6 ms·

I don't even really understand how to hedge my bets anymore. It's not like there's an industry that will be left unaffected by the current economic climate and.

by Sileni 8y ago

I don't even really understand how to hedge my bets anymore. It's not like there's an industry that will be left unaffected by the current economic climate and... well, the climate. What exactly am I supposed to be working on/towards if the system itself seems broken? I'm down to "Hope the problems don't really precipitate in my lifetime, and don't have kids". I don't feel like that's a solution.

garmaine 8y ago
> What exactly am I supposed to be working on/towards if the system itself seems broken? Replacing the current system with something better.
- plussed_reader 8y ago
  Any tips for the death and despair in the interim as 'something better' comes online?
  - PebblesRox 8y ago
    If you want tips, I recommend the Granola Shotgun blog: https://granolashotgun.com/2018/05/08/the-mangiapocalypse/ https://granolashotgun.com/2018/05/08/the-mangiapocalypse/ https://granolashotgun.com/2018/07/08/little-experiments-on-the-cheap/ https://granolashotgun.com/2018/07/08/little-experiments-on-...
    - tjr225 8y ago
      That blog is great...it sheds a lot of light on how Americans are /really/ living these days. Thanks for sharing.
  - zanny 8y ago
    Its also a bit optimistic to think the death and despair will even lead to something better. Romes fall was the Churches rise, the poor beheaded the monarchy in France to replace them with Emperor Napoleon. I for one think that the systemic and intentional divisiveness separating peoples and pushing them to war with one another than their opressors will also spur any attempt at improvement in the aftermath of coming disasters. We won't unite for the better, we will tear ourselves apart with blame and ire.
  - garmaine 8y ago
    See a psychiatrist.
eigenvalue 8y ago
The best you can do while preserving purchasing power is to diversify across asset classes with a big weighting to US equities.
nostrademons 8y ago
The current system is actually quite resilient, because it has the built-in capacity for parts of it to fail without bringing down the whole thing. The situation you should really be afraid of is when everything is fine, you're the envy of the world, the Supreme Leader has your back, right up until there's gunfire in the streets, people are scrambling across the border, there's no food in the supermarkets, there's suddenly a bloody coup in the capital, and enterprising oligarches have pilfered the country's coffers. In practical terms, you should recognize that this feeling is fear and it is in fact a feeling, and you can choose to own it rather than let it own you. Stay away from the particular enterprises that everyone says are about to collapse, and double-down on whatever assets nobody is paying attention to. Life goes on, and people have to do something, so own the things that people will be interested in over the next few years. It's all a bubble, just do your best to ride it. There were a few asset classes that were clearly looming bubbles in 2008: housing, CDOs, most hedge funds, Web 2.0 startups. If you were invested in them at the beginning of the year you probably lost your shirt. Meanwhile, if you invested in Bitcoin or mobile or sharing economy startups in 2009, you're likely a millionaire several times over. Housing itself started to become an attractive investment once the crash was over in 2010, with many landlords making 10%+ returns annually since then.
- rsync 8y ago
  "The current system is actually quite resilient, because it has the built-in capacity for parts of it to fail without bringing down the whole thing." This is false. It is the hallmark of the current economic order that our systems are very efficient, very interconnected, and very fragile. I shouldn't care whether or not provincial Chinese governors are faking their economic reports or making bad loans - but of course, I do, since that could have a ripple effect that makes my business suffer. I shouldn't be fragile to that but I am. Making the system less fragile would require removing some of the interconnections and the efficiencies. Growth and returns would be lower, but failures would be localized and less "interesting".
  - gobengo 8y ago
    I actually think parent comment to yours was quite measured and appropriate. Did you fully grok it? > This is false. It is the hallmark of the current economic order that our systems are very efficient, very interconnected, and very fragile. What evidence do you have to support this? Even in 07 an index-weighted fund only took 3 years to recover. If you were 50% in bonds, 1 year to recover. OP was encouraging you to separate your fear from the evidence-backed likelihood that while you may lose a bit in deliveraging, there are also gains to be had in the 10-year term. If you're feeling that things are fragile right now, adjust your allocation to something more conservative, take a two week vacation, listen to some mindfulness podcasts to calm down, and then think through where it might make sense to put 10% of your bets on 10yr+ plays.
beat 8y ago
The system seems broken only because our brains and society are wired to think negatively. Life has gotten tremendously better for just about the entire world over the past two centuries. Here's a fun data point for you. From 1997 to 2017, the global extreme poverty rate (people living on less than $2/day) dropped from 29% to 9%. Two thirds of the people at the bottom got out of that bottom, in the past twenty years alone. That's amazing.
- quickben 8y ago
  It's is, but it still doesn't change the fact that venezuella sucks right now, not because of tremendous amazing progress, but math and movement of numbers people agreed on. So, while all is amazing, all can be very non amazing on the receiving end of the liquidity removal.
  - omegaworks 8y ago
    Venezuela "sucks right now" due to geopolitical egotism. We've turned them into a pariah on the global market, penalizing nations that dare trade with them with our own sanctions. Of course the Bolivar tanked. You can use a dollar to buy anything in the world. You can't use the bolivar to buy diddly squat.
    - lr4444lr 8y ago
      Oh, and it had nothing to do with Chavez nationalizing industrious sectors and covering for his failures with the unsustainable crude oil prices?
      - omegaworks 8y ago
        Was it the act of nationalizing the sectors that made them unproductive or the refusal of the US to trade with said sectors post-nationalization? We have a long, colorful history of punishing latin american nations for embracing redistributive social policies and decolonisation. Never forget: https://www.democracynow.org/2013/9/10/40_years_after_chiles_9_11 https://www.democracynow.org/2013/9/10/40_years_after_chiles...
doctorpangloss 8y ago
There will always be demand for food, for example. Land in good climates. Don’t even worry about the houses. Good education and shelter is pretty close, but not at all commodified or fungible. Real estate is complicated I guess.
ChuckMcM 8y ago
"Ammunition, cigarettes, and booze" that was the advice given to my great grandfather when he worried about losing everything in the depression. The more pragmatic advice however is to hedge in real transactional things, food production, logistics, real estate, and manufacturing, Etc. That part of the economy that operates on barter if it has to because people need these things to live.
- dillondoyle 8y ago
  I just bought some more 'vice' last week mostly because I have this fear, probably precipitated from Trump + a BUNCH of for sale signs popping up when I almost never saw an actual sign go up over the last 5 years. I assume I'm not the only one afraid although consumer confidence seems to be up as of August at least.
xiphias2 8y ago
The main hedges for the financial system breakdown are physical gold, silver and (my personal favourite, although much riskier) Bitcoin (though make sure you use a hardware wallet if you want to own it).

