The Dow Jones Industrial Average (INDEXDJX: .DJI) , the S&P 500 Index (INDEXSP: .INX) and every market that starts with the word “stock” started the day in freefall and only concentrated capital infusion by the President’s Working Group on Financial Markets – coupled with a convenient “circuit breaker” trading halt – has prevented further price deterioration.
The weekend’s financial headlines catalyzed a global abdication of faith in the ability of any asset to perform well today.
The convergence of an OPEC spat, Coronavirus, and collapsing interest rates all point to a potential financial system collapse. Unlike the 2008 collapse, Quantitative Easing in the form of unbridled money-printing and interest rate reductions are not available this time around.
Short of government-sponsored capital pools stepping in to buy the stocks everyone is selling furiously, the tool cupboard is bare.
So what can governments and central banks to do stop the hemorrhaging now?
Printing enough money to give every citizen sufficient financial resources to stay home and isolate is one option, but that would make the fraudulent nature of our financial system apparent to everybody in the world.
What Can You Do?
First let’s consider the worst case scenario.
1. The markets continue to collapse despite multiple “circuit breaker” interruptions and trading closures implemented. You probably haven’t sold, or you have sold, what you can. If there’s nothing left to sell (as in my case, except real estate), then you can ignore the market, and focus on long term viability of your family and finances. Provisioning for a long term interruption in the food supply is key. A prolonged collapse in markets will ultimately cause a collapse in the food production and distribution system as frozen credit markets make transportation executives rethink the credit lines inherent in 30-day settlement windows.If you own arable land, start planning to plant every square inch in vegetables, with a healthy portion of those acres allocated to foods that can be stored. Meat and fish are going to be the first food items that will disappear, along with dry staples; rice, flour, lentils etc and canned goods.
2. Nothing. Buy ammo and wait.
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