A Survival Guide For 2019

As the first month of the year concludes, it's becoming clear that 2019 will be a very different kind of year.

The near-decade of 'recovery' following the Great Financial Crisis enjoyed a stability and tranquility that suddenly evaporated at the end of 2018.

Here in 2019, instability reigns.

The world's central banks are absolutely panicking. After last year's bursting of the Everything Bubble, their coordinated plans for Quantitative Tightening have been summarily thrown out the window. Suddenly, no chairman can prove himself too dovish.

Jerome Powell, the supposed hardliner among them, completely capitulated in the wake of the recent -15% tantrum in stocks, which, as Sven Henrich colorfully quipped, proved what we suspected all along:

The global tsunami of liquidity (i.e. thin-air money printing) released by the central banking cartel has been the defining trend of the past decade. It has driven, directly or indirectly, more world events than any other factor.

And one of its more notorious legacies is the massive disparity and wealth and income resulting from its favoring of the top 0.1% over everyone else. The mega-rich have seen their assets skyrocket in value, while the masses have been mercilessly squeezed between similarly rising costs of living and stagnant wages.

How have the tone-deaf politicians responded? With tax breaks for their Establishment masters and new taxes imposed on the public. As a result, populist ire is catching fire in an accelerating number of countries, which the authorities are anxious to suppress by all means to prevent it from conflagrating further -- most visibly demonstrated right now by the French government's increasingly jack-booted attempts to quash the Yellow Vest protests:

Meanwhile, two other principal drivers of the past decade's 'prosperity' are also suddenly in jeopardy.

China's once-unstoppable economic growth engine is now sputtering badly. The slowdown is so pronounced that it's now feared it will drag world GDP down to a decade low this year:

And all those headlines that claimed the US shale oil 'miracle' has ushered in a new era of over-abundant cheap domestic oil? Well, as we've long warned, it's becoming clear that promise was dangerously overhyped. It's recently been exposed that the shale operators -- who have never made a profit as an industry -- have been overstating their output by as much as 50%. That, plus a host of geological and financing challenges, is making the future production prospects of the Permian and other major shale basins look a lot dimmer:

Is The Permian Bull Run Coming To An End?

With the big Wall Street players now questioning the value of their existing investments in shale oil, the industry is finding it hard to raise money. Not a single bond sale has come off since November in an industry which must continuously raise capital to survive.

To add to the problems, the future of U.S. shale oil production seems to be in the Permian Basin in Texas which has been providing the lion's share of oil production growth for the entire country. But ongoing drought in an already arid West Texas has raised doubts about whether the Permian will have enough water to meet all the demand for fracking new wells.

If the needed capital is not forthcoming, it means that companies will be faced with declining revenues from declining production. With lower operating cash flow and little access to additional capital, these companies will be unable to drill enough wells to offset declining ones. That means even lower revenues in the future which will mean even lower investment in new wells. That's what a death spiral looks like.


A Poisonous Cocktail

Mix together a slowing global economy hopelessly addicted to central bank stimulus, festering social unrest and an approaching oil price spike/supply squeeze. The result?

Recession and revolt.

It's anybody's guess what will happen from here. But it seems certain that events will not recede back to the tranquility of the past decade.

Our prediction here at PeakProsperity.com is that the long-awaited (and, yes, perhaps too-long-predicted) downturn is nigh.

Either the economy descends into recession, resulting in widespread job losses and a deflationary correction of today's ridiculously-inflated financial markets. Or the central banks go "all in" and launch QE4ever, leading to runaway inflation (runaway stagflation, more likely) and possibly hyperinflation.

Either way, the pain and losses will be severe. And those hurt the most -- the working poor, the elderly unable to support themselves, the younger generations limited by diminished prospects -- will have no option but to rise up against the political regimes that have failed them so badly.

A Survival Guide For 2019

With the bursting of the Everything Bubble, we declared last year as the 'Year Everything Changed'. This will be the 'Year of Instability', possibly preceding an upcoming 'Year Of Woe' in 2020.

But look, we're not saying the world is the process of ending imminently. It's just that we've entered the part of the timeline when things are going to start to get really rocky.

And we think it's much more useful to think of 2019 as the 'Year Resilience Matters'. It shifts the focus away from fear and instead towards the many things you can do to protect yourself and those you care about - and even to position yourself to prosper through the coming challenges.

Here are recent articles/resources we've created to help you get started. Focus on the areas where you currently feel the most vulnerable.

