Lessons from the recent rash of natural disasters

It seems as if Mother Nature is waking up. Either she's trying to send humans an important warning, or perhaps she's just out to kill us all.

Massive storms across the globe, earthquakes, and collapsing ecosystems all combine to remind us that we are indeed intimately connected to our planet's natural systems. And that our well-being rests on staying on Mother Nature's good side.

Well, Mother Nature has seemed pretty pissed at us of late. Her recent punishments should be taken as a disciplinary wake-up call: It's time.

It’s time to prepare, everyone. Way past time.

And it’s time to recognize that there are multiplying failure points across the many systems we depend on for our way of life -- both natural and man-made. For example:

• The wealth gap between the rich and the poor is now grossly obscene and yet still growing wider.
• Our industrially-farmed soils are being depleted of their nutrients.
• Species are going extinct every single day.
• Global oil consumption ticks higher every year.
• Stock price overvaluation is about the highest it's ever been.
• Bonds have never been more expensive (i.e. yields have never been lower) in all of recorded history.
• Debt levels have never been higher (both globally and, in most cases, locally).
• The planet's population continues to explode (7.5 billion today, 10 billion by 2050) while key resources deplete at accelerating rates.

Only the foolish, or the seriously self-deluded, would think that these observations and trends will be consequence-free. 

Which means we have to begin doing things very differently. We have to change who we are, the actions we take, the investments we prioritize, and even our most fundamental values and priorities.

However most people simply will not prepare, not notice, and not change anything until they are forced to by crisis. And even then, some will resist any notion of change until they’ve lost everything.

The recent destructive hurricanes have been literally and figuratively instructive in this regard.

When To Stay And When To Go

The first lesson we learned from the hurricanes was this: Stay if you can, leave sooner than everyone else if you cannot.

Evacuating has a host of problems for those caught up in the exodus. Traffic jams, lack of fuel along the route, and having to drive for many hours only to end up in a distant hotel in a town probably not ready for a massive influx of people are just a few of the stresses. Living out of hotels and away from your job is also very expensive, especially for a nation where more than 75% live from paycheck to paycheck.

As the people of the Florida Keys learned with Irma, once you’ve evacuated, you're then unable to return until authorities have decided you can, creating enormous stress for people who want to check on their properties and (possibly) pets left behind, put tarps over damaged roofs, etc. The lesson many claimed to have learned from that experience was to not evacuate in the first place.

After reading enough accounts of people who regretted evacuating, coupled to the relatively low loss of life even in places like Dominca that took the full brunt of a Cat 5 hurricane where people live in less-than-ideal structures (flimsy, wood frame, tin roof affairs), it would take quite a lot for me to decide to not ride out a storm.

I’d have to have some special mitigating factors to impel me to evacuate -- like tall trees next to my house, being in a flood plain or near a flimsy dam or dyke, or having special needs people under my care who might need electricity or other services to remain alive.

I’ve never sat through a Cat 5 storm, so perhaps I’d change my mind if I ever did. All reports are it's an extremely terrifying experience: loud, violent, and seemingly endless. But I’m pretty confident that I’d choose to wait out a Cat 3 or lower in my house.

That said, I'd have a pre-arranged and well-defined evacuation plan in place, just in case. The experiences shared below have convinced me of the high value of doing so.

Getting Prepared Beforehand

We've had several PeakProsperity.com members write in who were in the direct paths of Harvey and Irma and came out from the storms OK. One best practice they shared in common was they were already fully stocked with emergency provisions well before the hurricanes even began forming way out in the Atlantic. These were folks who had prioritized being prepared for *whatever* future disaster might arise.

Despite this, they still experienced some surprises. No matter how well prepared you think you are, reality has a way of exposing your overlooked weaknesses.

Here's an account from one of our readers (Rector):

We live south of Corpus Christi and Harvey just missed our area. We began the usual fire drill of preparing for the hurricane, but it veered north just in time. Bizarrely the follow-on weather was delightful - sunny, crisp, and breezy - while the rest of the gulf coast became an apocalyptic nightmare. As I watched the news I was painfully aware of how close we came to being flooded, displaced, and disrupted.

