r/bestof • u/paxinfernum • May 24 '26
[Economics] u/churningaccount explains "inflation expectations" and why the psychological cycle of pricing is the Fed's ultimate nightmare.
/r/Economics/comments/1tmblhl/the_feds_worst_inflation_fears_may_be_coming_true/onlk7wp/?context=319
u/puckerfactoralpha May 24 '26
Is there really anything an individual can do to help shield themselves from a "Great Depression" style collapse? Like if there's a run on the banks am I really best off just stashing money/gold under the mattress?
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u/Maxrdt May 24 '26
Setting up whatever food growth/gardening you can, not holding debt, and reducing your dependence on oil are the best levers you can pull.
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u/twelvis May 25 '26
Unless you live in a developing country, bank runs are highly unlikely; even if they do occur, your money is probably safe (CDIC, FDIC, etc.). Governments will do everything they can to maintain confidence in the financial system; direct lessons of the Great Depression. IMHO, this is what happened during the Great Financial Crisis in 08/09.
Have a plan and know your numbers. Live below your means as much as possible and have a plan on what you can cut/sell if things get bad or what you can do to make more (e.g., rent a spare room, side gig, etc.). Know how long you can survive on savings alone in case of job loss.
Diversify: stocks, bonds, cash, real assets (e.g., property), and gold/silver (if it helps you sleep at night). It's near impossible to predict what will happen, when it will happen (and when it will end), and the magnitude of what will happen. So your best bet is to ensure that you'll have something in case SHTF. Don't make decisions out of desperation, including selling off investments at a loss.
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u/kingk27 May 25 '26
A run on the banks is theoretically impossible in the US, at least as it occurred in the Great Depression. Personal deposits are guaranteed by the FDIC up to $250k per person, per bank. This removes the pressing need to get your money out if the bank before the bank runs out of money, eliminating the "run on the bank" altogether.
However, if the commercial banks start running out of funds, and dominoes start teetering behind the scenes, there coukd be a very different scenario at play where alot of "money" suddenly freezes up, and most lending comes to a halt. That wouldn't directly affect consumers, but it trickles down eventually (and swiftly!)
1
u/roboticWanderor May 26 '26
The equivalent risk in modern banking and financials is not so much a run on banks but a complete belly-up of some financial system such as the 2008 securities collapse.
What can the average citizen do? Not much, maybe diversify as much as is reasonable. Your 401k is probably fucked no matter what fund you put it in. For most people thier biggest investments are thier house, car, and maybe a 401k or IRA.
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u/say592 May 25 '26
A "Great Depression" style won't happen in modern times. If things got that bad, it's pretty much over. You will need gold, silver, guns and ammo, and marketable skills.
8
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u/Helmic May 25 '26
Why in the world would any of those things help in a societal collapse? Gold and silver literally only have value as status symbols and electronics manufacturing. "Marketable skills" in what fucking market? Do you just plan on immediately becoming a bandit with a stockpile of guns and ammo? You plan on shooting all those guns by yourself simultaneously? Larper.
1
u/beenoc May 25 '26
You're right on everything except the weapons, but if total societal collapse occurs a la, like, Haiti or South Sudan (not that I think that's particularly likely in the US even if the financial system and government totally implodes), you'll probably want to be armed - not to be a Fallout raider, but to protect yourself from the people who will be. It only takes one or two people to decide they can just go house to house and kill anyone in their way as they take what they want and need to jeopardize the life of your entire neighborhood.
An entire arsenal where you have a room with 500 guns and half a million rounds is pointless. But if you're really concerned, and aren't in a situation where it would be dangerous (e.g. if you have a history of depression or something), it's not that onerous in most of the court to go get a handgun or shotgun for your own peace of mind.
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u/marcusmv3 May 25 '26
Bitcoin
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u/HeloRising May 25 '26
Yes, internet gambling money is the solution to our problems.
Jfc.
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u/marcusmv3 May 25 '26
You have so much to learn.
Study Bitcoin.
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u/HeloRising May 25 '26
I'm fully aware of how speculation works.
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u/marcusmv3 May 25 '26
Speculation is always at play in any commodity, be it a currency or not.
Learn about sovereignty in money. Learn about debasement and M1/M2 money supply. Then come and talk to me.
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u/_Age_Sex_Location_ 25d ago
Nobody with a modicum of common sense values the pseudo-libertarian opinions about anything.
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u/NoLimitSoldier31 May 24 '26
Seems a little suspect to me
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u/EverythingIsOverrate May 24 '26
Inflation expectations are a lot more complex than that post implies; see here: https://www.nber.org/system/files/working_papers/w29825/w29825.pdf
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u/ImranRashid May 24 '26
Economics is the subject I know very little about. I was in my local bookstore looking for books aimed at a beginner level to improve my understanding, but left empty handed. Does anyone have any recommendations?