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any advice for preparing for economic hard times?
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Oh, you're referring to investments being cheap? ... wouldn't that mean that I wouldn't need a lot of money to start?
Sorry to be so confusing, but what I meant by investing was more like... selling the "investment" of the massive piles of toys I have. They're not really an investment, since they'd be a bad one, but they would be an investment if I sold them. :> and then buying them back when everyone realizes luxury items like toys are worthless.
Worst case scenario: the market stays stable, some of them go up in value, and I have to spend more to get them back if I wanted all of them. (which I probably don't because I have way too many.)
I know my mom would encourage me to sell most of my toys. not JUST because most of them are taking up most of a room in her basement which is about 1/3rd of her basement, although I'm sure that factors into it.
It's just a re-evaluation... I've been going through it lately, but I haven't actually applied it directly to my collection. It's always been "oh yeah, I'll buy less" rather than "I'll sell off more".
I had to look up secured and unsecured debt. I don't have any debt right now. I have no education and no land.
I was going to ask something, but nevermind. I suppose when I can handle full-time classes, I'll be much closer to being able to support myself financially. (my mom managed to get two educations (only one degree though) without going into debt, so it's just a matter of working and reducing expenses.)
Even if you put a percentage of your savings in gold & silver?
What about learning ahead of time instead of during a disaster how to eat with less? and uh... things like sewing to fix your clothing? It's much easier to do that when there's less at risk from failure.
Well, thank you for taking me seriously despite my confusion on some things.
I suspected hyperinflation didn't have anything to do with the last great depression, but I was worried it might be combined with the current one the way things are looking. and hyperinflation is just as bad, isn't it? Hard to buy food when your money is worthless. I suppose I should learn a little something about that.
I guess I was right about debt still being worse off even in a depression, since people got their houses and possessions taken. (oh... I don't think I said that here. yeah I was totally thinking that though. no really.
Thank you for setting me straight on debt during a depression though. I wasn't looking for an excuse to get into debt, but I was despairing that there was any point in having a budget and saving.
Also good to know that Canada at least isn't on the road to hyperinflation like the USA is.
Confidence also won't stop a speeding train from hurtling off a cliff. (then again, if you're a passenger, panicking isn't going to help you or anyone else. you may get in the way of someone trying to help. and if they do manage to divert the train and you've since jumped out, well now you're on foot. but that depends on the odds. even if they had good odds and failed, it was safer bet to walk than to die. you know, assuming it isn't the desert you jumped out into, with no supplies and it's too far to the next town. and now my analogy is a runaway train. ooh! there's another one!)
I would like to hear more about economics from someone who knows what they're talking about, if you ever get the time. (I mean, I have more interest in other topics like soil cycles, thermodynamics, and psychology, but I'm not adverse to understanding economics.)
Also, my boyfriend's mother who keep worrying about "aaaaah recession this, recession that" has reminded us that we lived trough a big recession already. See? we survived! Odds are you probably didn't even realise. Of course now you have to work but if you manage your money well, you'll also be able to tell your kid you survived the great 2009 recession. And I'm pretty sure now is the worst time to sell pretty much anything. Including toys.
Trust me, confidence is EVERYTHING in a depression environment. Confidence affects stock prices and a lack thereof leads to the dreaded loss of faith in banking (the stupidity of a lot of firms has not helped this).
Also, avoid gold and silver. Their value fluctuations make ForEx values look stable. If you really want to get into the commodities market, natural gas and I think soybeans are trending well. If everything DOES go to hell and we're stuck in Mad Max land, gold and silver aren't that great in a subsistence barter economy anyway.
Also, US bond prices are on the rise, as a trend. I'm not sure if they've capped out, but the 30y bond has one up dramatically in the past year. It probably will continue as the fed tries to fight inflation. (I imagine the same thing would be true for your home country). Buy Canadian bonds and help the land of maple leaves stave off inflation.
Also, you won't see massive hyperinflation. You just won't, so don't plan for it. Hyperinflationary tactics (they're always dumb, don't think this is any sort of approval) can only be effective in an economy where the velocity of money is slow (postwar Germany, Bolivia etc.) . In a fast economy, the market will adjust almost instantly and nothing changes.
If you really want sound advice for your paranoia here it is. Reduce your daily consumption. Invest in durable goods (they are technically a form of investment) such as appliances. Save anything left over. Economize but don't stop spending, merely reprioritized. As the pillar of manly prowess Robothero stated, it's a buyer's market. Cars are a depreciating asset so now may not be the best time to upgrade. Also, avoid a plasma TV as they make your power bill skyrocket. If things really go to shit, power will still probably be in reasonable supply (but if you must, buy a cheap generator), but higher technology may be less available due to sunspot theory and trust me, you want a fridge.
EDIT: And God fucking damn it, the US economy, government and society are so much better positioned to handle a massive recession than they were during the great depression that the difference is nearly unfathomable. Frankly, the change is reasonably unnoticeable unless you are looking for it or really reading the news.
Also, large public debt has been a staple of governmental affairs since a fellow student of my alma mater came up with it (Hamilton lolz). Don't worry about it, the only reason we can even remotely enjoy our societies is arguably a result of the process.
The truth of the matter is most people can't comprehend the complexity of global finance. When they try, they always panic and wonder how the system will continue to function. This probably sounds incredibly condescending, but if that's the case, then so be it. Things are much more resilient now than they appear. Keep in mind that many people who make loud claims regarding a recession get money by doing so as people love sensationalism.
