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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.
Ping.
Everybody should be buying a few dairy cows from local family farmers (cheapest way to buy meat)to debone & can. You'll get 175-200 quarts of meat out of every cow plus have more as ground meat.
Paper products are going sky high down the road; stock up. For the last year or so, I have every month been buying one item, 300-500-700 cans when on sale and mailing into where we live. The postal shipping ends up being the normal price kinda thing. MOst everything is dated 2015 that we get.
Soon as garden drys out, snow has just melted, I'm planting tatoes, have 400 seed tatoes to plant. All with a troy built. Man can do pretty well with thousand lb tatoes in basement and give a few thousand lb to friends who really really appreciate them.
WE have 1000 gal in ground tank, which is full. yet we heat with wood that is free for the work of cutting & hauling.
So much all of us can do to survive what is heading our way; and then once it has passed rebuild our country for our kids.
Weimar ver. 2.0
Large gardens and educate yourself on how to run a chicken coop if you have enough land.
Don’t bet on that.
One of the long-term goals on the Left is the Guaranteed Income. We already have it with the subsidies for the unemployed, the poor, the disabled. Next, it could well be proposed and passed to do something similar for the elderly with minimal SS, easily done by increasing SSI while reducing SS for someone else. If we follow the UK, it could then be extended to all university students, “school leavers” and those _looking_ for jobs, even if they have never held one.
This would be done by taxing every productive portion of society and by disallowing all SS payouts to anyone holding over a set amount of assets of any sort. These will be nothing like the sort of Federal pensions people see today after working for them. Some existing Federal pensions could also be set lower in the future to *pay* for the scheme.
People are, I think, betting that the Federal government will do anything and everything they can to keep the dollar just strong enough so that cash retains some value. They have to buy off the upper economic tier, somehow, at least in the relative short term.
I will bet that somewhere in some NGO, someone is preparing a proposal to institute guaranteed income subsidies to anyone who needs to refinance, but lacks the income to qualify. They are already still trying to force the banks to give mortgages to anyone who applies. By guaranteeing the income of these applicants, they, in effect, just buy the mortgage for them. They already do this for renters, via Section 8 and HUD. Again, as in the UK, the subsidized *council house* is taxed, so the net subsidy is actually lower than initially quoted. I get dizzy trying to understand this sort of system, but it looks to me as though they could make it work for a decade or so and that would be enough for them to implement a full-on socialist state. Think of how many government workers it would take to keep this money train rolling around the country, giving the illusion of the fabled *multiplier*.
Put nothing past the Left. How much have zerO and the donks accomplished in just three years that we thought was impossible and crazy-sounding in the beginning?
I'm surprised the leftist politicians haven't tried to mandate equal access to firearms for the underprivileged.
I'm not surprised that politicians avoid the discussion of the probability of civil unrest — at least we have Free Republic to speculate and help prepare.
Sounds like a nice place to leave.
Agreed, but the budget Ryan offered was hardly "drastic." It was timid at best, and hardly a good starting point for negotiations.
“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.”
A lot of planning in my view depends on how worst your worst case scenario is. If you think that things will work out a lot like they are now, just with a lot more broke people and similar to the 1930’s, then that dictates one course of perparedness. If you expect something out of “Dawn of the Dead”, then it’s a whole different level.
Personally, I think this guy is outlining a more realistic worst case scenario than some I’ve been seeing.
Here along the Yukon, too expensive to fly feed in, so we don't do it anymore. I'd like to get 35 egg layers once again though. So many half starved predators around here. I actually had wolves in my garbage barrels last winter, a first. Had them kill/eat dogs, had them follow me on trail, but never 3 nights a day apart in my garbage. Those buggers would break into a coop or bear would do it for them.
Ping to this thread...
One can imagine what that will look like...Katrina was just a whisper of that which can come. Additional concern is even if you are prepared. Those people will be coming for what you might have. So if this goes full blown there's going to be more than chaos in our communities.
This is typical of the new Amerika. Totally dependent on the Urban lifestyle and the very system that caused all of this in the first place.
Not Obama, not the democrats, not Bernanke, not Geithner....they will tell you more lies. Stock up on ammo for self-defense. It could get nasty.
Funny, not one mention of becoming debt free or saving
I came away with a different impression: minimize debt and maximize cash.
Refinancing a home mortgage doesn’t guarantee ownership, only paying it off ensures ownership.
Arranging lines of credit is stupid - because credit lines can be canceled and there’s no guarantee you can pay it back. Working an extra shift at McDonalds is a better use of your time than “lining up lines of credit” - $50 cash plus a free dinner will pay for dinners later on.
Making yourself more valuable to an employer is not bad advice, but you’re still stuck if your employer goes under.
Stock up on cash and valuable items that are still valuable if the economy tanks - soap, gas, precious metals in trade-able amounts (silver, gold, lead in your favorite gun compatible form) and tools you and others can use.
The best and only approach is to start exercising faith in The Lord Jesus Christ. Make the decision now to surrender to his will for you! He is more than capable of being responsible for you.
How about NO debt? What good is cash when inflation goes through the roof? Hard, free and clear assets and commodities are the only thing to have in a collapse.
Looks like you and the author missed the point.
Unfortunately, the Russian system of economics meant few people but the wealthy had a hoard of necessities.
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