To understand the appropriate diversification strategy, you must really understand your current financial position and what the implications of the worst case scenario would be in your life.

People are made up of a variety of socio-economic layers. The first three I define are at very limited risk and represent a very limited part of the population. If they have any understanding of money management they understand diversifcation and safety, and indeed, they are not likely to be in this position or stay in this position regardless of economic conditions if they don't, hence there is no discussion around them.

1) The puppet masters

2) The extremely wealthy

3) The independently wealthy

Those with risk

4) Those with reasonable some wealth through work, inheritance or a combination thereof ... often referred to as "newer" money)

5) Those with good earnings and limited or no wealth

6) Those with some wealth and limited earning potential

7) Those with no wealth and moderate earning potential

8) Those with neither wealth and meagre earning potential

Of those with risk the worst case scenario is not death, it is suffering which of course includes forced personal denial and witnessing the true suffering of loved ones.

Diversification of skill sets (improved earning potential):

It is in the interest of all categories to improve skill sets and develop new skill sets, that is a form of diversifcation and works at all levels be it the puppet masters who must always be aware of popular opinion, trends in things which they do not control, and tracking the up and coming and getting to them early to influence them to the bottom of the list where building the basic skill sets to improve earning potential would be the focal point.

Clearly anyone who is not diversifying and increasing their skills by adapting and understanding the market conditions, reading and verifying information are at risk.

Rule 1 Never stop learning and working to improve yourself ... the more diverse the skill set (i.e. learning Chinese, Farsi or Russian, growing your own vegetables) to be acquired the greater the potential value if the world turns upside down. The greater the risk of the world turning upside down the more valuable diverse skill sets become.

Diversification of Wealth

The group to which these comments overwhelmingly apply is number 4 ... and I would suggest likely to represent those involved in such investment BB's.

Cash is king .... which begs the question is paper money cash. The answer of course is yes ... the value of that money like any copmmodity can rise and fall. Be it an IOU, an LC or a federal reserve note .... its value is definable and as long as laws exist in the jurisdiction in which that paper is generated there remains some value ... of course anyone who hasn't seen how inflation can impact the value of paper need only look at Argentina (once the 8th largest economy worldwide) and Zimbabwe to name a couple examples.

Is Gold money .... absolutely not .. it has been money but it currently is not recognized as such. Gold could best be described as a store of value ... difficult to produce and thus far inimitable, with little industrial/commercial value some consider it arcane.

Nonetheless, the effort to produce gold is increasing. The factors of production, be they purchase of land, exploration, engineering, labour, energy extraction, refinement etc all are commodities useful for other purposes. Indeed the scarcer gold "nuggets" or "flakes" become, the greater the store of value. to reproduce or acquire.

If gold is arcane it at least remains a tangible collectible and likely to retain its value more than a Honus Wagoner/ autographed Wayne Gretzky rookie card / Barry Bonds 745th home run ball/ Elvis Preley's leather jacket/ the shroud of Turin/ a Picasso Painting etc etc etc.

Like skill sets the more volatile the conditions, the more diversity away from paper valued wealth and the more movement to real assets such as gold one should seek. Real Estate ... that is acreage for farming or logging or hunting will retain value, even moreso when there is water available. A store of food and other necessities also of value. In a sense just saving for a rainy day.

Those in the 5-8 categories can recognize the danger and scaleback to acquire as much real property as defined in the last paragraph.

Whether or not we are in day 1 of the great financial flood or later ... we are nowhere near day 40 and at this point there is no point even opening the window to see if a dove can find land.

Expect nothing and you will never be disappointed, prepare for the worst and you will always have something.

orgy