Bush's "stimulus plan" is a trigger point. What you should consider doing ASAP

[JurisDoctorOfDoom]

Seahorse posted this at peakoil.com, I'm reposting part of it here although it also looks like he posted it earlier on another thread here at LATOC. Don't know exactly where he posted it first but will provide a link to the PO.com article in the interest of fairness.

http://www.peakoil.com/modules.php?name=Forums&file=viewtopic&t=35752

If you aren't worried about the credit crisis, the very fact that the gov't is getting ready to give every frickin one of us money for nothing should be a flashing red light, with sirens sounding. THIS IS A RED ALERT! There is no bigger sign of a crisis than the Romans throwing bread out to the citizens. TAKE ACTION NOW!

I personally always look for trigger points to make key decisions, the gov't throwing out money to prevent a crisis is one of them. A trigger point is that point in planning that if a pre-condition happens, you take a preplanned action. This is a trigger point. When the gov't passes out free money bc of a admitted financial crisis, you are an absolute fool if you don't take it seriously. This is not the tech bubble of 2001 (which was caused by overblown tech stock prices and didn't affect banks). This is a financial crisis where the world's largest banks may literally go bankrupt - this effects everyone!! The fact that experts worldwide reckon this as comparable to the Great Depression should be scary enough, and now that the gov't is discarding Adam Smith and literally giving money away for nothing to prevent a financial collapse from happening should scare the crap out of you. Take this seriously.

The gov't is getting ready to give everyone a bonus, who knows how much. Spend it wisely by investing in food. If you have credit card debts, car payments etc, do not use this money to pay on those regular bills, do not buy anything like a t.v. etc., do not take a vacation with it. Make this money work for you and BUY SOME FOOD! Especially if you have kids or anyone depending on you. This is a real opportunity to get ahead in the preparation game, use it wisely. Food is much more important than matches, solar, bullets, any other preparation. Food is the base level of survival, everything else is secondary! It is the reason why we work, EVERYTHING ELSE IS SECONDARY!

Buy food for the following reasons:

(1) I see people lose their jobs in the best of environments, and when they do, they don't have money to buy groceries! Don't let that happen to you. Most jobs will likely be in jeopardy over the next 2 years. Unless you are a gov't employee or working for a utility, a doctor or a nurse, your job security isn't very good. Buy food now, bc you may not have a monthly income to buy it later;

(2) Food prices are continually going up, call it stagflation or whatever. They will not be going down in the foreseeable future. Buy food now, bc food prices will never be cheaper. Buy it now while its available, at the best prices, and while you have a windfall to buy it;

(3) Even if you file for bankruptcy someday, they are not going to take the food in your pantry; its never happened. Food is not personal property which can be seized. Anything else you own can be seized. Buy food that you can keep and take it with you no matter what happens. You will not regret it.

(4) Even if you lose everything and were left in a tent city, if you have a sleeping bag and FOOD, you will be okay. If you have food, what money you do have coming in can be used to rebuild your life and buy other things. FOOD is security in the worse of times.

(5) If we get $600 or more gov't play money, you can buy a lot of food with this. Use every penny on food. A 50lb bag of rice is about $20, same for a 50lb bag of beans. Peanut butter, honey, canned goods, all will last a long time and are fairly cheap. Buy it and sock it away. Hold it for two years as a security, if nothing has happened by then, start eating it, no big deal.

(6) Food is the best investment right now, the only thing guaranteed to hold its value and, if the worse does happen, may be the only thing of value.

Do not waste this opportunity. If you don't have a store of food, get it now while you can! Don't waste this money by sending it to the credit card company or anyone else. Pay yourself with it by investing it in you, literally, and your family. You will not regret it.

The only thing you cannot do without in your life is food. This is a freebee, use it wisely.

If you already have food for six months, then make sure you have a good warm sleeping bag for you and all your immediate family. I picked up two today at a surplus store for $60 each. Sleeping bags are cheap, last a lifetime, and keep you warm even if you can't pay your utilities or are sleeping in some tent city bc you lose your job and your house. They are lightweight and easy to transport. They are your mobile shelter. If you don't have a good sleeping bag, I would also recommend getting one now, even if you have to buy it with a credit card.

This purpose of this thread is not to debate the credit crisis, but to discuss and share ideas as to what people can do right now to make their situation better should they lose their job, home, etc.

