[patience]

heroineworshipper,

I can see that we are deflating, no doubt, so my surplus is in cash, or checking accounts.

My current worry is that of a US Treasury bond dislocation (when, not if), since I can't tell what that would do to the dollar. My first thought is that if other countries don't see Treasuries as safe, then interest rates shoot the moon, and "cash is king". But. If other countries don't want T's, then why would they want dollars? Maybe to pay dollar-denominated debts, but eventually, that gets unwound. Then what? Meanwhile, the US govt/Fed, et al, "print money" in some obscure manner to keep our economy on life support. I have no idea how this plays out, but I'm sure I won't like it. My bet is that I prefer to have on hand enough of imported goods to last a long time, since we could see interruptions in supply, or ballooning prices, depending.

Any light shed on this morass would certainly be appreciated.

[perdition79]

My money is tied up in food, land, gold and survival toys, with no more than $15k as cash. Cash money, no bank accounts; I made the switch about a year ago. As much as everyone here knows about how fractional reserve banking works, I'm really surprised at all the people responding to this thread with money in the bank. I'll be damned if I'm going to allow banks to improve their reserve ratios with my money. The $10 I spend monthly on postal money orders is a small price to pay to sleep soundly, with the knowledge that I'm not contributing to the systemic fraud of the banking system.

[BikerJon]

I have some in the banks, 3 different ones.
I have some in cash on hand for emergencies.
I have some in silver
I have some in 401k, only because I get dollar for dollar match.

I keep thinking of moving some into oil. Something like 55 gal drums full of diesel. If the new carbon tax a read about today passes fuel prices should go up quite a bit.

[jdmartin]

I keep some liquidity in the bank. Mostly everything else is either in the house or paying down debt (ie mortgage). In the spring some of it will go into apple and peach trees and blackberry bushes to complete my fenceline. I have no delusions of becoming completely self-sufficient, but I don't see how it could hurt anything having some food of your own to eat. If nothing else, you've got some delicious, home-grown organic produce, and there's nothing wrong with that.

[ki11ercane]

$this->bbcode_second_pass_quote('Leanan', 'I') think we will be facing deflation, not inflation. This is looking like the Great Depression all over again. (Just like they've predicting for a long time at The Automatic Earth.) The government doesn't have enough helicopters. The amount of wealth that is being destroyed is just overwhelming. Bernanke is trying to empty the ocean with a teaspoon.

And it's not just money supply. It's the velocity of money. People have to spend it or lend it or it might as well not exist, and everyone's too afraid to do that.

Eventually, hyperinflation may be a problem, but it could be a long, long time. The Great Depression lasted ten years (and it took a world war to end it). In Japan, the printing presses have been going full bore for 18 years, but the only thing that actually caused inflation there was a rise in the price of oil.

[angrybill]

I agree.
For the debtor, most bank workers are notorious for deception and doing almost anything to get you to pay off debt at the slowest rate possible. I've been through that ugliness before. Credit collection agencies or a bank’s own credit collection agencies are the very worst. The laws are different for what they can and can not do. The rules are almost always broken. They can be absolutely deceptive and harmful to a consumer who's gone over in debt. We do our best to not be enslaved to the credit monster. Many of those bank executives that were once pawning their people and demanding repay, cutting credit limits, and raising rates on existing credits have hopefully worked themselves out of jobs and into a more humane way of living and treating people, as I wish ill on no one. Taste of their own medicine is good and I have no pity on them because of all the pain, hardship, and damage they have put the credit consumer through. The "credit beast" is that the rederic of today is to try and stimulate the cycle all over again. I'm ramping but bottom line, I don't borrow and won’t be enslaved to any credit organization ever again and sometimes we have to get out by out either by paying in full or applying for bankruptcy to get a fresh start and to never again be a slaver to borrowing institutions.
About deflation, in my opinion it will be good and I hope it does happen because during the deflation (like with oil prices now) lower prices for all goods and services, but not to last too long. While in deflation that's the time to stock up on the hard assets we need to operate on. Deflation won't last long because of all the stimulus’ plans when interest rates begin rising again, and then the prices of goods and services and consumer debt will begin to rise again. It's all part of the cycle of economics and I've only learn this through hard lessens suffered in life. I hate debt and anything associate with it, well, I'm sure everyone hates debt. Maybe someone else can contribute to the board and share their experiences and a visionary to help us to better prepare and get our lives into balance. I am trying with an admit tingly limited knowledge and really didn’t see the markets to fall or the housing because I just didn’t give it much thought, but now I do with increased intensity, studying the topics in order to be better prepared. Who knows, but with all the dynamics going on today and the future potential I may one day and with short duration invest heavily in the market or currencies, ride the wave of profit and get out and be cash basis again. It’s not yet clear when but I’m watching. Next week the ECB will announce interest rates for the Eurozone and they will most likely lower them. Britain’s interest rates are now at an all time low in the more their 300 year banking history. These downward moves in interest rates should weaken their currencies and feed the prospect of a short lived deflation worldwide through part of 2009. This is my understanding at current date.

[Cog]

I keep about half my money in cash at home and the other half in my checking account. As far as 401k's go, I do contribute to get the company match and consider this money as just a gamble really.

I'm saving as much as possible and paying down debt as rapidly as possible. I've stopped nearly all discretionary spending(Sorry Paulson)and choose to either pay down debt or save it depending on my particular doomer mood of the moment.

[MarkJ]

Banks, safes, building lots, acreage, farm land, apartment buildings, homes, investment properties, commercial property, businesses, heating oil, kerosene, propane, diesel, timber, soil, sand, commercial vehicles & construction equipment, tools, hardware, plumbing & HVAC/R inventory, toys, hunting, fishing and sporting equipment, antiques, collectibles etc.

I keep a lot of cash on hand since I buy vehicles, toys, tools and equipment in my travels. Some people I deal with only accept cash or barter as well.

[angrybill]

It does appear that the U.S. is a lstill a long way off from deflation and based on our few responders it seems most of use are still using banks, cash on hand, and other hard assets. And, since the U.S. fed rate is stopped at .25%, stimulus’s package brewing and feeding companies that feed the consumer then I would say it looks now a case and point of slow growth and recovery. We hope neither for a lasting deflation nor inflation but the real dollar has yet to be reached in my opinion. Housing is still too high, but gas prices are good if they stay under 50 per barrel. Looks like we will all be hearing a lot more about
Economics in the news in 2009.

[Revi]

You have to put your bets down and wait for what happens. Some in the bank, some in mutual funds, some in real estate and some in hard assets. That way there might be something left.

It could be a long depression, followed by an even longer one.

It's going to be hard just to stay in place, never mind save for retirement.

[topcat]

We use a 'diarrhea' based method. Our shit is spread thinly everywhere.

WAM (walkin' around money), bank money, CD's, PM's, junk silver, 401/TSP/IRA (mostly in money markets and bonds for now), food, acerage, fruit trees, equipment, ammo/toys.

[sameu]

cash, banking account, gold, tools
and planning to open a mini forex account, but that's just for playing

[dinopello]

Diversification. I'm in everything and then some.

[Leanan]

$this->bbcode_second_pass_quote('MonteQuest', 'Y')es, but without the vast infusion of money. The deflation may quickly become inflation.