Spare cash. How many of you have it right now? Raise your hand if you have some…boy, not a lot of hands. The period of time we are entering is something we shouldn’t fear, but we should be very cautious, concerned and level headed. If everything goes to hell and the powers that be flush the toilet, we will all sink. This power is in their hands, not ours. Keeping your head above the water while we circle the bowl is the key. Can we keep up with inflation and can we keep our heads about us? Can you do those things?
I’ve mentioned in many posts in the past that we all need to re-evaluate how we live and how we survive on a daily basis. The way we shop for the necessities of life such as food, and how we get from point A to point B are examples. Some of it is just simple frugal living and some of it is just common sense. The chances of more drastic and desperate changes are possible if you read the tealeaves.
Economists have been giving a lot of conflicting reports on the health of the economy over the past few months. The same economists who just 6 months ago were telling us the housing crisis had “bottomed out” are now saying they don’t understand why the American public is so “negative” toward the economy. Eleven months ago, the Chairman of the White House Council of Economic Advisors, Mr. Edward P. Lazear said, “We believe that the economy is back on track” and that the economy was “recovering and robust”. Just last week the Royal Bank of Scotland (RBS) warned investors that there is a 25% chance of a total crash of the stock, bond and commodity markets within the next 90 days.
The eggheads, waterheads, knuckleheads and greedheads that comment on the state of economic affairs we find ourselves in today, are the same people who led us to this point. None of them can tell us the truth of the matter since the truth is rarely factored into their equations. Get them all into a room and ask them if de-coupling has occurred. They don’t know who’s lying, who’s covering up and who’s hedging a bet or trying to cover a short.
If it weren’t apparent to you when New Orleans drowned, let me clue you in. We are all on our own. Big Daddy isn’t going to step in and save our collective hides. Big Daddy is taking care of himself and will be protected no matter which way the wind blows in the upcoming shit storm. The rest of us Joe 6 Packs will get by as long as we have clarity of thought, and put thoughts into action with a deliberate purpose.
If you have flour, beans, spices and seasonings in your pantry; if you can cook from scratch and don’t mind eating small portions where nutrition is the emphasis. You will survive the worst. If you don’t mind riding a bike, doing manual labor or fixing it yourself; foregoing career for a living wage and having multiple irons in the fire for earning money. You will survive the worst. If you can do those things and have the balls to run in the opposite direction that everyone else is running, you have an opportunity to create the foundation of wealth.
What I am saying is that we have not seen this sort of harsh economic outlook for generations. The prepared will not only survive, but will flourish. Too many people are desperately trying to maintain a lifestyle that they could not sustain in the first place. One by one those people are falling off the cliff into financial ruin. The rest of us are cutting corners, and using those proceeds to prepare ourselves for the upcoming months and years. Until cash as we know it is dissolved into some other form of currency, cash is still king. Those FRN’s will still buy goods and services. Fools are dropping cash into precious metals right now. The demand is high, the cost is high, they are paying with a devalued dollar and they don’t see that. The speculation for food and oil futures isn’t so much a cash cow of the wealthy, as it is a last ditch effort for the worlds financial houses to cover their losses right now.
Go back in history, find the people who made the foundations of their wealth in troubled financial times and you will see the path through this. When everyone is selling, you should buy. When everyone is running to the car lot to buy a hybrid, sit tight on your own car. When everyone is trying to dump their McMansion in the burbs, look at renting, renting to own or buying an unaltered, un-remodeled ranch house. When everyone is grabbing Bisquick and instant rice off the shelves, buy powdered milk, instant potatoes and dry beans. Go against the flow, you’ll pass a lot of scared herd occupants who have no clue of where they are heading.
If you are an “outsider” or have lived an alternative lifestyle for decades, the world is about to come to your level of existence. Be prepared for questions from the newbies. If you are an old hand at thrift stores and yard sales, be prepared for the former Saks Fifth Avenue buyers invading your territory. If you are about to enter our world, leave your attitude and upscale lifestyle stories at the door. We won’t help you with advice if you come to us acting like assholes. I’ve been seeing yuppies acting haughty in the very places they loathe but now rely on to survive.
I hit yard sales and thrift stores every week. I’ve been doing this since the 80’s. Over the years I have picked up antique and vintage furniture for pennies on the dollar. The only new pieces of furniture I have are the mattress I sleep on and the vintage styled La-Z-Boy in my living room. I pay for my gas, food and most of my utility payments every month by selling things I have bought over the years at these sales. I’m saving my best stuff for brighter days, just as I did in the 80’s and 90’s.
