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No DUplicitous DUpe Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 03:16 PM
Original message
Are you prepared for the coming financial crisis?
How To Protect Yourself From The Coming Financial Crisis
http://saneramblings.com/phpBB/viewtopic.php?t=217&sid=...

Dear Reader,

Are you prepared for the coming financial crisis?

We Americans haven't seen one like this since The Great Depression, as the dollar's value will get cut in half, real estate will lose 1/3 of its value and millions of people will lose their jobs.

As a veteran businessman and long term investor, I offer you suggestions to help protect you and your family and as many other people as you and I can reach.

Soon, everything you buy in dollars will cost more. The price of gas is just the start, and that price will fluctuate up and down, but the long term trend will be up.

And with it, so will the cost of groceries and other products you buy because the rising fuel prices make it more expensive to deliver them to the markets.

Those businesses not in a strong enough position to pass along price hikes will either fail, or have to slash expenses such as by laying off employees.

If you've recently traveled to Europe, Japan or Canada, you already know how expensive everything has become when paid for in U.S. dollars. And soon much of what you buy from retailors such as Wal-Mart and Home Depot will become more costly as well because a lot of it is imported.

As a result, dollars are flowing overseas so fast, that nations such as China, Japan, South Korea, as well as the Persian Gulf oil producers, Russia and others are flooded with them and need to invest them before they decline further in value.

They're buying U.S. assets and they're loaning the U.S Government money. Those who loan the money are in a strong position to dictate terms.

They can raise interest rates to make their loans more profitable, and to ensure their loans will be paid back they can encourage raising of taxes and the cut back of benefit programs such as Social Security and Medicare and other reductions in essential services to Americans.

And the cost increases won't stop there. After next year's elections your taxes will rise to pay for the Bush Administration's vast overspending on weapons and war.

All of these factors will combine to throw a lot of people out of work.

So what can you do to protect yourself from the coming financial crisis?

1) Consult with a reputable and objective investment advisor before doing anything. Someone not trying to sell you anything and who can take an unbiased look at your current finances.

This includes tax advise, because taxes are already eating up nearly half your paycheck. It is hard to become financially secure with nearly half your income gone.

2) Invest in income producing assets so that you're not solely locked into the declining dollar. My favorite is residential real estate because we all have to live somewhere and paying the rent is a high priority to most people.

This real estate ideally will be in major job centers, not in 2nd home communities or time shares because in tough times, people walk away from them.

If you choose residential real estate in which to invest, please be aware the market is beginning a sharp drop in value. This is a good time to save your cash because values are falling faster than your dollar is and plan to invest in the months to come when purchase prices will be much lower.

3) Invest in strong foreign currencies or buy assets in countries with strong currencies, as some major investors have been doing. But please be well informed because you could lose everything you invest if you're not knowledgeable. You may find it best to select a well-established, highly credible mutual fund to make these investments for you,

This same approach applies to commodities speculation such as in gold or oil futures.

4) If you can, run an income producing business, preferably one that can adjust its costs during times of financial turmoil and one offering products people need in good times and bad such as food, medical care or other essential items.

Another good business choice in major U.S. cities is to run one catering to immigrants, or get into the travel business, specifically catering to visitors because the U.S. is becoming a cheap place to visit for those with stronger currencies.

5) If you work for a living, preferably be employed by a dynamic company in a fast growing field, whether in medicine, computers, debt collection, energy or other choices that play to your skills.

Also military contracting and law enforcement will provide a strong base of employment for a long time to come.

6) In hard times many financial institutions will fail. Put your savings in FDIC insured accounts.

7) This final choice is one of conscience. Make charitable donations. One of your best investments is to help make the world a safer place as you offer a helping hand to those in need.

Please understand, the U.S. is still a great country and has the world's largest economy. It remains a highly desirable place to live and to work. And for now, people overseas will continue to loan us money to pay our bills.

