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.
The Federal Reserve winds down QE2 in June, starting on May 31, 2011. Some say that the stock and bond market will sink starting on that day. There is not be a QE3 and with Obama still in office - we are all screwed.
Now, I feel like the whirlpool is not only inevitable, but that the President is seeking ways to speed up our demise. Sumnavabeesh.
You are free to have your own point.
>A full pantry is the best savings account.
And a full magazine is the best insurance for it.
i heat with coal but i also have a fuel oil furnace so i bought a diesel generator... if the electric goes out it'll prolly be out at the gas stations too, but i always have two-three hundred gallons of fuel oil so the fuel oil can run the generator that can power the coal stove or the furnace plus lights etc
as unlikely as electing an extreme marxist to the white house...
Seriously unexpected.
There’s a house next door to us selling for $19,000. REALLY in need of fixing-up. Not much property with it, and two black walnut trees (bad, bad, bad for veggies!), but it’s away from the city and you can still do raised bed gardening - as we are doing. It’s in an old coal-mining patch town.
Hey, don’t worry about ANYTHING! Obama will just hand out what you need from his stash of stuff!!!/s;)
A more likely scenario is that the states will hold a convention and abolish the federal government. Then we break into confederacies composed of states with like-minded political philosophies. Each will go their own way, with some succeeding and even thriving, and others descending into chaos and totalitarian rule.
I sure wouldn’t want to be in the northeast or mid-west. People with little or no heating fuel and long winters will be worst hit.
The lightly populated areas of the southeast should make out well with its year-round growing season. So food will be plentiful. The mild winters also favor good survival for populations.
California would have been a good survival area with its mild climate, but with millions of welfare savages roaming the state, I wouldn’t want to be there.
The people in the big cities simply don’t have the resourcefulness to easily survive. If large numbers of citizens die, it will be in the big cities.
Most people trying to tough it out on 40 acres in the bush also won’t make it, especially if large cities are nearby. It’s impossible to guard a 40 acre perimeter with two people and a few kids. Say bye-bye.
People who band together in small Christian communities of like-minded people who believe in the constitution and are heavily armed will thrive. If that community is salted with a good number of military veterans, that’s also a plus.
We shall see...
“Funny, not one mention of becoming debt free or saving.”
I think those were covered in the 2nd and 3rd points, unless I’m reading incorrectly:
“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. “
Financial resources to pay for your spending reads as “Don’t go into debt to me.” Building cash reserves = “Save money” to me too, but I could be misreading.
*PING*
It could happen. I noticed someone posted the Civil War II keyword (cwii). The fragmenting of our great union would be a tragedy, but it may be the end result of runaway “diversity” or multiculturalism”.
Some things are just incompatible: looters and producers; islamists and constitutionalists; marxists and people who love freedom and personal responsibility....
“A full pantry is the best savings account.”
Sound advice for all of us.
Good point....they cut a mere two or three billion in Washington....
Meanwhile, in the U.K. they recently cut the equivalent of $119 billion, didn’t they? Washington is lame.
Having a few xtra spuds to give friends is mighty neighborly of you but don’t forget they might also be great trading stock for the other things you’re short of. We have a great source for dried taters so that’s the approach we’re taking. And it’s easy to lay in plenty of “trading stock”. They store long term really well. And don’t forget guns, ammo, silver coins, and tools as both protection for the tater pile and trading stock——been at this for a couple decades now.
Here in Maine, the winters are long, but we are the most heavily forested state in America.
We have an endless amount of hardwood here.....maple, ash, beech, birch, and some oak. It’s a lot of work, but many people have massive woodpiles to heat their homes (or supplement the home heating oil, which won’t be available in a true crisis).
Ryan’s budget just barely lowered the slope of Obamuzzie’s spending curve. The word “pathetic” applies in my view. Even the Rand Paul proposal, 1.5 trillion$ in three years, still leaves us at a higher spending level than will be necessary to be solid. We really need Rand Paul times two. If we can’t get that then it’s “hello Greece”. And have you noticed in the past few days the Gleeks are lighting up again? That first putz round with borrowed money just didn’t “meet expectations”.
The budget cuts can at best end the deficits in current and future years.
Devaluation and resulting inflation will be required to eradicate the deficit. If budget growth is less than inflation, that is a cut
It is not politically possible to solve the problems with one cleaver megawhack.
One aspect that won’t repeat from the 1930’s is the dust bowl part which hit my own family pretty hard. But this time there will be a hit to agriculture anyway. We’re headed for some wet years-—the recent eastern tornadoes and the current Mississippi floods are all that need to be mentioned. Currently most of our Northwest grain goes to Asia so we might have to outbid the Chinese for our own grain.———All the more reason to lay in all of that sort of thing you have room for.
We never have dried tatoes here, but dry meat, mostly caribou & dry fish is the ticket.
Our community is 200 miles from nx nearest place, road only open for a few months in summer. 100 White people in town, 28 Indians in village; split community. Wife and I have taught in a few Indian villages so we get along with everybody.
Our local Indians always plant 100 lb in one of my patches as I have trot built and they hill & dig them. They share the same way back, how their culture is; actually pretty good bunch.
I always send 500-700 lb up to Dawson Indians who are related to our guys down here and I know many of them for years. They stay at my place when they visit cause I have center Ice, big screen and even the Canadian Indians can’t do without hockey; bunch of their kids on junior teams. My yukon golds got all the way to Mayo Village and Old Crow. I got thank you calls from those guys. Local Indians always get 1500 lb too. I usually have 3500 lb all total, don’t want to start selling them, big headache, rather keep it real and just give to people I like & respect. I usually make up 50 lb bags and send them out of here when people are going outside, they always get to who was supposed to get them and people like it. That’s enough for me cause these new taters are quite good.
We have gold in all our streams, and have 5 AR’s, 1 with a TA31h-68 and another one with TA11H-308. Luv those horse shoe Acogs and killed caribou at 550 yards last fall with that CQB scope.
Now, how do you dry tatoes and how do you store dry tatoes?
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