Investing with Peak Oil in Mind

[Chris Wolf]

Like many others, I am confused about where to tuck away my little bit of retirement/emergency savings.  Right now I have about half in "socially responsible" stocks (although if I looked into the actual companies I doubt I would count them as responsible), and half with my local credit union.  But with the stock market becoming increasingly unstable, and in the long run being a totally unsustainable pyramid scheme of growth-- what should I do with that money instead?  And if the American dollar sees a big collapse like many people predict, will my money at a CU be "safe" or will it be deflated to almost no value, or will it disappear?

What do you guys and gals know about these issues?  Some people are buying gold, but that just seems so crazy to me.  Any input, advice, or resources would be appreciated.  Thanks!

[Judith Culver]

Chris, you have mentioned all the issues that we are struggling with as individuals and as a group. We are researching and talking to people. But there are no clear cut answers. We want to invest in local companies and loan money to local people and businesses, but the mechanisms are not available yet in this highly regulated industry.

Personally I think we need to divide our resources into two plans: a collapse plan and a more traditional, but localized, investment plan so we will have something in case the currency doesn't collapse.

For the collapse plan most suggest investing in "things" that will prepare for the post-peak future. Some suggest pre-1965 silver coins to be a medium of exchange; gold is too valuable to be traded. Some of us went to a teach-in last week with a great speaker. Shirley has written this up on the Personal Finance EDAP discussion, about the 3rd comment.

There are some financial sessions at the Green Festival with some of the most important representatives in sustainable investing. Maybe you will have a chance to look in on these while you are there.

We are breaking new ground for most of us and hope you will join the discussion.

[Judith Culver]

David C and I are interested in Catherine Austin Fitts ideas (www.solari.com) and the possibility of starting a Solari Circle in the fall. We haven't discussed a TW fund in this group yet, but I think about it often. I don't know how it would be organized. Do you know any professionals who could help us? I just downloaded, but haven't read, an article about starting a credit union. I wonder if this is the way to go.

David Marshak said:

...Judith, I wonder if you have discussed creating a TW Fund whereby we could pool money from ourselves as "investors" and lend it to Transition-related local businesses.

[Robert Plant]

Chris,

What about the idea of investing in local food production? "Slow Money" is based on permaculture concepts.



Personally my goal is to remain debt free, own free and clear a place to live/grow food, and to acquire the things that will not be available in the future. I think that all Fiat money will eventually become worthless(the value of what it buys), stocks are a bubble about to burst, and all paper assets will go away. My rule is if I can not put it in my hand or touch it, or if there is debt associated with it, then is does not exist. I do not like the idea of Mining Gold or Silver, but they do have a long track record of holding value. No easy answers, but Great question!

[Chris Wolf]

Walter, I totally agree with your points about people getting more than their money's worth with a local CSA (the health savings alone!!) and supporting local sustainable farmers. Absolutely.

I don't agree with your criticism of me that I am a "hip Bellinghamster" who buys produce from Mexico at the Food Coop. I have grown (myself), gleaned (locally), and scavenged (living off the waste stream) 95% of my food this year, and I plan to continue. When I buy food it is from a local farmer, or the occasional item that cannot be grown here, like a bar of chocolate. And I have been working FOR FREE about 40 hours a week for the last year raising awareness about local food, community resiliency, and related issues.

I have certainly bought CSA's in the past-- both for myself and for Christmas presents for others. But I buy from farms that call me a friend, not a hypocrite.

[Chris Wolf]

Thank you, Robert, for your insight... investing in a place I can live and grow food. Since I am a long ways away from having the kind of income required to buy a house or piece of land, I guess that means investing in something with a group of other like-minded people-- an appealing concept on a lot of levels. I am hoping that many Transitioners start considering the option of putting their resources together to create shared living/food growing situations. Eco-villages, or intentional communities, or whatever you want to call them.

Some permaculturists I know are investing most of their cash/stocks/etc in things like fruit trees and durable hand tools-- which makes a lot of sense to me!

Thanks for your input.

