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Sunday, August 30, 2009

What did you learn from the Crash?

What did you learn from the crash?

If you’re like me and plenty of other Americans, you lost money.

We lost 60% of our retirement fund, and of course, sales across the board are down for just about everyone except ammunition and gun manufacturers. Across the land people are trying to save more, seeking out bargains, stockpiling food due to rising prices, and many are looking for ways to earn extra cash. Many feel too that Wall Street is a casino and the odds are against you.

Most folks no longer trust the government or so-called experts either. Normal career paths have been permanently altered. Globalism promised something akin to nirvana but wound up impoverishing more people. The American people were sold a bill of goods where only Wall Street and government won. Globalism was primarily a means of privatizing profits, while socializing costs. Virtually all bills passed by Congress, hurt the middle class but boosted Wall Street. As is the norm on Wall Street, only short term profits were relevant; screw long-term profits, growth and main street America.

With the rise of big box stores such as Wal Mart, communities were lost. Merchants, who often owned the buildings from which they operated from, normally lived and invested in their community, supported Little League and other groups, have vanished in all too many areas of our country.

Americans, along with future generations, will pay a tremendous price for stupid government policies and corporate greed.
What the future holds…

I don’t envy my children. They will inherit the mess our government has created. This will be the first generation who cannot expect to do better than their parents. The biggest challenge they face is the rapid decline the world faces in terms of fossil fuels. Global growth has only been allowed due to oil and natural gas – both of which peaked five years ago. No one knows precisely how much oil is left, but the odds of finding more are slim or too costly. America, because of its huge appetite for fuel and because of our suburban lifestyles (our automobile driven society plus the lack of a national mass transit system) will suffer more than European citizens.

Green-house gas legislation (the Waxman-Markley Bill) making its way through Congress will raise your electric rates, but the cost is hard to pin down. The folly of this bill is that it will still allow companies to pollute, but they’ll be able to trade or sell off their pollution. The end result, if passed, prices for food and driving will increase.

Alternative energy will take up some of the slack, however, not enough focus on these technologies has taken place. Nuclear facilities enjoy virtually no support in this country, despite being safe and they take years to construct. Most energy resources, such as coal, require energy to obtain…and many feel coal is too polluting. Some experts have stated that the United States has reached its peak for coal too. China and India have even fewer natural resources than the U.S. and are actively seeking business deals in Africa to bolster their stockpiles. Are we in for a long, hard and cold winter? Time will tell and perhaps science will come along and “pull a rabbit out of the hat,” but I’m not counting on it.



Experts suggest you should consolidate your banking business at one institution to save money. The TD Bank has a “50-Plus Club” which offers interest-bearing checking accounts for those over 50 and requires only a minimum balance of $100 to avoid monthly fees; also provides free checks, free money orders, etc.

>> was voted the most inspiring money blog last year. Started as a chronicle of debt reduction for its creator…now excels at providing useful insights on personal finance, how to budget and more.

>>Storage Unit Auctions can yield big dividends. Americans have a lot of stuff and often store it in storage units. However, some forget about their belongings or cannot pay the monthly rent. At that point, the owner of the storage unit can legally sell off the goods, usually at auction, in order to recoup their monthly rental fees. This can be a bargain for you. I recently attended such an auction. One fellow paid $450 for a unit and was rewarded with valuable tools (exceeding $3200) plus a cigar box of old US silver coins. Of course, the reverse of this…the unit contains junk. Units went from $5 to $1300 (the expensive unit held a newer snow mobile). Most places advertise upcoming auctions and many maintain a mailing list of interested buyers. Worth checking out.
Finally, with taxes eating up your paycheck and food prices shooting up, it might be time to look into barter. Most of us have swapped items during our lives and it’s still useful today. Although there are many professional barter organizations (see our poorman site), if you keep your swap informal, there is no tax bite either as it’s pretty tough to put a value on trading some eggs for fresh fruit. Try it; see if your neighbors will set up an informal swap situation. Recently, on Oprah, an interior designer took five families from a neighborhood and each of them set out items they were willing to swap. Each family came away with ‘new’ items for redecorating their home at no cost.

That’s it for this week. I’m still out of town for another 10 days or so, but feel free to email me your questions or suggestions.
Bruce – the Poor Man

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