Depression

20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins

Today, millions of Americans say that they believe that the United States is on the verge of a major economic collapse and will soon be entering another Great Depression.  But only a small percentage of those same people are prepared for that to happen.  The sad truth is that the vast majority of Americans would last little more than a month on what they have stored up in their homes.  Most of us are so used to running out to the supermarket or to Wal-Mart for whatever we need that we never even stop to consider what would happen if suddenly we were not able to do that.  Already the U.S. economy is starting to stumble about like a drunken frat boy.  All it would take for the entire U.S. to resemble New Orleans after Hurricane Katrina would be for a major war, a terror attack, a deadly pandemic or a massive natural disaster to strike at just the right time and push the teetering U.S. economy over the edge.  So just how would you survive if you suddenly could not rely on the huge international corporate giants to feed, clothe and supply you and your family?  Do you have a plan?

Unless you already live in a cave or you are a complete and total mindless follower of the establishment media, you should be able to see very clearly that our society is more vulnerable now than it ever has been.  This year there have been an unprecedented number of large earthquakes around the world and volcanoes all over the globe are awakening.  You can just take a look at what has happened in Haiti and in Iceland to see how devastating a natural disaster can be.  Not only that, but we have a world that is full of lunatics in positions of power, and if one of them decides to set off a nuclear, chemical or biological weapon in a major city it could paralyze an entire region.  War could erupt in the Middle East at literally any moment, and if it does the price of oil will double or triple (at least) and there is the possibility that much of the entire world could be drawn into the conflict.  Scientists tell us that a massive high-altitude EMP (electromagnetic pulse) blast could send large portions of the United States back to the stone age in an instant.  In addition, there is the constant threat that the outbreak of a major viral pandemic (such as what happened with the 1918 Spanish Flu) could kill tens of millions of people around the globe and paralyze the economies of the world. 

But even without all of that, the truth is that the U.S. economy is going to collapse.  So just think of what will happen if one (or more) of those things does happen on top of all the economic problems that we are having.

Are you prepared?  

The following is a list of 20 things you and your family will need to survive when the economy totally collapses and the next Great Depression begins….

#1) Storable Food

Food is going to instantly become one of the most valuable commodities in existence in the event of an economic collapse.  If you do not have food you are not going to survive.  Most American families could not last much longer than a month on what they have in their house right now.  So what about you?  If disaster struck right now, how long could you survive on what you have?  The truth is that we all need to start storing up food.  If you and your family run out of food, you will suddenly find yourselves competing with the hordes of hungry people who are looting the stores and roaming the streets looking for something to eat.

Of course you can grow your own food, but that is going to take time.  So you need to have enough food stored up until the food that you plant has time to grow.  But if you have not stored up any seeds you might as well forget it.  When the economy totally collapses, the remaining seeds will disappear very quickly.  So if you think that you are going to need seeds, now is the time to get them.

#2) Clean Water

Most people can survive for a number of weeks without food, but without water you will die in just a few days.  So where would you get water if the water suddenly stopped flowing out of your taps?  Do you have a plan?  Is there an abundant supply of clean water near your home? Would you be able to boil water if you need to?

Besides storing water and figuring out how you are going to gather water if society breaks down, another thing to consider is water purification tablets.  The water you are able to gather during a time of crisis may not be suitable for drinking.  So you may find that water purification tablets come in very, very handy.

#3) Shelter

You can’t sleep on the streets, can you?  Well, some people will be able to get by living on the streets, but the vast majority of us will need some form of shelter to survive for long.  So what would you do if you and your family lost your home or suddenly were forced from your home?  Where would you go? 

The best thing to do is to come up with several plans.  Do you have relatives that you can bunk with in case of emergency?  Do you own a tent and sleeping bags if you had to rough it?  If one day everything hits the fan and you and your family have to “bug out” somewhere, where would that be?  You need to have a plan.

