The
IMF leads a group of gloomy forecasters that worry about stability of global
economy amid rising debt levels and slowing GDP growth.
Consumer
debt has risen to pre-2008 crisis levels in many countries. Corporate borrowing
has soared and governments, like U.S., face huge debts. Increasing interest may
bring discipline back to borrowing but growth will be tempered with confidence
levels ebbing away. London based forecasters Fathom Consulting expects a bust
in 2020. Nouriel Roubini also nominates 2020. And that’s not much time to
prepare.
According to Lombardi Letter, there are five signs that an economic collapse is about
to happen. They are:
1. Growing government debt: when an economy slows,
the government usually steps in to help stimulate spending again, but with a
high debt, the government might not be able to make that injection;
2. Stock markets trading at
all-time highs: investors are taking more risk on the market, markets continue
to trade higher meaning investments are bull-market driven and not
research-based which could lead to a stock market bubble;
3. Unemployment rate: eligible worker,
retirement, and student rates all identify trends in people not contributing to
the economy and could slow down economic growth;
4. Unstable government: this boils down to the
leader and government team in decisions and actions that may affect the economy
in various ways; and
5. Rising national debt: this means less consumer
spending in the economy and more money spent on paying debt.
Although those five economic collapse red flags are present in
any collapse, there are also other things we can do to be ahead of a financial
collapse. And that is to look at what the warning signs displayed by the people
involved in it all, America’s elite Wall Street executives and Silicon Valley
entrepreneurs.
What are the world’s richest doing?
A good sign of an economic downturn is
when you see some of the world’s richest executives preparing for an economic
disaster. You know things are about to go wrong if they are taking considerable
efforts to protect themselves and their families.
Silicon
Valley millionaires and Wall Street investors are buying big houses overlooking
lakes in New Zealand and other underpopulated places in the world should they
need the security of a hideaway
How can you prepare for an economic collapse?
We can’t fight an economic collapse but
we could prepare for one. So let us look at the steps you can take to prepare
for an economic collapse:
1. Learn simple economics
Basic understandings of economics will help you in not
only noticing an early downturn, but will help you identify possible safe
havens for your money and economic minefields that you should avoid.
2. Cash is king
When you have cash, it’s buying power that many might
lose. That includes money in the bank. Just make sure that whatever investments
you have, you are able to quickly liquidate them should you need to.
Savings and current accounts should always carry a certain
amount of emergency money as these can be withdrawn quickly. This is much
better than having all of your money in a fixed deposit account that provides
restrictions on when you can withdraw your money.
3. Start building an emergency cash fund
An emergency fund should not be in credit, it should
be from cash you saved in a savings account from your monthly income. Make sure
you have enough money to at least allow you to buy tickets to another country
and support yourself and your family for six months.
4. Start being more frugal with your monthly bills
When you have no money coming in, the worst thing to
have is money going out on expenses that you really don’t need. Start
minimizing bills by going through them each month with a highlighter and seeing
where most of your money is going. Is there a way to limit that? Perhaps the energy
bill is a little higher than it should be and the air-conditioning or heater is
being left on?
Practicing sustainable methods such as organic
gardening, generating
your own power and utilizing your own space is a great way to also lessen
monthly expenses.
5. Generate an additional (collapse-proof) form of income
Someone from Venezuela was an engineer, but started
making cheese, learned to use a crafting and cutting kit and became a freelance
writer for various websites as a way to find alternative income when his country’s economy collapsed. Many try
starting an at-home business to ensure they have a bit of extra cash each month
aside from their normal job, and as a fallback when times are tough.
6. Get out of debt
If you have considerable debt, build a strategy to get
out of it as quick as possible. In the case of a financial collapse there will
be multiple job loss and widespread income loss. The sooner you remove debt the
sooner you can remove the worry of having to pay debts when you have no source of
income.
7: Start prepping
If a financial collapse does occur, you are going to
want to start
prepping so that,
should an economic downturn occur, you have enough food saved up while you either
grow your own food in the garden to supplement it, or find another source of
free food. Chances are you will need food more than water as water will still
run, but stores may close down and shelves may empty out quite quickly.
That’s
a pessimist’s dire view. But it need not be the case. Let us be more optimistic
and hope that, it will not happen. And we pray we have leaders with the spirit
of wisdom and knowledge to avert such a disaster!
Reference:
How to prepare for the
next great economic collapse, Ben Brown (https://thepreppingguide.com)
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