FedUpUSA

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The people out there that believe that the U.S. economy is experiencing a permanent recovery and that very bright days are ahead for us should have their heads examined.  Unfortunately, what we are going through right now is simply just a period of “hopetimism” between two financial crashes.  Things may seem relatively stable right now, but it won’t last long.  The truth is that the financial crisis of 2008 was just a warm up act for the economic horror show that is coming.  Nothing really got fixed after the crash of 2008.  We are living in the biggest debt bubble in the history of the world, and it has gotten even bigger since then.  The “too big to fail” banks are larger now than they have ever been.  Americans continue to run up credit card balances like there is no tomorrow.  Tens of thousands of manufacturing facilities and millions of jobs continue to leave the country.  We continue to consume far more than we produce and we continue to become poorer as a nation.  None of the problems that caused the crisis of 2008 have been solved and we are even weaker financially than we were back then.  So why in the world are so many people so optimistic about the economy right now?

Just take a look at the chart posted below.  It shows the growth of total debt in the United States.  During the financial crisis of 2008 there was a little “hiccup”, but the truth is that not much deleveraging really took place at all.  And since the recession “ended”, total credit market debt has gone on to even greater heights….

So what does this mean for the future?

Well, if a small “hiccup” in the debt bubble caused so much chaos back in 2008, what is going to happen when this debt bubble finally bursts?

That is something to think about.

Sadly, most Americans seem oblivious to all of this.

If you go out to malls in the wealthy areas of America today, people are charging up a storm.  In all, Americans charged a whopping 2.5 trillion dollars on their credit cards during 2011.  Way too many people have already forgotten the lessons that we all learned back in 2008.

Of course some Americans pay off their credit cards every month, but way too many Americans are not doing that.  Today, Americans are carrying 793 billion dollars in revolving credit balances.

And student loan debt is an even bigger bubble than credit card debt is.  As I have written about previously, total student loan debt in America is rapidly approaching a trillion dollars.

So it looks like U.S. consumers have not learned to stay away from debt.

That is not good.

Well, what about the banks?

Has the financial system learned any lessons since 2008?

No, not really.

Sadly, the “too big to fail” banks are now even bigger than ever.  The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.  If they were to fail today, they would be even more of a threat to our financial system than they were back in 2008.

And our major banks continue to be very highly leveraged.  In fact, major banks all over the world are absolutely swamped with debt.

The following statistics come from Zero Hedge….

The U.S. banking system is leveraged 13 to 1.

The Japanese banking system is leveraged 23 to 1.

The French banking system is leveraged 26 to 1.

The German banking system is leveraged 32 to 1.

These are insane levels of leverage, and they are just inviting another major financial crisis.

Do you all remember Lehman Brothers?  The fact that they were leveraged so highly is what did them in back in 2008.  When the value of their holdings declined by just a little bit they were totally wiped out.

Well, during this next financial crisis large financial institutions are going to be wiped out all over the world.  Major banks all over the globe are going to be crying out for more bailouts when things take a turn against them.

They are making the exact same mistakes that they made before, and they are going to be expecting more government handouts when things go bad.

Will we ever learn?

So obviously the banking system has not learned any lessons.

What about the federal government?

Well, if you follow my blog regularly, you know that I love to write about how horrific U.S. government debt is.

Unfortunately, over the past four years things have gotten so much worse.

Back in 2008, the U.S. national debt crossed the 10 trillion dollar mark.

Just recently, it crossed the 15 trillion dollar mark.

So now we are in a much weaker position financially to respond to another major financial crisis.

Just check out the chart posted below.  This is a recipe for national financial suicide….

During fiscal 2011, the Obama administration stole close to 150 million dollars from our children and our grandchildren every single hour.

At the moment, the legacy of debt that we are passing on to future generations is sitting a grand total of $15,351,406,294,640.49.

But keep in mind that it is going up every single hour.

Meanwhile, our ability to service that debt is declining.  We are rapidly getting poorer as a nation.

During 2011, the amount of money that left the United States exceeded the amount of money that entered the United States by more than a half a trillion dollars.

