Good Destinations in Event of Global Economic Depression?

[Blue Skye]

A sailboat with alot of batteries, solar and wind gen sounds like a good place to be!

I trade in the foreign exchange market and typically what happens is global ecomomies help bail out weaker economies. All major economies are dependant on exports for economic growth and if the USD or any other major currency weakens too much other governments will try to ease the move for fear of ripple effect. As was the case for the Euro in 2000 when Japan, US and a few others gave it a lift.

Here is a recent quote from an analyst to better explain:

The broad weakness of the US dollar hit the forex market hard recently. Indeed, over the past few weeks, the currency has plummeted with signs that the US is already in a recession. The flip side of the trade is just as important: the Euro is hitting new highs almost daily, the Japanese yen is nearing 9-year highs, and the New Zealand dollar has broken to 26-year highs. The rapid appreciation of these currencies could prove especially worrying for government and central bank officials, as the Euro-zone, Japan, and New Zealand all depend on exports for economic growth, especially as consumers tighten their purse strings and spending fades. As a result, it is worth questioning if the European Central Bank, the Bank of Japan, and the Reserve Bank of Zealand will make a coordinated effort to stave off an an all-out crash of the US dollar in an attempt to weigh down their own currencies.
These Banks are no strangers to intervening in the currency markets. The last time a major coordinated effort was made to intervene was in September 2000, when the Fed, BOE, BoJ, and BoC joined forces with the ECB to support a beleaguered euro. Meanwhile, the RBNZ intervened just last year to cap gains in the New Zealand dollar. Will we see a repeat in 2008?

[Hud3]

Originally Posted by Chuck Baier

... we have friends that could not live on their retirement in places like the US, Canada or Europe. They now live quite well and very happily in Panama, Guatemala, and Costa Rico. Their money goes a lot farther...

Chuck,

Many of the Caribbean nations have the Eastern Caribbean dollar as currency. It's tied directly to the US dollar, so we rise and fall with the same monetary tides as you guys in the US. How about the countries you mentioned? Are their currencies independent and relatively sounder at this point in time, like the Euro and the Yen?

I know a lot of the financial benefit for non-working ex-pats living in those countries is lower local wages and relatively low prices for locally produced goods, but I was wondering about the currency aspect.

[Tspringer]

Forgive me for posting an opinion, I forgot this was the intardnet and some folks would take it as some kind of statement of fact.

Sure, the economy may do just fine. It may pan out that $50 Trillion in debt really isn't any big deal. I hope y'all are correct and I am wrong.



Terry

[sneuman]

Originally Posted by Hud3

Chuck,

Many of the Caribbean nations have the Eastern Caribbean dollar as currency. It's tied directly to the US dollar, so we rise and fall with the same monetary tides as you guys in the US. How about the countries you mentioned? Are their currencies independent and relatively sounder at this point in time, like the Euro and the Yen?

I know a lot of the financial benefit for non-working ex-pats living in those countries is lower local wages and relatively low prices for locally produced goods, but I was wondering about the currency aspect.

Pegged currencies are a good thing if you're getting paid in U.S. dollars. For example, my friends who get paid in USD who live in HK (HK$ pegged at appx. $7.8 U.S. dollars) are doing OK whereas those in Thailand (baht was 44:1 in 2003, now 28:1) are getting hammered.

[David_Old_Jersey]

But remember that currency pegs are artificial - if (when?) it is in a country's best interests to break the current peg rate they will.....with zero consideration for any expat retirees........whether this be an outright float, going for a band or a simple "adjustment".

Retiring / planning 20 years ahead one needs to carefully assess the risks of "what if".

Folk getting "hammered" in Thailand at 28?......obviously they have only been there for a "short time" ...25 to the USD was "normal" for a longggggg time . 38/40 became the new normal after the 1997 meltdown......of course between then and now been a lotta inflation (as their has been in the West).......I make the comment only cos' it's all a matter of perception as to what is "normal" and one can't plan on "your" bit of the 3rd world always staying in the Toilet economically/currency wise - no matter how conveniant (or the fact that using all the laws of Economics (and Physics?!) it should be still in the Toilet - but is not).

1997? - 92B/£1 for me = and a lotta .......for the locals of course

[sneuman]

Originally Posted by David_Old_Jersey

But remember that currency pegs are artificial - if (when?) it is in a country's best interests to break the current peg rate they will.....with zero consideration for any expat retirees........whether this be an outright float, going for a band or a simple "adjustment".

