How to Plan For (And Survive) an Economic Depression
Nobody knows what the economy is going to do over the next couple years, but all signs point to a struggle. Whether that means a recession, depression, or total collapse is anyone’s guess. But you should be prepared for any outcome. (MORE BELOW)
Wall Street cheers the prospect of mass unemployment
An event took place yesterday which encapsulates the essential class dynamic at work in the deepening crisis of the global capitalist economy as inflation surges to its highest levels in four decades, interest rate hikes by the US Fed and other central banks continue, and the danger of world recession looms ever larger.
Following a Bloomberg report that a US recession is virtually certain in the next twelve months, according to its economic model projections, stocks on Wall Street surged for the second day in a row after taking a battering in the recent period.
The financial speculators are salivating at the prospect of a recession, knowing full well that the Fed’s policies are aimed not at curbing corporate price gouging and bumper profits, but at slashing workers’ wages.
The class content of the so-called “fight against inflation,” which is the mantra of the Fed and other central banks, was spelled out by former Trump economic adviser Gary Cohn.
“We’re going to have to see job destruction if we’re really going to see inflation be curtailed,” he said in an interview with Yahoo Finance on Monday.
Cohn let the cat out of the bag so far as the “fight against inflation” is concerned, making clear it has nothing to do with the price hikes ripping apart living standards and that its central focus is only on one price: that of labour power, wages.
“We now have a smaller labour force population in the United States so businesses are having to pay workers more to attract them into the labour force which is inflationary. Wages go up and so this is inflationary,” he said.
This claim is a total falsification. As every economic report indicates, including the World Economic Outlook issued by the International Monetary Fund last week, wages have not kept pace with inflation, either in the US or the rest of the world.
The inflationary spiral is the outcome of the actions of the capitalist ruling classes. The refusal of governments around the world to undertake public health safety measures to eliminate COVID-19 from the human population, lest they adversely impacted on the stock market, set off the supply chain crisis.
The price hikes have been exacerbated by the US-NATO war against Russia in the Ukraine, the major increases in military spending by all governments and the speculative bubble created by the flow of ultra-cheap money into the financial system over the past decade and a half.
On top of this, there is rampant profit gouging by the food and energy giants and speculation by hedge funds and others in food, metals, energy and other basic commodities as the United Nations Conference on Trade and Development (UNCTAD) made clear in a report issued earlier this month.
But the central banks, and the representatives of finance capital have never let the truth get in the way of their class war agenda directed against the working class.
Cohn’s remarks on job destruction underscore comments made some months ago by former Democratic US Treasury Secretary Lawrence Summers, who called for an unemployment rate of 5-6 percent for several years or a jobless rate of 10 percent for at least a year.
The financial aristocracy is deploying two weapons to pursue its agenda.
On the economic front, it is following in the footsteps of former Fed chair Paul Volcker, who lifted interest rates to record highs in the 1980s to induce the deepest recession since the 1930s to batter down wage demands and restructure class relations.
At the same time, it is relying on the trade union apparatus to continue and deepen the role it has played during and ever since the Volcker assault: the suppression, by any means necessary, of the independent struggle of the working class against the escalating cuts to its living standards and the increasingly intolerable working conditions imposed over decades and intensified in the course of the pandemic.
Because of its central role in the global financial system, the Fed interest rate hikes are ripping through the world economy. The International Monetary Fund has warned that at least a third of countries will suffer an economic contraction over the next year. The World Bank and UNCTAD have said that the synchronised lifting of rates is inducing a global recession.
A vicious circle is in operation. The US rate hikes are raising the value of the dollar against other currencies. Currency depreciation means that the cost of their imports, most often priced in US dollars, rises, fuelling inflation. Central banks around the world then lift their rates, leading to further economic contraction.
As the Financial Times columnist Edward Luce recently noted, the Fed is the “engine of global contraction” and “monetary pain is America’s fastest growing export.”
But wages are by no means the only target as the ongoing financial crisis in the UK has demonstrated. The massive edifice of debt and fictitious capital, built up over the past decade and a half, can only be sustained if there is a continuous flow of the surplus value extracted from the working class into the coffers of finance capital.