by Sileni 8y ago

garmaine 8y ago

> What exactly am I supposed to be working on/towards if the system itself seems broken? Replacing the current system with something better.

plussed_reader 8y ago
Any tips for the death and despair in the interim as 'something better' comes online?
- PebblesRox 8y ago
  If you want tips, I recommend the Granola Shotgun blog: https://granolashotgun.com/2018/05/08/the-mangiapocalypse/ https://granolashotgun.com/2018/05/08/the-mangiapocalypse/ https://granolashotgun.com/2018/07/08/little-experiments-on-the-cheap/ https://granolashotgun.com/2018/07/08/little-experiments-on-...
  - tjr225 8y ago
    That blog is great...it sheds a lot of light on how Americans are /really/ living these days. Thanks for sharing.
- zanny 8y ago
  Its also a bit optimistic to think the death and despair will even lead to something better. Romes fall was the Churches rise, the poor beheaded the monarchy in France to replace them with Emperor Napoleon. I for one think that the systemic and intentional divisiveness separating peoples and pushing them to war with one another than their opressors will also spur any attempt at improvement in the aftermath of coming disasters. We won't unite for the better, we will tear ourselves apart with blame and ire.
- garmaine 8y ago
  See a psychiatrist.

eigenvalue 8y ago

The best you can do while preserving purchasing power is to diversify across asset classes with a big weighting to US equities.

