Years ago, it'd be American gun nuts - the type that quotes Ruby Ridge and Waco as revealing the soul of government. They'd be researching the continental US to find rural areas safe from floods, earthquakes and tornadoes; they'd be building houses quickly and cheaply from straw bales (it works very well, apparently). Pioneering without the Apache has a superficial romantic attraction.
But there is a new Apache: your fellow man. In northeastern Ohio, a sheriff's department has suffered such severe budget cuts that it now has only one police car to cover an area twice the size of the British West Midlands. A judge has advised residents to arm themselves, to be careful and vigilant and make connections with their neighbours. (htp: John Lott)
In Australia, an investor education website has turned from advising us how to build a balanced portfolio, to considering what happens when complex societies collapse:
Marc Faber is recommending that investors have half of their investments exposed to Asia. That is a very useful advice for very high net worth people who have the money and connections to resettle. But for the rest, it is very important to have your own plan B if something happens in your local area...
Your entire country will not be likely to collapse overnight. But if you are unlucky, your local region can be the one that descend into chaos first. The hard question to ask is: do you trust that your government [...] will have the resources, and competence to cope with large-scale crisis? We are not talking about small-scale crisis that affects small communities- we are talking about a scale large enough to affect at least hundreds of thousands of people.
If you are going to plan for Plan B, then you will have to increase the margins in your life and acquire skills outside the area of your specialisation.
Here in the UK, the Fleet Street Letter (an investor publication established in 1938 and edited by Lord Rees-Mogg, formerly editor of the Times) is striking a dramatic note with its headline "The Great Financial Deception of 2010". The thesis of the latest edition is that:
- British government credit will be downgraded (leading to a very damaging rise in interest rates)
- The FTSE will halve within the next three months
- A consumer sea-change from reckless spending to saving/paying off debt will tip Britain into deep and prolonged recession
- Residential and commercial property will halve in value within the next 10 years
Our handkerchief of an urban lawn won't grow enough to support us, and I'm still debating what to do for the best if the worst looks like happening. But one thing is clear: forming and strengthening community links will be a vital part of our survival plan.