Thursday, August 1, 2013

Daily Briefing For Thursday, August 1, 2013

The Struggle To Piece It All Together

Tonight, I'm starting not with a story but with some pictures from back home.  First Baptist Church in Shelbyville, TN recently hosted a Second Harvest food bank food giveaway.  Shelbyville, a town of about 15,000 people, continues to feel the pains that come with high unemployment.  The idea that there aren't people with food insecurity outside of the major metropolitan areas simply isn't true.

We shouldn't be surprised. The poor have lost ground in America.  In fact, over the last five years, the income inequality gap has grown faster than at any time in the last two decades.  And when we do have upbeat news about the economy, it often comes only when we revise previously released data in a downward fashion, so as to make this month's numbers rosier

Meanwhile, and despite spending the GDP of a small first world nation on cutting edge weapons, ammo and war wagons for our law enforcement community, we still see cops shooting suspects not suspected of committing a crime and leaving them locked up in cells - despite admitting they were not a suspect and wouldn't be charged - for four days without food or water.  You'd think for what we're spending to equip our law enforcement community they'd figure out how to use their resources so as not to violate people's constitutional rights.

Wrap all of these events together with a single, yet fragile, thread - our financial system.  And as ZeroHedge reports tonight, the inevitable rise in interest rates won't happen like it has in times past; "there are more than 440 trillion dollars worth of interest rate derivatives sitting out there, and rapidly rising interest rates could cause that gigantic time bomb to go off and implode our entire financial system."  Is this simply the hyperbole of gloom and doom permabears?  Or is this a clear and present danger?  Remember, the financial cognoscenti was slow to the party to warn us about what was happening in 2008 until it was well underway.  So unnerved was the journalism profession that they wrote articles chronicling, in quite defensive tones, just now awesome they were at warning us things were about to collapse.

Is it any wonder, then, that movie trailers like the one for Gray State are becoming more popular by the day?  Are you surprised that when National Geographic took a poll of over 1,000 Americans, 41% of them thought money spent on a bomb shelter was a better investment than the classic 401(k)?  Or that people like me are being contacted to be cast in a reality show about prepping? (The production company is still pitching the idea to various networks, I was told by email a couple of weeks back.)

Are things okay?  Should we just chill and not worry about things like another substantial correction in the stock market?  Or the prospect of bank holidays (which President Obama considered in 2008)?  What about the dropping participation in the labor market?

Like I said the other night, I'm not an expert in finance or economics.  But it seems to me that a lot of people who are believe things aren't all right after all. 

So what are we supposed to do?

First, execute the basics well.  That's not always glamorous.  For example, we had a home inspector (who is also an engineer) over to the house today to do a complete inspection and give us a list of recommendations to help us keep our home maintained.  We're not looking to put our house on the market anytime soon, but it's good to know what we need to do to keep our home functioning and reliable.

Identify if you live in an area that could be troubling if we experience harder times ahead. 

Start buying things that you'd likely use anyway that would be helpful if you lost your job or had neighbors who needed a hand to get through a tough time.  Here's a list of things you could buy this weekend without blowing up your checking account. 

Build a bug out bag.  Here are some items to put in it.

And yes, some people believe you can even profit from what's coning ahead

As a side note, stay alert on how to make a quick escape when things get bad.  Atlanta Jeff provided me this guidance on surviving an aircraft accident

I don't have a crystal ball.  I'm not psychic.  And I have no insider information.  All I know is what I read and hear.  And if there's a 10% chance that these people are 50% right, we all have a lot of thinking and preparing to do.

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