..what if the internet collapses?

  1. dub
    33,892 Posts.
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    Your Com Link Is Down, The Internet is Dead!

    We have all heard the discussions of the Internet and the very real possibility that one day it could be gone. Do you understand the implications of this and how this will affect you personally? Have you considered what would happen to your private and professional lives? My only answer to this quandary is, 'Be Prepared'.

    If the Internet were to one day disappear for whatever reason, be it government intervention, terrorist acts, or possibly something more simplistic (remember the black outs on the east coast?), the ramifications would be far reaching and very damaging. The ability to communicate would be drastically altered. You would no longer have the capability to send email to colleagues, to attend a forum on great sites such as this to get an unbiased view on where we are at, or even to trade your gold and silver stocks.

    In this scenario, it is not only possible, it is probable that the demise of your current internet connection will be aligned with some outside factor. In the case of terrorism, remember 911 and what happened to the trading desks worldwide. There were no markets, and there was no trading. Your investments were effectively gone for that period, only to open much later with a new re-rated value assigned to the investments. Dependent of course on your type of investments, many were scarred from such a portfolio bursting episode. You argue that everything was fine because of your wise use and prescient attitude regarding precious metals investments.

    What would happen to you if the Internet went down for an extended period? One of the things you will notice is, that the ability to trade online or manage your portfolio is gone. Your 'supposed' assets are nothing but digits on multiple computers. We will have to revert to the old way of doing business. The call to your broker will have to be made, remembering too that the broker will become swamped accordingly as he no longer has the capacity to deal with such a high volume of calls. Your information regarding your investments is going to be limited at best. You may or may not get information on a weekly basis, let alone a daily basis. By the time the intel reaches you regarding any particular investment, the damage will have been done. The large players and the players immediately involved such as specialists and floor traders, will already be front running any negative news. Even choosing wisely such as investment in Precious Metals, could set your portfolio up for a very negative repercussion later.

    Wow! What should I do? Well, first of all, you need to always remember that investments in paper assets are exactly that------paper assets. They are not real, they are digits existing somewhere in one fashion or another. This can be shares in any mining company or the futures market on soybeans. It is all paper assets. You need to understand that the impossible can happen, and then plan accordingly.

    This planning should entail the use of physical Precious Metal acquisition. A solid portfolio plan should, and in my opinion must, include physical precious metals. My personal choices are quite simple, gold and silver. The quantity of gold and silver held in its' true form is totally up to each individual investor. You must develop a plan that will allow you to continue on in the face of the impossible. The opinions run the full gamut regarding the amount of physical to hold vs paper. Some believe that all should be in physical, others say 50%, and still others have all of their hopes and dreams in paper assets ie stocks, bonds, etc.

    Many of us, who foresaw the precious metal market in the infant stages of a new and grand bull market, began to invest some time ago in this market. We are cataloging gains on a paper basis; it seems almost daily now. A portion of these paper assets must be converted into things 'real'. I am not saying that all of your investments should be in paper and physical precious metals. Your plan may include other items that are readily quantifiable. Real estate comes to mind, if it is purchased right, and the decrease in valuation in a market downturn can be absorbed accordingly. You may also choose other assets that will survive in any situation. Why not something in the food chain, such as part ownership in enterprises producing and distributing food products? The choices are endless, and all would add portfolio diversification. Your own home can be an asset provided you don't have it overleveraged to debt or have overbuilt to suit an area. Another would be investment in oils or other natural resource markets.

    I know some will answer that it is not in their best interests to do this, that it is not taking advantage of a roaring bull market in precious metals. My answer is simply, greed can be good, but it can also lead you down the road to ruin. I see people all too often that have too much of their precious assets invested in stocks. Even worse, many are betting the farm on the junior resource stocks. It is one thing to have assets comprised of the Newmont, Harmony, Pan American, or Hecla Mining stocks, and an altogether different one to have a portfolio overloaded with junior mining companies. A balance should be maintained at all times in your plan. It should, and must include some major miners stock holdings, some juniors for portfolio afterburners, and various methods of 'real' items.

    The one thing you can always be assured of is that the precious metals you hold in your hand, will always be there should you need it. It will not disappear if the internet shuts down and your communication link is gone. If you choose other investments wisely, you will have the capability to withstand any storms that may be on the horizon.

    Expect the unexpected, and your aim will always be true !!

    Be Wise, Invest in Physical Gold and Silver !!

    Have comments about this essay? Try me at [email protected]

    Frank A Lechner

    January 8, 2004

    Lechner is an independent business owner and investor who has studied the markets over the past 20 years, dating to the last major bull run in precious metal investments. We had a mini bull market in the early 90's and he believes we are currently in the early stages of an equivalent bull market to the late 70's and early 80's.



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