Thursday, July 2, 2009

A localisation recipe

John Robb (whose mind must work at many times normal human speed!) has a short and solid post this week: "Resilience Judo". John's view of the world is probably a little too dark for many people, but he seems perfectly cheerful despite all that. He's like a scientist from another planet, picking over humanity's less pleasant mass characteristics with a cool eye. Anyway this post is so good I'm going to quote a lot of it with my comments.
There are growing signs -- from a black swan in savings/debt reduction to massive debt loads to quarterly trillion dollar losses in personal wealth to stagnant/falling consumer purchases to persistently low consumer confidence -- that the parasite ridden American "consumer" is finally dead. If this is true, the economic model of the latter half of the last Century is likely dead too, and that will mean wrenching change. It's my belief that the dominant solution is to prepare for a local future to ride out this storm.
I'd say we're about six months or a year behind the US in all this, but it will happen here soon. Here's the bulk of John's post…
Here are some of my random (more random than I would like) thoughts on what you should do to prepare:
  • Ruthlessly reduce debt. Nothing on credit. Pay off every loan. Strategically walk away from underwater assets (like homes that are worth less than the mortgage). This will allow you to stay one step ahead of the death throes of the old economy.
  • Turn your hollow home into a productive asset. Most homes are devoid of any productive capacity. Adding energy, food, etc production to them turns them into real, productive assets. Get your assets out of financial derivatives (stocks, bonds, etc.) as fast as you can and put them into productive assets (not commodities) you can touch.
  • Make everything you can yourself. Grow your own food. Produce your own energy. Make/repair your own clothes. Turn costs into savings. Reskill to do this. The new "fashionable trend" isn't what you can buy, it's what you can make. Anyone that buys "designer or branded" anything is a fool.
  • Work online. Convert your skills into something that can be sold electronically (most of my complex work is done this way). Develop the skills necessary to work as part of a virtual team. Telecommute whenever possible (and push to do this, even if it means less money), reduce the number of cars/dress clothes/etc you own in synch with this conversion (and move to a less expensive locale when possible!). Always have two jobs going at the same time.
  • Build a local business. Own assets that produce and sell that production locally. Even if it is small, it will help down the line via contact networks/experience (a new spin on modern "networking"). Develop the niche skills that sell locally. Group/tribe up when possible to tackle larger opportunities.
  • Barter. Cashless trades. Convert what you have to what you need. Skill set bartering is amazingly effective. Become part of a local barter network (the backchannel).
  • Bring your family home. Grow your home to accommodate more people. Bring back parents and grown kids (with their families). This will allow you to pool incomes and radically reduce workload/costs. It's also beneficial for security. NOTE: I've found that consideration/compromise is the best way to handle an expansive family home environment.
  • Suggestions welcome!!
To amplify on John's points, don't go into debt for anything at the moment! Prices are going to plummet left right and centre once the downturn really hits Australia. If you've got any stuff you don't really need, sell it on eBay now! Cash will be king for a while, until inflation creeps up as the Federal government starts to wash away its financial burdens (social security for a start).

Remember that power comes from ownership of the means of production! Get the tools you need, learn the skills you need.

Buy from Savers, or the local op shop. Go to garage sales for bargains. Swap stuff. Don't waste precious capital.

Think self-employment. My wife and I have a retail plant nursery and florist, a garden maintenance business, I design and build interactive educational exhibits and one of my sons and I are getting into breeding aquarium fish. All our businesses are tiny but they add up and we have no debt. Look at your skill set and see where you can go with it.

Look at your home and location. Is it going to work for you long term? We've bought a block of land in our town but are not building yet, and may sell and buy something more suited. Meantime another of our sons has moved back from Melbourne with his partner. She's working for us part-time as well as making and selling jewelry and he's working part-time for another retailer and running his own business, all with no capital costs worth speaking of. We share tools and help each other out. We have two vehicles between the four of us. Our costs of living are very low.

Last words to John Robb…
This change doesn't require cute and crunchy notions about "lifestyle" environmentalism. It's all about mitigation of stresses in the short to medium term as living conditions deteriorate, while at the same time preparing to ride the resilient community wave to rapid and sustained long term success/wealth.

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