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If the global financial system is increasingly and fatally unstable, what should an average investor do? Whenever the word “if” appears, it implies that there is a corresponding “if not” proposition and the possibility of an “if other” proposition.

The first thing to do is make some assessment as to whether you personally believe the global financial system is fatally unstable. If you think the system is stable or will soon stabilize, then you need read no further – just keep following whatever investment strategy has worked for you in the past.

No one knows what the future holds so no one can help you in this highly personal assessment. Remember YoYo – You're on Your own. Always remember YoYo.

My own personal assessment leads me to believe that the global financial system is increasingly and fatally unstable. This conclusion was the result of about four years of serious thought and study. It isn't some sudden revelation.

Charles Hugh Smith summarizes my thinking more succinctly than I can, so I will quote his book, “An Unconventional Guide to Investing in Troubled Times”:

“The Status Quo advice of diversifying your money among global stocks, bonds and commodities may not offer the low risk and security that’s being promised, as interconnected global markets are destabilizing in unison. …

The rising centralization of financial power greatly increases the vulnerability of the system to disruption, as we have all become increasingly dependent on highly centralized financial systems. Transparency has been lost as much of this centralized power now resides in shadow institutions whose workings are opaque and largely outside the oversight of formal institutions; accountability has eroded to near-zero. …

In summary: in insulating participants from risk, fact-finding, and fluctuations (volatility), you make price discovery and thus stability impossible. Any stability that is forced on a system via intervention and purposeful obfuscation is merely a veneer of apparent stability waiting for an excuse to shatter.”

Events Asia, Europe, Russia, the Middle East and the USA reinforce this conclusion. Any proposed solution to the problems now facing governments around the world will inevitably involve “intervention and purposeful obfuscation”. Nothing can alter the basic fact that Europe and the USA are bankrupt and cannot meet their contractual obligations. That is “an excuse to shatter” if there ever was one.

Foreign and domestic stocks, bonds and commodities moving in unison and interconnected by a failing system means that traditional investments are likely to be unsafe and undesirable. So, what is an investor supposed to do? It is very difficult to even think about investing outside those markets. But thinking about it is something we must do or see our savings disappear like light fog in the morning sun.

Investments outside the financial system necessarily involve investing in things we can control. We can invest in ourselves and our community. We can invest in our friends and family. We can invest in things that will make our lives more livable, secure and pleasant if government services and promises fail. We can Bring It Home.

What might those investments be? Of course, that depends on individual situation and location. It also depends on what government services and promises make a difference in our individual lives. Again, YoYo – Always YoYo.

To get some idea of how economic collapse affects the average citizen, you can read the personal accounts of individuals from Chile, Argentina and Russia. These countries collapsed in different ways but the aftermath was remarkably similar for the citizenry – economic collapse was accompanied by social and political collapse. In other words, everything changed quickly.

Looking for investment clues in the common features of the collapse of these three countries, we find that:

Law and order breaks down as people become desperate. Personal security becomes a personal responsibility.
Basic necessities become prohibitively expensive or unavailable through normal channels.
Savings in traditional investments lose purchasing power, are lost in the market collapse or are simply confiscated by the government.
Jobs disappear as employers (including government) cannot meet payrolls.
Commerce grinds to a halt due to security problems, unreliable transportation, and lack of stable currency.


“Bring It Home” investing will involve developing the skills and networks to deliver Security, Basic Necessities, Education, Transportation, Communications and a Marketplace to your local community. Since money will likely be scarce or worthless, some means of payment and financing must be devised that takes this fact into account.

“Bring It Home” investing may not require much traditional capital. It will require a lot of time and personal effort to return a profit. Passive investment income will no longer be an option.

If the experiences related in the stories above contain any truth at all, hustle or starve are the only choices following an economic collapse. YoYo - Really.

Sense and Nonsense Is dedicated to providing the information, ideas and interaction necessary to build a community of people who can be trusted and who trust each other.