As we enter 2009, the U.S. Dollar is heading toward a crisis. Currently, the dollar crisis appears to reach its climax mid-year 2012. The Federal Reserve has begun injecting new money into the U.S. economy at breakneck speed and this will infiltrate Main Street soon. I expect commodity prices to begin their upward move soon since they are priced in U.S. Dollars but sold around the globe. With the pedal to the metal, Bernanke can only hope that these injections will not overtake the system like a flood.
The American saver has been bamboozled once again! Many of us have spent our lives "doing the right thing" when it comes to saving and investing for the future. We did not sign up for "sub-prime" loans but saved our money for the classic down payment, we diligently put money in our savings accounts, and we tempered our spending so that we would not be overextended. Along comes Wall Street seeking temporary profits purely based on greed and sets the economy up for failure. The Fed’s response is to move interest rates to zero. Who does this help? The banks. Who does this hurt? The average American saver! We are always told that this is done for the "greater good". Who is the "greater good"?
2009 will be a volatile year. The Obama-nation is planning to create 3 million new jobs. The administration will do everything in its power to keep unemployment below 10% because it seems that everything goes south beyond that magic number.
State Governments want some lovin’ too. They want the Feds to provide over $2 Trillion in state assistance as if the Feds were Daddy Warbucks. All of this funding is coming from you, me, and the global lenders. The global lenders will ultimately be on the losing end since the only thing left to do after the smoke clears is to devalue the U.S. Dollar. The buying power of our savings accounts will drop relative to other currencies. Global lenders will dump U.S. Dollars and head for the exits.
What are we to do? Since most of us are not independently wealthy, we must "crash proof" ourselves as much as possible.
1) Do what is essential to your life. What is truly important? What is unimportant? Create a "To Do" list daily and follow it.
2) De-leverage. Lower and eliminate debt where possible. Eliminate credit card debt. Move to cash basis on monthly expenditures. Evaluate current expenditures and determine whether you really need to spend the money.
3) Do not commit to new long term liabilities unless you are confident that you can cash flow the commitment. Why renew a two year commitment to a cell phone contract, just stay on a month to month commitment for now. Pay as you go!
4) Simplify your life. De-clutter your home. Remove the clutter from your mind. There is so much "noise" occurring now. Everyone on the Internet has an opinion… including me. Ask Our Heavenly Father to direct you to who you ought to read and listen to. Get rid of the rest. If you haven’t used the "stuff" around the house for 24 months, do you really need it? Give those articles around the house to others in need.
5) Renew relationships. Let’s face it, the clutter and complexity of your life has shoved personal relationships to the back burner. Everyone is too busy with non-essential tasks. We have become servants to complexity. Technology creates servants if possible and people have become addicted to information. Admit (or confess) your problem then re-discover face to face relationships. In the end, life is all about relationships, not things!
6) Address your ego. Your ego is not your friend. Excess consumption is often due to our quest to project an illusion. "We spend money we don’t have to impress people we don’t know".
7) Pursue revelation. There is no set formula that we can all implement because each of us are in unique situations. Only Our Heavenly Father can supply your specific "crash proof" action plan.