NB: There is no “right way” to deal with what’s coming. And what’s coming will be catastrophic. Especially if/when the commercial real estate market implodes (as early as mid 2025). But the most important thing is being able to anticipate the coming issues (before others) and get a leg up to protect you and your family:
1. MOVE SAVINGS TO LESS RISKY BANKS, BROKERAGES, AND/OR INSURANCE COMPANIES
The bigger banks are less likely to fail, because the US government won’t let them. We have seen the FDIC prop up a few regional banks in 2023, but that kind of reckless response isn’t possible to do for all banks. As such, putting money that you DO decide to keep in a bank in the “too big to fail” banks is more prudent than keeping cash in the regional banks (especially in unsecured amounts).
The best (read: safest) way to do this I’ve found is moving cash to whole life insurance policies. History has shown that large mutual life insurance companies are best situated to handle any financial storm.
2. BUY PHYSICAL ASSETS TO PRESERVE WEALTH (10-20%)
Buying physical gold and silver are NOT investments. But as the dollar falls due to rampant inflation (and given the FED’s recent pivot being tantamount to a capitulation to inflation), there will be a flight to safety and “risk free assets.”
Gold and silver have historically been safe-havens in time of economic and geopolitical uncertainty. And the coming months will be the mother of uncertainty as we face a situation many times worse than the 2008 collapse. Gold and silver (in your physical possession) will prove to be incredibly helpful in preserving wealth.
To be clear, I’m not suggesting we will revert to a bartering system that relies on gold and silver. I’m suggesting that as the dollar implodes/crashes, one’s wealth will be maintained as the value of gold and silver rises in proportion to the collapse of the dollar.
3. SHORT THE MARKET WITH LOW-RISK, LOW-BETA INVERSE ETFs (1-5%)
Important: this strategy is only if you have an appetite for *speculation* (not investing).
These ETFs include tickers like SEF (short financials), UDN (short the dollar), DRV (short the housing market), PSQ (short the nasdaq), and VIXY (short market sentiment in general). I recommend no more than 3-5% of your net income in such instruments as they are inherently risky (even these lower beta ones). They also are NOT “buy and hold” instruments—they are meant only for short term plays such as for situations like we are in now.
If you want to be extremely bearish and overly risky, you can look at other “2x” and “3x” leveraged ETFs—but these are tantamount to gambling. That said, I personally hold just a small amount of SQQQ, SRTY, and others in this current climate to roll the dice.
Long story short, if you’re not content to sit on the sidelines and wait for the crash to make your move—but want to try to live life a bit more dangerously and speculate on the market’s highly volatile ride down—consider shorting the market. Now is the time.
4. LIQUIDATE FROM STOCK MARKET; MOVE TO CASH POSITION (60-80%)
This is self explanatory once you read #5…
5. BUY ASSETS AFTER CRASH HITS
This is where opportunities for profiting on the disaster (as sad as that is) will come. But knowing something is going to happen (because you have your eyes open when everyone else is playing ostrich with their heads in the sand) will give you a tremendous advantage in the coming months/years.
Once the banking crash comes … wait. Wait for your opportunity to use your cash sitting on the sidelines. Then pounce!
You won’t have long — maybe 6-12 months tops. Use this time of tremendous uncertainty and turmoil to buy assets on the cheap. I imagine deals allowing you to buy at 30 or 40 cents on the dollar will surface.
Purchase real estate, land, commodities, crypto, strong blue chip companies that make tangible goods and/or pay dividends etc. If you re-enter the market, pay close attention to companies with the lowest P/E ratios, as that is where you’ll find your deals.
Buying ASSETS and investing once the world is hunkering down and licking their wounds will allow you to not just survive, but to THRIVE.
Important note: some have commented that this strategy puts one in a very dangerous “cash rich” position prior to inflation surging. This is true; this is a risk. This is why I say the window to purchase assets is small. Do not delay long after the crash. Don’t lick your wounds with everyone else. NOW is the time to buy crypto hand-over-fist.
Bitcoin, ETH etc are heavily correlated with risk assets at the moment (due to investor and hedge fund money pouring into the space the last decade). That money needs to pour out of the bubble.
What I’m saying here is crypto WILL crash! Hard. Some will even be convinced it is dead. Don’t be tempted to believe them. There will be a second surge after Bitcoin and ETH lose 70-90% of its value. THAT is when you buy it. Do the same for land.
Buy single family houses. Buy blue chip stocks. Buy multi-family rentals. Buy commodities and companies that make physical items (not services).
This is how you will not just survive, but thrive, in the coming banking collapse.
When?
What will the catalyst be for this mother of all crashes, you ask? I sincerely have no idea. It may be war or rumors of war. It may be the commercial real estate bubble implodes due to the convertible note ticking time-bomb. It may be any other number of factors. But the can that was kicked down the road for so long will eventually come to rest. And that is when the dominoes will start falling!