As a card-carrying member of the Peak Prosperity Preparer's Club - I came to the realization that Chris articulated - nothing can prepare you for this kind of Black Swan event. No matter what - losses will occur. My takeaways after being grazed by the Harvey bullet are (so far):

1. Be prepared to accept refugees. Family members are on the way (I think). At this point they are without resources and fractured. Dad is a cop and cannot leave Houston. We are happy to accept them into our home - but it wasn't exactly planned. In a wider emergency the same might happen and I will say yes then too. I need to expand my preparations for the likelihood of more people camping out with us. Turning everyone away outside of a pandemic scenario is not an option (really). What's the point of all this anyway if you can't help people?

2. Being 5% prepared is WAY better than zero. As I watch people in Houston it has occurred to me that I need a boat. I live on a body of water which has flooded before and will flood again. I built my home well above the flood plain - but Harvey just made a joke out of that math. As I watch people wade in chest deep water while others float by in boats; I'm buying a boat. Today.

3. Being prepared is great! I needed to do NOTHING to get ready for the hurricane at my home. Turns out that was really helpful because my time was spent getting other people and places prepared. All of my employees (save one) asked for the day off (to get their homes ready) leaving me alone in my preparations. Thankfully I didn't have to waste time at the gas pump, ATM, or the grocery store.

4. Evacuation plans are a real priority for me now. With four kids my mental default position has been to "hunker down". "We don't evacuate for hurricanes here" has been the attitude because we are prepared and have always done well. Harvey has demonstrated this is NOT ALWAYS POSSIBLE.

I will now focus my considerable prepping energy to developing a viable evacuation strategy. Not an overland hike in ghilli suits - but a real strategy to get this group of people somewhere else quickly and safely. Routes in every direction. A list of destinations. Checklists for packing, securing, and evacuating. Documentation, asset relocation, etc. I am even going to develop a plan to go into Mexico. I had a day and a half between threat presentation and expected landfall. Some events may present even less time.

5. I need to be able to execute a plan at less than 100%. As luck would have it, I pulled a muscle at CrossFita week before and would have needed to do all the above while limping around in pain. I represent the lion's share of muscle power for the family - but can they execute in my absence or incapacity? Hmm. . . not ready for that.

6. It is possible for two bad things to happen at the same time. The financial crisis could begin, North Korea could strike, or any of the other crap I worry about could commence at any moment. WHILE LIVING IN A FEMA SHELTER because I hadn't planned on evacuating. Am I ready to execute trades, etc. while in that shape? Hmm. . . not ready for that either.

I am thankful that we were spared the apocalypse but it has (again) identified holes in my plan that are the result of false premises. Challenge yours because you just can't make this stuff up.

Rector

(Source – Peak Prosperity)

So many lessons packed into that experience! Huge thanks to Rector for sharing that all with us. The part that really caught me and made me rethink my entire levels of preparation centered around just how unprepared I would be if I had to completely bug out and leave my home behind.

Harvey (and Katrina) showed that sometimes you have to do just that. So has Maria, which is going to leave parts of Puerto Rico without power for possibly several months, maybe as long as half a year.

Would you be willing to live without power in a tropical climate without power for 6 months? I wouldn’t. Just keeping food from spoiling would be a hard challenge, but just one of many -- including sleeping without A/C or fans (or rather trying to sleep I should say).

The other important lesson to take from Rector and other like him is that if preparing beforehand is comparatively easy. But during a crisis? It becomes very hard and sometimes impossible. Another reader account, this one from Morpheus who was in the direct path of Irma for time, confirms this:

I live in Palm Beach City Florida and right now both the US and European forecasting models have a Cat 4/Cat-5 eyewall slamming right into my house.

Maybe not as bad as a currency collapse, but it will be worse for me. Anyways, to make a long story short, we think that we are well prepped, at least we thought so.

But crisis' of this magnitude get you to think even deeper than you normally would. And boy o' boy, I wish I had thought deeper.

We're better prepped than 99% of the population out there but now all that procrastination over the years is grating on me like sandpaper.

Ohh the easy things that I could have done a month ago, 6 months, a year ago.

(Source – Peak Prosperity)

The message is clear: Even for those who think they are well-prepared, a true emergency can shine a harsh light on your shortcomings. The best time to prepare is as far beforehand as you can manage.

The vast majority of people will ignore this message. Take this story that made the rounds during Irma:

Like many Floridians racing to buy food and supplies before the arrival of Hurricane Irma, Pam Brekke found herself miles from home today, desperately hoping to score a generator.

