Recession? Depression?

[Daisygirl]

This post is going to seem kind of doomy and gloomy, and I hate to be less than optimistic. However, I have noticed a really unpleasant trend on the posts lately. Maybe we just never talked about it as much on here before, but it seems like more and more of us are either losing our jobs or being threatened with that possibility. It seems like many of us are having trouble keeping our homes. We are all battling with the ridiculous rise in the price of food, as well as the cost of gas.

I am starting to think that all the nay-sayers are right, that a major recession is in the near future. With the drop of the US dollar, and the Canadian dollar not far behind, it was bound to happen. The government cannot drop interest rates fast enough to make up for the massive debt both we as consumers, and the government, have been racking up. The government has been recently accused of printing money without commodities to back it up.

Where will this take us all? I think we, as frugal people, have many more of the skills to survive than a lot of other people, but this leads to the big question:

WHAT IS THE BEST WAY TO PREPARE FOR THIS?

Personally, I am trying to be more self-sufficient. I am trying to stockpile non-perishable food while prices are low, just like before, but this year I also plan to garden (not my favorite) to cut the food bill. I am saving every dime possible, and my goal is to pay off my house over the next 10 years instead of the 30 left on my mortgage.

Do I sound like a crazy woman, or have the rest of you thought about this too?

[AmyBoz]

I've definitely noticed more posts like this, and I think we've always been pretty open around here, so I think you are right...it's a trend.

It's hard to prepare for. I think people are doing the right thing by building up EF's, building stockpiles, and just making the wisest choices possible when it comes to spending and saving.

I think we've all thought about it throughout our adult lives. Seeing it happen makes us realize that we are doing smart things with our frugality and that we're better off for it.

I'm not sure if we are headed for a recession or a depression, but if we are, at least we've been able to have a heads up. That gives us much better odds than our grandparents or great-grandparents had in 1929!

[Daisygirl]

You're right Amy, and from everything I have read, the Depression in 1929, came after an enormous burst of spending on things no one had ever thought to spend money on before. Things were ready made that you used to make youreslf, that type of thing. That brings to mind new "needs" of our current society like water bottles and frozen dinners.

[nodmicks]

I just saw interviews with a few non gov econnomists who believe there will definately be a recession in 2008. However we have had many recessions. There have been a couple since I have been an adult looking at the data and honestly I never noticed at the time. However I am noticing the tightening and prices this time. I think we are a step ahead just for having frugal living skills honestly.
Having no or very little debt, frugal skills and and an ef is about all I can think of doing. However I'd do it even if there were no storm clouds on the horizon.

[frugalfarmwife]

It's getting tight everywhere and even those that aren't frugal are seeing/feeling it. As a lot of you know, I work with people that in my eyes are self centered and people "of the moment", well right now they can't afford "the moment" and are whining/complaining and crying about it, they haven't saved for a single rainy day.

On the other side, I've watched the weather and the farm outlook the last year, lots of flood or drought, no hay, no feed, the horse market is GONE, horses turned loose to starve, eggs up to $2.49 a dozen, many beef sold of early because farmers can't feed them so there could be a future beef shortage. Ethanol craze so everyone planted corn, now the corn prices dropped but wheat, oats, speltz and hay are through the roof, no one planted any. We can NOT continue on this way, it's obvious.

I know that my side of the family will be fine, they're frugal and/or very wealthy, but honestly hubbies family is in for a very hard time, no savings for a rainy day and bill collectors on the door step.

It's not going to be pretty, but I know those of us here will survive, we've got the grit and knowledge to weather the storm.

kj

[forHISglory]

Yes, I believe that we are at the beginning of a recession, and that it is going to cut deeply.

From what I've seen in my short time on this forum, most of you will survive. You not only are paying off bills and stockpiling, but you are also developing a mindset that will see you through. It looks as if you are seeing beyond mere desire, and are seeing the real priorities of life.

There's probably a lot more we could be doing to prepare, tho. I look at how my grandparents and parents lived during the Depression, and I know that I am NOT that prepared.

[Frugal Girl]

i think the best thing for all fo us to do is like my mom said: Pay off as much as you can right now.get out of as much debt as you can afford. Do the best that you can and pray.

[JohnH]

We are all battling with the ridiculous rise in the price of food, as well as the cost of gas.

Rises in the price of food and gas are not ridiculous, they are a function of the United States' lifestyle, the way that the majority of Americans live.

If they didn't hop into their giant SUVs and travel to the supermarket everyday then the cost of living would be less.

The supermarkets are full of people buying pre-prepared junk that has been processed by oil and/or flown in from thousands of miles with oil.

All processed foods and transported foods have an oil premium added to them. If the price of oil goes up then an oil-based lifestyle gets more expensive.

The government cannot drop interest rates fast enough to make up for the massive debt both we as consumers, and the government, have been racking up.

Lowering interest rates whilst prices inflate is a very dangerous thing to do.

The government has been recently accused of printing money without commodities to back it up.

The US has been printing money like there's no tomorrow since 1973 when the US came off the gold standard. It could no longer satisfy countries wishing to exchange their dollars for US gold. Consequently the dollar is now a fiat currency and the dollar has nothing backing it but the threat of military force when it feels economically threatened.

Personally, I am trying to be more self-sufficient. I am trying to stockpile non-perishable food while prices are low, just like before, but this year I also plan to garden (not my favorite) to cut the food bill. I am saving every dime possible, and my goal is to pay off my house over the next 10 years instead of the 30 left on my mortgage.