An informed populace would not have allowed the Pentagon's uncontrolled spending in concurrence with Congress to put us on a road to bankruptcy. Nor would it have let the Bush Adminstration trash our Bill of Rights, while Congress looked the other way.

To correct America's ills won't be easy. It will take a concerted effort, a unity of the American people to restore our nation's finances, its Constitutional government and to end the nightmare the U.S. is unleashing on itself and on the world. But it can and I hope it will be done.

Dick
http://saneramblings.com/phpBB/viewtopic.php?t=217&sid=...
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No DUplicitous DUpe Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 03:34 PM
Response to Original message
1. I can't recommend a story that I posted...
But I would, if I could. Nice column, Dick.
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ayeshahaqqiqa Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 03:40 PM
Response to Original message
2. I have two month's supply of food and water
and the means to grow more food and a spring in which to get water. Got clothes and a means to mend them. Got fire wood for the stove. Got the solar panels and wind generator ready to go, too. Work part time in health care, could go full time if need be.
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tavalon Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 06:26 PM
Response to Reply #2
14. You sound ready
even for one of the other big risks. Don't forget to stock up on N95 respirator masks (like the ones they fit test us with in the hospitals).
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Uben Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 03:54 PM
Response to Original message
3. A recession, maybe..
Yeah, we may have a recession coming, but just that...... a recession. We are not heading into a depression. These doomsayers pop up every time there is a downturn in the economy, and they have always been wrong, without exception.

When you look at the big picture, the U.S. is no worse shape than France or Germany, and is much better shape than many countires.
You will have to tighten your belt for a while, and the advice in the OPs column is good. Jobs will become scarcer, for sure, but we are not headed for days like 1939. The market is not going to crash, there are too many safeguards built in to help avoid it, and the people who control the markets have too much to lose.

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knitter4democracy Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 04:00 PM
Response to Reply #3
4. Most numbers in Michigan are the same as the Great Depression.
I'm just sayin', we're already there.
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Uben Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 04:03 PM
Response to Reply #4
5. Sorry to bust your bubble
Edited on Wed Nov-28-07 04:08 PM by Uben
but what numbers are you referring to?

on edit: I do realize that Michigan has already been hit very, very hard by job losses. And, I am sure there are localities where the situation is dire. I was in that shape back in the seventies. But, overall, the U.S. is not in as bad shape as some would have you think.


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knitter4democracy Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 04:19 PM
Response to Reply #5
6. Housing foreclosures, true unemployment, falling wages.
http://www.ns.umich.edu/htdocs/releases/story.php?id=10...

http://archives.record-eagle.com/2007/may/22economy.htm

I live here, and I know from what I see here that things are the worst I've ever seen. Even when I was a kid in the 70s, I never remember it being this bad.
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alarimer Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 04:31 PM
Response to Original message
7. You can invest if you have money
I have nothing. I will likely starve or sell myself just to buy food and gas.

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kineneb Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 04:56 PM
Response to Reply #7
8. exactly
We have no money either. Because of Medicaid rules, we are not allowed to have cash assets over $3000, which would include investments or insurance.

It is tough when one has to choose between healthcare/poverty or no- healthcare/money.
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alarimer Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 06:51 PM
Response to Reply #8
16. Now if we had universal health care, there would be no such limits on assets.
It's ridiculous.
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truedelphi Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 10:06 PM
Response to Reply #16
21. And this doesn't get mentioned either but when GM and other companies
Decide to outsource to other nations so that they don't get stuck paying worker's health care costs - well that just gives us one more reason to ask for SIngle Payer Universal Health Care.

Let's have a decent health care system and keep our jobs here.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 06:58 PM
Response to Reply #8
18. There is much advice to invest in foreign currencies, gold. but
But this is America, we use dollars to buy food and gas. Most Americans need their paychecks to buy the necessities. And with the value of the dollar declining, it takes more dollars to buy less. We might all need to use the barter system to be able to survive.