This gap is called a trade deficit, and it is absolutely ripping our economy to shreds.

For a moment, imagine Uncle Sam standing next to a giant pile of money on a map of the United States.  Then imagine a half a trillion dollars being taken out of that pile every single year.

So why haven’t we totally run out of money yet?

Well, it is because we borrow those dollars back.  In order to maintain our false standard of living, our federal government, our state governments and our local governments have to go out and beg the rest of the world to lend us our dollars back.

Sadly, our government schools have “dumbed-down” the population so much that most of them don’t even know what a “trade deficit” is anymore.

Meanwhile, our economic infrastructure is being gutted like a fish.

Look, I know that I go over this point over and over and over, but it is absolutely imperative that we all understand this.

The half a trillion dollars a year that leaves this country every year could have gone to support businesses and jobs inside the United States.

But instead it is going to support businesses and jobs on the other side of the world.

The consequences of this are absolutely devastating.

According to U.S. Representative Betty Sutton, an average of 23 manufacturing facilities a day closed down in the United States during 2010.  Overall, more than 56,000 manufacturing facilities in the United States have shut down since 2001.

Even many so-called “American companies” have been bought up by the rest of the world.  The following comes from a recent article posted on Economy In Crisis….

RCA is now a French company, Zenith is a Korean company. Frigidaire is a Swedish company. IBM’s Personal Computer Division—with its 500 patents—is now a Chinese company. Westinghouse Nuclear Energy’s major shareholder is Toshiba—a Japanese Company. Lucent Technologies, a former research division of AT&T, along with all the patents acquired from the beginning of the phone system, is now a French company. In 2008, Brazilian-Belgian brewing company InBev purchased the iconic American brewer Anheuser-Busch, makers of Budweiser. With the sale of these manufacturing companies, the future profit and technologies all belong to foreign entities.

We once had the greatest economic machine in the history of the world.

Now it is being dismantled and bought up by foreigners.

When America’s economic infrastructure declines, that means that there are less jobs available for all of us.

As I wrote about the other day, the employment situation in this country is not getting better and we have never even come close to recovering from the recession that started back in 2008.

During 2008 and 2009, the U.S. economy lost millions of jobs.  Since the beginning of 2010, the percentage of the U.S. population that has had a job has remained very stable….

Normally, when a recession ends the percentage of Americans that have a job bounces back pretty dramatically.

So considering the fact that the employment situation has never recovered from the last financial crisis, what is going to happen when the next financial crisis hits?

And most of the jobs that have been “created” during this so-called “recovery” have been low income jobs.  In fact, if you look closely at the employment numbers that were released last Friday, you will find that the vast majority of the “new jobs” were part-time jobs.

But you cannot pay a mortgage and support a family on a part-time job.

Sadly, the truth is that median household income in America has been steadily dropping over the past several years.  Tens of millions of American families are deeply struggling and more Americans than ever are falling into poverty.

Back in the year 2000, about one out of every nine Americans was living in poverty.  Today, about one out of every seven Americans is living in poverty.

All of this is causing a great deal of anxiety in America today.  Large numbers of Americans know that something has fundamentally changed, even if they don’t understand the specifics.  That is one reason why sites such as this one have become so popular.  People want some answers.

And once people get some answers about what is really happening, they tend to want to prepare for the hard times that are coming.

In a few days, a new series on National Geographic entitled “Doomsday Preppers” premieres.  The mainstream media is starting to take notice of the growing “prepper” movement in America today.  It is estimated that there are at least 2 million “preppers” in the United States at this point.  Of course people are “prepping” for a whole host of reasons, but the number one concern among most groups of preppers is the economy.

As the economy crumbles, more Americans than ever have decided that it is not a good thing to be 100% dependent on the system.

Back in 2008 and 2009, millions of Americans suddenly lost their jobs.  Because they did not have any finances stored up, large numbers of them also lost their homes.  Many went from being solidly middle class to being out on the street in a matter of months.

That doesn’t have to happen to you.  Instead of blowing your money on frivolous things, do what you can to set something aside for the difficult times that are on the horizon.

