Dealing with Our Coming Economic Disaster

American Thinker ^ | May 14, 2011 | Frank Ryan

[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.

[driftdiver]

Why? Because God helps those who help themselves. Faith and trust in God if first but until he starts providing manna we need to feed ourselves.

[driftdiver]

The storage is to provide something during times of natural disasters or unrest. Its not an investment other than to invest in personal survival.

Throughout history there are cases where people who set stuff back to survive lean times. The rest are dependent on the govt.

[familyop]

"It’s not fixable. And people like Ryan who are touted as the conservatives who will fix stuff - and castigated by Dems as extremists - are actually part of the problem.

There is now no way out of this mess, only through it, and that’s going to be like running through a fire."

Yes, for those who don't prepare to live through it in peace and quiet. Those who have mortgages on their home places should try to save a few payments in advance while stocking up on other things and preparing to avoid unnecessary trips to cities for some time. Sooner or later, depending on how future debt measures are managed, large numbers of current government employees will be unemployed. They are also most of the source of revenues for the "service industry."

[GOPJ]

The left is organized to destroy the country. Why is it a ‘bridge to far’ for us to organize to save the country?

[SIDENET]

I just don’t think it’s going to happen.

[little jeremiah]

My solution has been this:

Live very cheaply. I owe not one penny of debt. I live so simply that many people would be horrified. I still don’t have hot water - hub will get to installing the on demand propane hot water heater eventually; in the winter I always have about 4 gallons or more heating on the wood stove in large pots. I heat the house (ahem - cabin) with a used wood stove that cost $50, and it’s our own wood. We use wood that to heat with that most people would put on an outdoor burn pile, we burn everything burnable to save wood.

I cook everything from scratch except an occasional jar of salsa or canned pumpkin. We eat simply, two meals a day usually. We never, ever eat out or need “entertainment”. We read out loud to each other, play our own music and so on for our entertainment.

I make almost all house hold personal care stuff - I buy Kirks Castile soap from the manufacturer by the case - 50 bars per case - and have enough for the rest of my life and to share. I use it for washing my hair too, and rinse with diluted white vinegar, works better than any expensive shampoo.

I make my own tooth powder, skin oils, sink cleaner, salves, and treat hub and myself and clients with herbs.

I buy pretty much all food supplies in bulk, mostly from Azure Standard. I have enough bulk basic grains/beans etc for at least 2 years, and this includes helping others. We have enough to pay property tax for a few years if need be. Any vehicle we ever buy we get used, very cheap, and hub fixes them.

Hub got a straight razor for shaving, hasn’t used it yet, only shaves every so often since his beard isn’t super heavy and he looks nice in a short bear; he cuts his own hair and I but my own if need be.

He buys shoes when they’re on sale so he has extras, since he works outside most of the time he wears them out. I have tons of extra guitar strings since I love playing my guitars.

The bottom line is - our needs are few, our wants are simple, and we already live as though the economy is totally collapsed, have for some time.

There are a few things I’d like - a laptop in case of elecrtic outages, and a hand pump for the well. We have a lot of water storage capacity and only run the well to fill them up.

Most people could reduce their personal expenditure tremendously by cutting out things they consider necessities but don’t in reality need at all.

A couple of other things people should consider are developing skills that are marketable not necessarily to employers, but to the local community. For instance - hub went and bought a van for $400 as a parts van (we have two like it) and the man he bought it from runs a bike store in a town bout 85 miles from here. He is going gangbusters selling bikes, used bikes, fixed bikes, bike trailers. So anyone who knows how to fix bikes, for instance, or other useful items, will have something that can bring in money in hard times.

[familyop]

Excellent! Thanks for the info! Try the following for a hot water system, if you can do so in your situation. It includes building instructions.

The $1000 Solar Water Heating System
http://www.builditsolar.com/Experimental/PEXColDHW/Overview.htm

[marbren]

Hi Alamo-Girl, I was talking to driftdiver and he brought up this comment

God helps those who help themselves

I hear it a lot. Do you have any idea where it comes from?

driftdriver, FYI Alamo-Girl has much wisdom about God's word.

[little jeremiah]

Unfortunately (or maybe fortunately) we have a mostly 80 to 100 foot tree canopy. If he cuts any more around our house the summers are too hot, I can’t handle heat and usually there are weeks above 100 here. Although the last couple of summers have been cooler. And right now it’s 45, we’ve only had a few days without the wood stove on.

He does have 2 (two!) on demand propane hot water heaters, and a fair amount of propane stored. What I’d like is one of those hot water heaters that can use any bits of fuel and once heated, can have fuel added to run continuously. In fact, hub got 3 hot water tanks (for free, from an ad in the paper) to experiment with.

Plus there are ways to make one using the heat from the wood stove, fine except for summer. He just needs to buckle down and do it! A solar one would work for one of our outbuildings though.

I’d also love a solar food drier, once the garden gets going (hopefully this year!). We have clay/stone dirt, have to “make” and collect dirt to grow anything, and he still needs to fell some more trees. Even if I grow nothing but a few kinds of greens, I’ll be happy.