[Terese VanAssche]

Hi Chris & Robert,

I have long advocated for community living and have had the resources to buy land (0.9 acre) and a large 1911 Craftsman home with that in mind. It's keeping and maintaining it that would benefit from additional people sharing space on the land. That said, I have also long grown, gleaned, bartered and scavenged for food. and do support my local farmers with what they have avaiable for purchase. Learning to live without other things, or find an acceptable substitute.

that said, I once again have living space available in my home (large refurbished upstairs with 2 bedrooms, a studio room, and bathroom with shower.) Also lots of gardening space still available on this land. We have 5 varieties of apples, plums, blueberries, rasberries, 2 hazelnuts, one old gnarly pear tree 9but she bears fruit) and lots of established raised bed gardens and more in the works to replace front lawn with a medicine wheel herb garden and other consumables. Also planning to put in a chicken coop this summer. So in the interest of community living, please share this with those you know looking for a community living situation who can pay $400 a month for rent & utilities and contribute on the land. Thanks, Treese

Chris Wolf said:

Thank you, Robert, for your insight... investing in a place I can live and grow food. Since I am a long ways away from having the kind of income required to buy a house or piece of land, I guess that means investing in something with a group of other like-minded people-- an appealing concept on a lot of levels. I am hoping that many Transitioners start considering the option of putting their resources together to create shared living/food growing situations. Eco-villages, or intentional communities, or whatever you want to call them.

Some permaculturists I know are investing most of their cash/stocks/etc in things like fruit trees and durable hand tools-- which makes a lot of sense to me!

Thanks for your input.

[Rob Olason]

John Michael Greer looks at this issue of investment in the "Zombie" economy from a unique perspective. While this article doesn't really answer the question of where to move your IRA investment this year, it suggests that these "paper currencies" might not be the solid unit of wealth we currently believe them to be.

My personal feeling is that we have been duped by our corporate-dominated government to drop/diminish social safety net programs like pensions and social security for privatized programs such as IRAs in order to give wall street fund managers a permanent income stream in their annual management fees. And if the unit of wealth (US dollar) collapses, or hyper-inflates? Wall Street firms will simply re-write the rules in their favor as we have recently seen with the bank bailouts.

I'm wondering about the wisdom of cashing out an IRA to buy a plot of land to grow food on. Whatever happens to our paper currency, dirt will still be dirt.


The Article

[Laura J Sellens]

Wow, you guys, great discussion! Thanks Chris! I am just now catching up, I hadn't gotten any notices about this discussion.

My plan up till now was to follow Your Money or Your Life and invest in 30-year US bonds. However, I'm rethinking that lately--for the reasons that it's not local, I don't like what the government does with the money it gets, and it may be unstable in 30 years or less. However, I do think since bonds are our government's basis for its credit rating, that as long as there is a US government, they will hold paying their bond payments as a high priority. I'm thinking now about maybe 15-year bonds or TIPS instead. And also diversifying--putting as much money as I am able/comfortable in these local personal loans I'm working on, using my money as a triple whammy to work for me, help build community, and help my neighbors divorce themselves from megabanks. I'm thinking of targeting people who want to get out of credit card debt. Debt sucks! My heart breaks for people who live behind the 8-ball of debt. They could be inspired, active members of the community but instead have to keep dancing for the multinational puppeteers. I really want to change this. But up till now my thought has been to create in interest-income stream so I could quit my job and work for the world full-time. I also have some retirement accounts that are stuck in stock-based investments, and I basically just assume I'll never see any of that money. My assumption is that if I want assets, I need to save my own money out of my paycheck.

I am inspired by an article I just read in GROWING NW, a brand-new local publication highlighting topics related to resilience (check it out! it's SMASHING) about the land trust/net zero housing projects built on Lopez Island. I would be interested in exploring the option of collaborating to create an eco-village/land trust or work with Kulshan Community Land trust. No liquidity there, but it would sure be useful to me! And I do believe investing in useful things right now will save money in the end, as everything is likely to get more expensive.

I see the possibility of creating a credit union type entity to invest locally and working with Sustainable Connections to screen the businesses. Local investing is Judith's brainchild, though I'm hoping to come up to speed on that before too long.

I see the appeal in gold or other tangibles, but I think the value fluctuates wildly. Difficult to quantify what you have. And you don't see an income stream off a lump of gold.

