Except in times of war, our country ought never to be running a deficit. Unfortunately, there will always be some great social cause where money can be spent. In my opinion, the duty of the federal government is not social causes. Education, welfare (only where necessary), and medical assistance belong at the state and local level. For the Federal government collect taxes, run through taxes through a bureaucracy, then pass grants to the state governments (who spend a lot of resources applying for Federal grants) is all highly inefficient. Granted, State governments are more easily corrupted or inept. But Federal government is not the overlord of State governments, except where civil rights are not observed.
The causes of the crash of 1929 are not to dissimilar to today. There was an economic bubble and excessive use of debt. In 1927 and 1928, the Federal government leaders did nothing, even while they saw the seeds of economic collapse coming. Now in today’s day and age, we are more aware and more observant. Our leaders to see the possibility of economic collapse. Yet, I fail to see any bold and bright leadership in either the Republican or Democratic parties. Frankly, our generation is not well served by our leaders in the USA. As such, it is absolutely necessary that we prepare our families for the possibility of an economic collapse.
If you feel like an economic crash is possible in 2012, 2013, or 2014, as I do, there are many things you should do now in preparation. Here are my suggestions:
1# Prepare to — In the 1930′s, people were generally much more law abiding. Life centered upon your neighborhood, work, and church. If you got out of line or caused trouble, the community reacted quickly. In this day and age, people are less connected to their communities. If we have another great depression, crime will be rampant. Staving and desperate people lower their moral standards. You need a defensive carbine, shotgun, and pistol for every member of your family. Have enough ammunition, such that if you never could buy ammo again, you would have enough. Children from age 13 and above should learn how to shoot in a responsible and safe manner. (I am a super strong advocate of safety and working within the law. Take a safe gun course and know your state and local gun laws!)
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2# Get to know your neighbors – In 1930′s everyone in your neighborhood knew you and you knew everyone. It is time to return our communities to friendly helpful neighbors. Learn about your neighbors. Know their strengths, weaknesses and values. Know whom you can count on in an emergency and who you would help in an emergency. In a subtle manner, discuss emergency preparedness. Ask questions like, in case of a bad storm, do you have a chain saw to help clear the streets of downed trees? Start the seeds of a community watch program, which can evolve into a community safety program if WROL occurs. The best way to get to know your neighbors is to throw a block party. In my neighborhood, we throw a block party on Halloween for all of our children. And we are looking to possibly throw a New Year’s Day open house. Also, offer to watch your neighbor’s house when they go on vacation. Be a good neighbor and your neighborhood will respond to you.
3# Avoid all types of debt — Except for your primary mortgage, try hard to avoid any type of debt. During the great depression, many homes and farms where repossessed, leaving families as refugees. Instead of buying new cars on credit, but used for cash.
4# Find alternative sources of income — People in the 1930′s did everything and anything to earn income. If they had a job, then often had a 2nd job. If they had a job, the often had a home based business in addition. If they had no job, they took odd jobs or day labor to earn money. If you have skills of an essential service, offer that services to your friends and neighbors, and then ask for referrals from them.
5# Find alternative sources of food — When the next great depression strikes, the biggest problem will be access to food. Supply chains will collapse. Food supply companies will fail. Shipments of food could be blocked or delayed. You should have multiple mechanisms to obtain food. First and best is your own garden with home canned to save your results. Any home with room for a garden had a garden in the 1930′s. Additionally, join a local farm coop and go to your local farmers market. Befriend a local farmer and offer labor in return for food. Some farms will allow you to gleam from already picked fields.
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6# Be prepared to double up at home — Where three generations of the same family have their own homes, that is true luxury. Back in the 1930′s, families grouped together for mutual support. Grandma and grandpa did not live in a condo in Florida, rather they lived with their children. Young children lived with their parents until such time that they married and started their own families. In the next great depression, it is unlikely that people will be able to afford to live in separate homestead. And besides, it is a better family that lives together. Grandparents have historical, Darwinist role in family. That is to teach their children and assist in the raising of grandchildren.
7# Position your finances – For your investments, you should always have a diversified asset allocation. While I will not provide recommendations on your investments and retirement funds (I am not a financial advisor), I would recommend that you take a serious look at all of your investments. In the remote possibility of a full economic collapse, I do recommend that 5% of your investments are held in physical (within your hands-on control) in gold or silver. Otherwise, there are very tough decisions to be made regarding your investments. The economy may or may not recover. Stock market may go up or down. You need to decide for yourself how much risk you are willing to take. Due to near 0% Fed interest rate, bond are risky. If interest rates need to rise in the future, the value of bonds may go down. Do watch market conditions closely. Have a plan to quickly move your savings and investments to less-risky, principal protecting securities, if the economy looks to about collapse. (I am not a financial advisor. Do not use my blog for advice in your financial matters. Talk to a professional financial advisor.)