Yes, I am sure the thought of living like a Third World person must put the fear of God into an American, which is why they would prefer to shop in a supermarket.

Just think of the 20th century as the pinnacle. You were lucky to live part of your life in the days of plenty.

Now, it is a matter of adapting to new circumstances.

Like your forebears, some starved to death in Europe, unable to adapt to new situations. Others packed their bags and changed their lives in America.

You don't have anywhere to run to. Nobody does. So you have to stand and fight. Adapt your lifestyle or go under.

Self-reliance is key. Growing as much of your own food as you can. Removing pre-processed food from your diet. The possibility of empty supermarkets in the future is a real one. Kick the habit now and life won't be as hard as it will be for others, addicted to consumerism.

Remember, when you remove the plastic wrapper or open a tin or heat up pre-processed or cooked food then that is the result of an oil-based economy. An economy that is faltering.

[JohnH]

PS...

Stockpiling is a bad idea. By stockpiling you are converting your money into food and then leaving it in a cupboard where it will earn no interest.

It is far better to eat in a "just in time" style. If you grow or barter for food then it is much easier to do.

You can have a store of staples, like salt, sugar, flour but packets of rubbish are a waste of money. How many cupboards are full of packets of stuff that are well past their sell-by date?

I have a tiny 12V camping fridge. It holds today's greens from the garden, some milk, butter and eggs. How big is that fridge? Small. No freezer full of money. No electricity bill to run the thing.

"Oh John, what about my pizzas? I need to keep them in my fridge."

Make the bloody things yourself!

If you want to stockpile something with your money then buy gold. When currencies tank clever people buy gold. The price of gold has gone up by $150 an ounce in the past 12 months.

[Lambie]

Great posts everyone!!! Yes, I do believe it is true...unless you really had your head in the sand lately haha, we've got some real challenges ahead for us!!!! I do believe in a rotated, well stocked pantry, money set aside for the rainy day, and bills paid down/off!!! It is past time to get serious about being prepared in all ways!!! Our frugal skills will prove to be invaluable to us!!!Katy

[Daisygirl]

Wow, John, if I am not mistaken you seem rather hostile.

You bring up some very good points but everyone does not have to live the exact same way to live successfully.

I totally disagree with you about stockpiling food. The basics would be what was important in a scenario like you describe. Money in the bank earning interest would mean absolutely nothing since, as you pointed out, it is a currency backed up only by military power. That is an oxymoron, suggesting investments as opposed to somethng solid and useful.

You have to pick a side and stay on it if you're going to debate someone's idea properly, otherwise you're just ranting without point.

[frugalfarmwife]

I also am pro stockpile/full freezer, works for me here in chilly Ohio. I've got a freezer full of beef and veggies, hens that supply me with eggs (silly girls don't know it's winter, I'm getting 4-6 eggs a day, lol).

I barter eggs for the occasional favor from friends (doing chores on the RARE occasion we can't be here).

If I've got food to put on the table, a roof over my head and warmth I'm doing well, a stockpile and extra for the bills puts me AHEAD.

BTW, another reason for the rise in food costs, the farmers have to pay the increased price for fuel also, and they use a LOT of fuel, trust me.

kj

[annymoll]

Stockpiles of food may be useless if a situation is dire. Hungry people, unable or unwilling to buy or grow their own food( or limited supplies)will become violent.Your storehouse is useless with a gun in your face and a mob of hungry, terrified people.Hostility will be a normal thing. Since this is a gloom and doom thread, I can get down with it. Things will NOT be good. It will NOT be the Waltons.Learn to garden. I love the daily garden plan if possible. Learn to preserve your food. Have an emergency stash of money. Live debt free.Invest in solar resources.

[frugalfarmwife]

Stockpiles of food may be useless if a situation is dire. Hungry people, unable or unwilling to buy or grow their own food( or limited supplies)will become violent.Your storehouse is useless with a gun in your face and a mob of hungry, terrified people.Hostility will be a normal thing. Since this is a gloom and doom thread, I can get down with it. Things will NOT be good. It will NOT be the Waltons.Learn to garden. I love the daily garden plan if possible. Learn to preserve your food. Have an emergency stash of money. Live debt free.Invest in solar resources.

Honestly, if I was faced with angry people with guns in my face, they'd have one pointing back at them, and if needed I WOULD use it.

This takes me back to 9/11 and the immediate hysteria at the time. Hubby and I REALLY looked at the situation and all of our families, what we would do, who we would be there for. It REALLY put us in the mode to put together a survival plan.

We being the farmers in the family are rural, have the resources to last out many things, and the ability to cope.

I'm not a "gun toting nut", but I AM a proud self sufficient American citizen that CAN and WILL protect "me and mine" if needed.

kj

[annymoll]

Stockpiles of food may be useless if a situation is dire. Hungry people, unable or unwilling to buy or grow their own food( or limited supplies)will become violent.Your storehouse is useless with a gun in your face and a mob of hungry, terrified people.Hostility will be a normal thing. Since this is a gloom and doom thread, I can get down with it. Things will NOT be good. It will NOT be the Waltons.Learn to garden. I love the daily garden plan if possible. Learn to preserve your food. Have an emergency stash of money. Live debt free.Invest in solar resources.

Wanted to add : maybe learn to enjoy and be greatful for the new food source- Soylent Green?I'm going where you go OzFree Bird.