How can I prepare myself for economic collapse?
I see the recession is in full fledge and I think this quarter won’t be much better. Leaving us in uncertainty til the summer. By that time we could be suffering hyperinflation and with a lame duck president that never cared about people to begin with won’t move an inch. I know we may catch a tax break but thats going to add to debt and the government is going to raise taxes. So consider the tax cut canceled out already.
So I ask, as a person with modest savings, do to protect myself in case an economic disaster hits the country?
To prepare for Hyperinflation borrow all you can at fixed interest rates and buy tangible assets (gold not stocks or bonds) that you can sell later at inflated prices. I don’t think this would be a wise coarse of action because I think hyperinflation is unlikely.
For a severe economic melt down the more probable result is deflation. In this case the best action is to have as much cash as possible so you can buy what you need at lower prices later.
For just run of the mill recession planning buy stocks at their recession lows weighted heavily with banks with a safe loan portfolios and consumer cyclicals. With the low interest rate that a recession bring they will increase in value when the economy recovers. With the fall in the markets today I would start buying now and continue to buy on dips over the next several months.
To protect against all possibilities you can do a little of each.
45 Tips to Protecting Your Money During & After an Economic Crisis
The current economic crisis is making everyone think about how to protect their money and the financial security of their family. Here are 45 tips to protect your money during and after an economic crisis. These tips have been taken from Surviving the Debt Crisis.
- If you wish to achieve real wealth, focus on acquiring assets that are valued by other people. Concentrate on allocating you money across different types of assets, including some whose value might rise where others that you have face a fall in their value.
- Decide whether you might be better off making extra mortgage payments or putting that money into investments.
- Be careful with investments; do not fall for flattery or let yourself be convinced by claims that their past performance is necessarily a true indicator of future prospects.
- If you get plenty of money, it is advisable that you invest the entire amount at once and not with intervals between. Diversify your investments as suggested in Point 1.
- Making big investments just to avoid taxes is a decision that requires careful consideration and access to premium, probably high-cost professional advice.
- If you plan to studying in college, compare the college saving plans to find those which give you the best options.
- Coins are “little savings”, so do not spend them. Try saving coins and use the paper currency; you will see that you have effortlessly saved more by the end of the month.
- Buy a house only when you are willing to move into it immediately and live for at least a minimum of five years.
- Instead of hiring young members of your own family or giving them a portion of your money when they are young, place your inheritance into a trust until your minors are sensible enough to handle the money.
- Supermarket coupons can be a great help, provided you know the right way of using them.
- Do not run after high returns without considering that ‘A great reward may have a greater risk’.
- Have you noticed people who buy lottery tickets each day? Buying more tickets does not significantly increase your chance of a major prize but inflates your risky investment significantly.
- Both parents working may seem to be necessary at the moment, but you may not think so if you calculate the extra expenses involved such as lunch, commuting, wardrobe, childcare, etc.
- Be careful which pension plan you opt for. Check that the agent is not selling you insurance instead of a pension.
- Check out your life insurance policy and whether it is a good investment. Remember, an insurance policy is to protect you and not just for the company and their agent to profit from you.
- Maintaining your investments through all cycles is the key to being invested in the right time. This may make your success rate higher rather than investing and then withdrawing from time to time because of the fees and other costs at each change.
- Avoid using a credit card as much as possible, because you end up spending extra with it. Instead, you can go for a charge card, which makes you pay what you spend each month.
- When you plan to buy a home, go for a buyer-broker. Realtors are the ones who represent the seller, unless you are hiring a buyer-broker who is the one who represents you.
- Investing the same amount regularly is said to be the best way of using dollar cost averaging.
- Instead of a fifteen-year mortgage plan, go for a thirty-year mortgage if the longer mortgage means lower monthly payments and a higher tax deduction.
- Consider applying for a systematic withdrawal plan rather than applying for bonds if this will provide a steady flow of income even after your retirement.
- Check that your bank accounts are insured federally. The FDIC, or the Federal Deposit Insurance Corporation protects deposits up to around two hundred fifty thousand dollars per person. If you have, more than the secured amount, you may spread it through various banks.
- If you want annuities, consider sticking to the variable and not the fixed type. A fixed annuity has a fixed return but a variable annuity gives you a chance to earn the full return.
- Grandparents often plan college funds for their grandchildren but, I believe that this requires very careful thought beforehand.
- Do not purchase a mutual fund just because it is highly rated. Different funds, even a mutual fund that has just a single star may do exceptionally well in certain periods.
- The money that you may need in the next two years must be cash or fairly easy to convert to cash. The stock market is not a place to store the money that you might need immediately.
- You can invest globally, not just in the U.S.A. exchanges.