According to ABC affiliate WFTV-TV, Brekke, a Sanford, Florida, resident, had spent days waiting for empty shelves to be restocked and searching for a generator.

She said today that she'd traveled more than 30 miles to Orlando to a Lowe's Home Improvement store that had received a surprise shipment of a little more than 200 generators.

Within two hours, however, the generators were sold out and Brekke, who had been next in line, was empty-handed.

A heartbroken Brekke then began to cry. Ramon Santiago, who had gotten one of the generators but had not purchased it yet, noticed and insisted that she take his.

"She needs the generator," Santiago told WFTV-TV. "It's OK."

Brekke shared with Santiago that it was her ailing father who needed the generator to power his oxygen supply.

(Source)

A heartwarming story to be sure, and we can all applaud Mr. Santiago for his actions, but it's also an instructive tale that reveals the extent to which many people fail to think through their plans until forced to.

An imminent hurricane should not be a required prompt to begin thinking about scoring a generator. Look, if I had an ailing parent that required electricity in order to survive, hurricane threat or not, you can bet I would have back-up power already on site and thought through. Hey, sometimes the power goes out. Hurricane, blown transformer, or errant squirrel. It's insane to think it will always be available, uninterrupted, 100% of the time. 

So while this story had a happy ending, it shouldn’t have happened in the first place.

People should be prepared to take care of themselves through any reasonable and foreseeable emergency. Some are. Most are not.

Preparing in a rush while an emergency is approaching or underway is difficult, and not advised. In Puerto Rico, this was immediately apparent even before Maria landed:

"This storm promises to be catastrophic for our island," said Ernesto Morales with the U.S. National Weather Service in San Juan. "All of Puerto Rico will experience hurricane force winds."

Puerto Rico has imposed rationing of basic supplies including baby formula, water, milk, canned food, batteries and flashlights.

(Source)

That is, once a disaster is on the way, it’s too late to stock up! Don't get caught having delayed too long.

Preparing Is A Selfless Act

The entire topic of "prepping" seems to have gone dead over the past few years. But, trust me, it’s going to come back into style again soon.

Right now, many people have a negative reaction to the idea of ‘preparing’ and denigrate it as some sort of loony act.  This is really just a psychological evasion, a coping technique that allows them to ignore their own lack of resilience.

We all expect our corporations and governments (federal state and local) to be ready to easily predictable emergencies, and we get quite irate when that proves not to be true -- even though most of us have taken zero steps in our own lives to prepare for these "easily predictable" events.

This passage from our book Prosper! provides our views on what it means to prepare responsibly:

Selfless, Not Selfish

Another objection we hear to the prospect of preparing and becoming more resilient is that those actions could be seen by others as being selfish. Instead we see them as being selfless. Those who are not prepared when an emergency strikes are a drain on critical resources, while those who are prepared can be of assistance.

To be among those who can be in a position to render assistance, or at least need none of their own, means that your prior acts of preparation have selflessly removed you from the minus column in an emergency and placed you on the plus side. Anyone who has flown in an airplane is familiar with this model. During the emergency-procedure review prior to takeoff, you’re reminded to put on your oxygen mask first before assisting others or your own children. The reason for this is obvious: if you lose consciousness, then you’ll be of no help to anyone and become a burden on others.

The first steps toward preparedness usually involve addressing your own needs or those of your loved ones, but many people then go beyond that and prepare for others who may not be able to do so, or have not done so, or maybe even will not do so.

But let us put an important qualifier on that: preparing before a crisis hits is responsible and selfless, but trying to accumulate necessary items during a crisis is an act of hoarding. We do not and never will advocate hoarding. Responsible preparations begin long before any trouble appears. Anything else stands a good chance of making things worse, not better, and may earn you some enemies.

The news has been full of stories of how people behave when scarcity strikes, and these are often quite distressing tales of bad behavior and fragile civility. People in Boston fought over bottled water just hours after a water main broke in 2010. Nasty fights, too, given that the water main had broken just hours earlier.

In Venezuela, as of the writing of this book, desperate people are attempting to buy anything and everything that might remain in the stores as their national currency devalues by the day. Looting and violence are on the rise and hunger and hopelessness are taking hold. This has brought forth all sorts of stopgap government-mandated counter measures that are typically making things worse for average families.