#4) Warm Clothing

If you plan to survive for long in a nightmare economic situation, you are probably going to need some warm, functional clothing.  If you live in a cold climate, this is going to mean storing up plenty of blankets and cold weather clothes.  If you live in an area where it rains a lot, you will need to be sure to store up some rain gear.  If you think you may have to survive outdoors in an emergency situation, make sure that you and your family have something warm to put on your heads.  Someday after the economy has collapsed and people are scrambling to survive, a lot of folks are going to end up freezing to death.  In fact, in the coldest areas it is actually possible to freeze to death in your own home.  Don’t let that happen to you.

#5) An Axe

Staying along the theme of staying warm, you may want to consider investing in a good axe.  In the event of a major emergency, gathering firewood will be a priority.  Without a good tool to cut the wood with that will be much more difficult.

#6) Lighters Or Matches

You will also want something to start a fire with.  If you can start a fire, you can cook food, you can boil water and you can stay warm.  So in a true emergency situation, how do you plan to start a fire?  By rubbing sticks together?  Now is the time to put away a supply of lighters or matches so that you will be prepared when you really need them.

In addition, you may want to consider storing up a good supply of candles.  Candles come in quite handy whenever the electricity goes out, and in the event of a long-term economic nightmare we will all see why our forefathers relied on candles so much.

#7) Hiking Boots Or Comfortable Shoes

When you ask most people to list things necessary for survival, this is not the first or the second thing that comes to mind.  But having hiking boots or very comfortable and functional shoes will be absolutely critical.  You may very well find yourself in a situation where you and your family must walk everywhere you want to go.  So how far do you think you will get in high heels?  You will want footwear that you would feel comfortable walking in for hours if necessary.  You will also want footwear that will last a long time, because when the economy truly collapses you may not be able to run out to the shoe store and get what you need at that point. 

#8) A Flashlight And/Or Lantern

When the power goes off in your home, what is the first thing that you grab?  Just think about it.  A flashlight or a lantern of course.  In a major emergency, a flashlight or a lantern is going to be a necessity – especially if you need to go anywhere at night. 

Solar powered or “crank style” flashlights or lanterns will probably be best during a long-term emergency.  If you have battery-powered units you will want to begin storing up lots and lots of batteries.   

#9) A Radio

If a major crisis does hit the United States, what will you and your family want?  Among other things, you will all want to know what in the world is going on.  A radio can be an invaluable tool for keeping up with the news. 

Once again, solar powered or “crank style” radios will probably work best for the long term.  A battery-powered until would work as well – but only for as long as your batteries are able to last.

#10) Communication Equipment

When things really hit the fan you are going to want to communicate with your family and friends.  You will also want to be able to contact an ambulance or law enforcement if necessary.  Having an emergency cell phone is great, but it may or may not work during a time of crisis.  The Internet also may or may not be available.  Be sure to have a plan (whether it be high-tech or low-tech) for staying in communication with others during a major emergency.

#11) A Swiss Army Knife

If you have ever owned a Swiss Army knife you probably already know how incredibly handy they can be.  It can be a very valuable and versatile tool.  In a true survival situation, a Swiss Army knife can literally do dozens of different things for you.  Make sure that you have at least one stored up for emergencies.

#12) Personal Hygiene Items 

While these may not be absolute “essentials”, the truth is that life will get very unpleasant very quickly without them.  For example, what would you do without toilet paper?  Just think about it.  Imagine that you just finished your last roll of toilet paper and now you can’t get any more.  What would you do? 

The truth is that soap, toothbrushes, toothpaste, shampoo, toilet paper and other hygiene products are things that we completely take for granted in society today.  So what would happen if we could not go out and buy them any longer?

#13) A First Aid Kit And Other Medical Supplies

One  a more serious note, you may not be able to access a hospital or a doctor during a major crisis.  In your survival supplies, be absolutely certain that you have a good first aid kit and any other medical supplies that you think you may need.

#14) Extra Gasoline

There may come a day when gasoline is rationed or is simply not available at all.  If that happens, how will you get around?  Be certain to have some extra gasoline stored away just in case you find yourself really needing to get somewhere someday.

