Wednesday, August 26, 2015

Always be Prepared

As a youngster I was a member of the Boy Scout movement and the motto that was drilled into us was “Always be prepared.” Prepared for what? Prepared for whatever life throws at you, was the answer I got. It seemed a pretty reasonable idea to my eight-year-old brain. By training us young boys (and girls, if you were a Brownie) we could learn to pre-empt danger by thinking about the given risks of any situation and either prepare accordingly or choose to avoid the situation entirely.

So how has it happened that we have ended up with a society whose motto seems to be “Never be prepared”?

Watching the wild gyrations of the major stock markets of the last few days I noticed a couple of things. When things looked like they were going to get bad, the TV and internet pundits generally said: “There’s nothing to worry about, this situation can’t possibly happen.” And then when things actually did get bad they tended to say “Oh, well we knew there was always a risk of this happening and it’s time we faced up to the fact that what we feared most but had left unsaid has come to pass.” And then, when the dead cat bounce took the markets higher again the pundits trotted out and said: “Everything is fixed! We told you there was nothing to worry about!”

The average small investor (if there is such a thing anymore, outside of China) must be squirming on his couch clutching his head as spasms of cognitive dissonance rack his body. “But they said it couldn’t happen!”

Yet one person who couldn’t ever be confused with a TV finance pundit this week was Labour MP Damian McBride, who advised his Twitter followers to stock up on canned food and water, withdraw their cash and agree a rallying point with friends in family in case of communications breakdown and civil disorder.

He wasn’t mincing his words.

And McBride isn’t just some lowly backbencher either – he was Gordon Brown’s adviser when he was prime minister, as well as being a senior civil servant at the Treasury. As such he must know more than most people how fragile the global financial system is.

Predictably enough, he was roundly mocked by the press for being alarmist. Twitterers everywhere joined in with the two-minutes’ hate. In a world where sentiment is more important than reality such boat-rocking cannot not be allowed to pass.

The news message right now, as I type these words, is that markets have recovered from their panic attacks (even though this is patently untrue). China has calmed the waters by lowering its interest rates (what they still have interest rates above zero?) and there is soothing talk of more stimulus measures. The long-feared rate hike in the US is also being talked down. Nothing to see here, move along.

If current newspaper editorials and TV finance channels could be stuffed together into a cultural blender and reformed into the medium of music they would emerge as some kind of gently soothing mood music – the kind they play in dentists’ waiting rooms in the hope that it’ll drown out the noise of the drill and cries of pain coming from the next room.

Of course, none of this matters at this point because what this week’s market carnage has shown is that central banks are not omnipotent and they may even be running out of pumping power for all the epic mega-bubbles that have been created in recent years. Even those who haven’t been paying attention must now surely be able to see that unleashing quantitative easing (i.e. printing money) is simply an exercise in transferring the private risk/debt of the rich into public hands. You can unleash the monetary floodgates all you like and watch as all that liquidity flows into the feeding troughs of the world’s financial centres leaving the real – productive – sectors of the economy high and dry while wrecking many of the aspects of modern life that allow us to consider our societies as civilised.  

This is certain to have real consequences in the real world as levels of debt continue to skyrocket, and the ability of the real economy as a whole to repay that debt diminish by the week. You can extend your credit limit to the Moon and back, but if your income is falling and you keep piling on the debt then you must know that some day there will come a knock at the door. So should individuals prepare for the ensuing calamity that this moment of reckoning will bring into being? Or should we just sit there on our hands humming Everything is Awesome and hoping that the moment will never come?

*I just checked the Cub Scout’s website and – sure enough – their motto is still “Be prepared” – even if it now has far fewer members than it did in the 1970s and is embroiled in a sexual politics wrangle.


  1. Hi Jason,
    Just out of interest, do you know the background to those Twitter (I don't follow Twitter) comments? Has anyone thought to ask the guy? It doesn't appear to be the sort of advice that one gives both publicly and lightly. He may have his own beliefs and motivations and they would certainly be interesting to hear him out.
    I suspect that what we saw over the past few days was what is known as a "suckers rally" - and they can't be sustained long because the fundamentals never get addressed.
    Still, I've been thinking recently that a crash in the financial markets is a good way to disappear all of that excess paper money before it works its way into the economy of real world products and services - the pressure for it to go somewhere is certainly mounting.
    Interesting times. Fortunately the orchard and garden gets a little bit more productive every year. It takes a very long time to learn how to live in a place like this - as you well know - and you can't fast track that experience.
    Cheers. Chris

    1. Twitter is best avoided at all costs IMO. The MP making the comments has been in several newspaper articles regarding them. As for the people slating his warning - who knows?

      I think all that zombie money is already causing a lot of damage. Just look at the fracking industry in the US. Or the housing bubbles in the UK and Australia (which is making it unaffordable for normal people to buy their own houses).

      A great big financial crash might be painful for a lot of people, but it will be a lot worse if it doesn't happen soon. Having an orchard is the best bet!