- Keep a careful eye on your family budget; try to reduce your expenses, curtail your restaurant meals and other un-necessary expenses that may cause a future burden.
- When you want financial advice, only accept it from a registered investment advisor. A stockbroker is not the right person to advise you on your general finances.
- Write a check for yourself and save it first. This is an efficient, almost painless, way of saving.
- Do not include your child’s name is investments or bank accounts; this may mean that your other children might be disinherited and might cause tax problems.
- When you sell a home, go to a qualified realtor and get referrals from people you trust.
- Do not buy real estate investments with borrowed funds.
- Stopping your PMI when you have around 20% of the equity on your home left might save many hundreds of dollars.
- Buying mortgage life insurance should be considered carefully. Separate insurance might be a better option.
- If you contribute to a nondeductible IRA account is not a great idea, maintain a proper record or you may suffer serious losses.
- If you are 62 years of age now, you may be able to take a social security instead of waiting until you are 65.
- Money handling processes have changed, so do not stick to how your parents handled their money.
- While getting a pension, consider choosing a lump sum option where you can take control of your money and your future.
- While leasing the car, consider not paying for the cap cost reduction and perhaps get gap insurance instead.
- Saving money in your child’s name may not be a good idea. You will have to part with the money once your child turns 18 or 21.
- Instead of saving for your children’s college costs, consider starting to save for your own retirement first.
- Investing in a QTIP trust might be a good way of protecting your kids and spouse.
- Consider taking a policy that provides five or six years benefits instead of investing in long-term care insurance.
- Do not panic or worry; this will take you nowhere. It is not necessary that you take in all the gloom that the media throw at you.
Learn how to better protect you and your family in the current crisis, with this informative and easy to understand e-guide to Surviving the Debt Crisis.
Craig Maugham
http://www.articlesbase.com/wealth-building-articles/45-tips-to-protecting-your-money-during-after-an-economic-crisis-701108.html
Efic Keen to Lend During Gfc
EFIC keen to lend during GFC
AUSTRALIA’S export credit agency, the Export Finance and Insurance Corporation, is looking to maintain lending operations during the global financial crisis as it makes economic warnings about the year ahead.
EFIC chief economist Roger Donnelly echoed various commentators around the world as he said the world economy was now in a synchronised downturn that could be one of the most severe in the post-war period.
“Typically trade growth has outstripped GDP growth,” he said.
“Now, a significant risk is that world trade growth could fall below GDP growth.
“Certainly, it will be the role of credit agencies around the world, like EFIC, to continue the assistance they provide to help meet the gap that exists in the financial market and ensure exporters are appropriately financed.”
Of the various central bank action and government bailout packages around the world over the last few months, Donnelly said some of the intervention was justified, but would only work if the actions revived the willingness of the private sector to lend.
“The world needs macroeconomic stimulus at the moment because of the crisis of confidence in the private sector,” Donnelly said.
“Otherwise production could collapse, leading to further rounds of bankruptcies, defaults and forced asset sales.”
In what could appear to be a veiled attack on China(cnmining), Donnelly said global trade imbalances had proven unsustainable and were now being unwound.
“The unwinding and rebalancing will proceed more smoothly if governments in all economies, but especially surplus ones, support domestic demand, and surplus economies allow their currencies to appreciate,” he said.
On a more positive note, the economist noted resource nationalism is in decline and governments will be content to retain investment in the current economic climate.
“In the resource boom, countries had tried to gain a greater share of resource revenues by renegotiating tax and royalty rates and equity shares,” Donnelly said.
“But now, with commodity prices and associated windfall revenues both down, that risk is ebbing.”
The Export Finance and Insurance Corporation is a statutory authority that is wholly owned by the Australian government and operates under the EFIC Act.
tristass
http://www.articlesbase.com/international-business-articles/efic-keen-to-lend-during-gfc-690900.html
How many of you are concerned of an economic collapse?
Are you very concerned of an economic collapse? If so, who/what do you think is the cause if it? e.g.: Federal Reserve, big government, Iraq war, bail-outs, etc.
Deeply concerned, and I WISH I could share the optimism of some others above me.
With the amount of money the private banking cartel called the Federal Reserve has created out of thin air in the past few months (more than $8 TRILLION the last time I checked), the dollar cannot keep its status as reserve currency. It will take a while for the hyperinflation to kick, maybe a year, maybe a little more, and when it does we are toast.
China has already started to trade in Yuan instead of dollars. That was a little jewel of news that came out Christmas day when nobody was paying attention.
The price of gold is on the rise again, and that is no surprise considering recent events.
International shipping is grinding to a halt because of the credit crisis and the reduced demand for commodities and other goods. Look up what has been happening with the Baltic Dry Index. That is a clear indicator of pending global economic collapse. Only a miracle can stop it now.