Funds in a credit union are insured by NCUA at, I believe, the same rate as FDIC-insured banks. However, in a catastrophic economic blow-out, I don't think there's enough cash to actually pay out--I think it's more like protection against bank robbery. So as far as safety in credit unions: I think really the whole notion of value of paper money, whether it's in a credit union or under your mattress, is related to whether the economy would crash all at once or grind to a halt more slowly, allowing you time to clue in and move your assets. I tend to think there will be massive hiccups, like we experienced in 2009, but essentially the economy at large will slowly grind down and then transform into something new. I believe we will always have an economy of some form, it's just not likely to be based on Wall Street much longer. I hope this makes sense, I'm trying not to ramble but it's such a large topic.

There are risks drawbacks associated with every type of investment under the sun (maybe we should collaborate on a local renewable energy infrastructure?) But the major principle I've heard over and over is DIVERSIFY. When applied to our Transition vision, I think that advice still applies.

[Laura J Sellens]

Addendum:

My eyes just cast about my room and fell on my bookcase, spotted 'Be Here Now.' Great advice, right? It is worthwhile to think about the future and creatively direct ourselves towards a better one. But the only thing we can really do is make the best choices we can, right now, and not worry too much about what it's going to look like later on. We can trust that we are aware, sensible people who can see when conditions are changing. We can identify, seize, and, as necessary, create the most desirable options for the moment. We can cultivate versatility and we can adapt to changing situations and pressures. And in my opinion we are, and we will.

[Angela MacLeod]

Hi Chris, Thanks for starting this discussion. I appreciate the way you articulate questions and open discussions. My hope is that this TW ning site can be a welcoming forum for many people to share ideas and concerns but especially to tap in to a source of new ways of doing things. I feel disappointed when people use the mode of criticism and generalized comments about groups of people they hope to educate. It seems to me that this approach is more likely to discourage and alienate people instead of the intended "awakening'.

I would enjoy talking to you in person, perhaps on a walk or in the garden while we work, on this subject about where to put surplus $...It is a topic David and I have discussed, researched and mulled over for the last 6 years. Give me a call or shoot me an email if you want to get together.

Angela

[Shirley Jacobson]

This is a link to the Slow Money newsletter, which looks like it would be a good resource for information on the kind of local investing we are talking about.

http://org2.democracyinaction.org/o/6351/t/9221/p/salsa/web/common/...

VSJF Flexible Capital Fund 
In a time when credit is tight, global markets are in chaos, and we’re in bailout mode, there still lies great opportunity. There is a strong case for the benefits of “going local” in our investments, and our food and energy consumption. Over the last year, VSJF has moved closer to the launch of the VSJF Flexible Capital Fund, a $4.0 million near-equity fund that will provide flexible risk capital to Vermont’s growing agricultural and natural resource businesses. 

The VSJF Flexible Capital Fund is uniquely targeted to invest in Vermont’s growing natural resource and clean energy enterprises that are moving us toward a healthy food system and low carbon economy. It includes a technical assistance component through VSJF’s Peer to Peer Collaborative and leverages VSJF’s expertise and networks in Vermont’s natural resource markets. It is focused on opportunities that enhance supply chains and nurture long-term relationships. To portfolio companies, it offers a flexible, higher-risk debt instrument through royalty financing that won’t force an exit strategy for the companies in which we invest. To investors, it offers a tangible way to help build a sustainable food system, nurture healthy communities, preserve working landscapes and promote sustainable growth in Vermont.

To date, the VSJF has raised $500,000 in capital for investment into the Fund company, and is seeking an additional $3.5 million in equity from foundation, organizational and private investors, as well as $250,000 in grant funding for loan loss reserves. To learn more about the VSJF Flexible Capital Fund, contact Janice St. Onge, Deputy Director at [e-mail] or [phone].

[Robert Plant]

Any hints as too what you and David are thinking? I am not trying to be too personal, but I am trying to see what others are thinking. If this is something better done in person, than online, I understand?

Angela MacLeod said:

Hi Chris, Thanks for starting this discussion. I appreciate the way you articulate questions and open discussions. My hope is that this TW ning site can be a welcoming forum for many people to share ideas and concerns but especially to tap in to a source of new ways of doing things. I feel disappointed when people use the mode of criticism and generalized comments about groups of people they hope to educate. It seems to me that this approach is more likely to discourage and alienate people instead of the intended "awakening'.

I would enjoy talking to you in person, perhaps on a walk or in the garden while we work, on this subject about where to put surplus $...It is a topic David and I have discussed, researched and mulled over for the last 6 years. Give me a call or shoot me an email if you want to get together.

Angela