Right now it’s not about debt collection though (perhaps, yet). We haven’t seen massive defaulting so far. In the 1920s avg household debt increased 3x-4x domestically, which in a round about way caused us to start trying to collect debt from foreign (war torn) countries that couldn’t repay. Add in tariffs on trade to try and make them pay one way or another, which only made things that much worse (people retaliated with their own tariffs)

What we’re seeing right now though, and what has everyone freaked out, are banks literally unwilling to lend to one another. No one trusts anybody to not go bankrupt. The money market has literally frozen. Same thing is happening with bonds as well, which is where things get scary outside of banks. Companies raise money quickly in two ways — borrowing, or selling bonds. When you can’t do either, payroll, debt payment, inventory, etc. all risk freezing up. The $850bn bailout is intended to grease the wheels, but its almost moot if other countries don’t offer up their own support internally. We’re too global.

The silver lining, if there is a lining, is that this will likely hit Europe harder than it hits us. Meaning, money is moving out of the Euro and into the dollar for safety, which is causing oil to drop considerably. I have to honestly wonder if the EU countries have strong enough ties to withstand this. If someone gets the bright idea to leave the union to try and protect themselves from the carnage, it could fall apart.

Expect “cheap” gas again mid November in response to the strengthening dollar and falling oil demand. That means we’ll also be lucky enough to hear all the “see, a Dem was elected and we have cheap gas again!” comments from the illiterate. Fantastic.

Anyhow, keep contributing to everything just like normal. Keep rebalancing annually. When you do the math on expected returns in the market, its scary times like this that make those returns possible. Just have to stay regular.

The only thing I’ve done differently is buy a couple boxes of ammo from walmart. It’s always nice to have your bases covered, I guess