A lot of those “in the know” are quietly making their own preparations.  For example, legendary film director James Cameron (Avatar, Titanic and Terminator) has purchased more than 2600 acres of farmland in New Zealand and he is getting out of the U.S. for good apparently.

Unfortunately, most of us do not have the resources for something like that.  But what most of us can do is we can change our priorities and start focusing on the things that will help us survive the hard times that are coming.

So are you ready?

The Economic Collapse

On Friday, the entire financial world celebrated when it was announced that the unemployment rate in the United States had fallen to 8.3 percent. That is the lowest it has been since February 2009, and it came as an unexpected surprise for financial markets that are hungry for some good news.  According to the Bureau of Labor Statistics, nonfarm payrolls jumped by 243,000 during the month of January.  You can read the full employment report right here.  Based on this news, pundits all over the world were declaring that the U.S. economy is back.  Stocks continued to rise on Friday and the Dow is hovering near a 4 year high.  So does this mean that our economic problems are over?  Of course not.  A closer look at the numbers reveals just how fraudulent these employment statistics really are.  Between December 2011 and January 2012, the number of Americans “not in the labor force” increased by a whopping 1.2 million.  That was the largest increase ever in that category for a single month.  That is how the federal government is getting the unemployment rate to go down.  The government is simply pretending that huge numbers of unemployed Americans don’t want to be part of the labor force anymore.  As you will see below, the employment situation in America is not improving.  Yet everyone in the mainstream media is dancing around as if the economic crisis has been cancelled.  I can’t take it anymore!  It is beyond ridiculous that so many intelligent people continue to buy in to such fraudulent numbers.

The truth is that the labor force participation rate declined dramatically in January.  For those unfamiliar with this statistic, the labor force participation rate is the percentage of working age Americans that are either employed or that are unemployed and considered to be looking for a job.

As you can see from the chart posted below, the labor force participation rate rose steadily between 1970 and 2000.  That happened because large numbers of women were entering the labor force for the first time.

The labor force participation rate peaked at a little more then 67 percent in the late 90s.  Between 2000 and the start of the recent recession, it declined slightly to about 66 percent.

Since then, it has been dropping like a rock.  The chart below does not even include the latest data.  In January, the labor force participation rate was only 63.7 percent.  That is the lowest that is has been since May 1983.  So keep that in mind as you view the chart.

In reality, the percentage of men and women in the United States that would like to have jobs is almost certainly about the same as it was back in 2007 or 2008.  There has been no major social change that would cause large numbers of men or women to want to give up their careers.  So there is something very, very fishy with this chart….

The federal government has been pretending that millions of unemployed Americans have decided that they simply do not want jobs anymore.

This does not make sense at all.

The truth is that unemployment is not really declining at all.  The percentage of Americans that are working is not increasing.  The civilian employment-population ratio dropped like a rock during 2008 and 2009 and it has held very steady since that time.

In January, the civilian employment-population ratio once again held steady at 58.5 percent.  This is about where it has been for most of the last two years….

Does that chart look like an “economic recovery” to you?

Of course not.

If the percentage of people that are employed is about the same as it was two years ago, does that represent an improvement?

Of course not.

If the employment situation in America was getting better, the civilian employment-population ratio would be bouncing back.

We should be thankful that our economy is not free falling like it was during 2008 and 2009, but we also need to understand why things have stabilized.

The federal government is spending money like there is no tomorrow.  During 2011, the Obama administration stole an average of about 150 million dollars an hour from our children and our grandchildren and pumped it into the economy.  Even though the Obama administration spent that money on a lot of frivolous things, it still got into the pockets of average Americans who in turn went out and spent it on food, gas, clothes and other things.

Without all of this reckless government spending, we would not be able to continue to live way above our means and our economic problems would be a lot worse.

But even with the federal government borrowing and spending unprecedented amount of money, and even with interest rates at record lows, our economy is still deeply struggling.  Just consider the following facts….

-New home sales in the United States hit a brand new all-time record low during 2011.

-The average duration of unemployment in America is close to an all-time record high.

-The percentage of Americans living in “extreme poverty” is at an all-time high.

