Is the gov’t BS about the economy over?

Good question, but knowing government, I don’t think so.

The economy has been losing jobs for the past nine months and all we have heard is “the fundamentals of our economy are strong”. Apparently, when banks don’t loan money to other banks  money is not a fundamental part of our economy.*cough*

I also point out that volatitlity in the market with 2- 3 %  daily swings is a sure sign of trouble ahead.  

You might as well admit that even if our government and economists say we are NOT IN A RECESSION and certainly NOT IN A DEPRESSION,  we are headed for the cliff and we, personally, have not yet fallen over. But the banks have fallen off the cliff… and you know it.

Who will fall off the cliff next? Retail stores. They sell product on thin margins. Expect to see specialty retail stores begin to fail. And after them will be pricey restaurant chains. People will still choose to eat out but they will choose salt-of-earth restaurants and not bistros.

Construction has already slowed. Real estate sales and associated work industries has been abysmally slow for the past year. There is more trouble ahead. Banks were bailed out but the economy wasn’t.

Face it, friends. We are in the recession/depression that nobody wants to talk about.

The most important thing to consider right now is ”Will your current job survive a recession or depression?”  You are lucky if your job is in healthcare, government, or defense-military related. You are fortunate if your work cannot be done by others because of how long it takes to train a replacement. You are in trouble if it only takes a bright person to do your work and they can be trained quickly. You are in trouble if there are 10 people who do your job where you work and you are not well-liked.

 If you are an average person or family, you will want to look at your life in four areas and see what you can do to downsize: food, shelter, clothing, and debt. Now is not the time to buy new things on credit. Make do with your old car. It is cheaper to fix it than to buy new. If you must buy, and you are an average person, buy used vehicles less than three years old. You save on price and benefit from a long life expectancy. Quality clothing is cheap in America and will get cheaper as the manufacturers feel the pinch but do not spend your money on clothes that will not keep you warm, dry, and help you to look good at work. This would be the time to rid yourself of raggedy jeans and buy new ones that will last you 2-3 years. When it comes to appliances, buy one only if the old one is broken or you can pay cash. Pay off debt and do not add more.

 Cash will become king again. What will happen is that people who have too much credit card debt, and lose their jobs, will default. That will raise costs to banks who will charge more for credit cards. If you already have bad credit, you may find it impossible to get any type of loan. Start your savings account now and create a goal to have three months of cash in the bank (or at home) that you do not use to pay your bills. If you lose your job, you will have a short term cushion and much less stress about how to feed yourself and your family. Begin thinking about who  you will live with (if you have to) and how you will need to adjust to that. This is not a new concept. Multi-generational living and room mates once were quite common in America until cheap credit caused a housing boom. Once cheap credit is gone, and more job losses occur, you can expect that to come back.

How to save money you do not currently have? Stop spending money on things that are not food, shelter, and clothing related. Stop spending money on drugs, music, video games, new dvd’s, new cell phones, etc. Keep your current ones or do without. Enjoy what you have already purchased instead of buying new.

I know, I know. The economy runs on people buying things. Consumerism,they call it. Without it things get worse. I say that you need to make a hard choice right now. Plan for your own future under a recession economy or sleep in the streets. You may choose to keep your self-respect, and the respect of others, or else lose your dignity, your pride, and your sense of self-worth. Choose for yourself. Choose soon though. There is not much time until job shrinkage grows exponentially. If you know that your company is looking at how to re-organize itself, then you should know that they are looking to cut personnel costs and that means you are at risk.

If you think that I am wrong about this caution (this warning) then I ask you ’what will it take to convince you that a bad economy is ahead?’. Will you wait until you lose your job? Will you wait until your brother, sister, daughter, cousin, or uncle lose theirs? If that is what it will take, then I suggest you start saving cash now. You will need it soon.

This is not a normal recession that is coming. Get yourself prepared. I am.