You’re right, you’re no financial counselor. You also reek of fear. My dear dear Aunt Edith wisely spoke to me about the times of the depression and she said, “It was people like you and me who kept our country together during that time. We didn’t panic and pull all our money out. We remained calm.”

If everybody does what you did, we’d all be screwed. We live in America, the greatest, and most successful, capitalist country. I don’t see every big company or the stock market as the Gadianton Robbers. Of course there is corruption. But a blanket condemnation of our way of life does no one any good. You just sit there on your greenbacks.

If everybody does what you did, we’d all be screwed.

Hmmm. You’d think that some kind of a bell would go off signaling that there’s something desperately wrong with an economic system that screws everybody when everybody merely pulls in their horns and goes on the defensive.

That’s the reasoning I gave Bill, who said we needed to protect our investment by taking our money out. I said, “Okay, but if other companies fall, people will lose jobs. If they lose jobs, they won’t be able to patronize businesses that provide income for people who buy cars. This trickles down no matter what.”

We could sit on our little savings, put it in our mattress and when Bill loses his job because companies here are shutting down left and right and no one can buy cars, that won’t be worth much. It might buy us a little time, that’s all. We’re all in this together.

Queuno, there’s a difference between living providently and having a prudent reserve and panic, leading to mass exodus from capitalism and a failing economy. That’s when real socialism will take over.

I am definitely not scared to death. Not scared at all, really. I have been married for a little under 2 years, no kids (yet, hopefully soon!), and my husband still has 2 years of undergrad…We have been wanting to buy a house for the last 2 years but couldn’t afford it (we weren’t willing to buy something that we couldn’t afford with “creative” financing). We live below our means and are working on being more prepared temporally. We are trying to follow the counsel given and we just aren’t scared. We realize that doesn’t mean that things will be perfect and we won’t have any hard times…We just aren’t scared. (In fact, we’re looking at dumping some extra money into the stock market…now seems like a pretty good time to buy). Is it the end of the world if my standard of living changes? Of course not. We’ll get through it, and probably learn a lot too…

I would just like to say that I’m typing this on MY NEW BLACKBERRY!!!!

Selling off your stock portfolio in a downward spiraling market reminds me of a line from Catch 22:
“What if everybody did what you’re doing?” “Well, I’d certainly be a damned fool not to do it then, wouldn’t I?”

Having lost about 40k in my retirement savings during the dot com bubble back in 2000, I was determined to never let that happen again. So as the dollar weakened, housing prices dropped, and oil peaked, I decided that now was the time to get out. I’ve been out of the market since the start of this year and expect to remain out for at least another 18 months. Buy low, sell high. I think we have much lower to go.

Great post annegb,

I think yours is the right approach. Regardless of whether or not someone pulled their assets out in time to avoid losses in the stock market, if everything were to crash horribly, so would the dollar. Therefore, everyone, but especially those with no stake in the markets that the gov’t has been propping up, will suffer as the dollar is inflated beyond our what we could ever dream of.

I don’t think things will go that way. And I don’t think our Prophets have told us to pad the mattress with cash. Go get some fruit trees and a good garden or make friends with some farmers. Those kinds of things will get you by no matter what the market does. Prophets call upon us to be self-sufficient, not bankers. If we follow our Prophetic counsel and strive to gain skills and assets that will make us self-sufficient, we will be fine.

And this talk of socialism is hilarious. Mark N., so according to that logic, the simple fact that we have a universal currency for our republic constitutes a form of socialism.

The Gadianton Robbers comment scored a 10 on the unintentional comedy scale.

The currency markets do not follow the stock markets as tightly as you suggest.

If at all.

The emphasis during the first two years of President Franklin Roosevelt’s “New Deal” was to provide work relief for the millions of unemployed Americans. Federal money flowed to the states to pay for public works projects, which employed the jobless. Some federal aid also directly assisted needy victims of the Depression. The states, however, remained mainly responsible for taking care of the so-called “unemployables” (widows, poor children, the elderly poor, and the disabled). But states and private charities, too, were unable to keep up the support of these people at a time when tax collections and personal giving were declining steeply.

In his State of the Union Address before Congress on January 4, 1935, President Roosevelt declared, “the time has come for action by the national government” to provide “security against the major hazards and vicissitudes [uncertainties] of life.” He went on to propose the creation of federal unemployment and old-age insurance programs. He also called for guaranteed benefits for poor single mothers and their children along with other dependent persons.

#21: That’s FDR. Sorry again, I should not be posting during breakfast.

