“You must have chaos within you to give birth to a dancing star.”Friedrich Nietzsche
The world is currently in a state of chaos.
The political climate has taken a dangerous step backwards. The media chooses spread lies rather than cover actual news. Reports of wildfires, flooding, hurricanes and other weird weather phenomenon is being reported all over social media.
The central banks are in the process of crashing the economies on all continents around the planet. Supply chain disruptions only serve to add to our problems.
Add in a health crisis with dubious information surrounding the whole mess, and you already know that we’re not even close to being “in the clear” for a long time. Chaos is here and its here to stay.
What to do in such circumstances? And how to possibly even profit from it? These are the kind of questions I’ll try and answer in this article.
Learning From History
“In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.”Friedrich Nietzsche
What we are currently living through is the end of an empire; the end of an era.
This is hardly the first time in history when something like this has happened. Which is why we also have have plenty of examples of empires rising and falling.
The estimated median age of an empire until it collapses is roughly 250 years according to Sir John Glubb’s research. Examples of empires:
Which country is the current, de facto leader of the world aka the head of the empire? America.
America declared its independence on July 4th, 1776. In 2021, it has been 245 years since the birth of the American empire. This simply means that we’ve reached the point in history where the baton of power is about to be handed to someone else.
What are the signs of a collapsing empire? Is a good question that everyone should study further on their own. Study and learn from history.
That being said, the collapse invariably looks more or less the same each time, and it happens in stages (using targetofopportunity.com as the source):
Stage 1: The Decay
The peak of prosperity has been reached. The economy is doing well and the standard of living is high. Goods and services are abundant and available. Life is good. It’s all rainbows and sunshine.
However, it is also at this point where the idea of redistribution of wealth policies get implemented, as the government thinks wealth of the nation belongs to everyone equally. Fairness and equality are promoted and policies supporting these ideas are put in place. Wealth gets taken from the have’s to the have-nots (or from the productive to the unproductive) and this will slowly, but surely decrease productivity and increase the dependency on the government and welfare programs.
This is also when immigrants from other countries flood into the wealthy country due to the generous handouts and higher standard of living (from their point of view).
Stage 2: Decline hastens
The economy starts slowing down and the quality of life declines. Many are now unemployed and receiving benefits from the government as they are paid not to work. Government spending is expanding at an ever more increasing pace.
Stage 3: The noose tightens
The collapse of the economy is now on its way after a prolonged decline in productivity. The government implements price controls to control the shortages of food and other essential goods. Evictions and homelessness are now a clearly visible problem.
At this point the government will continue their money printing crusade. They have bills to pay and benefits to hand out. This will, however, only make the situation worse.
Uprisings and violent gangs start appearing on the streets. Infrastructure in general starts failing. The whole system begins to fall apart.
This is also the point where the government will try and confiscate weapons from its citizens for “their own good.”
Stage 4: The end is near
You can tell that the country is in the stage 4 of the collapse when most of the middle class has lost most of everything that they used to own. No house, no belongings.
The government will try and restrict any kind of ‘unnecessary’ movement inside the country, and they will also attempt to stop people from moving themselves (or their assets) to other countries. The exchange of currencies is halted in order to control the economy.
The shelves in the stores get emptied as soon as they’re filled. Food and other essentials are being rationed. Forget about healthcare.
Chaos is brought into the society. Violence; rape, robberies and murder are now an every day occurrence. The only law that exists is the law of the nature; survival of the fittest.
Stage 5: What? There’s a stage 5?
The government implements martial law and a war breaks out between the civilians and the government. The country is stricken with severe poverty and starvation.
The government starts rationing low quality lodging, food and water to its citizens.
There’s no more room for democracy. Socialist form of government takes over and a totalitarian state is formed. They promise to fix all of the problems in the society for a little bit of safety and stability.
There are no more freedom or liberties of any kind in the society; it is now controlled by the big brother more than ever before, and it’ll get worse.
This continues until “the system” finally implodes.
America is the prime “beneficiary” in the decline, and they’re rapidly moving towards stage 3 and 4 of the collapse. That being said, this time the collapse will also happen to some degree all around the world, not just in the US.
