In case you haven’t noticed, the world is slowing down. More specifically, the worlds consumption and production. What amazes me is how you wouldn’t have any idea whatsoever if all you did was watch the mainstream news at 6-oclock.
China’s stock market is in a major crash. The reason? Industrial output is weak and China’s economy is slowing. Why? Because they’re not shipping as much ‘stuff’ elsewhere like they used to. Why? Because people aren’t buying as much ‘stuff’. Why? Because most people are tapped out. Why? Because we have reached or are rapidly reaching ‘peak debt’.
While there are MANY more signs of the coming economic depression, there is one glaring fact… ‘The debt’ will never and cannot ever be paid back. More specifically the debt of nations, including the USA. We (and other nations) are tapped out. The only reason we’re bumping along is because of money printing. Additionally we used to rely on the fact that the US dollar was the world’s reserve currency. Well that has been changing and will continue to change as the saga unfolds.
Personal debt (for most) is enormous. And people’s paychecks have not gone up much during these years either. Many (most) people are tapped out and they are living at the edge of their ability to service their debts and pay their bills – having left little to no ‘cushion’. They have reached ‘peak debt’ and are not buying extravagantly as they once did.
The current financial system REQUIRES that we borrow (more) for ‘it’ to continue. It is ENTIRELY based on debt. For there to be so called ‘growth’, it REQUIRES that more people, more businesses, go into DEBT. They call that growth. While calculated debt (managed ‘smart’ debt) can be advantageous in some situations, unfortunately in many circumstances debt is unwise. That said, ‘they’ (TPTB) have created a gargantuan debt bubble. There is so much debt, that it cannot possibly be serviced. Ever.
The current system WILL crash. And it seems ever closer.
When it does, and depending on the extent and management of the crash, we will either be facing a long term economic depression, or we will be facing outright SHTF.
While we sometimes focus on SHTF scenarios, the fact is that there is a chance that an economic depression might not be an end-of-the-world scenario (although it will be for many). Though the next economic depression might meltdown into total collapse and social chaos, lets presume in this instance that it (the collapse) turns into a slow and long lasting economic depression, as in the Great Depression II.
What would it be like?
Well, lets say that the power is still on, electricity is flowing, the system is still functioning (although sporadic), the 1% are still rich and running the world, but most of the rest are struggling to put food on the table because so many have lost their jobs and household take-home income has collapsed (as well as the stock market, people’s 401k plans, and many retirement benefits have been slashed or eliminated). The government is providing vouchers for food and assistance but that’s not enough (for most). There has been sporadic violence in the cities and some metro regions, but the police and .gov have cracked down hard. Foreclosures and repossession’s are rampant. People are moving in with family, friends, relatives in order to have a roof over their heads. There’s little to no work that pays enough to climb out of the abyss, but there are odd jobs here and there.
With that picture painted, what can we do to prepare for a long term economic depression?
A few thoughts include the following:
Get out of debt! While you may think that the banks won’t have the manpower to foreclose or to repo your assets, think again. They will. If you cannot pay your debts, they will only give you so much grace period before they will come after you.
Think ‘FOOD’! You and your family will need to eat. Today’s food budget is much more of a factor than the .gov gives credit (via their CPI calculation – Consumer Price Index). Food prices will never go down. Period. The more you inventory now, the better off you’ll be later. Everyone needs to eat. During the Great Depression, FOOD was a top priority. It will be the same during Great Depression II.
Slash cost-of-living expenses!. Examine ALL of your monthly expenses. Trim them so that you can prepare for the coming economic collapse. Only YOU know your own budget and whether or not you NEED this or that. Just saying.
Sell assets that will be of no practical use during Great Depression II. Get some money for it (them) now before no one will pay you for it later.
Now it’s your turn.
What do you recommend to prepare for a long term economic depression?