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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 06:48 PM
Response to Reply #7
15. in America, we use dollars to buy food & gas
and with the value of the dollar declining, it costs more dollars to buy less food & gas.


:(
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RC Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 05:31 PM
Response to Original message
9. With all that unemployed labor sitting around, maybe we can get
jobs in-sourced and rebuild our manufacturing infrastructure. This time without the greedy CEO's and their hand picked Boards. Build it from the bottom up.
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kansasblue Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 06:16 PM
Response to Original message
10. My friend follows real estate. Here's his view:
"California...it is turning into sewage, at least as far as property values are concerned. Florida and California are really getting hit hard with the real estate problems, and who knows when it will end. When you read about the subprime lending mess just let one word flash in your head: California. Those guys out there were the kings at making those vulture loans to people who could not afford them, and it is only going to get worse. Frankly, I do not see how California is going to not fall into some kind of hurt from all of this. Their real estate spiraled out of control, including stuff at the low end, because lenders were putting out these loan products based upon teaser rates that sucked in just scads of unsuspecting borrowers who thought housing prices would rise forever. Now, as these teaser rates are starting to come off and the rates are resetting on the loans, the monthly mortgage payments are blowing past the borrowers ability to pay. It could really sting out there, and I would not touch that real estate market for a long time. Some of those markets could see valuations slice in half....HALF!"
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Le Taz Hot Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-29-07 09:43 AM
Response to Reply #10
25. The higher priced real estate is getting
hit hard in CA but not the median-low priced housing (low priced being relative of course, this IS California). I'm always watching those local real estate shows on Sunday mornings and a year-and-a-half ago, the houses that were going for $600,000 are now going for about $350,000. However, at the hight of the housing boon, my own very modest house was valued at about $235,000. It's only devalued to about $229,000. Remember, the VAST majority of Californians don't live in million dollar homes. Most of us own homes that are comparable to mine.
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SoCalDem Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 06:17 PM
Response to Original message
11. Most of the things the writer suggests are good, but for people without
money already, they are not a lot of help..

The savings rate is already at its lowest EVER, and many (if not most) people are already trying to cut their expenses.

Starting a business is dicey in the best of times, so doing it now, when money is already tight, is not something that most people can do..

Sharing with family & friends is probably the safest way to survive, and a lot of doing-without.

...


Prepare your family for the hard times ahead.

Posted by SoCalDem in General Discussion

Sat Mar 10th 2007, 08:06 AM

No one is immune from the hard landing ahead.
Even with a democratic congress, we will still have almost 2 years left of this mal-adminstration to screw things up even more than they have.

As a boomer, I have lived through many recessions, and they are no fun..

The mini-recession (was it really even a real recession) in the post-Clinton /early Bush years was NOTHING compared to what may be looming on the horizon.

Many people are in way over their heads and a few missed paychecks can send them right onto the streets.

We all think that our family budget is carved in stone and there's no room for "adjustments", but in most cases that's not entirely true.



Easy stuff first:

1. Learn to cook:

......a) Even with higher grocery prices, it's still cheaper (and better for you ) to cook , than to order in, nuke a frozen dinner, or use prepared mixes
......b) grow some fresh veggies if you have some yard space
......c) stock up on bargains at the store when you see them
......d) shop with a list, and stick to it
......e) buy store brands whenever possible
......f) use coupons if they are for things you already buy
......g) Cook several meals at the same time and package your own "frozen dinners" for the rest of the week


2. GET RID OF YOUR CREDIT CARDS

.......a) If you cannot pay them off, please consider filing bankruptcy (if you qualify, and can do it). The deck is stacked against consumers, and it's only going to get worse, folks. The sooner you get "out from under", the sooner you can start rebuilding your financial stability .
........b) Keep ONE credit card with the lowest interest rate possible, and use it once a month (to keep it active)..and pay it in full BEFORE the due date..(If you need to rent a car or reserve a hotel room, you will need a credit card to avoid paying a large cash deposit.
.........c) If your bank offers it, use the online bill-paying service. This eliminates the cost of writing/mailing checks, and it provides a detailed record of what (and where) you are spending your money. It saves on postage too and gas..and time.
........d) Ask your bank for a checking account that comes with over-draft protection (ours has $1k) so if you ever screw up, you will not be charged a bunch of bank fees...or keep a savings account where you have your checking, so you could transfer (online) between accounts.
.......e) Buy a shredder and USE IT. Shred all papers that have any identifying information on them.
.......f) Pay your bills EARLY and pay extra if you can.