I would also recommend learning about your local food shelters, where they are located, local unemployment office, etc. Start educating yourself now by reading about local support services for the poor and physically finding out where they are located.

Original: http://www.peakoil.com/modules.php?name=Forums&file=viewtopic&t=35752

[warwgn]

I just hope it holds off untill after the 25th!!


Want to go see the new Rambo movie first to get some fresh ideas in my head

[JurisDoctorOfDoom]

More from Seahorse:

The risk of a financial meltdown is high. The warnings are there. They are very real. But, it hasn't happened yet. So the question becomes what prudent measures should a person do to prepare in case it manifests. You do have to keep working, before, during and after, that won't change. The goal here is to:

(1) Take measures that will preserve what assets you have. If you have stocks should one sell? I wouldn't go so far as to withdraw funds from an IRA and take the penalties. However, I would considering selling the stocks in the IRA but keeping it in the IRA and putting the money into something else like TIPS or a high interest money market account. The stock market has dropped 2000 points this month. So, when guys like Cramer says it could drop another couple thousand, its reasonable to assume he's right.

(2) Raise money - Raise money by selling stuff you don't need. Have a garage sell now and sell anything you don't need, that may have some value now, but may not have any value in a financial meltdown. Basically, sell stuff now before everyone else does the same thing because they are broke. I was talking to someone that says they have a collector car that they will sell if things get bad. If you wait until things get bad, the car will be worth a lot less, maybe nothing. So, you have to beat the herd. If you think you will sell it later, sell it now. Sell all old music CDs, books, clothes, furniture, anything you don' t need and sock the money away.

(3) Take money out of your bank? If we have a financial meltdown the likes that Cramer suggests, then many, many banks will close. Even with FDIC insurance, you will not be paid right away. I remember reading somewhere that many people during the S&L crisis waited, sometimes up to 2 years, to be paid. Most people can't wait that long. Bottom line is this - that money in the bank may be put on hold for awhile (even if its in a safety deposit box), so I do think its worth considering the option of having some cash on hand and buried in the back yard if that's what it takes. Further, its impossible to know which banks are safe. Who would have ever thought the large banks like Citibank would be in trouble, but they are. The smaller banks I'm dealing with appear to be in the same financially distressed boat, but you will never know it. They don't advertise it. I'm dealing with two that are on the FDIC watch list as troubled, but that's not public information. The only reason I know is I'm in a lawsuit with them and the documents were produced during discovery. So, all we know is we don't know, and don't think it can't happen to you.

The financial worse is not over yet. It is still impossible to predict a bottom. The housing bust is not over, has not bottomed, and now we are in the beginning of the commercial loan bust. We are far from over, and even at this early stage of a downturn, it appears the entire banking industry will meltdown and never see how low can go.

[mazz75]

Yep, the question is when the next shoe will drop
It's debatable whether it's even contained at this point, if something blows it could result in the trillion dollar debt system grinding to a complete halt. That means it's not just banks posting write downs but pension funds and investment funds. What's worse is business credit drying up that worries me. How long before companies can't fund thier PAYROLL?
That would truly be a shit storm to behold
Short term at least having a few months supplies and cash will enable you to avoid the general panic, eventually the government will be so threatened they'll organise some kind of rescue (food rations, debt deferral) but you don't want to be caught up in the initial phase as Joe6pack assimilates the new reality. It's exciting stuff but realistically could play out over a year or more. I've been wrong before thinking TSHTF next month and been proven wrong every time!

[GermanOkie]

 I would agree. Why not just print everybody 10k apiece?  This just shows how weak the system is.

[GermanOkie]

 Everybody is still in denial. That's what is scary.

[reddawn2]

I would agree. Why not just print everybody 10k apiece?  This just shows how weak the system is.

Yeah,  I really dont understand these "kickbacks".  I thought the first one was just a political stunt.

Does 800 dollars a person really stimulate the nations economy?   And,   if they have the money to give back why did they take it in the first place?


I dont know,  I think this is all about presentation.  To create a warm fuzzy feeling to.............stakeholders.

[SaraBeth]

I would agree. Why not just print everybody 10k apiece?  This just shows how weak the system is.

Yeah,  I really dont understand these "kickbacks".  I thought the first one was just a political stunt.

Does 800 dollars a person really stimulate the nations economy?   And,   if they have the money to give back why did they take it in the first place?