Understanding which stage of the collapse your country’s in is quite important when you’re making a plan for yourself. A plan for stage 1 will not work for stages 4 or 5, for example.
Due to globalism the world economy is more interconnected than ever before. Trade is global, and therefore the economic trouble in any given country affect the entire supply chain. No country is completely safe, but there are some that are in better position than others.
What we do know for sure is that chaos is coming. I’m not certain it will go through all the stages of collapse in each and every country, but one should prepare for tougher times ahead.
But of course, we don’t want to just survive what’s coming; we want to thrive and prosper if possible!
Let’s dig deeper.
Health Is Wealth
“A fit, healthy body—that is the best fashion statement”Jess C Scott
Wealth means nothing if you haven’t got health. You need to be able to enjoy the fruits of your labour with your physical body intact.
Having a healthy body is the lynchpin of everything that’s essential. If your body is in poor shape, it will invariably show up elsewhere in your daily life. If walking up the stairs is causing you to lose your breath, you should be concerned.
If we’re about to enter tough times, it is prudent to spend some time thinking about and getting in shape. It will help you before, during and after the collapse. Also, getting in shape after everything around you is already smouldering to bits is not something you want to be doing.
Having had both an unhealthy and a fit body, I can tell you that most people have the capability to get in shape. It really isn’t all that difficult. All it takes is determination and some basic knowledge about health.
To get a healthy body you need to spend time doing activities such as walking, running or possibly getting on a bicycle. Bodyweight training is also an excellent way to stay in shape. Combine these two exercises, do it for 30 minutes to an hour every day, you’re already on your way to getting a healthier body.
In order to get strong and to get a six pack, if that is your goal, you more than likely need to spend more time lifting weights and considering what you eat. Getting a six pack is more about what you put in your body rather than your exercise routine.
You already know what a healthy meal looks like as it is not a secret to anyone. Try and move towards a healthier diet if you haven’t already. You can replace your snacks with healthier options such as nuts, fruits and vegetables. Fasting and intermitted fasting are also a fantastic way to lose weight.
Your body also needs certain vitamins to function properly. Vitamins C and D in particular are super useful, and especially so in colder climates. I’ll also mention zinc, iron, magnesium and iodine. Stock up on supplements if you haven’t already done so.
This will get you started on your way towards a healthier body. It is recommended you get started with this sooner rather than later. Preferably today.
But its not just your body that requires your attention. You need to also take care of your mind.
Knowledge Is Power
He who has health, has hope; and he who has hope, has everything.Thomas Carlyle
We all know the famous saying, “knowledge is power,” but what does it actually mean?
All kinds of information can be considered knowledge. There are people who are extremely knowledgeable about very specific topics. Take for example a rock climbing instructor who may know everything there is to know about rock climbing, the courses, the locations and the gear you may need in different occasions. This is specialized knowledge.
There’s also generalized knowledge. A person might have read about certain topics more broadly, but have little knowledge of how things work in detail.
This gives a good understanding of knowledge: anything can be considered knowledge. It depends on the knowledge itself whether it ends up being power or not.
So, the saying is actually wrong. It should be “certain kind of knowledge is power.”
See, whatever you spend your time doing and researching, however mundane it may be, ends up being knowledge that you possess.
Gardeners know a lot about gardening. Woodcutters and cut the tree just right. Stock market analysts can tell you what the charts say and where they might be headed.
But what happens to someone who consumes knowledge about topics that are just plain pointless or just wrong in the first place? They, too, end up becoming specialists in whatever they’ve been researching.
Spending time on social media liking photos and watching videos of cats? I guess you’re a cat photo and video expert then. Not a whole lot of power can be gained through that knowledge. You should guard your mind.
The reason why I’m able to write these long blog posts about rather complex topics like macro economics and history is because I have a lot of general and specific knowledge on these topics. I’ve read hundreds of books on the topic and spent thousands of hours researching the topics further.