#15) A Sewing Kit

If you were not able to run out and buy new clothes for you and your family, what would you do?  Well, you would want to repair the clothes that you have and make them last as long as possible.  Without a good sewing kit that will be very difficult to do.

#16) Self-Defense Equipment

Whether it is pepper spray to fend off wild animals or something more “robust” to fend off wild humans, millions of Americans will one day be thankful that they have something to defend themselves with.

#17) A Compass

In the event of a major emergency, you and your family may find yourselves having to be on the move.  If you are in a wilderness area, it will be very hard to tell what direction you are heading without a compass.  It is always a good idea to have at least one compass stored up. 

#18) A Hiking Backpack

If you and your family suddenly have to “bug out”, what will you carry all of your survival supplies in?  Having a good hiking backpack or “survival bag” for everyone in your family is extremely important.  If something happened in the city where you live and you suddenly had to “go”, what would you put your most important stuff in?  How would you carry it all if you had to travel by foot?  These are very important things to think about. 

#19) A Community

During a long-term crisis, it is those who are willing to work together that will have the best chance of making it.  Whether it is your family, your friends, a church or a local group of people that you know, make sure that you have some people that you can rely on and work together with in the event that everything hits the fan.  Loners are going to have a really hard time of surviving for long.

#20) A Backup Plan

Lastly, it is always, always, always important to have a backup plan for everything.

If someone comes in and steals all the food that you have stored up, what are you going to do?

If travel is restricted and your can’t get to your “bug out” location immediately do you have a Plan B?

If you have built your house into an impregnable survival fortress but circumstances force you to leave do you have an alternate plan?

The truth is that crisis situations rarely unfold just as we envision.  It is important to be flexible and to be ready with backup plans when disaster strikes. 

You don’t want to end up like the folks in New Orleans after Hurricane Katrina.  You don’t want to have to rely on the government to take care of you if something really bad happens. 

Right now the U.S. strategic grain reserve contains only enough wheat to make half a loaf of bread for each of the approximately 300 million people in the United States.

How long do you think that is going to last?

Now is the time to get ready.

Now is the time to prepare.

The United States economy is going to collapse and incredibly hard times are coming.

Will you be able to survive when it happens?

All Money In The United States Comes Into Existence As Debt – So What Will Happen Now That Bank Lending In The U.S. Is Contracting At The Fastest Rate In History?

Most Americans who closely follow economics understand that all money in the United States comes into existence as debt.  Either the Federal Reserve creates it when the U.S. government borrows money, or private banks create it when they use fractional reserve banking to make loans to customers.  If lending increases, it is going to create new money and increase the money supply.  But if lending declines, it is going to take money out of the system and will decrease the money supply.  So why is this important?  It is important because without sufficient lending, the U.S. economy will seize up and grind to a standstill.  Unfortunately, we have created an economic system that is fueled by credit, and without enough credit businesses can’t expand or hire more workers, individuals can’t buy homes and cars and there will not be any hope that the U.S. economy will function at previous levels.

If you will remember, this is what happened at the beginning of the Great Depression.  The big banks severely tightened credit and it created a deflationary depression.

Unfortunately, the same thing is happening again.  In 2009 U.S. banks posted their sharpest decline in lending since 1942.  In 2010 so far, bank lending in the U.S. has contracted at the fastest rate in recorded history.  A “credit freeze” has struck the entire banking industry.  One indication of just how bad the credit freeze has gotten is to look at a graph of the M1 Money Multiplier.  It is now at the lowest point it has been in decades.  Why?  Because banks are simply not lending money….

But didn’t Bush and Obama insist that if we got cash into the hands of the bankers that they would lend it out and help all of us “Main Street” folks out?

It didn’t work out that way, did it?

Instead, the banks (especially the big banks) are reducing their lending, hoarding cash and shrinking the money supply.

