I was fortunate enough to get out of the market almost exactly two years ago so I missed the big losses. But if you're going to time the market (not advisable for most, but the writing was on the wall), getting out is only half of the equation. Now i've got to get back in, which I'm doing slooooowly over the next year, with approx 8% back in per month automatically, rain or shine. I might make an exception if the asteroid hits or the mothership arrives.

Like SR, I've stockpiled long-term food and enough "stuff" that I could survive a depression if this turns into one.

@Houtx: If you rode the market down then getting out now isn't going to do much for you. I think the market is close to bottom - it could go down another 10% but might not go down much at all. Nobody knows. But I think the biggest losses have already taken place.

I'm no expert, but I think we're in for a short-term deflationary period during which prices will go down as retailers try to unload their stuff to fewer and fewer people who have money to buy. The government will keep the printing presses rolling, dramatically increasing the money supply and making the dollar worth less - or worthless - again, who knows?

The latest number I heard was that the average taxpaying family of 3.4 (or whatever it is) now shares something like $165,000 of the national debt. That's excluding the huge numbers that don't actually pay taxes.

There is only one way out when you owe this much money - that is inflation. As an overly-simple example, if we each make $1000 yearly and owe $100 (10% of our income), we can print money until our dollars are worth half as much. At that point we make $2000 yearly (our wages inflate with everything else) but still owe $100 because inflation has no effect on what you owe - so now we only owe 5% of our income*. So we've essentially cut our debt in half by doing nothing but inflate.

My advice: Save money where you can and be prepared for short and medium-term, um, problems. To the extent that you are prepared for problems, don't tell your neighbors. At best, they'll think you're wacko. At worst, they may come looking for your stuff if things go south. I would NOT have large amounts of money sacked away in U.S. Dollars (bank accounts, CDs, money market funds, etc.). These are sure to be harmed greatly if we go inflationary. If you have large amounts of money, I'd put them in a bank account or CD denominated in the currency of stable democracies whose governments are strongly anti-inflation - like New Zealand, Australia and Switzerland. Such accounts are easy to open with U.S. based banks like EverBank. Gold is always nice and I'm a big fan of it, but as with anything, limit your exposure to it. For most people, 15% or so is a safe number. Eggs, baskets, all that stuff.


*Your mortgage and credit card balances don't go up or down because of inflation, nor does the national debt.