3. Examine your "extras".

.......a) Do you really "need" that cell phone package? Are your calls on it, the yak-yak,killing-time calls or is it truly for "emergencies" like people tell themselves? Could you get by with a prepaid cheapo-phone that "lives in the car", and a cheaper "frill-free" land line for the yak-yak calls? (People managed this way for over 100 years)
.......b) Cut the cable bill by going to the bare-bones package and have friends tape the HBO stuff for you.
.......c) Take your lunch to work. Even $4-5 a day ends up being close to a Benjamin a month.
.......d) Send kids to school with a lunch too, It's better for them than what they get in the cafeteria. let them make their own, and they might accept it more.
........e) Shop the sales at upscale department stores, and you can often find better clothing/accessories than at Walmart/KMart/Target..and there is no stigma for shopping at resale shops/flea markets/yard sales.
.......f) PAY OFF YOUR VEHICLES (if you can) and figure out exactly what those extra cars are costing you. You have to consider insurance, gasoline, repairs, tires, finance charges.. the whole enchilada
.......g) Take a hard look at the secondary income job (usually the wife's). What are you actually getting to KEEP from that job, after the daycare costs, lunches at work, extra car expenses, extra costs associated with the job, and any income tax implications. Now figure out if it's actually worth the trouble. remember that you only get to spend what's left over, and often that part-time job ends up costing the family money in the long run.
......h) Start saying "We cannot afford that" to your kids. SHOW them the family budget and make them a part of the financial team.
......i) Cancel magazine subscriptions.. (Most probably don't even get read..or when family asks what you want for your birthday/xmas/etc , let THEM subscribe to your favorite magazine as your gift
.....j) When you eat out, go early and use coupons for meals if you get them

4. Maintain your appliances, cars & equipment. An annual "check-up" is cheaper than a complete breakdown.

5. Network and barter casually

.....a) Everyone has a special skill, so trade services within your group. (be careful how you do this, because the IRS is "interested" in bartering .)..
......b) When you buy something pricey, show them cash and ask for a cash discount
......c) Shop in your community, with privately owned businesses, if you can. Often they deliver free and are eager to please you
......d) Ask your friends for referrals for things you need done (if you cannot do them yourself).
......e) If you have young kids, set up an "exchange" with other families..for clothes & toys.
......f) Set up or join a babysitting co-op (It's easy, fun and it's FREE babysitting (as in no money paid..just your time)

6. Consider "shared-housing" . If you are an empty-nester with a big house, you could "rent a room" to a single who cannot afford the high cost of an apartment..or you could incorporate a parent/grandparent into your home (cue fingernails on a chalkboard here)..but if it's the difference between losing your home or keeping it, you may need to consider this

7. Energy use can be cut down

....a) Obviously the new lightbulbs help, but there are other things you can do.
.....b) Do laundry & dishes at off-peak times
.....c) Close off registers in unused rooms
.....d) Set the turn-off timers on tvs incase you fall asleep
....e) Replace washers in faucets so they don't drip
.....f) Plan your shopping /errands in a circular trip.
.....g) Make sure your car has a locking gas cap




I've droned on long enough, but let me tell you, that when a REAL recession hits, and hits hard, many families will be hit hard. Most young folks have never experienced wage-freezes or 15% mortgage loans .. But when WE endured those things, there were no killer health care premiums or $25K cars or all the distractions we have today.