If this continues, we may very well experience a 1930s-style deflationary depression, at least for a while.

Already we are seeing the effects of tighter credit hitting the economy….

*Federal regulators on Friday shuttered banks in Florida, Illinois, Maryland and Utah, boosting to 26 the number of bank failures in the United States so far in 2010.  The closing of numerous banks on Friday is almost becoming a weekly ritual now.

*The FDIC is planning to open a massive satellite office near Chicago that will house up to 500 temporary staffers and contractors to manage receiverships and liquidate assets from what they are expecting will be a gigantic wave of failed Midwest banks over the next few years.

*The U.S. Postal Service, facing a $238 billion budget deficit by 2020, is being urged to consider cutting delivery to as few as three days a week.  As money continues to get tighter, we should expect even more government services to be cut.  In fact, some local governments around the U.S. are considering bulldozing whole neighborhoods just so they don’t have to spend money on providing those neighborhoods with essential services.

So will the U.S. government come to the rescue?

Well, some would argue that the unprecedented spending by the U.S. government over the past several years is the only reason why the U.S. economy has not already plunged into a full-blown depression.

But of course all of this government debt is only going to make our long-term problems even worse.

The Congressional Budget Office is projecting that Barack Obama’s proposed budget plan would add more than $9.7 trillion to the U.S. national debt over the next decade.

That is not good news.

Especially if the Federal Reserve refuses to keep “monetizing” all of this debt.

During a recent hearing, Federal Reserve Chairman Ben Bernanke warned Congress that the Federal Reserve does not plan to continue to “print money” to help Congress finance the exploding U.S. national debt.

So if the Federal Reserve will not finance this gigantic pile of U.S. debt, who will?

Already China and some other major foreign powers have reduced their holdings of U.S. Treasuries.

So who is going to borrow the trillions upon trillions that the U.S. government is going to have to borrow?

Perhaps the U.S. government will decide to stop spending so much and will start cutting back and will start being more fiscally responsible.

But don’t count on it.

You see, if the U.S. government does not keep borrowing insane amounts of money to pump up the U.S. economy the whole thing could come down like a house of cards.

Of course it is all going to come down like a house of cards eventually anyway.

There are several ways that all of this could play out (deflationary depression, hyperinflationary implosion, societal collapse, etc.), but all of them are bad.

The truth is that an economic collapse is coming whether you or I like it or not.  We had all better get ready while we still can.

Why Situps Don't Work

15 Reasons Why Barack Obama’s Declaration That “A Second Depression Is No Longer A Possibility” Is Dead Wrong

Is the United States economy headed for another Great Depression?  Well, according to Barack Obama, that is no longer possible.  According to Obama, the United States has avoided an economic collapse and is headed for another wonderful era of growth and prosperity.  But is Obama right?  Do the economic signs indicate that the U.S. is headed towards recovery or towards even more difficult times?  As you shall see below, there is no way in the world that Barack Obama should have ever said that “a second depression is no longer a possibility”.  In fact, as the U.S. financial system continues to crumble, it is likely that those words will be exploited by his political adversaries again and again.  If you are a politician and you are going to issue a guarantee, you had better be able to deliver the goods.  In this case, Obama is making a promise that defies all of the economic data.

Video of Obama making his declaration that “a second depression is no longer a possibility” is posted below….      

So why is Obama wrong?  Well, if you want a full examination of why the United States is headed for an economic collapse, please read the rest of this blog.  In this article we just wanted to highlight a few of the reasons why the U.S. is headed for a complete financial meltdown….

#1) The U.S. housing market is continuing to come apart like a 20 dollar suit.  The U.S. government just announced that in January sales of new homes plunged to the lowest level on record.  This is not a sign that the U.S. economy is recovering.

#2) In fact, a lot more houses may be on the market soon.  The number of U.S. mortgages more than 90 days overdue has climbed to 5.1 percent.  An increasing number of Americans find themselves simply unable to keep up with their mortgages.  This is another indication that things are getting worse instead of better.