  • Lose weight/Get fit -- after all, if you don't have your health, the rest doesn't matter. Resilience starts with your most important asset: your body. Our free how-to primers on successful and sustainable weight loss and functional fitness are great resources for everyone looking for guidance on how to boost their physical health.
  • Shore up your key relationships -- whatever the future brings, no single person can be prepared for every possible outcome. We're going to need to rely on others, on key relationships and trusted community ties, when events play to our weaknesses. How do we nurture the kind of relationships that thrive, instead of unravel, during times of stress? Our free report breaks down the science behind successful social bonds.
  • Prepare for deflation -- asset prices desperately want to deflate. The past decade of money-printing (QE 1,2 & 3) has blown prices well into bubble territory and allowed for credit to expand way beyond what fundamentals allow. With the bursting of the Everything Bubble, especially if the central banks somehow resume their committed tightening plans, *much* lower prices should lie ahead. A recession will only exacerbate this trend further. So we recommend that investors get liquid and preserve 'dry powder' to ride out the correction and be poised to re-enter the market when quality assets can be purchased at much better valuations than today. Our primers on holding cash in short-term US T-bills and in hedging for a major market correction are important resources for anyone looking to position their capital for a deflationary purge.
  • Prepare for inflation -- of course, today's central banks hate deflation. They may well take a "damn the consequences" approach when serious deflation next raises its head and kick-off QE 4-ever -- which would have to be on a scale much larger than the previous QE efforts to achieve it's desired effect. But at that magnitude, it is highly likely the central banks will kill the purchasing power of their underlying currencies -- unleashing runaway inflation (runaway stagflation, more likely) and quite possibly hyperinflation. So, it's wise to have a portion of your portfolio in assets that will weather the ravages of inflation better than most. This is why we recommend folks consider owning precious metals (and why we endorse the Hard Assets Alliance for doing so) as well as invest for inflation-adjusted income going forward (vs speculating for capital gain).
  • Prepare for likely emergencies -- one of the few things we can predict with certainty is that 2019 will have its fair share of floods, fires, hurricanes, blizzards, and blackouts. Every location has its own set of probable disasters than can be anticipated. Preparing for these is relatively straightforward and absolutely prudent. Our free guide to emergency preparedness is full of battle-tested recommendations and advice for doing it well.
  • Prepare for unlikely emergencies -- another thing we can predict with confidence is that nothing this year will go 100% according to plan. There will be errors, unintended consequences, surprises, and accidents. We've written in the past of the wisdom of holding umbrella liability insurance for protection against the unexpected. More than 80% of US households either don't own any or are under-insured. If you think you may be one of them, read our free primer on the topic.
  • Develop your master plan -- as with most goals, success dramatically improves when working with an experienced coach. Those looking for help in making key decisions and/or getting custom answers to their unique personal situations can schedule a consultation with us. And those looking to have a crash-audit of their investment portfolio can schedule a free review with our endorsed financial advisor.
  • Live resiliently - they say "The best revenge is to live well". The same is true when it comes to resilience. Creating a resilient life is the best way to overcome adversity and enjoy prosperity in your daily living. Our book Prosper!: How To Prepare For The Future And Create A World Worth Inheriting offers a blueprint for doing just this. As does our intensive 3-day seminar (this year's is nearly sold out, so register soon if interested), which also connects you into the Peak Prosperity tribe -- a worldwide community of smart, accomplished truth-seekers with big hearts eager to support each other in their journey to live more resilient lives.

The goal here is not perfection; no one can be fully prepared for every eventuality. It's to be "good enough" across as many of these dimensions as possible.

By taking prudent action today in these areas, you'll be vastly more able to navigate the instabilities that 2019 throws at you.

And, just as important, you'll be well-positioned to be in service to the many less-prepared folks around you.

This is a companion discussion topic for the original entry at https://peakprosperity.com/a-survival-guide-for-2019/

Believe me. I get it.
But, as I was reading this, the scene in the first Jurassic Park movie where Jeff Goldblum explains chaos theory came to mind.
How do you prepare for chaos? I’m not sure my stockpile of luck is adequate for what is coming.

Just a suggestion. While many people cannot be reached when they do not feel anything is wrong, I think the minute that it becomes apparent that there is an explosive emergency, they will panic and want to do something. This reminds me of what Rhonda Byrne, creator of The Secret did. All of a sudden one day you could post a video on the internet with a blockbuster title about the disaster, what caused it, and what to do about it. You could then refer them to your website or whatever information you wanted to give them about what the next step is.
I think this would be a Blockbuster film in the genre of Science Fiction. Perhaps, how the central Bankers destroyed the world.
Thank you

LesPhelps wrote:
Believe me. I get it. But, as I was reading this, the scene in the first Jurassic Park movie where Jeff Goldblum explains chaos theory came to mind. How do you prepare for chaos? I’m not sure my stockpile of luck is adequate for what is coming.

It’s completely understandable to presume that chaos is the vehicle which will take us from A [where we are now] to Z (where we end up]. The truth is that the probability of the onset of sudden, dramatic chaos is completely & utterly uncertain. In the past 7-8 years I’ve lost count of the number of times I just KNEW that C would happen because that’s always been the outcome when A+B happens. Wrong. Cause & effect is so much harder to determine now.
The Descent may take the form of decades-long painful decline. I think one can be over-prepared for the short term.

