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Wildebeest is a PhD MBA who invests primarily in resource stocks such as base metals, iron ore and coal.
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  • Post (next) crash strategies
    I've just returned from Peru where, walking through some of the isolated villages in the Andes reachable only by foot or by donkey, I was reminded of some of Marc Faber's recommendations about how to prepare for the doom and gloom that he sees on the horizon.

    For those pondering a post economic Armageddon scenario it seems to me that stocking up on canned food is overrated. It will eventually run out. Also bomb shelters seem over the top unless an economic collapse leads to a total loss of law and order and/or war.

    Observing subsistence farmers in Peru it seems like a lot can be said for having a small plot of fertile land somewhere, preferably close to running water, and a couple of donkeys. Choose a climate that doesn't fluctuate too much so that you can get crops all year round. Grow potatoes for starch. Meat? Well sources of meat might be too valuable alive, certainly donkeys for carrying stuff, ox for ploughing fields, cows for milk, goats, sheep for fibers. These animals seem like they will be too valuable to eat. Maybe the post-Armageddon world will see us all as vegetarians relying on beans and legumes for protein with an occasional meat supplement from an aging donkey.

    So I'm wondering what necessities people believe they would need to have at hand in the event of a transition to subsistence farming? I'd probably want to have a water still or some means to sterilize water, maybe solar sterilization. A good supply of seeds to get me started. Some knowledge of how to build a mud brick or stone house/hut. What other things should I need and what crops should I plant? Any ideas?

    Disclosure: no positions
    Jul 01 4:05 PM | Link | 1 Comment
  • Marc Faber: Mirror, Mirror on the Wall, When is the Next AIG to Fall?
    I always find Marc Faber both entertaining and informative. ...but would I enjoy listening to him as much if he didn't have that accent? Not sure. All I know is that he always reminds me of Dr Strangelove. Here is a link to a one hour long speech he recently gave at the Mises Institute titled "Mirror, Mirror on the Wall, When is the Next AIG to Fall?"

    Disclosure: not relevant
    Jun 06 3:49 PM | Link | Comment!
  • Commodities and Speculators
    A constant source of irritation to me is articles about base metals that fail to distinguish between physical demand and speculative demand and typically fail to mention the supply side at all. Are speculators adding liquidity to the market or are they the market? The way I see it rising prices in base metals don't necessarily signal economic growth. You need to determine if the prices are rising because of demand from industries with an interest in the underlying commodity or from demand for futures contracts by speculators who have no intention of taking physical delivery of the commodity. My opinion of the rally in base metals since March 2009 is that physical demand has been weak, notwithstanding transient buying splurges by China in some -- but not all -- base metals.

    Anyway I came across this interesting article by James Montier of GMO:

    The entire article is interesting but the commodities commentary begins on page 9. Note that GMO estimate that speculative money accounts for half of commodity trades.

    hat tip to The Big Picture.

    Disclosure: not relevant
    Jun 06 8:51 AM | Link | Comment!
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