[GOPJ]

When the dollar ceases to have fiat value and you walk into a grocery store with gold you’re dead - you’ll be far out numbered. Gold is beautiful, but it only has value in a stable economy.

The country won't stay in a state of chaos forever - probably less than three years. After that time - and probably before - lines of communication will be set up. In the first days gold won't have value - as you say - it can't be eaten - and it's worthless in an unstable environment. But that instability - at that level - won't last. And when it starts falling away, gold will have value. Our currency collapsing doesn't imply that every currency in the world will collapse as the same time. Gold will still trade for Canadian dollars - and those might hold their value.

[driftdiver]

There’s a illustration I’ve been told that pretty much covers the God helps those who help themselves. I’ll mangle it but here goes.

There’s a guy trapped on a deserted island. There’s very little food or water. The guy spends a lot of time praying for God to rescue him.

One day the guy sees a dilapidated half sunken raft on the beach. He looks at it and prays for God to rescue him.

Later he seeks a broken down sail boat drifting by. He looks at it and prays to God for rescue.

Finally the guy dies of starvation and upon meeting God he asks why he was never rescued. So God says “what do you mean? I sent you a raft and a sailboat, all you had to do was sail over to the next island.”

Why do you buy food today? Why do you pay your bills? Surely God would take care of that if you just pray.

[familyop]

"I live so simply that many people would be horrified. I still don’t have hot water - hub will get to installing the on demand propane hot water heater eventually; in the winter I always have about 4 gallons or more heating on the wood stove in large pots."

I bathed for months with water heated on a stove. That's nothing to be ashamed of at all. ...makes it all that much better to have hot water on tap, when it's installed. Yes, he'll get it done. Living frugally requires much time spent working for a while, but the rewards are great.

"I heat the house (ahem - cabin) with a used wood stove that cost $50, and it’s our own wood. We use wood that to heat with that most people would put on an outdoor burn pile, we burn everything burnable to save wood."

That wood stove was a good deal. A simple box type stove costs more than $250 new, and I saw a new Chinese-made one at Harbor Freight that was poorly engineered (top too iffy to open with the tool without it falling off).

"I cook everything from scratch except an occasional jar of salsa or canned pumpkin. We eat simply, two meals a day usually. We never, ever eat out or need “entertainment”. We read out loud to each other, play our own music and so on for our entertainment."

We cook everything from scratch. I worked on the bread baking at first, until it rose right for our high altitude, then the women here took over (how such things tend to work, you know). Now I bust rocks all day with chippers and pickaxes to make way for utility installations. ...about to have the water system further upgraded with a frostless outdoor hydrant for gardening, tool cleaning, etc. ;-)

"I make almost all house hold personal care stuff - I buy Kirks Castile soap from the manufacturer by the case - 50 bars per case - and have enough for the rest of my life and to share. I use it for washing my hair too, and rinse with diluted white vinegar, works better than any expensive shampoo."

Hmmm. Thanks. I'll check that stuff out.

"I make my own tooth powder, skin oils, sink cleaner, salves, and treat hub and myself and clients with herbs."

Now those are things that I haven't learned to do, yet. Good advice!

"I buy pretty much all food supplies in bulk, mostly from Azure Standard. I have enough bulk basic grains/beans etc for at least 2 years, and this includes helping others. We have enough to pay property tax for a few years if need be. Any vehicle we ever buy we get used, very cheap, and hub fixes them."

Azure Standard...I just bookmarked that outfit.

"Hub got a straight razor for shaving, hasn’t used it yet, only shaves every so often since his beard isn’t super heavy and he looks nice in a short bear; he cuts his own hair and I but my own if need be."

We cut our own hair, too. I was a little prejudiced about men with long hair for a while after being in the Army Guard but have seen more wisdom concerned that since then. I'm good friends with the resourceful local hairballs and have started letting mine grow during winters. Boo! ;-)

"A couple of other things people should consider are developing skills that are marketable not necessarily to employers, but to the local community. For instance - hub went and bought a van for $400 as a parts van (we have two like it) and the man he bought it from runs a bike store in a town bout 85 miles from here. He is going gangbusters selling bikes, used bikes, fixed bikes, bike trailers. So anyone who knows how to fix bikes, for instance, or other useful items, will have something that can bring in money in hard times."

He's a good one! Most men these days won't even do simple repairs. We've been doing our own major mechanical work for several years now. It's not been so bad, since we learned more about our chosen vehicle. We're going to get another one like it and rebuild the engine for that one as a stroker, too (longer stroke for larger displacement, can be done without extra fuel cost if done carefully with research on the Net in advance). ;-)

[little jeremiah]

Hmm, rebuilding an engine - I’ll show hub what your wrote and see if he groks it, I don’t for sure. All our vans (three) are old Astro vans, he’s had many of them and likes them. I’m not so fond of them but since I rarely go out I don’t really mind. He’s done head gaskets and things, re-building an engine sounds much harder than that. I would assume that machining stuff would be necessary.