-The number of Americans on food stamps recently hit a new all-time high.

-According to the Census Bureau, an all-time record 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government.  Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.

So let’s not get too excited about the economy.

Yes, things have somewhat stabilized.  The percentage of Americans that have jobs is about the same as it was two years ago.  Considering how rapidly jobs are being shipped out of the United States, that is a good thing.

Enjoy this false bubble of hope while you can.  Things are about to get a lot worse.

Do you remember how rapidly things fell apart after the financial crisis of 2008?

Well, another major financial crisis is on the way.  This time it is going to be centered in Europe initially, but it is going to spread all around the globe just like the last one did.

As the charts above show, we have never even come close to recovering from the last recession, and another one is on the way.

So how bad are things going to get after the next wave of the financial crisis hits us?

That is something that we should all be thinking about.

The Economic Collapse

Just as the market was starting to flag a bit on the NFP number here comes services ISM and blows out the bears’ teeth.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. “The NMI registered 56.8 percent in January, 3.8 percentage points higher than the seasonally adjusted 53 percent registered in December, and indicating continued growth at a faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 59.5 percent, which is 3.6 percentage points higher than the seasonally adjusted 55.9 percent reported in December, reflecting growth for the 30th consecutive month. The New Orders Index increased by 4.8 percentage points to 59.4 percent, and the Employment Index increased by 7.6 percentage points to 57.4 percent, indicating substantial growth in employment after one month of contraction. The Prices Index increased 1.5 percentage points to 63.5 percent, indicating prices increased at a slightly faster rate in January when compared to December. According to the NMI, 12 non-manufacturing industries reported growth in January. Respondents’ comments are mostly positive about business conditions. There is concern about cost pressures and the sustainability of the recent spike in activity.”

I’m surprised by this number – particularly the employment index, which is not congruent with the household survey.  In addition the prices number is trouble.

But it is what it is, and the market loved it (as expected with a beat of this type), so for today the right thing to do is sit back and enjoy the ride.

Reality will intrude when you look at the size of government and its fiscal demands given the employment participation rate, but today is not the day — the junkie got his fix, the needle went in and was loaded with heroin, and he’s up and dancing on both the TV and in the markets.

The Market-Ticker

Discussion (registration required to post)

A higher percentage of the American population is receiving government benefits than ever before.  Yes, there have always been poor people that have needed our assistance, but what does it say about our economy that the number of Americans dependent on the government is at an all-time high?  Every night on the evening news we are told that the economy is improving, and Barack Obama is endlessly giving speeches about the “economic recovery” that is supposedly underway.  But that is not the reality on the ground for those on the bottom rungs of the income ladder in America.  People are really hurting out there, and the number of Americans that are turning to the government for financial assistance just continues to increase.  Yes, we should always have a “safety net”, but right now our “safety net” is becoming massively overloaded as millions more Americans jump on to it every single year.  What all of these impoverished Americans really need are jobs, but the U.S. Congress and the past several administrations have been systematically killing job growth in America.  So unfortunately the number of poor Americans is going to continue to rise, and that is really bad news for a nation that is already drowning in debt.

Some people out there want to blame the poor for the statistics that you are about to read, but that is a mistake.  Yes, there are a lot of people out there that are abusing the system, and that needs to be stopped.

But many Americans that are dependent on the government are in that situation because there simply are not enough jobs in this country.

And unfortunately, the Obama administration and the U.S. Congress continue to pursue the same job-killing policies that have gotten us into this mess in the first place.  So millions of Americans that have learned to survive as government dependents are not being given the opportunity to break out of that cycle.  When there is a shortage of decent jobs, it is easy to give up.  Many tend to become more and more comfortable being dependent on the government as time goes by.

Once you become addicted to getting a government check in the mail, it can be very difficult to give that up.  There are some that get trapped in a life of government dependence for years or even decades.

The following are 16 statistics which show that the number of Americans dependent on the government is at an all-time high….

#1 According to the Census Bureau, 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government.  Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.

#2 The amount of money that the federal government gives directly to Americans has increased by 32 percent since Barack Obama entered the White House.

