Jan
22
How do we get our cheap goods now?
January 22, 2008 | Comments Off
The market slump we saw in the last couple of days is a reflection of a breakdown in one of the most interesting money cycles in history. It seems that American (and other industrialized) consumers have been on a shopping spree for goods produced by emerging economies. Those economies didn’t knew what to do with all that money they where receiving (it wasn’t going towards feeding their people for sure). Most of that money went straight into the banking system which parked their money in the “Ultra Safe” USA Mortgage Backed Security market (our Home Mortgages and Home Equity Lines — the prime and the sub-prime).
The feeling of being rich that we had enjoyed on the USA for so long has started to vanish — and will continue to do so fast. Living in the US will not be a guarantee for living a great life. I say it with sadness as I am very proud to be living here and I want the best for the country. And it is not easier for the world around us — they do not get money for their cheap goods and they do not get the money they invested into our mortgages either — double whammy for them.
In short… we need to generate cash…. and given the dollar’s decline, lots more than we used to. I do not think Bush, nor the Federal Reserve, nor any future President can save us from this one. Blaming any of them for the decline is pointless as well: something is happening and we better take action. I think in a global world like we are living, it is each one of us who can fend for ourselves, and by fending by ourselves we can help the nation and the globe as well.
There are a few things that each one of us will have to evaluate now:
- Value of Skill-set – Do we have the right education, skills and experience to get all the cash we need? Maybe a career change will do — or an increased education level like a degree.
- Are We Spending Time On What May Help Us? - Are we networking with people who can help us grow? Are we following our great ideas, trying them out, giving them a fair chance of helping us?
- Real Need For Stuff – Do we need all that cash? What for? For things we throw away anyways?
- Are Earning What We Will Need? – Have we considered the inflation ahead of us? If not, we better change something.
- Are We Working The Right Hours? – Maybe we have a part time. Maybe we are a stay at home spouse. Nothing wrong with that. But it will not be as easy as it used to be to voluntarily reject extra income. If we are independent, there is always more things that could be done.
- Are We Investing Right? – I know the last few days have been depressing and discouraging to most investors. But if we don’t invest, we are assuring ourselves that we will be working for the rest of our lives — which is not bad on itself, but we need to be aware of it. Social Security will not prevent that.
- Are We Telling Our Children That The US Economy is Not Great Anymore? – Many parents shield their offspring from life’s reality. Some don’t tell them about the importance of getting into a good career that will cover their needs and wants. Now more than ever we need to do so.
It is not the end of the world. It is the start of a different one: different from the one where we where born.
Related Posts:
Comments
Subscribe