LesPhelps wrote:
Believe me. I get it. But, as I was reading this, the scene in the first Jurassic Park movie where Jeff Goldblum explains chaos theory came to mind. How do you prepare for chaos? I’m not sure my stockpile of luck is adequate for what is coming.

You can’t. The best you can do is plan in such a way as to increase your odds slightly. Then you do the best with what comes. However, doing nothing to prepare is most certainly less likely to lead to success, so…yeah.

Chaos is,neither approaching nor leaving. Live in a fashion that minimizes the undesirable outcome…and don’t change…for me, that is a depression era lifestyle.
I do have a scheduled hip replacement, which will be very modern, pending.

robie robinson wrote:
Live in a fashion that minimizes the undesirable outcome....
And figure out how to enjoy this oncoming wave. It's not personal, it's not even business. It's evolution. Get stoked. VIVA -- Sager

As a conspiracy theorist (or to be more correct, someone with a scientific approach who formulates beliefs based on evidence), I think the other factor to consider is that the central banks will go out with a bang. The problem for the bankers that a deflationary asset crash, or alternatively dramatic undeniable stagflation, create is that it squarely points the finger at their mismanagement. If 9/11 taught us anything, it’s that they will do anything to direct blame away from themselves, and that they have a fully captured and obedient media. And the Patriot Act and other similar changes in other countries have stripped us of our rights; the freedoms we currently enjoy are merely being granted to us by our masters so as to not stoke unrest and suspicion.
I dont expect this to end with either a deflationary crash (although a deflationary crash may be part of a larger event, however) or rampant stagflation. I think they are planning for the end and they’re just waiting for the right time.
So my advice would be to plan for a similar 9/11 type event which takes down the internet and conveniently causes the implosion of the monetary system, and some kind of martial law implemented. Likely Russion hackers working in collaboration with ISIS will be the fabricated villains. This will also provide the cover to blame hackers for the financial reset, and also to justify further military action in the middle east against Muslim countries.
Of course, they will have “our” new monetary system ready to go shortly after this, revalued to properly price in fundamentals. Whether this goes cashless or not, I’m not sure since a world in chaos with sketchy internet will be very difficult to force into electronic-only transactions.
I personally think they can still do quite a bit more covert QE to prop the markets up. They don’t have to tell us, and they can electronically send the money exactly where it needs to go without causing inflation. But, I’m still expecting this “end” in 2019, although I’ve been saying it will be “this year” every year since 2010…

I’ve been reading accounts written during the decline and fall of the Roman empire recently. The Life of Saint Severinus details life in Noricum (Southern Germany) in the 450-482 timeframe, while the Letters of Sidonius details Roman upper class life in Gaul (Southern France) during roughly the same period (460-480). Up front, it’s amazing that these documents survived the subsequent dark age, and are worth reading for that reason alone.
I know historical parallels are never completely accurate, but read this description of the Roman “top 1%” from the introduction of Sidonius: “These members of the Senatorial class were possessed of enourmous wealth, but they seem to have had little encouragement to expend any part of it for the benefit of their country. They escaped the municipal taxation which they could well afford; their chief use for surplus money was to lend it out at 12%…Thus they had come to possess nearly the whole superficial area of a country which they did not even suppose to defend. If they wished to commit illegal acts, they could often set themselves above the law…” History usually rhymes vice repeating, but our era looks almost like plagarism. Side note: “Senatorial” was a rank granted based on wealth, not necessarily from being a Senator.
The lesson I’m deriving from them though is that the decline and degragation of systems took most of the decades mentioned to play out. A single year of instability was often just a slightly steeper step downward. Especially in the letters of Sidonius, life doesn’t seem to “feel” much different as the Franks and Burgundians overgrow the receding empire. Sidonius visits Rome around 461, and the politics of the Empire are business as usual. Certain years are key of course. Rome ceded large portions of Gaul to the Barbarians in 475. The Empire ceased to pay the soldiers gaurding the danube around the same time. The periphery began collapsing, settlements were abandoned and destroyed. The occasional drought/famine, war, or disaster stepped lightly on the accelerator. Watching the people in these books deal with the descent is fascinating.
I expect 2019 to play out along the lines in the article, but being armed with the knowledge of the context it takes place in (decline) is critical. Just being aware allows for prudent positioning. As G.I. Joe says, “Knowing is half the battle”.

Snydeman wrote:
You can't. The best you can do is plan in such a way as to increase your odds slightly. Then you do the best with what comes. However, doing nothing to prepare is most certainly less likely to lead to success, so...yeah.
I’m obviously not doing nothing. However, I have no belief that prepping will allow me to safely and comfortably navigate the coming turmoil, nor can I predict, with any reasonable accuracy, the timing and exact nature of the turmoil. Also, it’s not just prepping that is needed. We need to reduce our on-going contribution to the problems.

