case and a consummation of a merger in the latter.