The thing to understand about currencies is that they always trade in pairs, so it’s always one currency against another. The main drivers in the currency markets are the relative interest rates of sovereign debt, current accounts balance (balance of trade), the relative strength of the economies underpinning the currencies, and the actions of central banks attempting to support or devalue their currencies. The dollar has been strong recently against the Euro because europe has been somewhat behind the curve in cutting interest rates and acknowledging that their economy is in serious trouble. People are realizing Europe is in bad trouble, and that has been reflected in a move higher in the dollar against the Euro. The dollar has been pretty weak against the Yen recently as the carry trade unwinds.

So you are right, it is not so much that the prospects are bright for the US economy, but rather the prospects just got dimmer for the rest of the world.

As for the dollar and prices, i’m not sure I understand why you would expect prices to change much with movements in the dollar exchange rate. At a certain point it will tend to put pricing pressure on imports/exports, but a lot of this is absorbed by the companies doing the importing/exporting. Plus, i guess it depends on what prices you are looking at. If you are looking at the prices of homes, stocks, or gasoline, they have all changed quite a bit recently (to the downside).

If there is massive inflation or a complete devaluation of the currency (for instance upon default of sovereign debt) you will see wild swings in the prices of things. The odds of that happening now in the US are pretty much nil though. i’m not sure how the dollar fared in the 20s and 30s against other currencies of the time, but things were much different then as everyone was pretty much on a gold standard. It was a deflationary time though, so cash should have held its value pretty well.

One thing I’ve always wondered about is when the Jews were forced out of their homes, not the rich people, but the ordinary Jews, and then returned (the ones who survived)to that home, why did people assume it was still theirs? Because didn’t most of them rent just like other average people? I read a lot about people leaving their homes in times of crisis like this, or taking in relatives and I wonder if payments are suspended if the country’s economy fails? Because who would you make the payments to? Do you just assume the house is yours, or apartment?

I know a lot of the time, gentiles took their homes, but often they just set up housekeeping in the house or apartment they left.

Because I’ve thought, if we have a mass crisis here economically and the government falls like we’re been prophesied to, the whole town couldn’t move out of their houses. How will that work?

And the crisis we face now is deflationary in nature rather than inflationary

Perhaps. The real question is: “what will all the liquidity do?”

I don’t know. The odds on the ten year forecast are a whole different thing.

The liquidity hasn’t really done much so far, despite unprecedented amounts of it supplied this year by the Fed, destroying its balance sheet. You cannot fix a solvency problem with more liquidity. The economy is going to contract, and all the government interference in the world can’t stop that. Given the fact that real estate assets remain inflated and overleveraged, we’re in for a lot more pain. Bob’s plan in 27 is good. I suspect we will see a time in the relatively near future when many people feel that buying a house was the worst decision they ever made. Of course, that will be the time to buy.

Seth is right that everything is vulnerable, though some asset classes clearly outperform others at certain times. Cash is likely to do so for the near future. I still see the odds of the dollar crashing as remote–what currency would the money flow into?

I agree re: financial advisors. I’ve had so many friends that have been fleeced by these “professionals” in recent years. They just try to sell you into whatever mutual fund they make the biggest commission on, and keep you invested no matter what. Major conflict of interest. There have been long stretches of time when the market goes down or sideways, and holding stocks is a losing proposition. We’re heading into another one of those stretches when stocks will likely be a poorly performing asset class for quite a while.
There is no substitute for learning to manage your own money and making your own financial decisions.

I saw a clip of Bill Maher’s movie about religion where he asked somebody, “If God is so powerful, why doesn’t he just destroy Satan?” And I thought, “Damn, he has a point?”

I think it’s all some part of the universe’s great plan for us to grow and improve as we suffer. Like I’ve said over and over and over, I’m not even sure you guys all exist.

am i scared to death? why would i be? my disability retirement is under $600 a month. i finally got a 30+ year old car i paid $700 for. it runs good. i lost my house / career / health to policing ten years in texas. each day i’m in this awful, improbably stupid pain, much of it inflicted by my unlikely choice of a career ‘back then’.
On the positive side, serving Christ is easy for me; as caring friends give me clothes or goods, I give mine away, for example. My self esteem is improving since I started serving Him. Life is hard. Nobody ever told me life would be fair. I pray a lot for all who are suffering so much fear…it really is the devil’s tool. Jesus, and growing faith, hope, and love He brings, will replace fear.
most of my acquaintances are either Saints (LDS) or seriously sinners. People are afraid of the people that come to my (open) door where they are invited to feel the Spirit of Christ and be not judged. Poverty sucks, but it does bring interesting opportunities to minister for Christ. I believe more of us will turn to Christ and service as the economy has its way with our ‘planned’ futures. Praying you blessings…whether you’re in a life-like dream state or wide awake and terrified!

With poverty at 14 percent in the usa , you better be scared