The pool of surplus value on which it feeds must be expanded through the suppression of wages on the one hand and cuts to vital social services on the other. This is the meaning of the financial storm in Britain in the past month.
The objection of finance capital to the Truss government’s mini-budget was not that more money was to be showered on the corporations and super rich via £45 billion worth of tax cuts but that these measures were not funded. That is, they had to be financed through further cuts to already eviscerated social services such as health and education.
That program is now being undertaken as the rejigged Tory government prepares major cuts to be announced at the end of this month to “restore confidence.”
And this class war agenda must be followed worldwide as the IMF’s Fiscal Monitor Report, issued last week, spelled out. It said that in the context of high inflation, rising debt and interest rates consistency between monetary and fiscal policy was “paramount,” meaning that governments had to keep their budgets on a “tightening course.”
But that “tightening” will not be applied to military spending as governments around the world devote ever increasing resources to their war budgets.
As for inflation, the policy is “let it rip” with the IMF declaring that “attempts to limit price increases through price control, subsidies or tax cuts will be costly to the budget and ultimately ineffective.”
What must be the response to this unleashing of class war at home and the growing dangers of world war, with potential nuclear consequences? That is the key question confronting the working class in the US, the centre of the global capitalist system, and in every country.
The World Socialist Web Site and the International Committee have advanced a clear program: the development in every industry and workplace of rank-and-file committees to break the stranglehold of the trade union bureaucracy and advance the independent struggle of the working class to meet its needs. In the United States, the highest expression of this fight is the campaign of Will Lehman for president of the United Auto Workers.
This perspective raises the necessity for a political program, based on the understanding that, whatever the immediate form of the myriad of depredations inflicted upon it, they are rooted in the deepening crisis of the system as a whole and that the fight for socialism is the axis of the struggle to overturn the dictatorship of the profit system.
Poll: Voters Believe Republicans More Concerned with Top Issues, Democrat Leaders out of Touch
Voters believe Republicans are more in tune with the top issues plaguing the country, while Democrats are focused on partisan goals, an October Harris Poll/HarrisX survey found.
The survey asked respondents, “What would you say are the most important issues facing the country today,” weeks ahead of the highly anticipated 2022 midterm election.
The top issue, overall, is price increases/inflation, with 37 percent noting it as the most important issue. Twenty-nine percent identified the economy and jobs as the top issue, followed by 23 percent who said immigration, and 18 percent who said crime and drugs.
What is more, the perceived concerns of Republicans match up with top issues for Americans, as respondents said Republican Party leaders are most concerned with immigration, price increases/inflation, and the economy and jobs.
Meanwhile, Democrat leaders appear to be out of touch, as voters view their top issues of concern to be January 6, women’s rights, and the environment/climate change.
This data could spell trouble for Democrats, as Americans have witnessed a dramatic rise in prices, crime, and illegal immigration under the leadership of President Biden and Democrats controlling both the Senate and the House.
Consumer prices, for example, are up 8.2 percent compared with one year ago. Individuals are also worried about rising crime, prompting conservative senators to call on President Biden to deploy all available resources to American cities dealing with these issues:
Meanwhile, according to some estimates, roughly 5 million illegal migrants have crossed the border since Biden took office. In June alone, authorities on the Southern border seized enough fentanyl to kill 140 million people.
The survey was taken October 12-13, 2022, among 2,010 registered voters.
How to Plan For (And Survive) an Economic Depression
Nobody knows what the economy is going to do over the next couple years, but all signs point to a struggle. Whether that means a recession, depression, or total collapse is anyone’s guess. But you should be prepared for any outcome.
What’s Coming Down the Line?
It’s unclear what will happen in the economy moving forward. However, one thing is for certain: It’s not going to be good. All of the financial indicators suggest we’re entering into risky territory.
At no point in the last 65-plus years has there been inflation above 4 percent and unemployment below 5 percent and the economy failed to enter into a recession within 24 months. It just doesn’t happen. Throw a severe debt crisis and supply shocks into the mix and we have a real problem on our hands.