I believe that central banks will go back to QE and reinflate the various bubbles again. Can they pull it off again without any real problems? We will see. We may just turn Japanese; central bank buys equities directly, interest rates at zero and minimal growth. I think they (CB’s) would prefer turning Japanese over the other possible out comes.

Thank you, Ejihnson, for the recommendations of these accounts of Imperial decline in the periphery and the core. The parallels are very close b/c Homo Sapiens are still running Wetware 1.0. The Senatorial class today has offshore tax havens to evade paying to defend the Empire they largely own…
I’ve read a great many books on Rome and the eastern Roman Empire (Byzantium) over the past decade, and think “The Rise of Rome” helps us understand the systems and values that enabled Rome to expand and rule vastly diverse regions for hundreds of years with very basic technologies. The decay of these systems and values led to systemic failure.
“The Inheritance of Rome” is more academic, but worth a read for those who want to understand how Rome’s structures continued on for hundreds of years (Charlemagne et al.) and then slowly eroded into feudalism.

LesPhelps wrote:
Snydeman wrote:
You can't. The best you can do is plan in such a way as to increase your odds slightly. Then you do the best with what comes. However, doing nothing to prepare is most certainly less likely to lead to success, so...yeah.
I’m obviously not doing nothing. However, I have no belief that prepping will allow me to safely and comfortably navigate the coming turmoil, nor can I predict, with any reasonable accuracy, the timing and exact nature of the turmoil. Also, it’s not just prepping that is needed. We need to reduce our on-going contribution to the problems.

Agreed on all counts. For us, if prepping can raise our chances even a few digits, it’ll be worth it.

live a life in keeping with Mama. Been called a prepper for 35+ yrs.(prepper wasn’t an expression then)only to reply that my life was best exhausted in the bosom of a piece of land and the family that drew its existence from that place on earth.
see all you all on the other side, husband,father,farmer,optometrist

I have been ‘prepping’ for at least ten years. Most of the food in my cache is well past its ‘best by’ date but, especially with canned goods, I believe that date is just an arbitrary number to encourage us to buy more stuff. I open a can now and then to sample the contents. So far so good. I would prefer to cycle through my stockpile by using and replacing, but my wife is still convinced I am delusional and refuses to eat canned anything.
What has most impressed me in the last ten years is the ability of TPTB to kick the can down the road and to manipulate the stock market, the price of gold and pretty much anything they want. Although the signs all point to 2019 being a pivotal year, I am still sceptical. They kept what looked like a crisis going for ten years already, why not another ten? Ten years ago nobody would have believed they could keep it going until now.
At my age (78 tomorrow) I’m not about to start farming, or any other major enterprise. I already have enough going on just to keep my house maintained, my boat shipshape and my car running. The banksters have already stolen most of my anticipated retirement income but, fuggem, turns out I don’t need as much as I planned for anyway.
The main thing is to be aware and have a plan for the day when something really bad happens. Other than that, I say relax, have a good time, make the most of every day.
At the rate its going, I reckon I will die just in time.

Lions wrote,

You could then refer them to your website
I do wonder how the Internet will fare during a time of chaos. We know it was designed to survive nuclear warfare, but what about drawn-out, erosive chaos? That's a whole 'nother animal, I think.

CHS wrote,

The Senatorial class today has offshore tax havens to evade paying to defend the Empire they largely own....
It's crazy, isn't it? They own the place but they won't pay to keep it in good order and condition. How do we label them: parasites? plunderers? opportunists? lunatics? destroyers? optimists? I'd really like to know what their motives, dreams and expectations are. Someone (Chris?) wrote recently that many of the rich people he's met aren't particularly clever or intelligent or gifted; they merely happen to be rich. So the 0.01% collect their loot and go and live in a luxurious bunker while the rest of Rome burns, then they come out and — what? Absolutely I do not understand what drives them.
What's it all about, alfie? Is it just for the moment we live? What's it all about when you sort it out, alfie? Are we meant to take more than we give Or are we meant to be kind? And if only fools are kind, alfie, Then I guess it's wise to be cruel. And if life belongs only to the strong, alfie, What will you lend on an old golden rule? As sure as I believe there's a heaven above, alfie, I know there's something much more, Something even non-believers can believe in. I believe in love, alfie. Without true love we just exist, alfie. Until you find the love you've missed you're nothing, alfie. When you walk let your heart lead the way And you'll find love any day, alfie, alfie. Source
my age (78 tomorrow)
Happy Birthday! smiley

I guess I missed the recovery you alluded to.

I am 70.I have had similar experiences and reached that same conclusion.Thanks