Prepare: American Economic Meltdown

"That headline will grab reader's attention", I think to myself as I pen today's post.

Well, if you read the headlines today ("Economic growth actually lower in 2nd quarter"), then it sure seems that way. Skim through the content of the news, the reactions of one or two economic whiz kids and then read the comments. Americans are hurting.

The Modern Survival Manual: Surviving the Economic Collapse

1 in 10, officially, working age Americans are unemployed. That number, for all intents and purposes, it lower than the actual number of unemployed as it does not take into account those who are working part time jobs, contract jobs, have stopped looking for work and those who are no longer on the unemployment rolls. A number of smart people have suggested the unemployment index is actually closer to 18%.

1 in 10 homes may go into foreclosure before the end of this year. Home sales are down and banks consider foreclosed homes to be a toxic asset which sells at a far lower rate and for less money than normal houses on the market. Answer? More empty homes and more homeless (even if they are sleeping at Grandma's or friend's houses).

So what are the answers to these problems?

HOMEWARD surviving the global economic collapse

I have my opinions, but that is not the nature of this blog. My business is presenting solutions to Americans who want to survive now and afterwards if this situation gets worse.

First, if you have a job, great! Keep it. Don't get yourself fired right now as there are few jobs to replace what you have.

If you don't have a job, stop waiting for the right one or for one to magically appear. I had to create my own line of work when this mess started. My income is one fourth what it was just two years ago, but we manage. The secret is to be open and willing to do anything to make a living.

Debt - debt is bad. In our household, we are agressively paying off anything we can while maintaining the bills. To do it, we cut out every extra we could find, we sold off junk we did not need and we cut spending where we could. We clip coupons, cook each meal from scratch, pack lunches, water and coffee (so we don't buy them out) and recycle and reuse everything. Each debt you pay off frees money for other debt and lowers your monthly outlay.

Stock up - we don't go to the boutique store and buy a 6 oz of olive oil. Rather, we buy 5 gallons at a time. Same with bulk rice, flour, sugar, etc. Buy big, store it right and you have a supply of foods to cook with daily. We also do the same thing with toilet paper, light bulbs, etc.

If this get's worse...

Don't go into "hunker down mode". That's what rabbits do when a car is about to run them over. You must live in "adapt or die" mode. If things are worse economically where you are, be prepared to abandon ship for greener fields. In times like these, there is value in being able to leave home with most possessions in one or two bags.

Think about your ancestors who came to this country or who migrated centuries ago. They piled what they had on their back and left. We may be in the same circumstances soon.

One note, know where you are going, how you are going to get there and where you will stay once you arrive. A pitiful refugee one day is a locust and pest the next day.

Will there be a complete economic breakdown? I hope not. My kids go to school, I go to the grocery store, I have customers I talk with daily and visit - I would hate for all of that to crumble and vanish. I like normal, normal is good.

But if there is, get ready. Those who are ready and who adapt will survive. Some will thrive.

Prepare: Survival Scenario - Economic Collapse

Read the news and get back to me...

Several European countries are in economic turmoil requiring infusions of cash from fellow EU countries, the US and international banks. Few of the EU nations want or have the stomach to make the changes neccessary to continue any version of their government funding systems.

The US national debt based upon federal deficit spending is about one trillion dollars from equaling the Gross Domestic Product of the country -  a key tipping point in economics. We will owe more than we are worth.

The physical resources needed to maintain our day to day lives are shrinking in available supplies. Fossil fuels for transportation of goods to market are going to be more in demand, harder to get and more than likely only available from volatile regions.

In short, one of three things will happen sooner or later...

1) Nothing, We will continue to plod along slapping short term economic bandaids on each crisis. The world will aspire to survivable mediocrity.

2) The world will have to make some fundamental and difficult changes to all of our economic systems and processes. Money will have intrinsic value, each entity in the chain will live within its own means and debt will be based upon physical collateral equal to the amount owed.

3) We continue to make bad decisions and the system will collapse. Dollars, pounds, euros, yuans, yens, etc will be nothing more than bookmarks and toilet paper and the world will decend into chaos.

Economic collapse will not occur a la James, Wesley Rawles "Patriots" extreme Crunch, but slowly.

Employment and spending, private and public, will curtail.  Governments will no longer be able to finance their debt and deficit spending as there will be no lenders or fincial aid available. Tax reciepts will continue to drop off and mandatory spending programs will end.  Failed theories of price and wage controls will briefly rear their ugly heads and skulk back to the economic trashcan. Governments and lenders will attempt to seize physical assets but the holders and squatter will fight back making such efforts a costly pursuit.

So how do you survive an economic collapse?

First things first. How dependent are you on an employer or a government program handing out a non-bouncing and regular check?

Second, how much do you owe and how likely is it that the holder of the debt will come after you for collection efforts including seizure of assets in the event you can no longer maintain your obligations?

Third, where are your assets? In government backed and issued non-negotiable currency, electronic, paper or metal? In physical and tangible assets with actual value based upon demand?

 Fourth, who knows how much you have, own or suspect you might have? Do you trust them? Do they live with you?

Fifth, what tangible skills do you possess that someone might need and be willing to compensate you for but does not put you at risk of involuntary servitude or slavery?

Finally, what chances do you have, on your own or in a limited community, to provide most if not all of your needs and security for a time period up to and including indefinately?

Work is cut out for you.

Here are some clues...

Don't depend upon any single source of income.

Eliminate at risk debt as soon as possible. Take money assigned to one debt once it has been retired and apply it to another debt. Don't incur more debt (this sounds like a no-brainer, but how many people celebrate paying off *something*  with a credit card financed vacation or night out?).