8# Build an emergency fund — Every prudent family should have an emergency fund. Rather than using credit cards for emergencies, better to pull from savings. Emergencies tend to cluster, unfortunately. Illnesses, job losses, and weather disasters can all hit at once. Putting emergencies on a credit card have lead to many bankruptcies. Ideally, you should have 6 to 12 months of emergency savings. If you are single or have a two wage family, then perhaps 6 months is enough. If your family has only a single income earner, or you have a seasonal job, or employer is having financial problems, then 12 months of emergency savings is appropriate. You can start by simply taking $50 or $100 from each paycheck to put in a savings account. Cut back on expenses everywhere in your life, so that every penny saved is directed to emergency savings.
9# Do not delay medical issues — If you have any outstanding minor surgeries or dental care, please deal with it now. You may not have access to medical insurance or health care providers when the economy collapses. Get your eyes checked and update your eye glasses prescription. The hernia operation you have been putting off may be a life-ending after economic collapse. If you are overweight, drink too much alcohol, use tobacco products, or addicted to drugs, you are running out of time to correct these issues. Alcoholic and drug addicts will be among the first to die after an economic collapse.
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10#Shed non-essential toys — While you still have time and your toys still have economic value, shift your assets from non-essential to essentials. Have a jet ski, weekend motorcycle, and 48 inch LCD TV, but no long-term food storage? Have a baseball card collection or your wife has a doll collection, but no way to defend your family? Sell the toys. Buy essentials. One of my hobbies is coin collecting. I shifted my collection from collectibles coins to gold and silver coins.
11#Take up hiking and camping as a hobby – The best way to build a bug-out bag or be prepared for an emergency relocation is hiking and camping. Hiking, for that matter any walking, is great exercise. Your preparations for hiking and camping will enable you to prepare for a bug-out situation. You will learn about what gear you need. An overnight hiking trip will teach you how to pack lightly and with only essentials. This past Summer, I took my young family on their first camping trip. They loved it. We started with just camping in just a cabin (we are suburbanites, so you will need to cut us some slack). And we are working our way up to tents.
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12#Produce your own energy — If you can afford it, adding solar panels to your home is starting towards becoming energy efficient. Add a wood-burning fireplace and cast iron stoves to you home, so that you can heat your home from firewood. In an economic collapse, you may not be able to afford to pay for heating fuel. There are many interesting home kits to produce bio-diesel and alcohol fuels for vehicles.
14#Monitor the news — Watch the economic news closely. Do not be blind sided by a possible economic collapse. Be prepared to move quick to move your money and investments to safer assets. Be quick or be poor.
15#Watch your banks closely — If your bank has a lot of negative news, consider moving your accounts. Watch for a potential run on your bank. Make sure your bank is FDIC insured. FDIC insurance only covers up to $250,000 in deposits. So if you have more than $250,000 at one bank, then spread it out to multiple banks.
16#Learn new skills — Never shot a gun before, then take a gun safety class and obtain your concealed carry permit. Learn now to do home canning with a pressure cooker. Take first aid courses. Learn how to plant a home garden. Gain the skills now that will carry you through.
17#Buy farmland – If you have the money, it would be hard not to consider buying a plot of farmland for your family. Even 10 or 20 acres in a remote location with ample annual rain or source of clean ground water would be an excellent way to insure your family will have food in the future.
I truly hope there will not be an economic collapse. But for some countries, economic collapse has already come. Look at the situations in Argentina and Greece. Debt levels for Great Britain, France, Spain, Portugal, Germany, Japan and USA are reaching crisis levels, yet still growing. An economic collapse is possible, not an alarmst bloggers posting. It is time to prepare your family.(source)
Former Adviser To Ex UK Prime Minister Warns Public To Start Prepping
HSBC payment system collapses. Corporate media continually using propaganda that the stock market can’t crash. Consumer sentiment tumbles. Personal spending declines as J Crew reports a decline in sales. It is looking like 2008 all over again, as retail investors are getting out of the market. China unwinding dumping treasuries. Huge push to get rid of paper currency so the central banks have full control. Former Adviser to Ex UK Prime Minister warns everyone needs to prepare for the upcoming collapse. The US Government/central bank continues to blame China for the crash of the market.
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