The New Great Depression

new poverty

by Mrs. Cogs

A few years back Peter Schiff opined the Great Depression of the 1930s would look like a Sunday school picnic compared to what is headed our way. Without a doubt the cat is out of the bag. Everyone knows things are not going well. Unfortunately, it seems most people think that fixing the system, changing the politicians, tweaking the rules and the return to honorable ways of yesteryear hold the solution to restoring our idea of a stable and prosperous society.

The disconnect is easy to perceive when we compare black and white faded photos from the 1930’s of dusty farms, soup lines and children who don’t smile to the modern edgy world images from our cell phones, televisions and computers of how things supposedly are now. We live in a bright and vivid world where descriptions have been meticulously spoon fed to us so we will largely act according to how others might see us and we can feel better about ourselves. This only works until financial or emotional changes crash into our lives such as the Big One roaring towards us all now.

The New Depression already began and the news blackout is deafening. Aside from malcontents who insist upon harping on unpleasant subjects and who have no desire to participate in society’s uniform “solutions”, one only has to watch a Sunday football game and it’s commercials to be refreshed in the programming that the American dream indeed lives on. It’s right there in front of us to see with our own eyes and if you are not living that life you are obviously doing something wrong. (And obviously this is sarcasm.)

americandream

As the government has altered the methods to compute inflation, unemployment and debt, the headlines are meaningless since we can no longer use these measures to compare with numbers from the past. Most people are so busy and programmed in their complicated lives that even if it is noticed, what could we possibly do about it? So we suck it up and proceed, feeling better after we catch that prescribed Sunday game. If we’re lucky we have a few like minded friends or family members to gripe to about the state of things before we carry on in the same manner. Until we can’t.

The modern day New Depression has indeed arrived, it just hasn’t been announced yet. Draw your own conclusions. The population of America: 319 million or 4.4% of the people in the world. Americans who are of working age and are “out of the work force”: 92 million. The average household worth compared to ten years ago: 36% less. Number of homeless people in America: 1.75 million (and those are the ones they can find to count). The percent of American college grads supported by parents two years after attaining their degree: 50%. The number of Americans who lead hungry lives: 31 million.

It is here and it’s about to get much uglier. How our personal future develops is largely dependent upon the mindset we each adopt now. As many of us have recently concluded, this postponement of announcing the reality and truth of the dire situation has bought us time. This is our wiggle room. It may last for a few more years or it may end next month.

What is required is something we can choose voluntarily or wait until it is forced upon us by circumstances. It is a critical examination and re-prioritizing of what we value. More than just taking for granted a roof over our heads and a meal when we are hungry a new mindset, or rather a return to what many consider old school views, is called for.

In a world of instant gratification and narcissistic attitudes, where many collect affirmation from unlimited sources via social media, all those “likes” aren’t going to mean so much when one is suddenly living in their car. Who won on the reality TV show of the week will quickly become meaningless when the kids are hungry. These rude awakenings happen every day for people and continue at an accelerated rate.

For years now I have followed the progress of well meaning people trying to change this downhill progression of behavior and the resulting events by means of protest, political change or through the alternative media. While more people are becoming aware of the true reality swirling around the pretty images of life still broadcasted to us, the system careens towards the tar pits and our efforts must first and foremost be focused upon ourselves. As I have stated many times before, if we are to help anyone else we must first put on our own oxygen mask and breathe deeply.

There are some tough truths to think about if you are going to save yourself. The one that knocked me off my feet was learning that if I don’t know how to take care of myself, then I am dependent upon others. And that is about to be a very bad thing. I realized I depended upon an employer to pay me so I could pay for food, water, heat, housing, basic sanitation; in essence every product I use. And I depend upon other people to do their job so I can access these goods and services. Many now depend upon the government to provide what they cannot. The opportunity to alter the way we depend upon others to fill our needs may or may to not be available or affordable in the future. And this deficiency exposes each of us to assured failure at some point along the line.

poverty in the USAWikiHow now supplies us with instructions on How To Live On The Street.