#3 The number of Americans receiving Social Security disability benefits has increased by 10 percent since Barack Obama first took office.

#4 Back in 1990, the federal government accounted for 32 percent of all health care spending in America.  Today, that figure is up to 45 percent and it is projected to surpass 50 percent very shortly.

#5 The number of Americans on food stamps recently hit a new all-time high.  It has increased by 3 million since this time last year and by more than 14 million since Barack Obama first entered the White House.

#6 Today, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps.  This is unprecedented in American history.

#7 In 2010, 42 percent of all single mothers in the United States were on food stamps.

#8 Back in 1980, government transfer payments accounted for just 11.7% of all income.  In 2010, government transfer payments accounted for 18.4% of all income, which was a new all-time high.

#9 By the end of 2011, approximately 55 million Americans received a total of approximately 727 billion dollars in Social Security benefits.  As the retirement crisis becomes much worse, that dollar figure is projected to absolutely skyrocket.

#10 According to the Congressional Budget Office, the Social Security system paid out more in benefits than it received in payroll taxes in 2010.  That was not supposed to happen until at least 2016.

#11 Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse.  It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

#12 The U.S. government now says that the Medicare trust fund will run out five years faster than previously anticipated.

#13 The total cost of just three federal government programs – the Department of Defense, Social Security and Medicare – exceeded the total amount of taxes brought in during fiscal 2010 by 10 billion dollars.

#14 It is being projected that entitlement spending by the federal government will nearly double by the year 2050.

#15 Right now, spending by the federal government accounts for about 24 percent of GDP.  Back in 2001, it accounted for just 18 percent.

#16 When you total it all up, American households are now receiving more money directly from the federal government than they are paying to the government in taxes.

Once again, I am not blaming the poor.  Almost all of us know of someone that is on government assistance.  Most of them are not dependent on the government because they are lazy or because they want to cheat the system.  Most of them have just had their dreams crushed by this horrible economy and need a helping hand.

It is incredible how anyone can run around claiming that the U.S. economy is heading in the right direction with all of this going on.

Yes, things are going fairly well for the boys and girls down on Wall Street, but for the vast majority of Americans things are looking quite bleak.

For example, things have gotten so bad that the state of Florida is actually considering using ballparks and sports stadiums as shelters for the homeless.

But when it comes to so many people being financially dependent on the federal government, there is a major problem.

The problem is that the federal government is absolutely drowning in debt.

So why don’t our politicians just explain to the American people that we need to start cutting back and reducing the size of some of these programs?

Well, if any of our politicians try to do that they won’t get elected next time around.

The truth is that the American people are deeply addicted to government money.

Any politician that proposes significant cuts to Social Security or Medicare is a goner.

Every poll or survey that is done on this subject shows that the American people are overwhelmingly against cuts to programs like Social Security and Medicare.

So politicians will just keep spending money like there is no tomorrow, and the American people will just keep sending them back to Washington.

But just like we saw in Greece, a day of reckoning comes eventually.

There will come a time when the federal government will not be able to steal 150 million dollars an hour from our children and our grandchildren.

There will come a time when there will not be enough money for all of these growing social programs.

So once the government checks stop rolling in, what is going to happen then?

The Economic Collapse

How should people prepare for the difficult years that are coming?  I get asked about that a lot.  Once people really examine the facts, it is not too hard to convince them that an economic collapse is coming.  But once they accept that reality, most of them want to know what they can do to prepare themselves and their families for the hard times that are ahead.  Well, the truth is that it does not have to be complicated.  Many of the things discussed throughout this article are things that most of us should be doing anyway.  Now is not the time to be splurging on luxuries or expensive vacations.  Now is not the time to be going into large amounts of debt.  Instead, we all need to get back to the basics and we all need to do what we can to become more independent of the system.  Just remember what happened back in 2008.  Millions of Americans lost their jobs and millions of Americans lost their homes.  Now experts all over the globe are warning that another great financial crisis that could be just as bad as 2008 (or even worse) is coming.  Those that don’t take the time to prepare this time are not going to have any excuse.

