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Surviving A Global Depression – Pensions & Investments

Updated on January 26, 2009

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.

Next: Surviving A Global Depression – Is Gold The Right Hedge?

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    • Hal Licino profile imageAUTHOR

      Hal Licino 

      8 years ago from Toronto

      Yikes. That can't be healthy. I know of a family run printing business that had been in the industry since their greatgrandpa founded it. They foolishly overextended themselves to a single publisher to the tune of $2.2 mill. The publisher stiffed them, they got less than $5,000 from the bankruptcy, and they went into bankruptcy themselves. Ouch.

    • Tom Cornett profile image

      Tom Cornett 

      8 years ago from Ohio

      Good hub Hal...people really need to monitor their money. My father-in-law lost 18 grand because his company went bankrupt.

    • Hal Licino profile imageAUTHOR

      Hal Licino 

      8 years ago from Toronto

      Thanks. Be ready as the wild ride is far from over! :)

    • profile image

      Wife Who Saves 

      8 years ago

      I am a sincere believer in hoping for the best but preparing for the worst. I like your hub.

    • Hal Licino profile imageAUTHOR

      Hal Licino 

      9 years ago from Toronto

      gone, thanks for reading!

      issues veritas, I'm not clear on what you're asking about the Federal Employees Retirement System.

    • profile image

      issues veritas 

      9 years ago

      Hal,

      Social Security versu FERs

    • profile image

      gone 

      9 years ago

      thanks you it is interesting

    • Hal Licino profile imageAUTHOR

      Hal Licino 

      9 years ago from Toronto

      The Social Security Administration is effectively broke today. There are effectively no plans nor money to pay out to today's working demographic. You can just imagine what would happen during a global depression!

    • ocbill profile image

      ocbill 

      9 years ago from hopefully somewhere peaceful and nice

      and there is no talk of social security funds lacking. imaging when that kicks back in to the social talk. Lots of things on the agenda to do.

    working

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