Retiring / planning 20 years ahead one needs to carefully assess the risks of "what if".

Folk getting "hammered" in Thailand at 28?......obviously they have only been there for a "short time" ...25 to the USD was "normal" for a longggggg time . 38/40 became the new normal after the 1997 meltdown......of course between then and now been a lotta inflation (as their has been in the ...

Well, it's all relative. If you moved there on a US salary at 44, you've lost nearly 40% of your salary! I know <-- that was me, except it was more like 40 to 32, that's still a 20% decline.

[Palarran]

If the question is where to go, I would think where it's already relatively cheap. Costa Rica, Mexico, Belize. Not an Island, nor a heavily industrialized country. Low cost food grown locally. Inexpensive labor when needed.
I'd also prefer an area where I'm not afraid to be robbed or shot - but thats just me.

[David M]

The major economies are so linked together now that a collapse of one major economy would have a large effect on all the rest...so essentially, there is no place to run. You could put it all in precious metals but if there is no demand for metals because of all the collapsed economies then what is the point? You can't eat gold.

I'm not going to worry about it.

[Charlie]

The solution is really not that hard.

Given: John Steinbeck said, "Montana would be the greatest place in the world to live if it had an ocean."

Given: Life in Montana is 20 years behind the two coasts

Given: With Global warming Montana will soon have an ocean

Conclusion: Open a marina in Montana. It should have an ocean soon. And since Montana is twenty years behind the coasts there is no worry because when the world ends you'll have twenty years to figure out what to do.

Case solved.

[Pelagic]

Originally Posted by Captkev

I was reading an article online last night concerning the imminent collapse of the U.S. economy (they predicted 3rd quarter of 08) and was wondering if this did happen what would you pick to be the best destinations to weather the storm... especially considering the economic, political, etc. effects it would have on the destination country?

I think an important part of your question is not so much where you are, but where your head is at.

Self reliance, which most sailors aspire to, is the key to survival in any situation. When disasters hit, (man made or natural), I notice that the simple people in third worlds just shrug it off and get back to basic survival techniques.

I think what makes the OP nervous is the amount of anger a major collapse will generate within a basically spoiled nation. Makes me nervous to!

[cooper]

It may also be worth bearing in mind that "as a general rule" "you are welcome to VISIT, but if you want to stay then you must meet "certain criteria" As a non humanitarian "refugee" you would want to have your age, skillset, and bank balance well and truly in the positive before you have any chance of moving to Australia. I gather that this is also the case for a lot of other more desirable places. Mind you I am not suggesting that the land of Oz is a good place to move to on the contrary, it is full of mean and nasty bitey things and thats just the people. Mostly desert, and dust...bush fires....

[Lightfin]

I think those who are able to live on their boats in mild climates, and able to visit islands with plentiful food, political stability as well as reasonable social stability/safety, and an openness to barter because cash may have little or no value.

Before a worst case scenario occurs it's difficult to estimate where those places may be. But, I would guess the more remote the location, and the more it's already far from and/or not very dependent upon trade, the better (south pacific islands??).

[Latitude9.5]

I've got some plans, but me and my gold aren't tellin

[Wotname]

Originally Posted by Lightfin

Before a worst case scenario occurs it's difficult to estimate where those places may be. But, I would guess the more remote the location, and the more it's already far from and/or not very dependent upon trade, the better (south pacific islands??).

Wasn't there a story (perhaps urban myth) of an american who was looking for somewhere safe to take his family before the outbreak of WW2. After a lot of analysis, he decides on Guadalcanal, Solomon Islands as the safest spot - the battle of Guadalcanal raged from August 7, 42 to February 7, 43.

Hard to pick a good spot but as Cooper points out, Australia is not one of them .

[blondezilla]

I was reading this article the other day.... There is a super volcano under Yellowstone National Park that is going to blow one day and take the entire country out and...

Just sail and smile and enjoy... Life has many small pleasures to enjoy that don't rely on the economy, while the rest of the planet is crying bloody murder and worried about things they cannot change.

Small towns don't tend to feel the blow quite as bad as being right in the metropolitan areas of a larger cities. Small towns with close friends are always a good bet if the poo hits the fan. And of course, somewhere warmer as opposed to colder.
It's a great time to invest in a boat and get off the grid.
Always always network, the more people you meet the more friends you have and the less worry that you will be up S*it's Creek without a sail.


You will all be fine.
There I have spoken....