I pray I am wrong, but am preparing in every way possible – stocking up with supplies to be self-sufficient for three years.
ECONOMIC COLLAPSE 2010 PETER SCHIFF !!! TOP PREDICTIONS DECADE OF SIN PAYING FOR OUR SINS !!!
The bride’s symbolic vision of the church, its explanation, which concerns the moderation and attitude that the pope ought to maintain regarding his own person and regarding the cardinals and other prelates of Holy Mother Church, and especially about the attitude of humility.
Book 4 – Chapter 49 SAINT BRIDGET PATRON SAINT OF EUROPE FINAL PART
Let him then organize his entourage with moderation and keep only those servants needed to protect him. Although it is in God’s hands to call him to judgment, still it is only right for him to have servants both in order to strengthen the cause of justice and so that he can humble those who rebel against God and against the holy customs of the church.
The hinge-pins attached to the doors represent the cardinals who have been bent outward and stretched as far as possible toward all pride, greed, and physical pleasure. This is why the pope should take a hammer and tongs in hand and bend the hinges to his will by not letting them have more clothes, servants, and equipment than necessity and utility require. Let him bend them with the tongs, that is, with his soothing words and divine counsel and fatherly love. Then, if they refuse to obey, he should take the hammer and display severity toward them, doing with them whatever lies in his power and does not go against justice, until they are bent to his will.
The floor represents the bishops and the secular clergy, whose greed is bottomless. From their pride and luxurious way of living come the fumes that make all the angels in heaven and all God’s friends on earth shun them.
The pope can improve the situation greatly by allowing them to have only what they need and nothing superfluous, and he should order each bishop to watch over the ways of his own clergy. Anyone who refuses to mend his ways and live continently should be stripped of his prebends, because God would rather not have a mass said in a given place than let a whorish hand touch the body of God.”
Duration : 0:7:5
$78.8 Trillion; United States Debt Obligations exceed world GDP; Monetary Collapse Looming?
How in the world are we going to pay off all of this debt? Raising taxes to do it would burden our economy, and then the situation would only get worse. To me the solution is obvious, cut spending.
For too long in this country we’ve had the give-me-stuff people standing there with their hand out, and the government putting something in it. Does the idea of small government ring a bell? It is what our founding Fathers had in mind when they gave us our constitution. That is why there is a list in the constitution that quite clearly spells out the powers of the federal government, and also what it is not allowed to do. So basically if it was not listed as a power, then they are to stay away from it, and allow the States to handle it.
Just take a look at federal laws. At the very beginning they will state their authority in enacting the law, and it is almost always the commerce clause. I’m sure they even think that just because your computer is hooked up to the internet, and therefore has contact with other computers in other States, that they then would have the constitutional right of regulating your computer, and thereby your internet communications; they are out of control.
jbranstetter04
Federal obligations exceed world GDP
Does $65.5 trillion terrify anyone yet?
As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world.
The total U.S. obligations, including Social Security and Medicare benefits to be paid in the future, effectively have placed the U.S. government in bankruptcy, even before new continuing social welfare obligation embedded in the massive spending plan are taken into account.
The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the “2008 Financial Report of the United States Government” as released by the U.S. Department of Treasury.
The difference between the $455 billion “official” budget deficit numbers and the $5.1 trillion budget deficit cited by “2008 Financial Report of the United States Government” is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur.
But the numbers in the 2008 report are calculated on a GAAP basis (“Generally Accepted Accounting
Practices”) that include year-for-year changes in the net present value of unfunded liabilities in social insurance programs such as Social Security and Medicare.
Under cash accounting, the government makes no provision for future Social Security and Medicare benefits in the year in which those benefits accrue.
“As bad as 2008 was, the $455 billion budget deficit on a cash basis and the $5.1 trillion federal budget deficit on a GAAP accounting basis does not reflect any significant money [from] the financial bailout or Troubled Asset Relief Program, or TARP, which was approved after the close of the fiscal year,” economist John Williams, who publishes the Internet website Shadow Government Statistics, told WND.
“The Congressional Budget Office estimated the fiscal year 2009 budget deficit as being $1.2 trillion on a cash basis and that was before taking into consideration the full costs of the war in Iraq and Afghanistan, before the cost of the Obama nearly $800 billion economic stimulus plan, or the cost of the second $350 billion in TARP funds, as well as all current bailouts being contemplated by the U.S. Treasury and Federal Reserve,” he said.
“The federal government’s deficit is hemorrhaging at a pace which threatens the viability of the financial system,” Williams added. “The popularly reported 2009 [deficit] will clearly exceed $2 trillion on a cash basis and that full amount has to be funded by Treasury borrowing.
http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=88851
Duration : 0:1:41