Skip to comments.Dealing with Our Coming Economic Disaster
Posted on 05/14/2011 9:23:12 AM PDT by OwenKellogg
The situation in the United States has deteriorated and will continue to do so unless drastic action on our federal, state and local government deficits is taken. We need to trace what happens during an economic collapse. In preparation for a collapse here is what you can do personally to avoid being swept away by the tidal wave of fear, anxiety and trepidation.
During the early stages of a nation collapsing economically, the debt of the nation swells almost uncontrollably. We, in the United States are already there.
From the burgeoning debt loads come the setting for collapse.
While the disaster can unfold in many ways, the course for the United States is already set in motion.
Inflation will increase. When inflation hits, citizens with limited financial resources become economic casualties first. These citizens are part of the beginnings of the downward spiral which ultimately leads to a depression.
In a misguided attempt to kick start the economy, our government will attempt another stimulus program which will fail. The parameters under which Fiscal Policy might work if you are so inclined to believe that it does have long been broken. Consequences of government actions are becoming unpredictable and are having unintended consequences.
The United States began the first phase of the stimulus program with the American Recovery and Reinvestment Act as well as the significant expansion of the unemployment compensation to pull us out of the recession. Both actions were the wrong actions at the wrong time.
When stimulus programs fail, our government will try to increase taxes or fees, often in deceptive ways such as fuel taxes, oil drilling taxes, user fees or increased regulatory burdens. This demand to increase taxes is to help support the citizens who were the first economic casualties of the recession as well as to pay for the deficit.
Next the bond rating agencies will downgrade our debt. At that point, our interest rates will increase and further prolong the recession. It is this downgrading of the debt and potential inability to sell our debt on the open markets that will be our undoing.
Our deficits will skyrocket because of the increased interest costs and creditor-forced reductions in spending will be enforced against us. The U. S. Congress will no longer establish our budget priorities. Our creditors will, as is done is Greece today.
The depression follows.
What then should the individual do?
Personally we have many options and they are extremely straightforward. The actions to be taken are exactly the same action that government needs to take but will not.
First, know where you are financially. Know your income and expenses and balance your own budget.
Second, you must start to build your funds if you are able. By establishing some cash reserves, you are reducing the risk of you becoming one of the first casualties of the collapse.
Third, you should consider paying off all short term credit card debt and minimize the use of credit cards unless you have the financial resources to pay for your spending.
Fourth, I would recommend refinancing your home with a 30 year long term mortgage considering how low rates look now. If your home is "underwater" with debt already that may not be possible.
Fifth, build up credit availability if you have the discipline not to use it. If you do not have that discipline, adding credit availability is one of the worst things you can do.
Sixth, make certain you are valuable to your employer. Stay current and productive. Many countries in Europe have 15% unemployment or more. Try not to become part of the "expendable" because you have let yourself stagnate.
Finally, help your family.
Surviving an economic collapse is possible. It will take 2 or more years for the U. S. to be in a full collapse. In interim get active politically, vote, and make government accountable, responsible and efficient to help prevent the disaster. I doubt Washington has gotten the message though! I hope you do. Your family is depending on it.
Frank Ryan, CPA specializes in corporate restructuring and lectures on ethics for the state CPA societies. Frank is a retired Colonel in the Marine Corps Reserve and served in Iraq and briefly in Afghanistan. He is on numerous boards of publicly traded and non-profit organizations.
While the disaster can unfold in many ways, the course for the United States is already set in motion....
What a way to ruin the day...God save us from this mess as it is quite obvious no one else is going to do it!
I think this is a bridge too far in the US.
Take a good look at our political class.
Friggin' worthless parasites.
building up cash reserves translates to becoming a big fat economic fall guy, because the dollar is shrinking and cash reserves therefore lose value at the rate the dollar is shrinking.
A 30 year mortgage will not do any good unless one has a stable source of income. I would submit that there is no such thing as a stable source of income these days. The closest thing might be a government pension, but it is impractical for everyone to snap their fingers and get a government pension.
A full pantry is the best savings account.
Personally I recommend investing in commodities and no I don’t mean gold or silver (Nice if you can but it seems the train has left the station for those commodities). I eman food, guns, ammo, general household supplies like TP, soap, detergents.... good basic clothes like socks, underwear good sturdy jeans, maybe enough oil and fileters to change your vechicle out 3 or four times. Learn put in and learn to garden. Learn to can food. I see a time coming when when we will tell our grandchildren and great-grandchildren stoies of times much like those that our own grandparents and great-grandparents went through.
Stocked pantries are the best idea, but it's almost too late to do it economically!
But, fearless leader is going to Memphis Monday to have a fundraiser... and maybe see the flooding!
Black/African American population: 61.1%
White/Caucasian population: 33.6%
(Map of the 1927 flood!)
“A full pantry is the best savings account”
Well said. Add a good water filtration sysem, a hand crank grain mill and about 500 lbs of grains, rice and beans. Its going to be a rough ride.
All good advice, Kartographer.
You wanna post a link to your survival guide?
For those who might be just starting you may be interested in downloading my Preparedness Manual, it can be downloaded at:
Did it, but thanks for asking!
Freedom from the debt cycle means having the cash on hand to buy the needed survival items. Big cash on hand may mean the ability to buy something of real value at depression prices — and coming out the other side in great shape.
Planning on going into and coming out of the depression with a big pile of cash may be financial foolishness. It's definitely going to be worth much less.
Amen to that one!!! God help us.
I live in the UP of Michigan. We bought 40 acres of farm land and woodland about 3 years ago for $19,000. Most homes here average around $40,000. But, you can find them once in awhile under $20,000, livable, just not great.
Yes, EVERYONE, STOCK UP YOUR FOOD SHELVES!!
The article doesnt discuss the effects of the inner cities rioting and looting because they will be the first casualties of this collapse. We wont only have to protect our selves from the economy but also protect ourselves from those who fall by the wayside.