"Bob, I got a bad feeling on this one. All right? I mean I got a bad feeling! I don't think I'm gonna make it outta here! D'ya understand what I'm sayin' to you?"
The global markets are clearly in turmoil...again. I thought I would start a quasi-open thread here on ZH, where we can ask questions and share concerns or strategies with one another.
So, like my asteroid article from last year, let's have a little more fun, and use this as a test of our financial-armageddon preparedness.
First, a definition or two...
The normalcy bias, or normality bias, is a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster and its possible effects. This may result in situations where people fail to adequately prepare and, on a larger scale, the failure of governments to include the populace in its disaster preparations.
The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred, it never will occur. It can result in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.
The opposite of normalcy bias would be overreaction, or "worst-case thinking" bias,in which small deviations from normality are dealt with as signaling an impending catastrophe.
Our "worst-case thinking" test scenario is that we have a repeat of 2008, only an order of magnitude worse, and this time it is truly global, with no markets or fiat currency unaffected. The trigger is that at 4:00 pm Eastern, today, a coordinated revolutionary attack destroys the FRBNY, BIS, BofJ, and the BofE. The banks and markets simply do not re-open.
Let's start by having everyone answer four questions:
1) Are you at all prepared to survive even one month without ANY financial intermediaries?2) What is one immediate action you would take, NOW, to improve your chances?3) Are you going to stay put, or likely need to go somewhere?4) What is your single biggest knowledge gap?
As a reminder...
Acknowledge that nobody really knows if, what, when, or how anything in the future is going to happen...it is all just speculation. Finally, always remember that, "on a long enough timeline the survival rate for everyone drops to zero," so don't get too worked up, or go into debt, just because of this little exercise in paranoia.
BONUS: If you answered no to question one, have you considered that you may be betting your life on a bunch of bankers?