But there is also a lot of sensationalism out there.  There are some people out there that claim that the economy is going to collapse all at once and that we are going to go from where we are now to some type of a post-apocalyptic “Mad Max” society almost overnight.

Well, that is just not going to happen.  We are not going to wake up next week in a world where we are all fighting each other with sharp pointed sticks.

Just like anything else, an economic collapse takes time.  I like to describe what is happening using an analogy from the beach.  When you build a mighty sand castle, it is not totally destroyed by the first wave that comes along, right?

Well, it is the same thing with the U.S. economy.  It was the greatest economic machine that the world has ever seen, and it is most definitely in decline.  But there are stages to that decline.

The “wave” that came along in 2008 did a huge amount of damage.  Our economy has not recovered from that.

Now another wave is coming.  But that will not be the end.  There will be other waves after that.

Eventually, this thing is coming all the way down.  Someday America will be such a horror show that it will be hard to believe that it is the same place that many of us grew up in.

But in the short-term, we are going to be facing a major league recession and millions of Americans will lose their jobs.  It won’t be the end of the world, but for some people it may feel like it.

So when you are talking about “how to prepare”, the truth is that it depends on what kind of time frame you are talking about.

In the long-term, a lot of the things that even the hardcore survivalists are doing will not be nearly enough.

In the short-term, there are things that all of us can do to weather the coming storm….

Get Out Of Debt

The global financial system is headed for a massive crisis.  Just like in 2008, a lot of people are going to lose their jobs and a lot of people are going to lose their homes.

In such an environment, it makes sense to travel as “lightly” as possible.

That means getting rid of debt.

Some forms of debt are worse than others.  Mortgage debt is not that bad.  We all need somewhere to live, and not all of us can run out and immediately pay off our mortgages.

But there are other forms of debt that are absolutely toxic.  A good example of this is credit card debt.  There are very few things that are as good at bleeding your finances as credit card debt is.  For example, according to the credit card repayment calculator, if you have a $6000 balance on a credit card with a 20 percent interest rate and only pay the minimum payment each time, it will take you 54 years to pay off that credit card.

During those 54 years you will pay $26,168 in interest rate charges on that credit card balance in addition to the $6000 in principal that you are required to pay back.  That is before any fees or penalties are even calculated.

But a lot of Americans still have not learned to stay away from credit card debt.  In fact, one out of every seven Americans has at least 10 credit cards.

Ouch.

The truth is that in future years there is a good chance that you may be facing a situation where you are not making as much income, so you want to try to start reducing your expenses right now.  Getting out of debt will help you to do this.

Save Money

A shockingly high number of American families are operating without any kind of financial cushion whatsoever….

-According to a Harris Interactive survey taken in 2010, 77 percent of all Americans are living paycheck to paycheck.

-According to one recent survey, one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.

This is one reason why so many Americans have lost their homes and why so many Americans have fallen below the poverty level in recent years.  They simply had no cushion.

Last year, 2.6 million more Americans dropped into poverty.  That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.

Don’t let this happen to you.  At a minimum, everyone out there should have a cushion that will cover at least 6 months worth of expenses.  Preferably, you should have a cushion that will last you at least a year.

Yes, I know that is a tall order.  But you would be amazed at how much money the average American family wastes in a typical month.  Almost all of us have areas where we can cut back.

Trust me, in the middle of a major recession you will be really glad that you are sitting on a pile of savings.

Get Independent Of The System

What would you do if you lost your job tomorrow?

Would you have any other income?

How long would it be before you lost your home?

Those are very important questions.

The truth is that the system is failing and so we all need to work hard to become more independent of the system.

So what does that mean?

Well, instead of relying on someone else to employ you indefinitely, you can start up a business in your spare time.  Yes, it will cut into your television time, but if someday you lose your job you will be extremely happy that you still have some income coming in.

Another way of becoming more independent is to start a garden.

Yes, you can run down the street and buy giant piles of cheap food right now, but that will not be the case forever.

Store Food And Focus On The Essentials

I might get into a little trouble for saying this, but the truth is that there is not going to be a major famine in America in 2012.