Have skills which pay the bills. It would be great to be able to rewire someone's home for cash, but anyone has abilities right now which make can make money. Mowing the neighbors' lawns, washing their cars, watching their children, house or pet sitting, running errands, throwing newspapers or delivering pizzas. Offer to hold garage sales for friends and neighbors for a cut of the action. Offer to clean out their garage, attic or basement with the caveat you get to sell whatever you take to the curb. The list is endless and goes on and on..

If money loses value, if goods become difficult to obtain or if the new coin of purchase is unavailable to you, how do you replicate what you need? Do you have a yard, acrage or access to a patch of land you can grow some food on? Do you have small livestock or can you get some? Did you stockpile toilet paper, diapers, tampons, aspirin, cooking oil and batteries when your currency and debit card still worked?

What do you have to barter with for more supplies? Is it limited or can you make more?

What about maintaining what you have? Do you have friends and neighbors who are likely to drop in with hand outstetched? Or arrive with evil intent?  Do you maintain a low profile and suffer along with the rest of the gang?

Physically, where are you? Rural? Suburbs? Urban? Good neighborhood or bad? A big target on the home or as non-descriept as possible?

It's a lot to think about. But here are some clues from history. As long as there are people, any economic collapse will not last permanently. People want society and place universal value on certain goods and services. Looting and slavery do not thrive long term. Humanity survived the Black Plauge, the Fall of the Roman Empire, invaders and conquerors, war and disease.

Final thought - the Roman Empire minted a coin which was comprised of a certain meaure and weight of silver. The coin was identified by the image of the Emperor featured on the obverse. Later versions of this coin were dilluted with base metals to increase their circulation and lower the cost. However, the original silver coin was used for over a thousand years and widely accepted as late as the 1400's in places such as Holland and England long after the Roman Empire was dead and buried.

Some things, minted and coined by people long dead,  have value and survive the darkest of the Dark Ages regardless of a complete lack of infrastructure or government. Even in an economic collapse, something will take the place of what is presently used or something previously used and trusted will "step up to the plate".

Keep faith and prepare for the best,

 

Prepare: Job and Credit Survival

Some may ask, "Where have you been? Why no posts for the last week or so?". Others probably did not notice; most have thier own problems these days and spending time reading blogs is not on the To-Do list.

First, the unemployment numbers keep going up. It's "officially" over 10 percent nationwide, with many states reporting double digits in the high teens, such as Michigan, California, Oregon and others.

The layoffs are continuing across the country and they will keep up until the balance sheets look good enough to see stocks rise. "See, everything is swell now".

Let's get back to reality. Layoffs will continue. Stop clinging to the idea that your job is "safe and secure". And it's not just private enterprise. Cities and states are running out of money that means that those teachers, cops, firemen and yes bureaucrats are going to start getting let go too.

What's worse is that many jobs are not coming back. Sure we have been losing manufacturing jobs for years, but add to that jobs in finance, insurance, and services are going bye-bye now too. With the current shenanigans going on in DC, don't expect there to be an uptick which creates new jobs and industries any time soon.

Even the Chairman of the Fed says that this will continue until 2011 or longer.

What are these people thinking?

Let's add to that the financial industry. Your credit cards, car loans and mortgages. Some of these companies have their heads on straight. They are working with their customer to find a way for them to keep their home and car anyway possible. I applaud those companies.

The credit card companies are in La-La Land. For customers falling behind on their "minimum payments" they are raising their interest rates. We are talking 18 - 24 percent interest rates. The worse car loan I ever had as a young man was 9.5 percent. Credit card interest at 24 percent? How do they expect anyone to pay that back?

And what's more, the credit card companies are moving quickly to charge off accounts and send them to law firms for collection. Great. What's next? Loan sharks breaking legs?

Have you ever spoken with a credit card company before? If you have a balance, they ask how much can you pay right now. They offer a free "check by phone". All we need is the past due amount of $3214.92, please. Can we set that up today? Sure, let me go sell a kidney and I will get back to you.

Then they have the nerve to ask, "Do you have a friend or relative you can get the money from? Or do you have retirement you can borrow against?". Sure, why don't I rent out my children for hard labor. I will get that money to you right away. The credit card companies will be asking for debtors prisons in the next session of Congress mark my words.

Hey credit card companies! How about you eat the late charges, over limit fees and lower your interest rates to single digits? Didn't think so.

These are the same companies who received huge loans and payouts from TARP courtesy of me and you. Granted, some refused loans and others paid them back, but where was our loan or rescue money?

Speaking of which, I don't want charity - let me keep some of what I earned in the form of tax relief. How about we freeze income taxes and tax withholding for one year. Guess what? Spending like you have never seen before.

Sure, many of us would use that windfall to pay down debt, buy food and save. But there would be spending - we are Americans after all.

But we can't have that. Our money is needed overseas, in the pockets of bankers and special interests groups who have never held a job or earned a dime in their life.

I have said before, I work three jobs. Sometimes I get paid on time other times not. I don't plan on ever having a standard, 9-5, get paid on the 15Th and 30Th, job again. Those days are over. Not by my choice. If someone called today and offered me $100,000 a year with benefits, I would be at their office before the phone hung up. They have us like rats in a maze.

This is life in America. I still am not discouraged. I am still optimistic. I still believe. Why?

Because our oppressors will starve by their own rules and requirements before they can break us. They can't think outside of the box while we lost ours to foreclosure years ago. They need the revenue, interest payments, minimum balances and late payments which are not coming any longer. We got used to less, unreliable, devalued money years ago. We will survive.

Systemic failure is imminent. Get your house in order and get ready.

Next - crop failure, weather patterns and food shortages coming this fall.