  2. Hi Jason,
    You'll see AU$26.50 (just to be on the safe side of the promised PayPal fees etc.). Make sure you sign it before sending it too, with perhaps a cheery greeting? ;-)! I'll let you know how I enjoyed it, but it will take a month or two to get through it as the Conan book is truly massive and epic. Cheers. Chris

    1. Hi Chris - thanks!!! Did you see my other message???? I gave you the WRONG Paypal details :(( My correct Paypal email is

      I'll send it anyway, even if you have already sent the money to the other - mystery - Paypal.

      Enjoy Conan!

    2. Hi Jason. Oh no! Well, won't they get a surprise! No promises, but they hadn't accepted the payment yet - so I pressed the cancel button. All may not be lost yet. No promises though as I'm in unchartered waters. I'll let you know more as the events unfold!
      The lesson here is to rethink that second cider! Hehe! ;-)! Been there, done that! Hehe!
      The Conan stories make it very hard to put the book down.
      Cheers. Chris

    3. Oh cripes - silly me! Not so much a case of too much cider, but not having had my morning coffee when I wrote it. woodlander71 is the account name for something else - but I went and secured it as a Yahoo address as well late yesterday.

      So, not to worry - it has been cancelled (I got an email saying so). So, we can start again - this time with

      Thanks :)

      BTW I will have to read the Conan stories. I enjoyed the film when I was about 10.

    4. Looks like TSHTF Moment has arrived.

      Unfortunately, I shall be unable to report on the Doom on Friday since I will be anaethisized while getting my neck carved up, but hopefully the rest of the Doomers & Kollapsniks will pick up the slack.

      Hope to be back in the Doom Saddle on Sunday.

      Meanwhile, keep the faith and work for a Better Tomorrow. :)

      Save As Many As You Can.


    5. Good luck with the op - hope it all goes well. Looking forward to your return and tuning into the purported epic four-hour podcast with Nicole Foss et al.

    6. We could have gone 6 or even 8 if the Lightweights didn't crap out after Part 2. LOL.

      Nicole is the Energizer Bunny of Collapse. Flip the switch, and she just GOES! roflmaopimp.


  3. Get a couple of beers and you can join us in the marathon but better be prepared!

  4. Hi Jason,
    No stress mate, you should see the PayPal transfer today. All is good here as PayPal cancelled the original transfer (thankfully). I'm looking forward to reading your thoughts as you are an outstanding writer.
    Cheers. Chris

    1. Hi Chris - sorry for the delay in replying but I've been away in Denmark. I got the transfer - thanks - and will send the book to the address listed on the transaction.

      Thanks for the moral support! Much appreciated.

  5. Thanks Jason. It is hard to prepare and pull myself out of this surreal dream, especially when everyone around me thinks I am the delusional one.

    Dilemma. My youngest son won't be home from the US for another week, so I was very glad that financial collapse was 'postponed'. My eldest daughter has been working 2 jobs, 7 days a week to save up for a tour of Canada and the US. There is a 0% chance of me being able to talk her out of going. Being prepared alone provides absolutely no sense of comfort.

    1. Hi Judy - yes, that's a tough one. I don't regard international travel as dangerous yet (excluding the obvious places, of course) - but I do think there is a real risk of getting stuck in places if there's a financial whoopsie moment.

      I like to read the books of Dervla Murphy. Now there's a woman who knows how to travel. She set off from Ireland to India as a young woman, travelling by bicycle and packing a gun, which she used to shoot some wolves and rapists that attacked her. I'm not suggesting you put these ideas in the head of your daughter, of course :)

      This is no bad thing, imo. Maybe a new era of 'interesting' travel is upon us.

    2. I guess I am not really picturing Armageddon, and she is an experienced traveller. But at the beginning of July I tried to get some Euros for a trip to France and many of the local banks had run out because of the Greek credit controls. Everyone who already had holidays booked in Greece had taken all the Euros to cover their spending. In the end a quick whip round of friends who had leftover Euros tucked away, yielded enough for our needs.

      Multiplying that on a much larger scale or looking at how the controls affected the Greeks is very real and rather scary. Damian McBride seems to have left "Stock up on cash for the short-term" out of his tweets. Or maybe that would start a run on the banks so is considered irresponsible.

      Carrying the cash for a few months vacation is not really an option. Even if the flights aren't affected there is still plenty of travel required to get to the airports. There are so many links in the chain that need to be in place for her to make it home in the event of financial constraints.

    3. "Stock up on cash" - if only that were an option for most of us!

      But regarding your daughter and her plans the only advice I can offer is make sure she knows the contact details for the British consulates and embassies in North America. In my experience (elsewhere in the world) they tend to be helpful if you adopt a 'please help me' attitude - rather than demanding help. If she always carries enough cash for an emergency train/bus journey to one of those then that'll provide some security. I'm sure she's sensible enough, though.


I'll try to reply to comments as time permits.