nostrademons 8y ago

The current system is actually quite resilient, because it has the built-in capacity for parts of it to fail without bringing down the whole thing. The situation you should really be afraid of is when everything is fine, you're the envy of the world, the Supreme Leader has your back, right up until there's gunfire in the streets, people are scrambling across the border, there's no food in the supermarkets, there's suddenly a bloody coup in the capital, and enterprising oligarches have pilfered the country's coffers. In practical terms, you should recognize that this feeling is fear and it is in fact a feeling, and you can choose to own it rather than let it own you. Stay away from the particular enterprises that everyone says are about to collapse, and double-down on whatever assets nobody is paying attention to. Life goes on, and people have to do something, so own the things that people will be interested in over the next few years. It's all a bubble, just do your best to ride it. There were a few asset classes that were clearly looming bubbles in 2008: housing, CDOs, most hedge funds, Web 2.0 startups. If you were invested in them at the beginning of the year you probably lost your shirt. Meanwhile, if you invested in Bitcoin or mobile or sharing economy startups in 2009, you're likely a millionaire several times over. Housing itself started to become an attractive investment once the crash was over in 2010, with many landlords making 10%+ returns annually since then.

rsync 8y ago
"The current system is actually quite resilient, because it has the built-in capacity for parts of it to fail without bringing down the whole thing." This is false. It is the hallmark of the current economic order that our systems are very efficient, very interconnected, and very fragile. I shouldn't care whether or not provincial Chinese governors are faking their economic reports or making bad loans - but of course, I do, since that could have a ripple effect that makes my business suffer. I shouldn't be fragile to that but I am. Making the system less fragile would require removing some of the interconnections and the efficiencies. Growth and returns would be lower, but failures would be localized and less "interesting".
- gobengo 8y ago
  I actually think parent comment to yours was quite measured and appropriate. Did you fully grok it? > This is false. It is the hallmark of the current economic order that our systems are very efficient, very interconnected, and very fragile. What evidence do you have to support this? Even in 07 an index-weighted fund only took 3 years to recover. If you were 50% in bonds, 1 year to recover. OP was encouraging you to separate your fear from the evidence-backed likelihood that while you may lose a bit in deliveraging, there are also gains to be had in the 10-year term. If you're feeling that things are fragile right now, adjust your allocation to something more conservative, take a two week vacation, listen to some mindfulness podcasts to calm down, and then think through where it might make sense to put 10% of your bets on 10yr+ plays.

beat 8y ago

The system seems broken only because our brains and society are wired to think negatively. Life has gotten tremendously better for just about the entire world over the past two centuries. Here's a fun data point for you. From 1997 to 2017, the global extreme poverty rate (people living on less than $2/day) dropped from 29% to 9%. Two thirds of the people at the bottom got out of that bottom, in the past twenty years alone. That's amazing.

quickben 8y ago
It's is, but it still doesn't change the fact that venezuella sucks right now, not because of tremendous amazing progress, but math and movement of numbers people agreed on. So, while all is amazing, all can be very non amazing on the receiving end of the liquidity removal.
- omegaworks 8y ago
  Venezuela "sucks right now" due to geopolitical egotism. We've turned them into a pariah on the global market, penalizing nations that dare trade with them with our own sanctions. Of course the Bolivar tanked. You can use a dollar to buy anything in the world. You can't use the bolivar to buy diddly squat.
  - lr4444lr 8y ago
    Oh, and it had nothing to do with Chavez nationalizing industrious sectors and covering for his failures with the unsustainable crude oil prices?
    - omegaworks 8y ago
      Was it the act of nationalizing the sectors that made them unproductive or the refusal of the US to trade with said sectors post-nationalization? We have a long, colorful history of punishing latin american nations for embracing redistributive social policies and decolonisation. Never forget: https://www.democracynow.org/2013/9/10/40_years_after_chiles_9_11 https://www.democracynow.org/2013/9/10/40_years_after_chiles...

doctorpangloss 8y ago

There will always be demand for food, for example. Land in good climates. Don’t even worry about the houses. Good education and shelter is pretty close, but not at all commodified or fungible. Real estate is complicated I guess.

ChuckMcM 8y ago

"Ammunition, cigarettes, and booze" that was the advice given to my great grandfather when he worried about losing everything in the depression. The more pragmatic advice however is to hedge in real transactional things, food production, logistics, real estate, and manufacturing, Etc. That part of the economy that operates on barter if it has to because people need these things to live.

dillondoyle 8y ago
I just bought some more 'vice' last week mostly because I have this fear, probably precipitated from Trump + a BUNCH of for sale signs popping up when I almost never saw an actual sign go up over the last 5 years. I assume I'm not the only one afraid although consumer confidence seems to be up as of August at least.

xiphias2 8y ago

The main hedges for the financial system breakdown are physical gold, silver and (my personal favourite, although much riskier) Bitcoin (though make sure you use a hardware wallet if you want to own it).