I was not really providing any of this for myself, but rather depending upon everyone else’s specialties to supply goods and services to me and others. The risk that another cannot or will not fulfill their end of this collective bargain is known as counter-party risk. As our systems degrade, this risk will be the weakest link for most people.

Being prepared for events or changing times is a very good idea, one I wholeheartedly endorse. But to only prepare yourself for a rough patch and then to expect life will continue with business as usual, because (after all) it always has, is foolish in the face of a paradigm change such as the magnitude the world is facing.

Never before have global systems of banking, food, natural resources and information been so over-leveraged and extended. When the music stops and everybody reaches for their chair, rather than one person being left without a seat, there will be one heavily protected chair for every 20 or 30 people. That is when the New Depression becomes official and is acknowledged in a public out loud voice.

It won’t matter whether the catalyst is blamed on an epidemic, terrorism or even Krugman’s alien invasion. Finally everyone will see that the music has stopped playing and be forced to recognize we are living in a very different world. May I humbly propose that what that world becomes for each of us ultimately largely depends upon what we do now.

For me, as I expect is also the case for many of you, making decisions that bring about big changes in our lives will be met with great disapproval of those closest to you. We live in a society where change is bad and should be resisted, unless of course it involves upward mobility and better “things”.

Moving to a smaller house? Yanking the kids out of the school system where their friends are? Leaving the urban jungle for parts unknown? This is just crazy talk. After all, in order to have these be positive changes, one would need to acknowledge that happiness does not come from what we have in life or how others perceive us. It requires a huge deliberate mental adjustment. I would suggest that this decision is your proverbial oxygen mask. Breathe deep and become comfortable with the new air. I think you’ll find it much fresher.

Rethinking the big picture involves “crazy talk” such as considering the liquidation of today’s luxuries and believed future security for a different goal. Try telling anyone who understands finance that you are thinking of quitting your job so you can get your hands on your 401k so you can cash it out after paying 45% in penalties and taxes. Then add the part about downsizing your home and lifestyle and for a while you will find you’ve become the new cautionary tale that person tells others about.

But here is the thing you can’t get around. When the music stops playing, whatever you have is all you have. Whether those ‘things’ consist of retirement funds, brokerage accounts or whatever you have at the bank, or public ‘benefits’ such as Social Security, disability, Medicare, Medicaid or EBT, all of them are just pieces of paper with a promise on it and you will NOT be on the short list of people to get what they expect. The late comedian George Carlin informed us many years ago, “It’s a small club and you ain’t in it.”

hungry

For now, those paper promises are still being delivered. The US Dollar has not become so debased it is worthless….yet. Capital controls have not yet been completely implemented to ‘protect’ your retirement funds from yourself. Even if you have no savings and are receiving food stamps and government aid, there are many choices everyone can make to be less dependent upon others, even if each seems like an inconsequential baby step. Every step you can take to provide something for yourself is a victory.

This is not your granny’s depression, this is the New Depression where anybody who really desires to can access the information highway and find alternatives, especially with a bit of help. As the systems we depend upon degrade, we can actually improve our lives with each decision we act upon as we learn that our needs and wants aren’t really what we were taught they are.

As the momentum of change progresses, the fear levels will increase and the herd will be corralled in various directions, often not ultimately in their best interest. The only way to avoid the majority of the chaos is to be able to depend upon yourself. Roll up your sleeves, it’s going to take a lot of time and hard work.

Many definitions are going to need revising such as what is ‘normal’ and what does one ‘deserve’. How we choose to look at life will determine the new normal and will predicate what we create and how we treat others. If the rules are all about to change, what better time to set an example such as showing small kindnesses or taking the generosity of our time to teach someone something useful? Maybe I cannot save the current system, but I certainly can turn to my neighbor and lend a hand.

I would suggest that before the brunt of the storm hits that all of us, even those far ahead of the curve, take some extra time to consider what we need and value. If you think because you are but one person that what you choose and how you act doesn’t make a difference, I am here to say you are wrong. How you write the narrative of your own reality makes all the difference in the world.

Teaching the next ones a better way.
Teaching the next ones a better way.

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