Sunday, May 13, 2012

What Can We Do ?

Poor Uncle Sam               (Photo:

 This is the final post for awhile on the subject of a potential impending financial collapse in the United States.

  Over five posts, I have examined the reasons the United States may be headed for a financial crash.  I have skipped the post on how many people with an entitlement mentality are driving the national debt upwards, as we all already know this.  Houston, we have a problem, along with Denver, New York, Miami, Detroit, Los Angeles, Seattle, Atlanta, Austin, Fargo, Taos and everywhere in between.  We touched on mis-structuring in our housing and banking sectors and in the attitudes of Americans which fuelled a housing market collapse which hasn't ended yet.  I did not mention a similar issue in commercial building, with defaults coming, although that would also be true.  We touched on runaway taxation as a phenomenon which has made it difficult for many to pay their own bills. It has also begun to socialize some to the idea that "the government has my money, and will therefore have to take care of my needs".   Then, I mentioned the serious issues of unemployment which have plagued our nation, most acutely from 2008 and forward.  I believe the unemployment situation to be inadequately reflected in governmental figures, and therefore inaccurately reported to us. Then, without getting into the complete stupidity of "Quantittative Easing" by the Federal Reserve, I tried to impart that the very bank entrusted with trying to keep the economy from crashing, may be part of the problems we are facing as a nation. (See below)   The printing of money, unbacked by anything, can only fuel inflation. (More paper money chasing the same amount of goods and services.)  The only reason inflation isn't a larger problem than it is, is that the banks are reluctant to lend money, thus holding back runaway inflation.  In the last post. I touched on our nations crushing debt, and how a default is a possibility.


      As individual families there is not much we can do to impact the changes which need to be made in our government.  The game continues to be played in much the same way a compulsive gambler plays, unable to stop and sure that next time, he will get his losses back.   We can be politically informed, registered to vote, and do our best to know what is going on. We can seek people of like minds for ideas and for support.  We can be active supporters and thorns in the side of our Congressmen. Both Democrats and Republicans in my state know my family and I well. We make our ideas known to them on a regular basis, with I am afraid, limited impact. We can make sure we vote, and ensure that every family member we have is informed, and votes also.
      Then, we need to get down to serious brass tacks.  How likely is a financial collapse in the US in the next one to two years or even before that ?  Each of our families must take a serious look at choices we make.  If your primary income or a substantial part of it ended, what would your plan be ?   If your adjustable credit, or credit cards went from a 9% to a 27% rate, what would you do ?   What is your financial disaster back up plan ?  Where would you live, and where would you go ?   It isn't necessary to tell me, but it is necessary that you, your spouse and your children have some idea what that "worst case scenario plan" is for your family.  The absolute worst case scenario rarely happens, but some version of it often does.  If your income ceased next month, how would you eat ?  Do you have long term food stored for major emergencies ?   Do you have medications set aside should your employer collapse ?   I know that few of us had the funds to set up a perfect and adequate retreat, but plans of any kind made now, may do a great deal to minimize the misery of an economic disaster the likes of which cannot be fully anticipated.
       I have personally and seriously looked at leaving the United States.  I don't know that in my research I found anywhere I thought would be insulated from civil unrest, financial collapse, or governmental problems. It may be that for most of us, where we are, is where we are, and we will need to survive somehow, exactly where we are. I do know that once a cascading failure of our domestic systems begins that it will be too late to leave. The point is that nations and governmental systems are so interdependent and interlocked that a failure in one location will appreciably ripple in another.   A financial crash in the US adversely impacts England.  A great loss of wealth in the US trips a recession in Russia. Australia could see a crash in visitors and in tourism if the European Union collapses. A financial collapse in the US may well lock the borders down to Canada.
        I have no advance warming of what might occur.  I know that those who manage our finances in the great machine that is the US economy, don't seem to understand it.  I know that the US economy is a resilient entity generally as many of the things done in the past would have destroyed a less tenacious machine.  However, there is a point of no return.  There is a point at which the machinations and failures will destroy the "Middle Class" and turn many into paupers.    I have no idea whether a natural disaster coupled with a terrorist act will beget a financial collapse and whether the US will experience a perfect storm.  I know only that it might be desirable for everyone to fashion a family emergency financial back-up plan.  Decide what you can pay off, what you should keep, and what you could part with should things become difficult.

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