Investing for a Worst Case Scenario

April 29, 2010 by  
Filed under Economics

The past two years have seen endless bailouts and rescue attempts initiated by the government toward those who are financially inept, clueless, or reckless (e.g., Wall Street). (OK, in some cases – a minority – the bailees have just been unlucky.) Some folks think that these massive government interventions will lead to a more calamitous economic conditions in the coming years.

Paul Farrell is one of those doomsayers. He has written a two part series about “surviving the end of civilization 2050.”  If you assume that he (and like thinkers) are correct, how to you invest for a worst case scenario?

That is the subject of the second installment of Farrell’s survival series. Keep in mind that part of Farrell’s image of the future includes the risk of devastation caused by the nuclearization of rogue states like Iran and North Korea.

Farrell asks us first to accept the realities of human failure that will produce economic disaster.  He then urges us to adopt a two-prong strategy. First, we are to use some of our existing resources to prepare to isolate ourselves from disaster (e.g., outside a nuclear blast zone) and to stockpile food and other emergency supplies for the long term.

Second, we should stay active in the market but looking for opportunities that exploit the same “ethics” (greed being one) that guides Wall Street. In other words, accept what is real, let go of the anger, and do what is necessary for you and your family.

Here is a link to Farrell’s article. Mr. ToughMoneyLove would be interested in hearing your reactions.

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2 Responses to “Investing for a Worst Case Scenario”
  1. Rick Beagle says:

    Fallout shelters with stockpiles of supplies combined with promotion of deadly sins in one article! It is the fifties again without the moral compass….

    I choose to help my neighbor, not plan for their destruction.

    Rick Beagle

  2. MasterPo says:

    If you really believe there will be a total collapse of society in the next 20-50 years then financial investing is totally of no good (save maybe for physical gold as barter later).

    Some weapons, food, medicine, a shelter far from major population centers – that’s what you should be “investing” in *if* you believe that.

    Personally, I do believe there will be some MAJOR civil unrest with in the next 5 years, possibly starting in 2011. And I’m not just talking about the bus and subway going on strike for a few days.

    Whether that leads to Mad Max land, I have no idea. Probably not but who knows.

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