Economists and market experts foresee more inflation, higher interest rates, increased debt, and additional supply chain issues coming in the next six to 12 months. In other words, things are going to get worse before we can even think about things getting better.
A recession would be the best-case scenario -- a temporary blip on the way to an eventual recovery. But you shouldn’t rule out the possibility of a depression or, while less likely, a total collapse.
Smart Ways You Can Prepare Your Family
As an individual, there’s nothing you can do to stop a recession, depression, or collapse. (In fact, there’s not a person in the world who has that much power.) At this point, we’re all at the mercy of whatever happens. The only thing you can do is to prepare your family proactively. Here are some ways to financially prepare your family for whatever is to come:
- Stockpile Staples
This first suggestion might not seem like a piece of financial advice, but it is. In an inflationary marketplace where prices are rising and you suspect supply chain issues are coming down the line, stockpiling staple foods and goods is a wise decision that will provide you with financial relief in the coming months.
When you don’t have to worry about overpaying for things like rice, pasta, sugar, flour, soap, toothpaste, and other necessities, you can reallocate that money to other areas. It creates margin in your budget to be successful. It allows you to focus on other things and conserve your financial resources.
- Diversify Your Assets
You never want to be too heavily invested in one asset or investment type when a recession or collapse is coming. It can easily cause you to lose everything. You’re much better off being diversified across multiple asset classes. While it’s likely that all of these assets will temporarily go down in value, it gives you more flexibility and increases your chances of an eventual recovery.
Cryptocurrency is one asset class you should definitely keep your eye on. While it’s currently down (like everything else) the decentralized nature of Bitcoin, Ethereum, and other digital currencies make it an excellent option for diversification.
The key is to know when to invest. Learn how to analyze market opportunities using things like MT4 indicators to help you line up the right investments.
- Build Up an Emergency Fund
Focus your energy on building up an emergency fund. If you don’t already have a minimum of six months’ worth of cash in a savings account, you don’t have enough. You need enough cash to allow you to survive for at least six months, even if you don’t earn another dime during that period. Do whatever it takes between now and the coming financial crisis to do this.
As a reference, a family with basic living expenses (meaning food, shelter, medical care, etc.) of $5,000 per month will need a minimum of $30,000 in an emergency fund. Don’t underestimate this!
- Pull Out Cash
While it’s never happened in the United States, all you have to do is look at the financial collapse in Greece from a few years ago to understand how quickly things can go sideways. Believe it or not, there could come a point in time where banks could limit how much money you’re able to pull out on a daily/weekly basis. The easiest way to avoid a scenario like this is by pulling out cash ASAP.
You’ll have to decide how much physical cash you want to keep on hand, but a one-month supply of cash is a good starting point. Using the example above, a family with $5,000 of monthly expenses should have at least $5,000 in cash sitting in a home safe. If you have a particularly safe location and aren’t worried about the possibility of fire or burglary, two to three months of physical cash is a good idea.
- Make Tradeworthy Investments
Now’s a good time to make what we call “tradeworthy” investments. That means instead of putting a bunch of money into the stock market, buy things that you can barter with during a depression. Good options include alcohol and liquor, tobacco, and ammunition.
- Find Additional Streams of Income
In a depression, you can go from a successful career and stable position with your employer one day to no job and no career prospects almost overnight. The best way to insulate yourself from this threat is by proactively adding additional streams of income.
The more jobs and hustles you have, the less likely you’ll lose 100 percent of your income. You might lose a good chunk of it if your primary employer fires you, but you still have a few different methods for generating income. This will serve you well when stuff starts hitting the fan in an economic collapse.
Adding it All Up
If an economic crash, recession, collapse, or depression is going to happen, there isn’t much you can do about it. It’s going to happen. You can, however, control how prepared you are. By making smart choices today, you can lessen the impact it has on your family tomorrow. Handle what you can handle and forget about the rest.
