If this doesn't make frugal acceptable again, I don't know what will

[toile]

Just read this at millionairemomnextdoor and thought...if this doesnt make frugal socially acceptable again, I dont know what will?
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How bad is it?

If the losses hold (markets are still open as I write), the Dow will close under 9,800 for the first time since December 2003. The financial meltdown is not limited to the USA-- it's spreading across the globe and foreign markets are tumbling as well. Many are worried that Europe is not in a strong position to deal with a credit crisis. Russia and Brazil had to halt their exchanges today after 10% declines. Yes, in one day! Today's declines (so far) erased over $2.5 trillion from equity markets around the world.

Despite passage of the bailout plan, the credit market remains tight. Banks continue to hoard cash to meet their own funding needs and are wary of lending to other banks, businesses and individuals.

American consumers are pulling back on their spending, all but guaranteeing that the economic situation will get worse before it gets better.

The housing slump is at the center of the meltdown. The S&P/Case-Shiller home-price index dropped 16.3 percent from a year earlier, more than forecast. Property values are dropping and foreclosures are rising. Banks will probably clamp down on lending even more in coming months to limit losses. Therefore, residential real estate will keep contracting and consumer spending will continue to sputter.

159,000 jobs were lost in September, the most lost in more than five years. So far this year, 760,000 jobs have disappeared.

Consumers are not buying cars. Auto sales fell sharply in September, forcing some dealers to close shop.

Since peaking at $147.27 on July, crude oil has fallen nearly 40%. Crude oil was off 5.7% to $88.58 today as traders worried that a global economic slump will reduce demand for gasoline and other fuels.

California is close to running out of cash to fund day-to-day operations. California Gov. Arnold Schwarzenegger warned Treasury Secretary Henry Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks.

[Athena31]

Things are changing that is for sure. Seems like it may be time for the government to live within its means like the rest of us huh?

[Cricketlegs]

Stockpile anyone???

I gotta get my food stockpile going ASAP!

It always falls when there is no money!

[HappyMama]

Unfortunately many don't want to hear the reality of the situation. I saw this coming last year and many didn't want to hear , it makes me sad .

But yes the good thing is many will learn to live within their means, that happiness isn't things as much as security. Everything everyone does here. Being frugal will be the new cool....LOL

Preparing for the new financial future is important. There won't be very much credit so I guess those who didn't learn will now.

[Araceli]

and it will be getting worse. For example in Mexico, at the beginning of september, we had an average dollar-peso price of 10.77 pesos per dollar (buy) and 10.81 pesos per dollar (sale). It is now fixed on 14.89 pesos per dollar (buy) and 15.29 (sale). It is expected to jump up to 79.91 per dollar by the end of the year, if things keep on going in the same fashion as they are, which I'm very sure will happen. Yet, people don't understand the need to save, which leaves me VERY concerned. It's crazy how people can't understand the line between what they want and what they need before it's too late.

[JanieD]

I commented over the weekend about everyone should be saving with the economy in the shape its in. I was told its easier for some to save & that certain extra things shouldn't be cut just to save a little money. Not sure what it will take for some, but many aren't ready to make changes yet.

[toile]

and it will be getting worse. For example in Mexico, at the beginning of september, we had an average dollar-peso price of 10.77 pesos per dollar (buy) and 10.81 pesos per dollar (sale). It is now fixed on 14.89 pesos per dollar (buy) and 15.29 (sale). It is expected to jump up to 79.91 per dollar by the end of the year, if things keep on going in the same fashion as they are, which I'm very sure will happen. Yet, people don't understand the need to save, which leaves me VERY concerned. It's crazy how people can't understand the line between what they want and what they need before it's too late.

Ok now I have only traveled to China, and my dollars equaled $8 each when I went.
Are you saying that the American dollar will be worth $79 dollars soon in Mexico?
I dont always understand the hows and whys of the dollars worth.
What is going on with the Mexican $, are they hurting too?
The idea of $79 makes the seem really bad off or do I misunderstand the meaning etc..?

[peanut]

Well, whatever happens in the U.S. eventually finds it's way to Canada. They are 80% of our trading. Thankfully the Canadian banks are considered among the safest in the world right now. Still, bank investment officials seem a bit nervous. And DH and I are not planning on borrowing any money to fund renovations. We plan to live within our means...

Jean

[Araceli]

Ok now I have only traveled to China, and my dollars equaled $8 each when I went.
Are you saying that the American dollar will be worth $79 dollars soon in Mexico?
I dont always understand the hows and whys of the dollars worth.
What is going on with the Mexican $, are they hurting too?
The idea of $79 makes the seem really bad off or do I misunderstand the meaning etc..?

Currently, 1 american dollar is worth 15.29 if you want to buy it here. If you want to sell your american dollars in Mexico, each will be exchanged for 14.89 pesos. It is expected that a single american dollar will be worth 79 pesos by the end of this year if the economy hasn't stabilized by then. This means a dollar will be worth 5x its current value in Mexico if Banxico's strategy of auctioning 3000 million dollars isn't successful. By this means, the peso-dollar equivalence can be kept artificially low in favour to the peso. but this doesn't mean that the inflation rates won't be raised, and thus the acquisitive power will decline in the country.

To illustrate this, let's say we import a laptop from the US that is currently worth 1000 dollars. The equivalent is 15,290 pesos. By december, the price in pesos could be around 75,000 pesos, even if the dollar price is kept artificially low at 14, or 15 or 16 pesos. Acquisitive power will still decline and the prices will raise.

The reason why this is happening is because investors have lost money while investing in stock shares in Mexico, which has led to loss of trust in the mexican stock market. Loss of powerful investors caused the market to go down, accounting for a 10-20% depreciation of the mexican peso within two weeks compared to foreign currencies..

[toile]

Thank you for explaining that so well!