Start now and if it doesn't come to pass, you mightr only end up with a savings account & some good habits.. Wait too long, and you might be homeless and broke.

Read entry | Discuss (298 comments) | Remove from Journal | Add/Edit intro
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brer cat Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 07:51 PM
Response to Reply #11
19. Hi, SCD, I saw this post previously, and it is an excellent one,
but I think your attitude about #6 needs adjusting. (Or maybe not...I don't know your family.) Living with family members is mostly about RESPECT. I moved in with my elderly parents years ago when I could not work full-time, take care of my child and house, AND give them the attention they needed. By living together, we had far fewer "chores" than maintaining two households, and far more support. I respected that my mother was still head of her household, and we both paid attention to the abilities and desires of each other in allocating our time.

I am now on the verge of a 4-month period of living with my daughter. We both agree that it is a very "odd" arrangement given our ages, but we recognize that it may become very necessary for us permanently to survive. Once again, I respect that she is now head of household. I share advise, but do not offer criticism; I share cooking, cleaning and childcare, but she doesn't expect a free live-in housekeeper. It's all about respect and reasonable expectations.

And the monetary savings can be huge. I am 61, still active, but no longer have a permanent full-time job, and will not be able to get one in this economy. Her childcare expenses when the children are out of school run $250/week; she misses too many days from work because of sick children, and I can take over that task and help her job security; I'm an efficient cook and gardener, so I can save big bucks on her budget there.

It can be a win-win rather than "fingers on chalk board" if there is respect on both sides.




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SoCalDem Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 09:07 PM
Response to Reply #19
20. Yup.. it's a family thing.. and for many people I know
but finances being what they are these days, it's also something that can work out, if everyone "gives a little"...
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No DUplicitous DUpe Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-29-07 09:31 AM
Response to Reply #11
22. Great post, SCD. I must have missed it the first time n/t
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Le Taz Hot Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-29-07 09:38 AM
Response to Reply #11
24. Thank you.
Edited on Thu Nov-29-07 09:38 AM by Le Taz Hot
I was beginning to think I was the only one who thought the thread topic was pretentious as hell. Invest in real estate. Right. Well, first I must figure out how I'm going to live for the month, after paying bills, on $200.00 and then if I have anything left over, I'll consider that real estate investment idea. :eyes:

Honestly, SoCalDem, I loved this post when you did it a while back and iirc, it got lots of great responses. Now, THESE are useful to those of us who aren't part of the investor class.
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SoCalDem Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-29-07 10:42 AM
Response to Reply #24
28. I always crack up at the "IRS tips" they have around the end of every year
especially when they "suggest" putting $10K or so into this fund or that, to get the "tax advantage".. like most people can just DO something like that.. Most people are worrying about how to pay for the Xmas gifts or how to juggle payments to keep a roof over their heads for another month..

MOST people live in the real world where CoCos or even Olive Garden is a "night out at a nice restaurant". :)
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Virginia Dare Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 06:21 PM
Response to Original message
12. Get out of debt and get used to living within your means..
and hopefully you will continue to have some. That's about all you can practically do.
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Imagevision Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 06:53 PM
Response to Reply #12
17. Start living within your means? oh my, will it get that bad?!?
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dysfunctional press Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 06:21 PM
Response to Original message
13. upscale communal-living...the wave of the future.
nt
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L. Coyote Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-29-07 09:36 AM
Response to Original message
23. Are you prepared for an onslaught of DOOMSDAY B.S. ??
While there are real concerns, the BS is overboard. Economies have cycles and events create them. Let's not divorce the causes from the events in a frenzy of negative spin.
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newportdadde Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-29-07 10:01 AM
Response to Original message
26. Tip #8) If you run out of toilet paper just use 1 dollar bills.
We are destroying ourselves.
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Eurobabe Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-29-07 10:15 AM
Response to Original message
27. Yeah, BUT FDIC accounts are only insured up to $100K
all of this talk is making me really nervous....
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