In the process of becoming more resilient, time is your most valuable asset. Be aware that many things that are easily available now may be difficult or impossible to obtain later. Now, before any big crises have hit, it’s very easy to pick up the phone, or click a mouse button, and have the big brown truck of happiness roll up to your doorstep a few days later with your purchase.

Everything you could ever want to buy is currently available and stores are abundantly stocked (in most countries). However, we can imagine a large number of possible futures where such access to consumer goods and desired items is either much more restricted, much more expensive, or even impossible. For those without monetary resources, some of your most important assets—such as Social and Emotional Capital—require no money at all…but will take time to develop.

Preparing beforehand -- and thereby being in a position to help those around you in the event of an emergency -- is selfless. Preparing in the midst of a crisis, grabbing what you can, is selfish.

Why Bring All This Up? The Coming Financial Storm

The recent hurricanes are merely reminders that sometimes things happen that are out of our control. They remind us that risk still exists.

Our longstanding view is that there’s a financial storm coming. One that is going to be larger and more destructive than all the others that came before.

Just as the hurricanes in the Atlantic basin were fueled by ocean temperatures a full 1.5 degrees warmer than average, the coming financial storm will be fueled by the most excessive pool of "hot money" created in all of history.

In 2016, the stock market had convincingly rolled over and formed a very reliable head-and-shoulders top indicating an approaching correction. In response, the world's central banking cartel (led by the ECB and Bank of Japan in this case) went on the most aggressive money printing spree the world had yet seen, flooding the markets to drive prices back higher. Here's what happened to the Dow Jones industrial average in response:

While that “rescued” the stock market, it has only served to drive it to a higher level that will be far more destructive when it finally corrects. Such ‘help’ always turns out to have come with a long-term cost far greater than the short-term benefit.

History shows that every bubble experiences a final blow-off top phase. They all do, whether the object of fascination is a railroad, swamp land in Florida, tulip bulbs, or today’s financial assets.

The final spurt on the above monthly chart of the Dow certainly looks like that moment of central bank panic of 2016 has finally resulted in the blow off-top we've been looking for. One that has been long in coming.

Another feature of bubbles is that they require prices to depart wildly from their underlying fundamentals. Well, we need look no further than small cap stocks in the US, which have just hit a brand new record high as earnings have been in terminal decline:

Yes, Virginia: stocks hitting new highs as earnings expectations hit new lows is very telling. It means that the crazy liquidity experiment of the central banks now has a life of its own. It’s crazy for stocks to be behaving this way, especially since this is our third (and biggest) asset price bubble in 20 years.

Stock prices now shrug off the risk of nuclear war, despite the escalating saber-rattling between the US and North Korea. They are also immune to the increasing trade tensions between the US and China, and a host of other generally deteriorating geopolitical trends.

In short, they are in bubble land and are now in search of a pin.

The situation is now so obvious that even "mainstream" media outlets like MarketWatch are reporting on the dangerous repercussions of the Federal Reserve's behavior:

“I’ll admit that it feels a little surreal that this Federal Reserve with its addiction to manipulating markets is actually trying to kick the habit. The unwinding of the balance sheet will dominate markets for at least the next two years and cements our outlook for higher rates,” said Bryce Doty, senior portfolio manager at SIT Investments, which manages some $7 billion.

(Source)

I suppose it’s gratifying to finally see in print the same things we’ve been saying for years: The Federal Reserve and rest of the world's central banking cartel are addicted to manipulating markets. But the world eventually catches up.

At the same time it’s a little unnerving to see these ideas going mainstream, because that means we’re much closer to the end of this experiment than the beginning. All it takes is a critical mass of people to lose faith in the central banks for things to really get started to the downside.

Once they do, we predict the financial turmoil will take on a life of its own and we’ll all be damned lucky if that doesn’t spread into wider and more destructive geopolitical conflicts.

In Part 2 -- Crisis Preparation: What To Do, we detail out, point-by-point, the most important steps concerned individuals should take now -- before another disaster arrives -- to safeguard their investment capital, their property, and the personal security of their families.

Because whether caused by Mother Nature or man's own recklessness, we are due for more crisis. Don't be caught unprepared.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

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 -- Published: Sunday, 24 September 2017 | E-Mail  | Print  | Source: GoldSeek.com

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