recessions, depressions, and investing

Analysts are predicting a depression. Democratic hopefuls are predicting change, and everyone else is just trying to survive. One of the questions that rarely surfaces when we find ourselves on the alleged cusp of collapse is how our current investment strategies may be affected.

For example, the typical American worker feeds a 401k with x amount of dollars per year, and hopes to supplement it with his/her pension and social security benefits. The assume that they will have to work 65 years (more like 75) before they can retire. Hopefully, by that time, they will have paid off their mortgage and credit card debt, and can spend what is left of their lives trying to rest and relax. But what happens when the market collapses? What happens when their 401k disappears, and the government finally admits to running out of social security?

Everyone is reliant on their current "sound investments" because they have worked well in the past for the majority of the population. But what kind of changes do we need to make when faced with a potential depression? Who has the experience to guide Americans through these decisions? What kind of planning existed for those who were hit so hard by the depression of the late 20s and 30s? Can we rely on the advice of our futures broker and investment advisers to steer us clear of an impending wave of bankruptcy and foreclosures?

Some would say this is unfounded paranoia. Some would say not to worry about it, or to trust that our government would prevent a depression from happening again. Others say to take all that paper money and buy gold. Personally, I've sunk much of my future into land. It may not be a very accessible source of funds in an emergency, but at least I know that I have somewhere to live (rent and mortgage free) in a bind.