Surviving A Global Depression – Pensions & Investments
Many people depend on their pensions to carry them through old age. Yet pensions would be susceptible to a depression’s drastic economic impact as well.
Low: A pension is only worth what you can get back from it in “real terms” and that is where the problem lies. To simply believe the pension fund managers when they state that their investments are indexed to inflation does not absolve you of responsibility to determine just how safe that fund is when subjected to global crises. It is highly recommended that you sit down with your pension fund representative before the depression hits, and determine what your pension prospects are, should there be significant economic disruptions ahead. You may be shocked at the lack of preparation your fund manager has taken to safeguard your pension.
Medium: Pensions would have little or no value at this point. Many pension funds invest heavily in the stock markets and the Dow plummeting to 2,000 would see the collapse of almost every single pension fund in the world. The best possible pension investment in this scenario is investing in family. That may sound ridiculous, but when you consider it for a moment, it’s not as silly as it may seem. If the monetary assurances of sufficient funding during your twilight years were to evaporate, you would have nothing to fall back on to take care of your needs: Except family! An extended family on good terms with each other will ensure that its elderly members are taken care of. The younger members will work to earn a living and they’ll share their income to sustain the elders. That’s the way families have worked for thousands of years, and it is only a recent phenomenon to leave the elderly to fend for themselves. In revitalizing this traditional family structure, you may find there is a much greater benefit than just making sure food is on the table and wood in the hearth. You may find that it is a pleasant alternative to an independent, albeit lonely, old age, being instead surrounded by the warmth and security of family. So now may be the time to build bridges with your family, wherever they may be. They may turn out to be your salvation.
So... exactly what is the value of varied investments in a depression era?
Again, we are looking at these investments as potential insurance policies for the inevitable economic paroxysms that will mark the global depression. If the depression is of Low Severity, things will get shaken up a bit and then settle back down soon enough. But if it goes to Medium and upwards, the effects will be so far-reaching and pervasive that it will mark a turning point in human history.
There are countless other investments available, but none of them offer any specific security in a depression era. Investment-grade art will be worthless as it offers no tangible benefit and is primarily of interest to the rarefied connoisseur, who will likely be caught up in other, more immediate interests... like food and shelter. The same applies to collectibles, toys, antiques and other overvalued items. They are only worth what the aficionado is willing to pay. Wine is an interesting investment since, unlike art and other collectibles, you can actually drink it. However, for the prices that some vintages are fetching, you could buy the entire grocery inventory stock of the local corner store.
Classic cars as an investment are also not recommended in a depression era. Although there have been times in the recent past where classic car prices have shot through the roof, with people paying millions for classics in concours condition, there is no indication that those valuations will survive a depression, especially a Medium range or stronger one. Cars of any sort will lose their value as fuels simply cease to be available. When people are living in a fearful environment like the one in a global depression, the idea of blasting down country lanes in a V-10 Viper convertible somehow loses its sheen.