I dont know,  I think this is all about presentation.  To create a warm fuzzy feeling to.............stakeholders.

Bread and Circus...

[oklahoma89]

Everybody is still in denial. That's what is scary.

A shoe or two....maybe 3 will drop in the next 2 weeks.

It is not that everyone is in denial...its that everybody does not understand..all this is pretty complicated.

[RobTzu]

Marginal Propensity to Save.  MPS.  That is how much money will you save on your next dollar.  Your first dollar is all spent, food, rent, etc.  As your income goes up, you will save more.  We all know this.  In 2001, with those rebates, we saw a MPS of about 0.2.  So, one dollar out, ended up being 80 cents spent, 20 cents saved.  Then someone else gets the 80 cents, and saves 16 cents, and spends 64 cents of it.  This continues on down the line.  Essentially, the multplier of a tax cut is 4.  So if we hand out 150 billion dollars, we can expect consumption to go up 600 billion.  As much as I love tax cuts, it would be better to have the government just spend the money.  That way the first round does not leak money into savings.  That would mean the 150 billion dollars would yeild 750 billion in Government spending and Consumption.  Of course some of it may leak out, if we buy foreign products, it will actually shrink GDP....  If I was making a stimulis package I would just dump the money into Renewable Research (in the US), and buy and give out as many domestically made bicycles as possible.

[Midatlantic]

Crap.

[gnosis]

Well, I dropped an IRA and took the 10% penalty of $45, so I could get debt free. I know seahorse (good chap, BTW), said it may not be wise to do that, but I figured it would be worthless soon and the money was a better investment spent on erasing a loan, which was eating more in interest than my IRA was earning in interest. That is to say, I used the $$ to pay off a debt of equal value. I don't regret it, because I am now debt free. House is paid for, cars too, etc... One was earning little  (IRA), and the other was costing quite a lot (loan interest). I did this transaction a while ago, before he posted his comments, so hindsight is all I have now.

Now, the best I can do is take the rest of his comments and buy up even more food tomorrow. Rice here is $44 per 50 lb bag, much more expensive than it is in the USA, which I find upsetting, but oh well.

Thanks again, seahorse, and I am going to paste one of your phrases up on a wall to remind me: "hunker down, go to 100% security".

To me that means, be on guard people. Watch your back, pay attention, don't fall asleep on the job, and keep your eyes peeled. Now is the start everything we have been readying for. It's go time.

EDIT: Was $45 not $145

[bkwillia]

The thing is, while most of us doomers are all over the credit crisis and survival, most of the people getting this money will spend it on beer, gas, food and credit card debt.  The latter being the most important, since credit card companies are next on the hit list.  By driving down credit card defaults, the gov't may be able to prevent a retail credit crunch, having failed to prevent the commercial credit crunch.  This is a good investment for the feds, since if they can keep consumers spending through this transition, they might have an economy left to tax next year.

[Centurian]

Lets look at some hypothetical #'s being thrown around -

https://www.cia.gov/library/publications/the-world-factbook/print/us.html
GDP - per capita (PPP):
$43,800 (2006 est.)



$600 payment to every person - That is only 1.37% of GDP
$800 payment to every person - would be only 1.83% of GDP
$1600 payment to Family of 3.5 people    -  (1600) / 3.5X43800= 1.04 % of GDP

Or  150 Billion package / Total GDP  13.06 Trillion = 1.15% of GDP   This is about 3 1/2 days of spending

IF our economic troubles were only 150 - 300 billion it might make a difference but with -
1)  Write offs of billions of $ happening weekly by major banks & mortgage lenders
2)  The combined effects of destruction of wealth on wall street, housing slump & property devaluation, and weak retail sales etc.
3)  The  inflation in energy & food prices
4)  The resultant currency devaluation & resultant inflation

Any way you look at the package it is just a drop in the bucket. IMHO it will cause more trouble than benefits.

 It will be another way to hide from the sheeple the forcing of liquidity into the market place and retail sectors but anybody with a brain & half a desire to use it should see straight thru this as another scam.

This is a warning shot accross the bow. 

[flash417]

Ya know, even though I mentioned it to others, I was in a little disbelief that we could see the Amero in 2010 as mentioned in other sources. I thought, well the dollar would probably have to be equivalent to the Peso or something. Now I see why we can head in that direction so fast.