Hub collected over the last year or so about maybe 50 bikes - put ads in the local paper and craigslist - most for free, some for cheap. He grew up in Eastern Europe and worked in his father’s and grandfather’s shops fixing and doing and making, so he can pretty much do anything with some tools. He has plans for three wheeler bikes, since they can be driven safely even by the elderly or not so fit, for driving on errands, shopping, etc.

Even around here - very rural - people are starting to ride bikes to town for errands; guys on non-fancy bikes and wearing non-bike clothes, and coming home with grocery bags over the handlebars. Bike trailers are easy to make.

He also has ideas for clothes squeezers - washing clothes by hand is something I have more experience with than many people and the worst part is wringing them out. Pedal power washing machines are something he’s interested in too. Oh, and he’s collected maybe 8 sewing machines - they can be picked up for very little at auctions, garage sales, etc and parts to make pedal machines out of them.

Maybe people might think I’m an extremist, but off grid living is something I’d rather be prepared for and not have it happen, then have it happen without being prepared for it.

I have tons of recipes for all kinds of things if you or anyone is interested. I have a blog I keep meaning to update and add stuff, maybe when it’s better I’ll post a link on one of these threads.

Another aspect is first aid or some kind of home medical care. I save all old clean rags and use for home made bandaids. A strip of adhesive tape or even masking tape, and a square of folded clean tee shirt works very well, in fact much better than costly bandaids. We use powdered turmeric on cuts and wounds or infections, is anti-bacterial and heals cuts fast. Clay is also good for many wounds and excellent for burns, along with lavender oil.

As you see, I could go on and on... I make my own hand sanitizer and cleaner, healing skin tonic, etc. Oh - and wart remover.

[Red in Blue PA]

The Lord helps those who help themselves.

Prayer is an excellent thing, but if you think that and that alone will get you through difficult times, you are delusional.

[little jeremiah]

Something else I was thinking about.

If people are getting happiness from “consuming”, shopping - having all the “latest” in clothes, gear, gadgetry, addicted to entertainment; or in other words have a huge list of things they HAVE to have or HAVE to do - then a simple life of reduced consumption will seem like torture.

But if someone has contentment from within, that is not dependent on buying, having, consuming, new new new goods and gadgets and like stimulations, then a simple life is attractive, peaceful, and very satisfying. I’d rather have no money owed and few fancy clothes, gadgets, goodies and so on, than the reverse.

[familyop]

"He also has ideas for clothes squeezers - washing clothes by hand is something I have more experience with than many people and the worst part is wringing them out."

We used one of these for quite a while in a camping situation. ...only 300 watts for a couple of minutes. ...works great!

Spin Dryer
http://www.laundry-alternative.com/products/Spin_Dryer.html

Whew: "out of stock" until June, "e-mail to reserve a unit," etc. Those things must have become more popular since we bought one.

[familyop]

Rebuilding an engine doesn’t cost much at all. But yes, sometimes, a little machining is necessary (e.g., overbore, if shoulders in cylinders are too deep).

Lengthening the stroke in an engine is more expensive and only for those who need more horsepower at certain RPMs in six cylinders, for example. Please ignore the stupid joke picture at the top of the page (awful bikini picture w/ surgical disfigurement or image manipulation), and scroll down for engine parts details, process and other links.

http://www.lunghd.com/Tech_Articles/Stroker/Stroker.htm

[familyop]

The cost of the modifications is about $500 beyond buying a remanufactured engine from a parts store. I wouldn’t even consider it except for the occasional run over high passes with slightly heavy loads...and some of the more buttheaded tourists from the cities. ...nice to be able to pass like a slingshot on a switchback after meeting a belligerent.

[Alamo-Girl]

Thank you so much for asking me, dear marbren! And thank you, dear driftdiver, for sharing your insights!

The saying "God helps those who help themselves" is attributed to Benjamin Franklin best I can tell. And it is not Scriptural per se.

However the Scriptures do contain several stories with a theme similar to the one driftdiver conveyed.

For instance, God did not "need" Moses to raise his arm to part the Red Sea. And He did not "need" the Israelites to march around Jericho so that He could bring the walls down. God did not "need" the boy David or a slingshot to slay Goliath.

In each case God moved His own people to act on faith and then He made it so.

Therefore I say unto you, What things soever ye desire, when ye pray, believe that ye receive [them], and ye shall have [them].

And when ye stand praying, forgive, if ye have ought against any: that your Father also which is in heaven may forgive you your trespasses. But if ye do not forgive, neither will your Father which is in heaven forgive your trespasses. – Mark 11:24-26

I'm certain it was for their sakes.

God's Name is I AM.

[little jeremiah]

Thanks for the information. I’ll tell him just in case he’s interested. Fortunately we don’t live so high up that we have those switchbacks. I get scared of those kinds of roads!

His squeezer idea is a basket with holes in it - like the interior of a washing machine - and a flat plate that fits just inside, with a long handle like a lever, and use pressure (he some ideas about that I think) that presses the clothes down, squeezing out the water.

I like the one you sent a link to.