#3) Over 24% of all homes with mortgages in the United States were underwater as of the end of 2009.  So in other words, nearly one out of every four U.S. homeowners with a mortgage owe more on their homes than the homes are worth.  That is a giant mess, and it is going to be very painful to untangle it.

#4) If all of that wasn’t bad enough, a massive “second wave” of adjustable rate mortgages is scheduled to reset beginning in 2010.  The “first wave” of mortgage resets from 2006 – 2008 absolutely crippled the U.S. housing market, and this second wave threatens to make things far worse.

#5) Confidence among U.S. consumers fell dramatically in February to the lowest level in 10 months.  Consumers that are not confident in the economy tend to hold on to their money.  If consumers don’t spend their money then the economy is not going to grow.

#6) Many analysts are predicting that the next “shoe to fall” in the ongoing financial crisis will be commercial real estate.  U.S. commercial property values are down approximately 40 percent since 2007 and currently 18 percent of all office space in the United States is sitting vacant. 

#7) In fact, the commercial real estate sector is just now entering the danger zone.  It is projected that the largest commercial real estate loan losses will be experienced in 2011 and the years following.  Some analysts are estimating that losses from commercial real estate at U.S. banks alone could range as high as 200 to 300 billion dollars.  To get an idea of how rapidly commercial real estate loans are turning sour, just check out the chart below….

#8) All of these bad loans are causing banks to dramatically slow down real estate lending.  During the middle of the decade, the number of commercial real estate loans exploded, but now the bubble has burst, and as the chart below reveals, commercial real estate lending has dropped through the floor….

#9) All of these real estate problems are decimating America’s small and mid-size banks.  The FDIC has announced that the number of banks on its “problem” list climbed to 702 at the end of 2009.  This is compared to only 552 banks that were on the problem list at the end of September and only 252 banks that were on the problem list at the end of 2008.  As you can see from these figures, the banking crisis in the U.S. is escalating rapidly.

#10) The U.S. national debt is now over 12 trillion dollars and it is rising at a rate of about 3.8 billion dollars per day.  In fact, some analysts are projecting that the United States will borrow more money in 2010 than the rest of the governments of the world combined.

#11) The financial mess in the U.S. is scaring off other nations from buying U.S. government debt.  In fact, the Federal Reserve now has to “buy” most U.S. government debt because others are extremely hesitant to purchase the massive amount of bad paper the U.S. is trying to sell.  In addition, other countries are now using the massive amounts of U.S. government debt that they already hold as leverage.  A major U.K. newspaper is warning that evidence is mounting that recent Chinese sales of U.S. Treasury bonds are intended as a warning to the United States government rather than simply being part of a routine portfolio shift.

#12) But the U.S. is not the only economy that is suffering during this economic downturn.  The entire world economy has been impacted.  The World Trade Organization has announced that world trade fell by 12% last year as the world economic crisis caused the biggest drop in world trade since 1945.

#13) The United States should not expect the rest of the world to pick up the economic slack either.  The crisis in Greece has made headlines all over the globe recently, and Harvard University Professor Kenneth Rogoff is warning that we could soon see a huge wave of sovereign defaults.

#14) The reality is that things are so bad in some parts of Europe that it could take years and years to recover.  In fact, the chief economist of the International Monetary Fund is warning that financial “belt-tightening” in Europe will be “extremely painful” and could take up to 20 years.  The truth is that if Europe is suffering economically, it will be very difficult for the U.S. to recover at the same time.

#15) In addition, some of the most prominent investors in the world know what is coming and are issuing their own warnings.  For example, Charlie Munger, Warren Buffett’s long-time business partner, has warned in a new article for Slate.com that “it’s basically over” for the U.S. economy.  Marc Faber is warning that things are going to get so bad that it is time for investors to buy farmland and gold.

But apparently Barack Obama knows better. 

Apparently Barack Obama can guarantee that it is impossible for the United States to go into another depression.

Do you believe him?

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