« InBev To Drink Up Bud? | Main | Where’s the Beef »
Must Read: Buffett Says In For Long Recession
By JD Bluefield | May 25, 2008
I just read a great article on Warren Buffett yesterday. It basically says that you can call a recession when the technical definition occurs, but we’re already there whether you want to admit it or not. Here are the pertinent parts:
He said the United States was “already in recession” and added: “Perhaps not in the sense that economists would define it” with two consecutive quarters of negative growth.
“But the people are already feeling the effects,” said Buffett, the world’s richest man. “It will be deeper and last longer than many think.”
Buffett also renewed his criticism of derivatives trading. “It’s not right that hundreds of thousands of jobs are being eliminated, that entire industrial sectors in the real economy are being wiped out by financial bets even though the sectors are actually in good health.”
Click here for the full article.
The FDIC is also hinting at hard times: They are saying that there may be a record of banks failing in the near future, mostly due to credit derivitives and housing speculation. As you can see, with the Savings and Loans scandal of the 80’s, this may be the worst time in history for banks in 20 years.
Engineer Your Food And Finances: If you haven’t begun cutting your budget or planning for future hard times, now might be a good time to start. You also might want to look into storing food and buying in bulk. I wouldn’t plan for all out society breakdown and anarchy, but its always good to be prepared for short term bumps in supply and prices.
Engineer A Factor of Safety: If you’ve read Engineering Out Luck, you know I always like to give myself some buffer with money and stocks, but the same applies to food too. I’m always reminded of the Oct 2006 earthquake that knocked out all of Hawaii’s power for a full day. It may not sound like much, but within hours people were panicking and mobbing stores for food and water. By the following morning, all the power had been restored, but for the next week people continued to mob stores for food, water and supplies. I’m sure by now, this is just a forgotten memory and they’ve pretty much eaten through that safety net. If you keep a FoS on food, you’ll be doing what I did during that blackout. While all the insanity was going down, I was finishing off the beers before they got warm and barbecuing on my propane grill. Be prepared and you’ll never have to be the chicken without a head.
If you’re going to prepare ahead, in terms of food/water, insure you have enough for the number of people in your family. An active reader just sent me this link to Costco, that shows the different emergency food kits they offer. The most interesting is the $80, 275 serving bucket that lasts up to 20 years. Very neat. These buckets should always be the last resort, after the main food in the fridge has been used up.
Topics: Investing |
Comments
You must be logged in to post a comment.