With enough knowledge you’ll be able to read through the lies politicians and media spew out on a constant basis and have a laugh about it. The more your knowledge (especially knowledge related to history) expands, the more you’ll be able to predict what’s to come in the future. History doesn’t necessarily repeat itself, but it certainly rhymes.
How does this information help you? You need to be aware of the fact that the type of knowledge you consume matters, and it matters a lot. If you spend too much time on social media and you are doing it without some kind of goal in mind, I’m sorry, it is a waste of your time. Mainstream news? Cancer to your soul and mind, and listening to them is potentially lethal. TV series? You should be extremely picky about what you spend your time watching and listening.
I’d say the vast majority of media (~98%) is not useful to you in any way. The problem is, of course, trying to find sources of information that actually are worth your time. Aldous Huxley predicted our current events in his 1958 interview:
All of that being said, (social) media is a tool. Like any tool, you need to know how to use it effectively, or the tool will end up using you.
I’ve spent a tremendous amount of time looking for great sources of information. I can point you toward a certain direction, but I can’t guarantee it’ll work for you. You should try and look for many opposing points of view and come to conclusions about your habitat by yourself with the data you’ve gathered.
Reading books is a great source of information, but you need to read a lot to get something out of it. Not all books are created equal. I recommend audiobooks at double (x2) speed for efficiency.
Other sources: Zerohedge has good information in there, and is one of the best sources online. Brighteon is a decent source. Bitchute is okay, but it also has a lot of nonsense in there. Telegram is also worth mentioning. Youtube is overall quite bad (a by-product of too many users), but it has good videos in there if you know where to look.
I personally try and give you relevant information. I may not be successful all the time, but at least I can give you plenty of sources I deem noteworthy.
Even if the source is “better than the alternative,” it doesn’t mean it’s all good. You need to sift through it yourself. Over a longer period of time you will come to conclusions what sources are worth your while and which ones aren’t. Information gathering and “googling things up” is also a skill if you haven’t noticed.
What kind of knowledge is needed right now? Specialists of any kind are always needed. You might already be a specialist in your own field, so keep up with that knowledge.
Other than that topics around survival and economics/finance are currently quite important. Some would say knowledge about health is important, but I’m personally not an expert on the topic. I know what works for me and I’ll stick to it.
Right now the world is moving forward at a rapid rate and you should try and keep up with current information as much as possible. If the information comes from a trusted source, it may end up being valuable to you – as in it may end up saving your life.
With all that talk about knowledge it’s also important to take care of your mind. Take a break every now and then. Relax and do something that you find enjoyable without all the distractions. Remember to meditate or pray. Go for those walks in the nature. If you must, schedule breaks into your day.
With that we’ve covered all our tracks. Let’s figure out how to profit from all of the madness.
The Inflation King
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”Warren Buffett
I’m not qualified to give you financial advise. It all depends on the circumstances of the individual in question. Investing in anything always carries a risk with it. There is no such thing as a “risk free” trade, but luck does, indeed, benefit the brave.
What I can give you is general information around the topic. Let’s start with some questions.
Has something similar to our current situation happened in the past?
How people reacted to the situation?
Did anyone manage to benefit from the circumstances?
Our current problem is a massive debt bubble:
The debt will never be paid. Previous times in history the countries that have faced this problem have always chosen to inflate their way out of debt by printing massive amounts of currency, making it essentially worthless in the process. The difference is that this time the debt issue is global, and all countries will face consequences from this bubble bursting.
Inflation is a tax on the poor. When currency gets printed in large amounts, it also erodes the purchasing power of said currency units. This process causes assets (such as stocks and a house) to go up in price in relation to the currency units in the economy. Over time it gets more difficult to “escape the rat race,” as salaries do not keep up with the inflation. Getting rich, buying a house or even feeding oneself becomes more of a burden to each individual who doesn’t already own assets.
Especially people considered to be in the middleclass will be hurt by the upcoming events. Previous times in history when the debt bubble popped the middle class became the new poor. You don’t want to end up in this group.
