How To Protect Yourself In The Coming Financial Crisis

[No DUplicitous DUpe]

How To Protect Yourself In The Coming Financial Crisis
(posted with permission from: http://sane-ramblings.blogspot.com/2012/06/how-to-protect-yourself-in-coming.html)

As Portugal, Ireland, Italy, Greece and Spain move closer to the brink of a bank and sovereign debt collapse, fear of that collapse has begun to spread not only through the Euro Zone, but to the Asian manufacturing powerhouses. Most notably China, Japan and South Korea are seeing their economies already get hit, as is India.

And that impact is starting to be felt in Canada, Australia, Latin America and throughout Africa, all these nations major providers of raw materials to the manufacturing powerhouses. Even multinational corporate giants like General Electric, Heineken and others are moving quickly to protect their cash, restructure contracts and strengthen payment terms, as they prepare for the storm to come.

The U.S. is next to get hit and get hit hard, as illustrated by a dismal jobs report (6/1/12) and by news that many college graduates can't find jobs, or can't find jobs that pay a decent wage and are unable to pay their student loans, a possible trillion dollar exposure to U.S. taxpayers. Home foreclosures and a weak real estate market continue to burden any form of economic recovery, and 1 of 6 Americans get some or all of their meals from food banks. Many Americans are just one big medical emergency from facing financial ruin.

In addition, many major U.S. states are struggling to pay their bills, most notably the U.S.'s biggest state, California, which has a nearly $16 billion shortfall it is scrambling to close with as yet undetermined but huge spending cuts to come.

Meanwhile, the U.S. is by far the biggest debtor nation in the world and its government hasn't defaulted on its debts only because it has huge borrowing capacity. And because of global financial panic, money keeps pouring into U.S. T-Bills, thus briefly putting off the day of reckoning for a dysfunctional and corrupt government.

So how can you protect yourself in the coming financial crisis:

1) Take care of your health. Without good health, you can do little to protect yourself and your loved ones at such a crucial time. If you suffer from diabetes, heart disease and other often preventable but severe diseases, do something about it, starting today. Begin eating wisely, slashing junk foods and get some exercise. Your well-being depends on it!

2) Protect your job. Cross train so you have more to offer your employer, find ways to help generate revenue or cut costs because that is how nearly every organization is now focused, be upbeat because no-one wants to be near a complainer and word about complainers travels far and fast and tackle jobs your boss feels are essential but doesn't want to personally do. And with a smile, the more you can do to help others in your organization with their work, the more support you will receive from them and this is a time when everyone needs the support of others.

3) Slash your overhead. Sell-off unessential items such as an extra car, or a motorcycle, boat or other toys you may no longer be using but cost you money to keep. Pay down or pay-off your credit cards for those monthly payments are eating your budget alive. If need be, approach those credit providers to explain the dire nature of your finances and try to get a forgiveness of some of your debt or better payment terms.

4) Educate yourself with practical courses. Select online, extension or other courses that can put money in your pocket such as those related to computers, medical care or other much needed skills.

5) Make charitable donations. To the extent you can afford to, please give generously to charities for in the end, all we have is each other. And the donation you make now may help someone else get back on his feet and in turn he may later help you get back on your feet.

One final note: Together we will get through the horrors of this financial crisis, for the world has had many financial crises and after considerable hardship, it always survives them. During the 1930's Great Depression, people came together to help one another and as times grow worse that is what we will do now.

---

To learn more about the state of the global and U.S. economies, please see the following Wall Street Journal articles:
"Euro-Zone Reports Deepen Gloom"
"Grim Job Report Sinks Markets"
"Asia Weakness Heightens Fears Of Contagion"
"Japan Gives Warning on Yen"
"Asia Strains Under Euro Crisis"
"India Economy Shows Sharp Slowing"
"Business Braces for Europe's Worst"
GE: Best Approach for Continent Is to Pull Back
"African Nations Begin to Feel Pinch"
"Student Debt Rises by 8% As College Tuitions Climb"

[ManyShadesOf]

1. great advice but WHO is living like this? Seriesly?

1) Protect your health was the perfect way to start off.

2) Job advice all good.

3) Slash your overhead. Sell-off unessential items such as an extra car, or a motorcycle, boat or other toys you may no longer be using but cost you money to keep.

