A tribe member hit me up with a question. With his permission I cleaned up the chat a but and am posting it here. I copied it from a chat so if the formatting is a little off that’s why. His words, edited for content, OPSEC and length.
Steely Dan– I’m actually looking at a van today for off grid, I know I lend myself to doom thinking but based on my little economic study increased interest rates equal bad times ahead aka step one to a hyper inflation
Ryan- Long answer to follow.
Steely Dan– Hell Yeah Brother
Ryan
Are you planning to live off grid in a van or to have it as a plan b?
Steely Dan– More I see the current system crumbling around me and putting the time in at a job to eventually get a raise to eventually afford a house while wages stagnate and decrease due to inflation and also automation seems like its just not going to be worth the grind anymore like it was say even late 90 pre crash 2000’s. I don’t have kids and I think my time and resources are better spend enjoying the next 4 years and seeing how things shake out while at the same time having mobile off grid shelter.
Ryan
Let me think on that and I’ll write soon
Steely Dan– Awesome
Ryan
It doesn’t relate to what I am going to say but do you mind if I clean this all up (no names, places, etc) and post it on the blog? (Blog note- I only post things like this if have the persons permission.)
So breaking this down we can look at the following issues: Economic depression/ recession/ collapse, buying a house vs off grid van, inflation and wage stagnation, Join the rat race or wait it out.
Economic depression/ recession/ collapse- Expecting some sort of economic downturn in the next few years is a pretty sure thing. The bull run the stock market is on has to stop eventually and signs say it will be fairly soon. You said 4 years, I would say more like the next 2. The real question is how bad will it be. Are we talking 2008/9, 1979 or 1929? The answer is nobody really knows. In general the higher the boom the bigger the correction but its really anybody’s guess. It is also worth noting that the more extreme a prediction the less likely it is to come true. So a drop of say 20% on the stock market, GDP growth going to say 1% and unemployment going up a couple points inside 4 years would be really high. The odds of a 40% drop, GDP retracting 3-4% and 10% unemployment are pretty low. Odds of an 80% drop, GDP retracting 20% and 25% unemployment are in the powerball range. So we don’t really know what is going to happen. Break.
Inflation- What is inflation? Inflation is when the value of something goes down due to an increase in supply. We will use something beside money as the example right now. Lets say we are talking cigarettes at some kind of military training or in jail where they are difficult to get. The cigarettes are valuable because they are rare. People can use them to trade for stuff they want, to avoid details, etc. If say the Marboro Man showed up with a pick up truck filled with cartons all of a sudden everyone has plenty of smokes. SO even if smokes are still used for a medium of exchange (and it is in IF) their value relative to a guard shift or an MRE brownie went way down. Make sense?
Inflation of a fiat (not backed by a commodity such as gold or silver) currency is the same except with one addition. At a big picture level (vs say a boom town) inflation happens in currencies because the supply increases while the amount of goods and services that supply is chasing is stagnant or grows slower. More dollars and the same amount of stuff. So far this is the same as our cigarette example. The difference is governents can just print more fiat currency at will. It is a hidden tax.
This took me a long time to get so I will try to explain it here. Why is inflation a hidden tax? Inflation is a hidden tax because the government is spending more money which devalues the money you currently have. It simply skips the unpleasant effort of making a new tax and collecting it. If you have a thousand bucks in savings and the government creates 20% inflation in effect you have $800 in purchasing power now. Same as if they passed a 20% tax on savings and took your $200. That is why it is a hidden tax. Break
Economic problems, inflation and wage stagnation. When governments have economic downturns they try to spend their way out of them. They inject money into banks, build public works, hire people, etc. Think of it like trying to use some starter fluid to get a problem engine going. The issue is that governments typically don’t have the amount of money needed to do this sitting around. They don’t want to tax people directly either. So they print it or borrow it. Mostly they print it. This as we discussed earlier causes more money to be moving around which causes inflation. Wage stagnation. The major issue with inflation is that its not applied evenly. If we woke up and a zero or 3 were added to everything it wouldn’t be an issue. Your bills and debts would be higher but so would your savings and wages.It doesn’t happen that way though. Things adjust unevenly. Also since these things come with economic problems unemployment goes up. That means employers can be pickier and don’t have to compete for workers as much. So wages will often stagnate, both in nominal amount and compared to inflation. Break
Why join the rat race? I think the first question is “Do you want to join the rat race anyway?” I would say that we have to make a plan for our lives that considers both potential (realistic) worst case scenarios as well as things going along more or less like normal. It would suck to live a life you hate because you are getting ready for some extreme scenario to die in bed in your bunker alone at 85 with it never having happened. I think we need to plan and prepare for (atleast somewhat) realistic potential problems but I don’t think we need to completely define our lives based upon those scenarios.
Buying a house vs off grid van. In an inflationary scenario owning a home at a fixed rate is a good thing. Provided of course that you keep enough income to pay the mortgage. It is true that the relative value of the mortgage would go down but your wages would likely stay flat (or even go away if you got laid off, etc) and your other variable costs would go up. A realistic assessment of how recession proof ones job is would be prudent here. One middle ground option would be buy a house and if things get bad just rent it out. A lot of families kept their homes living in the basement (or whatever) and renting out the rest during the great depression. Now if you are worried that won’t work because the town you live in would take too big of a hit, etc then maybe buying isn’t wise. The van thing has benefits for sure but also drawbacks. Can you live in a van where you want to live?
Do you actually want to live in a van down by the river? We get kind of spoiled with plumbing, hot water, etc all. Does your spouse want to do that? Do you accept the hit that living in an van is going to bring to your dating/ social life?
Steely Dan
I’m driving one second
Ryan
NO worries. Just stuff to think about.
I think a fundamental question here is what you want your life to be like? If you went the van route and things kept humming along normally would you feel like the sacrifice was made in vain?
As a middle ground if one can pull together the cash a van set up for camping and a little chunk of land somewhere is a pretty good back up option. Having a van to take camping and a chunk of land out in the middle of nowhere (or at a relatives place) where you could potentially pre position bulk supplies is a pretty solid contingency plan. While it isn’t as awesome as a doomsday bunker, hunting cbin or ranch it is probably a lot more realistic as a back up plan for most normal people. For the price of a couple nice vacations you could have a van and a little piece of land. I know this isn’t as clear cut as it might have been but hope it gives you a way to look at these problems.
Steely Dan
This helps alot and yes feel free to publish, I think with the is it worth the gamble question I’m looking at the recreation aspect of doing some cool stuff with what’s left of my 20’s and more sacrificing parts of my life, security, stability, for the freedom of movement and ownership of my time usually reserved for well of retired white people
Ryan
I feel a lot better knowing it’s more that you want that lifestyle than some worst case scenario thing
I would say you probably want a small rv or travel trailer. A bathroom/ shower and the ability to refrigerate/ cook food are pretty important. Ditto some kind of heating system.
There are tons of available ones at a variety of price points