Inflation is not the only problem. You see, governments have obligations to pay in order to keep their voters happy. They made promises about welfare benefits to the poor and other special interest groups. They also need to pay down that debt. It’s a double whammy for them, which means it’s double the problem for you too. This simply means that taxes will also go up. As an example, Biden’s new tax plan includes taxing the rich in New York by nearly 62%.
“Tax the rich, yeah!,” I can already hear the chants. However, what many seem to forget that the taxman is coming for you too sooner or later. The rich own assets, and taxing said assets is more difficult than taxing the salary of an individual. You can also expect taxes on goods and services to go up. Of course, one must pay the rent as well – which is also going up.
The gist is that your purchasing power is about to go down, hard. Most people are unaware of this problem. You aren’t. You should probably do something with this information.
What can one do?
Do you know the story of “the inflation king” of Germany, Hugo Stinnes?
In the 1920’s Germany faced similar problems with inflation. Their central bank started printing currency and this destroyed their economy in a short few years.
This actually was one of causes for the rise of Hitler. He promised to get rid of the greedy banking cartel that was prevalent in Germany. He was successful in this attempt and the economy prospered for a little while, until he decided to go to war with the rest of the world. The rest is, so to say, history.
Speaking of history, usually after an economic collapse, a strong man (usually with military background) has risen to power soon after or during the collapse. This doesn’t necessarily bide well for your country if your goal is peace. Another thing to look out for.
Anyway, let’s continue our inflation story. Hugo Stinnes (born in 1870) was a German industrialist who became the richest man in Germany during the time of Weimar hyperinflation in the early 1920’s.
Mr. Stinnes came from a family that owned a coal mining plant, so he had some wealth to begin with.
Thanks to his education and understanding of current events, he could see what was about to happen due to the currency printing by the German central bankers. He started borrowing large sums of German marks, which he then used to buy hard assets and companies with said hard assets.
In a couple of years, his assets started going up in value in relation to the paper marks. As his assets rose up in value, he was able to pay back his debt in now worthless paper marks, while simultaneously getting richer and richer in the process. By the end of 1923 he was the richest man in Germany due to his smart allocation of resources.
Hugo Stinnes was, however, unable to enjoy his riches for long. He died in 1924 due to a failed gall bladder operation (talk about health = wealth). At the time of his death, his financial empire consisted of 4500 companies and 3000 manufacturing plants. All of it collapsed within a year after his death.
“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did. So throw off the bowlines, sail away from the safe harbor, catch the trade winds in your sails. Explore. Dream. Discover.”Mark Twain
The world economy is currently in a similar state Weimar Germany was in 1920’s. Debt’s can not be repaid and currency printing must continue. The major difference is that this time around its going to be global rather than focused around just one country. The situation brings with it many known and unknown risks. But where there are risks, there is also opportunity.
What are the current risks?
Understanding what the risks and the most pressing issues of our time are is the key to profiting from what is to come.
I like to believe you already understand that inflation is coming our way, and you should start preparing yourself for that reality. But this is not the only issue we face.
Whatever is currently happening around the world is truly bizarre. Countries have been in lockdown mode for nearly two years now. Weather hasn’t been what it once was. Economies are in brink of destruction. Supply chains are cratering. Healthcare and school systems are suffering. Unemployment remains high, despite the fact that record number of companies claim to be looking for workers.
I can’t tell you exactly what is going on, but something is off. It will eventually lead to a reset of some sort.
Yet, while nothing makes sense, everything makes sense if you think about it from a certain point of view. The point of view of a central planner who wants to “own it all.” The question then stands: what if all that we’re currently experiencing was (more or less) planned from the very beginning?
If that is the case, then we’re truly in trouble and it will be difficult to profit from all of this. That being said, we will try our best, what ever the case may end up being.
Another theory it all may have been planned:
The risks we’re facing are abundant and they are everywhere. Doing nothing is also a choice you can make, but it will probably lead you nowhere, and possibly lead you down a path you really don’t want to take at this time.
No matter what you choose to do or not do will bring with it a certain degree of risk. This is both the worst and the best time to start taking calculated risks.
What are hard assets?