Are they effin kidding us?

Debt and student loans are mentioned. Who is not in debt up to their eyeballs, even if they have the "unessential items" and toys?

The people in this country are HURTING. PROTECT YOUR HEALTH? Without health insurance!! The health insurance you couldn't afford to use even when you had it!! Unemployment benefits are being CUT OFF!! People are scrambling to get food stamps. The illusion that many or any Americans have the luxury of this lackadaisical attitude to SURVIVAL is a problem. It is THE problem. This is why more people are not reacting and demanding real change.

"During the 1930's Great Depression, people came together to help one another and as times grow worse that is what we will do now."
People are already doing this! This is a DEPRESSION. What ivory tower is this writer and audience living in?

[coalition_unwilling]

2. Um, how do you pay down or pay off your credit cards if you are unemployed? - n/t

[lastlib]

5. Just take Mitt Rmoney's advice:

Borrow $$ from your parents and start a business. You'll be rich like him in no time.

(JIC)

[Lns.Lns]

3. Nice thoughts, I prefer the Financial Times to WSJ

As you point out, it has in the past, required a crash to reset the social landscape. But my question is why haven't we evolved past this? We almost started on the right path after the Great Depression, but greed does seem to win out. If you believe the Fourth Turning scenario, it will come again and worse than this last one.

This cycle of destruction has been lead by Milton Friedman types on the Republican side and to a lesser extent Hayek types on the Libertarian side. I do have my plan B in the event Republicans win out, but with all the information available now, I don't understand why we are allowing this to happen. When will we evolve past this?

Dragi is the hope for overcoming Germany, Austria, et al., but will it be in time? Roubini has been predicting China's blowup for a while now and where it was ignored before now the only debate is whether it is a hard or soft landing. But then what do you expect out of a country that suppresses it's people to the extent that China does? Contagion encompasses many by stander nations. We almost proved that Keynes was right as the rest of world is hanging on our success due to the steps taken. But as usual, the incredulous right is willing to do anything to stop the truth from emerging. Some South American countries (having been destroyed by the Chicago Boys ideology) are turning to themselves for sustainability. I keep hoping that we will learn before it is too late again.

As a side note for weathering these cycles... learn from Minsky's observations... when available credit starts to exit production and instead goes toward feeding speculation (it comes in different forms at different times, e.g. stocks, housing, banks, etc.), pull back on your investments. If it is a housing bubble, sell your house buy another when it crashes (that happens only when it is a bad one). During manias gold gets cheap, buy some and sell it during the panic. If it is a minor recession, buy good stocks right after the big sell off. My personal preference is not to buy everyday things unless you can pay for it outright.

These are things I know, however, I would be a much happier person if I never had to be that cynical or defensive. Getting money and religion out of politics, educating the populace well and free would be a good start. These are the things I am for. I do the other for survival when others don't seem to care enough to put a stop to the madness.

[aint_no_life_nowhere]

4. I'm sure Ann Romney will sell off one of her 12 dressage horses

And Mitt needs to start training and educating himself in a field that actually makes a positive contribution to society to face his unemployed status after November.

[coalition_unwilling]

6. I think much of this is fatuous and self-serving twaddle (except maybe #5), but

I would encourage urban dwellers to make contingency plans to get out of Dodge on short notice should the need ever arise. I've read in a couple places that the average American city has only a 3-day food supply and so, in the event of a significant disruption to food and water supplies, cities could easily go feral quite quickly.

However, that 3-day food supply item I read may have been fear-mongering to push some agenda. I don't remember where I read it nor the context for same.

[Speck Tater]

7. I read a book with that exact title published in 1968 or 69.

It warned that the global economy would collapse by 1980.

It's good to see that Chicken Little is still on the job.

[flamingdem]

8. Jim Cramer just declared that the economy is hopping

on Tweety's show

Cited the auto industry

[dixiegrrrrl]

11. When Cramer speaks, do the opposite.

[a la izquierda]

9. I'm sure when the economy tanks...

the government will gladly accept pebbles for my $120K in student loans...
but thanks for the advice.

[BlueDemKev]

10. How can we possibly have another major financial crisis....

....when we haven't even half-recovered from the 2008-09 economic collapse?