Eight things that killed the Democrat Party
The old Democrat Party is gone. In its place is a radical Libertine Party, full of itself and full of radical sexual, cultural, and economic ideas that have all but killed their chances of ever getting legitimately elected again. The following five things are what I believe has murdered the Democrat Party in its sleep:
- CRT: Critical Race Theory in all its permutations, regardless of its origins and history, has become the banner of anti-white racism, disguising itself as "anti-racism." Under its banner, white people are told they are worthless, toxic, hateful oppressors. Worse, companies are actually hiring people who promote this toxicity and schools are teaching students to hate white people. Now out in the open, anti-white racism has created a hate-filled atmosphere of constant tension and dissension, where the only thing that matters, first and foremost, is skin color. This can only be laid at the feet of Democrats.
- TRANS WOMEN IN WOMEN'S SPORTS: The gross unfairness of allowing men into women's sports (no, I will not call them "women") is so blatant and outrageous, that proponents are seen not merely as insane, but malevolent. The destruction of women's sports is viewed by all rational people as evil in the name of wokeness.
- CORRUPTION IN THE FBI: The malicious and ethics-free raid on Mar-a-Lago is viewed even by many Democrats and all Republicans as vicious political intimidation, with the goal of destroying any followers of Donald Trump. This began in earnest during the "Russia collusion" case and saw its culmination in midnight raids of innocent conservatives revealing a hateful, vengeful vigilantism on the part of the radical left. In the hope that supporters of Trump and other conservative candidates would drop out of politics in fear of similar reprisals, these Gestapo tactics have not only solidified Trump's support and the support of even moderately conservative candidates, but have shown the Left to be petty children in a deranged, red-haze temper tantrum.
- COVID MASK AND VACCINE MANDATES: Certainly a show of power rather than anything prophylactic against COVID, blue states and leftist groups have revealed that they know the masks do not prevent COVID, but instead are a symbol of big-government Stasi tactics designed to subjugate the citizenry in order to prepare them for eventual control.
- DRAG QUEENS IN THE SCHOOLS: Young children have been indoctrinated into sexual fetishism and perverse sexual behavior at the behest of school administrators and leftist parents who seem to see nothing morally wrong with gay men dressing up as women in highly sexually-suggestive costumery and behavior. Why they are doing this has become clear: They want to break down all parental control over children and indoctrinate them into pedophilia, perversity, and compliance. For most parents, this was a bustier too far.
- THE ECONOMY: From the start in 2021 when Joe Biden killed the Keystone pipeline and halted all drilling and new permits, the economy began tanking. Gas prices, supply line problems, paying people not to work, profligate spending, and other avoidable problems has hit the average American smack dab in the wallet. No matter how much the Biden administration denies their role in inflation and no matter how many times Joe says the economy is "strong as hell," Americans watch their buying power dwindle. They want relief and it is clear they will not get it from the Democrat Party.
- ILLEGAL IMMIGRATION: From day one, the borders were flung open by the Democrat Party to drug traffickers, murderers, and myriad other miscreants in the hope they would be new Democrat votes. As a result, crime is rampant, blue cities under Democrat rule are suffering and homelessness is on the rise, all the while Biden spokespeople are claiming the "border is closed." Squealing like stuck pigs, places like New York City which have reluctantly become home to Texas' illegals, have seen a marked inability to safely house the very illegals they claim to have wanted to live in their "sanctuary city."
- CRIME: Because of the Democrat rule in blue cities, crime is not being prosecuted in the name of some weird kind of reparations. What the Democrats don't get is that they hurt their own innocent population by allowing criminals a get-out-jail-free card, and by not prosecuting at all. Their racist policies hurt the very people they claim to want to help. Why are they doing this? To deliberately create chaos in the execution of anti-white racism. The one solution to the rising crime rate, the prosecution and incarceration of criminals, is the one thing blue cities under Democrat rule will not do. Mayor Lightfoot makes weird and demonic home videos of herself dancing around in what appears to be a drugged stupor. Rather than be a responsible mayor, she has totally ignored the death-by-violence rate in Chicago. This is another very clear example of Democrats doing what they do best; destroying things.
All this is happening under Democrat governance and it is clear even to Democrat voters of good will that their party is no longer serving them but is serving Luciferian ends.
Image: Doug Mercado
No comments:
Post a Comment