EDIT two: your savings plan is reasonably sound. Social services tend to be increased during depressions, not the other way around. For proof of that, take a look at US History circa the hundred days.
So uh... can anyone make any predictions on how this would effect prices of electronics, and secondary market toy prices? :> I want to know whether I can expect any deals on toys, and whether I should delay further the time it would take me to save up for a laptop. I have a feeling there's no big bubble for used toys like there is on other stuff that's dropped in price. :S
Oh, BTW, I had a tiny little $100 Canadian savings bond for the longest time. They extended the maturation date a couple times, but I needed the cash to pay off my debt. I had it for 15 years and it only doubled in that time. I thought they were supposed to double ever 10 years, not 15. That's disappointing.
Chill bro. Everything will be fine
Electronics and secondary market items will generally tend towards a decrease in value, however true collector items are fairly immune to price fluctuations, as the people who have them value them much more highly than other items (like cars) and generally will not sell them in a down market.
Treasury Bonds generally have an extremely low coupon (ie interest rate). However, you know exactly how much you get paid before even buying it because all bonds list maturity and coupon rate. Unless a bond defaults (part of the reason we are in this mess is due to defaulting bonds), you generally know when the bond matures and how much money you will make over that period - that is one of the reasons why bonds are less aggressive than stocks (there are, of course, many others as well).
Okay, while the rest of the stuff is sound economics, I just have to jump in on this.
1. Plasmas get a bad rep because no one bothers to take them out of factory "Torch Mode". A calibrated set will use much less power.
2. Technology has gotten more efficient - while plasmas used to be a good 100-150W over a similarly sized LCD, they're at the point now of being within 50W or less.
3. Finally, if you have to worry about the difference in cost of powering an LCD vs Plasma vs RPTV vs whatever, and the extra $5 a month will break your budget, you probably shouldn't be buying a fucking HDTV, because you're poor, Kenny.
[tiny]also, shitty toppage is shitty[/tiny]
Can trade TF2 items or whatever else you're interested in. PM me.
You sell them and invest the money into a monetary driver such as a mutual fund, money market, CD, whatever.
I don't think any 1st world country is on the road to hyperinflation. Hyperinflation is the byproduct of a failed belief that the government could reduce it's own massive debts by printing money to pay off the debt. Imagine that the US decided, hey, we're 8 trillion in debt lets print an 8 trillion dollar bill and give it to our creditors. Job done right?
Of course not, the creditors then try to take that money and convert it into foreign currency, or buy goods with it. This causes a collapse in the value of the currency and means that the wages people recieve and the taxes people pay aren't worth so much. The government has fixed foreign expenditure in real value, so it runs up more debt, and prints more money and soon noone has any faith in the currency and it collapses.
Every economist now knows you cannot print money to pay a debt. The world can only have inflation caused by an increased scarcity of goods, and since demand falls in a recession we are more likely to see deflation than inflation in a depression. This means that if you are truly worried about a major recession then you need to avoid debt, especially unsecured debt.
I'd also state that toys are not an investment. You should view money spent on them as money spent on a perishable, as in you won't get it back, especially in tough economic times. If you do truly want to try and make money on them you should itemize them carefully, then store them carefully in boxes and not look at them till the height of a boom. Then you may recoup a good fraction of the money you spent, or make a small profit if you have purchased something which has become collectible.
Does it work as long as most people are convinced things are fine?
tl;dr: I know toys aren't an investment.
... I don't get it. The first paragraph reads like you weren't reading what I was saying. The second short paragraph seems to suggest otherwise, unless you just happened to be echoing what I had said without reading it. Here's what I said: (notice the first time I said "investing" in quotes, and then clarified why it wasn't literal use of the word.
God damnit, I know!!! Does no one pay attention here??
I've spent years and thousands of dollars, and I realize that these in general depreciate in value.
I read an American book on investing... (which was fine for general advice on saving, but not so good on specific advice on investing, since the Canadian system differs) something like "The only book you'll ever need on investing". It said that the stock market was pure luck, and that antiques were generally a poor investment unless perhaps you were already an expert in them. I know enough about the particular brand of toys I buy to know at least in the short-term which ones are more likely to be the exceptions to depreciating, but it IS gambling, and the risks are all estimated. There are very few things I can predict with much certainty.
Bailouts aren't real money. They are diversified loans given directly from the government that allow a company to inject real money into troubled assets, and repay the government with the dividends and income from said assets. This also gives the government a direct stake in the company allowing them to adjust and maintain certain sanctions and requirements to keep them from fucking up again.
Manics, Panics and Crashes
Anatomy of the Bear
A Monetary History of the United States <-- fucking awesome book
Enough. (Just finished reading this for work. Anything by Bogle is awesome)
any How-To book for dummies is a joke. And when you are done with those books you can go here.
This isn't entirely true. Partially, but not entirely.
The rise and fall of individual stocks is so unpredictable to casual investors that it might as well be pure luck. Professional analysts who do nothing but sit all day and analyze company reports have trouble accurately predicting individual stock values.
However, the rise and fall of industries and of the market as a whole are not luck. They are much more predictable. That's why reputable books and sites will advise you to invest in mutual funds - by compiling different stocks from an industry or the entire market together, the fall of one stock is absorbed by the rise of another.
the "no true scotch man" fallacy.