To my friends: I have written and posted such themed topics before. But I wanted to once again voice my concern for all of you in the coming months. It is my belief and fear that the US economy is currently in a very bad place, and worse is still heading in a very bad direction. To use an analogy:
We are all pawns in an economic game of chess. Many of us have been already “taken” in this awful game. But now the “bad guys” have let it be known that check in is 3 moves and check-mate is in 4. And of course, check-mate spells the end of the game.
I wish I could spell out some sure fire measures that we all could take such that we could weather this chaos unscathed. But as we are merely pawns and as the game that is in motion is too far gone for most of us to hope for it to pass us by. What little I can suggest I do here:
Eliminate all short term debt: The federal government, due to pressure from the large financial institutions, eliminated usury laws years ago. In their place, there are two limits, one hard and one soft. The hard limit is about 33%, and is the max rate an institution can charge above the second rate. The second is often called the prime rate. Currently and for a long time this rate has sat at 0%. However, there is NO cap on this rate. During the 80’s this rate reached 20%. Thus there is NO actual maximum rate and without breaking any historic records; a rate of 53% could be charged credit consumers. You do not want to be there!
Roll variable short term debt into fixed debt (short or long term): Inflation actually benefits long term low fixed rate loan holders. This is because they can pay back “expensive” money with inflated “cheap” money. Another analogy:
Think about a small city of 20,000 people, which has for no real reason 10,000 gas masks. As long as the threat of death due to gas bombs is low to none, the value of owning gas masks is low to none. But at the moment of the gas attack, the 10,000 gas masks will have a value equal to the richest 10,000 city dwellers. The point being, getting a loan now is cheap… at the moment of impact of inflation it will not be. I do not think there will be a long slow climb.
If possible, employment wise, position yourself as producer of goods. Especially food stuff… yes; farming. But any REAL producer of a marketable product will benefit from the future crisis. This is because, unlike other times, there is a real possibility that other world economies will also shy away from the US dollar. While the USA has been a huge importer of everything for decades, once others decide they do not want the dollar, most of the cheap goods we have come to rely on will evaporate from store shelves.
Consider, minimizing your dollar assets. Everyone loves having lots of dollars, but during inflation your dollar buys less and less on a daily basis. The better plan is to move any large cash asset into “things” which will go up in value in relation to the falling value of the dollar. Currently commodity traders are doing this RIGHT NOW, and in doing so are of course driving up the prices of the things we need and consume. Land ( but not houses), and liquid commodities ( silver, gold) or producing entities like oil wells or mines ( stock) as your stock in the company is “owning” a part of the actual possessions of that company.
My prayers go out to all of you.
We are all pawns in an economic game of chess. Many of us have been already “taken” in this awful game. But now the “bad guys” have let it be known that check in is 3 moves and check-mate is in 4. And of course, check-mate spells the end of the game.
I wish I could spell out some sure fire measures that we all could take such that we could weather this chaos unscathed. But as we are merely pawns and as the game that is in motion is too far gone for most of us to hope for it to pass us by. What little I can suggest I do here:
Eliminate all short term debt: The federal government, due to pressure from the large financial institutions, eliminated usury laws years ago. In their place, there are two limits, one hard and one soft. The hard limit is about 33%, and is the max rate an institution can charge above the second rate. The second is often called the prime rate. Currently and for a long time this rate has sat at 0%. However, there is NO cap on this rate. During the 80’s this rate reached 20%. Thus there is NO actual maximum rate and without breaking any historic records; a rate of 53% could be charged credit consumers. You do not want to be there!
Roll variable short term debt into fixed debt (short or long term): Inflation actually benefits long term low fixed rate loan holders. This is because they can pay back “expensive” money with inflated “cheap” money. Another analogy:
Think about a small city of 20,000 people, which has for no real reason 10,000 gas masks. As long as the threat of death due to gas bombs is low to none, the value of owning gas masks is low to none. But at the moment of the gas attack, the 10,000 gas masks will have a value equal to the richest 10,000 city dwellers. The point being, getting a loan now is cheap… at the moment of impact of inflation it will not be. I do not think there will be a long slow climb.
If possible, employment wise, position yourself as producer of goods. Especially food stuff… yes; farming. But any REAL producer of a marketable product will benefit from the future crisis. This is because, unlike other times, there is a real possibility that other world economies will also shy away from the US dollar. While the USA has been a huge importer of everything for decades, once others decide they do not want the dollar, most of the cheap goods we have come to rely on will evaporate from store shelves.
Consider, minimizing your dollar assets. Everyone loves having lots of dollars, but during inflation your dollar buys less and less on a daily basis. The better plan is to move any large cash asset into “things” which will go up in value in relation to the falling value of the dollar. Currently commodity traders are doing this RIGHT NOW, and in doing so are of course driving up the prices of the things we need and consume. Land ( but not houses), and liquid commodities ( silver, gold) or producing entities like oil wells or mines ( stock) as your stock in the company is “owning” a part of the actual possessions of that company.
My prayers go out to all of you.