However, that does not mean that you should not be storing food and other essentials.

In the old days, our grandparents always saved up food.  It was just a natural thing for them to do.  This was especially the case if they lived through the Great Depression.

When hard times come, you will be glad that you have food stored up.  Plus, food is never going to be cheaper than it is today.  Having food stored up is a great hedge against the rising food prices that we will see in the future.

No, we are not going to see hyperinflation by the end of the year like many of the sensationalists are warning.  But someday you will be really glad that you stored up food for yourself and your family.

We live in a world that is becoming more unstable with each passing month.  You never know when the next natural disaster, pandemic, war or national emergency will strike.

It only makes sense to store food and other basic essentials that you will need in the future.

In a previous article entitled “20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins”, I listed 20 of the things that you would need in the event of a major disaster, a national emergency or a total economic collapse.  These are things that you are going to want to make sure that you have ready right now, because after the crisis begins it may be too late to prepare….

#1) Storable Food

#2) Clean Water

#3) Shelter

#4) Warm Clothing

#5) An Axe

#6) Lighters Or Matches

#7) Hiking Boots Or Comfortable Shoes

#8) A Flashlight And/Or Lantern

#9) A Radio

#10) Communication Equipment

#11) A Swiss Army Knife

#12) Personal Hygiene Items

#13) A First Aid Kit And Other Medical Supplies

#14) Extra Gasoline (But Be Very Careful How You Store It)

#15) A Sewing Kit

#16) Self-Defense Equipment

#17) A Compass

#18) A Hiking Backpack

#19) A Community

#20) A Backup Plan

In the comments to that article, the readers suggested the following additional items….

A K-Bar Fighting Knife

Salt

Extra Batteries

Medicine

A Camp Stove

Propane

Pet Food

Heirloom Seeds

Tools

An LED Headlamp

Candles

Clorox

Calcium Hypochlorite

Ziplock Bags

Maps Of Your Area

Binoculars

Sleeping Bags

Rifle For Hunting

Extra Socks

Gloves

Gold And Silver Coins For Bartering

Once again, a lot of these things are not going to be needed right away.  The economy is going to go through a lot more ups and downs before it totally dies.

In the short-term, keep an eye on the European debt crisis, the Japanese debt crisis and the U.S. debt crisis.  There are a lot of similarities between what happened back in 2008 and what is happening now.

And what happened following the crisis of 2008?

Unemployment shot through the roof.

So be prepared for that.

Make a plan for how you and your family will survive if you end up unemployed.

Also, when it comes to “how to prepare”, there is one aspect that is often overlooked.

During the difficult years ahead, we are all going to have to be mentally and spiritually tough.

It won’t matter how good your physical and financial preparations are if you are cowardly and paralyzed by fear.

The times that are coming are going to test all of our hearts.

Some people are going to make it and some people aren’t.

Some people will become so consumed with fear that they will give up completely.

Don’t let that happen to you.

Prepare your heart, soul, mind and body right now for what is coming.  For those that are cowardly the years ahead will be a total nightmare, but for those that overcome the fear the years ahead have the potential to be a great adventure.

The Economic Collapse

Here it is…..

Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down, the U.S. Bureau of Labor Statistics  reported today. Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining.

Uh huh.  Let’s see what we actually have in here.

Heh the annualized doesn’t look so bad eh?  But look at the blue dashed line — that’s not so good.  And we need to dig into that and figure out what’s up, because I don’t like that trend at all.

Ok, so the actual number of employed people went down.  Hmmmmm.

“Not in labor force” went down slightly as a trend (that is, the slope decreased), but increased numerically.

How about the employment rate — the most-important number in there, since it controls the taxing capacity of the government.

That’s not good — it’s down a touch and has flat-lined now for basically two years.

Here’s the problem with this report — the non-institutional working-age population went from 240.441 million to 240.584, a gain of 143,000 people of working age.  But the number of employed people went down from 141.070 million to 140.681 — a loss of 389,000.  Adding the two, which is the correct way to look at it, the economy on a population-adjusted basis lost 532,000 jobs.