According to investopedia, hard assets are:
- A hard asset is a tangible or physical item or resource that an individual or company owns.
- Often, the value of hard assets moves in the opposite direction of the value of soft assets, creating a buffer against losses.
- Hard assets can be long-term assets, such as machinery or short-term assets, such as raw materials or inventory.
Hard assets are basically assets you can not easily print into existence.
- Gold / Silver
- Food & Water
- Commodities in general
There’s also a new type of hard asset we need to take into account: crypto currencies.
There are basically two ways of owning hard assets: either own companies (a company of your own, or stocks) or have said assets in your own possessions. I recommend you consider both options.
The current risks related to owning assets are the vast. Here’s one of the more recent risks that popped up:
I won’t go much into this topic in particular, but what you need to know is that companies connected to real estate all around the world are in dire straits. In 2008 we had a similar problem, and it resulted in one of the greatest financial market melt downs in recent history. It’s good to keep this in mind.
But considering everything else in the economy is also messed up, perhaps nothing will happen to the markets. Perhaps we’ll keep reaching new all time highs day after day after day.
At the end of the day, it really doesn’t matter what happens in the markets. We all know where we are headed – towards shortages and higher prices. This will be the case even if there are hiccups along the way.
Trying to time the market is foolish. Most simply can’t do it. Usually time in the market beats timing the market. So, perhaps it would be prudent to start “dollar cost averaging” your way into hard assets of your choosing. I recommend gold and silver in particular, but things like oil, copper and even uranium seem like good choices.
It really is quite difficult for me to find bad places to park your currencies if you just keep in mind that inflation is coming and hard assets will benefit from it. However, you will need to do your own research on this topic and find what works best for you. (Well, there is one bad place, and it is in your bank account.)
Personally, I recommend having both physical and digital assets + stocks. Being diversified is in your best interest at this time.
What I can’t recommend is doing what Mr. Stinnes did: borrow a bunch of currency to make purchases. Debt is the last thing you want to own in this uncertain environment. Slow and steady, the turtle wins the race.
With the investing part out of the way, let’s mention a couple more ideas.
During times of economic turmoil, it is quite common to see double digit unemployment numbers. I wouldn’t be at all surprised to hear that we’ll reach 30% or higher unemployment.
This means the following: you may find it difficult to find or keep a job. Forget about such stability.
The best thing to do in such a case is to either find a company that simply can’t fire you for whatever reason, or create a company of your own.
But I’ve got an even better idea: Why not try and do both?
Having a job and a side gig business has been a great way to build wealth in the past, but in the future it might become a necessity. Having a company also allows you to transact and own assets under the company name, which in itself may be quite a useful function. I’d at least consider this option.
Another idea is related around your health.
I already mentioned that your health = wealth, something that is not a new idea. However, you also need to think about this further. Your surroundings matter when your health is concerned.
In previous times in history when economies have gone down, it has also brought with it large amounts of instability within larger cities. Moving to a less crowded area might be in your best interest and you should take it into serious consideration.
Mobility is also something you might want to keep in mind.
If the world starts falling apart around you all of a sudden, do you have a place where you can go? Or can you just pack up your bag(s) and leave? At the very least you should try and keep your options as open as possible.
“The dangers of life are infinite, and among them is safety.”Goethe
This article should have given you more than enough of a heads up for what’s to come. You should also now be better prepared to profit from the coming chaos.
When it comes to investing, nothing is set in stone. There’s no way to guarantee something will or wont work. Ultimately, it is up to you to make the decision to make a move or not – and it’s also you who accepts the risks involved. Doing nothing carries a risk, and doing something (anything) carries a whole another kind of risk.
What you should keep in mind that what we’re living through now is just history repeating itself. The bad times won’t last, but you most certainly don’t want to start from zero once we’re through all of what’s about to happen. With the right steps, you might even find yourself in a much better place than ever before.
It is ultimately your attitude towards life what determines how well you’re going to make it through all of this. If you want to prosper, you should aim to maximize your freedom – even at the cost of safety.
I hope this helps. Good luck out there.