The difference between my past yard sale and thrifting experiences and today is that the best stuff is harder to come by than it once was. That will be changing very soon as the folks who paid outrageous money for some things 10 years ago, are trying to dump them in a down economy. I’m waiting for all those Deco armoires that people bought and made into home entertainment centers, to flood back on the market. They think they’ll get $600 for them, just like they paid for it in 1998, but they are in for a surprise when dealers tell them, “You ruined it when you cut a hole in the back to run electrical wires. I’ll give you $50 for it.”
I’m already seeing northside suburban women horrified to learn that the Jadite they bought in 2000, because Martha Stewart had it, is actually worth 1/10th what they paid for it originally. They have no concept that Anchor Hocking made a TON of Fire King and the Jadite line just isn’t rare. It’s actually a bit eye opening to see an educated and apparently intelligent person, look tight lipped and terse when someone walks away from a $160 Jadite compote. I actually saw that at a yard sale. Another dealer who was there with me told her she was being optimistic on her price and said he would give her $15. When she acted mortified the rude bugger told her she shouldn’t try to run an antique store from her garage as he walked back to his van. I wouldn’t have said it, but it was pretty darn funny to see and hear this exchange go on.
Just a few weeks ago I was digging through several boxes of records in someone’s driveway on a Saturday morning. I bought one record for $0.50 and passed up oodles of 1950’s Columbia Masterworks LPs priced at $5.00 each. I asked the owner why the other records were five bucks and the one I found was two bits, the guy said the others were old and you could sell them on eBay, the one I had was new and everyone had it. I gave him two quarters and walked away with a copy of the banned cover version of the “Some Girls” album by the Rolling Stones. How the dude missed the actual value of that album, and how it came into his possession are beyond me. At least it’s now in the collection of someone who knows what they have.
This is the new direction we are heading. Folks are getting desperate, think they can sell things they bought at an over-inflated price for the same price or better, and get pissed off when dealers clue them into reality. The new direction is that anger is building and we have an abundance of over-inflated egos and sense of self in a lot of our fellow travelers. A lot of people bought into the lie that the American Dream is owning stuff and moving up some ladder to more stuff in a bigger house every year or two.
The American Dream, in my mind, has always been the freedom to choose which direction you want to take in life. No guarantees, no promises and if you are willing to take the risk, no safety net. Success has been a greatly distorted word in American society. Success has become a word meaning riches and possessions. Success in my definition simply means raising yourself above your conditions or situation. A man or woman who tries to start and run an honest business, but fail, are successes in my book. They tried, they took the risk and they gave it a shot. The final outcome isn’t always as important as the actual act of trying to make a go of it.
By the end of summer as we feel the first cool winds of autumn arrive, the ladies who are selling some of their mementos of their days at Brown and a $160 compote, the man with the Columbia Masterworks LPs with split seams, the folks who had a condo foreclosed on and are trying to get rid of the damaged Armoire, will begin to sense that a cold winter and bills and upcoming holidays are looming. They will sell those possessions to pay the bills. The good stuff always gets sold first. The crap gets pulled out later. Unfortunately, the folks who had good money and spent it on crap are selling crap. They don’t even know what the “good stuff” is because they never knew in the first place.
All the while, we have been picking up their Mercury Living Presence and “Shaded Dog” S1 pressing RCA albums for a buck here and there, a quarter each on a good score. The folks with climate-controlled storage are snagging pieces of Heywood-Wakefield at used Broyhill and unfinished furniture prices. Now the pawnbrokers are changing their names and MO. They advertise on late night TV, rent commercial space in trendy zip codes and call themselves “Gold Services”.
Too many people, who are being dragged down in the depths of this economic upheaval, are doing so because they never understood the true value of education. What I mean is that for all of my life the value of education has been stressed to a point where it becomes a droning noise. The value of that education was earning a better living; at least that is what we were told. I agree with that statement but too many of us have ignored the true gift of education. That gift is the ability to learn and hone the skills necessary to research, study and evaluate data. Even some cat working the Starbucks cash register, who has an MFA in Drama should understand how to research and prepare for a part in a local theater. Those skills can port over to the “real world” but few people placed an emphasis on honing that skill. Now, we have a nation of highly educated people who don’t know the difference between propaganda and news, or the difference between fact and opinion.
It’s no wonder we spent so many billions of dollars on NASCAR collectables, DVDs sets of crappy TV shows and a plasma screen TV for kitchen viewing of the Today show. If we don’t know the difference between junk investments and investments into things with intrinsic value, how can we complain about the state of our economic affairs?
The great sloughing off of quick money has been going on in earnest for well over a year, we still have a long way to go before we hit bottom. Grab their crumbs as they fall to the way side as they will find their way back up again after things hit the cellar. Keep your head about you. Don’t fall for bullshit propaganda. Think about what service or goods you can provide to earn a living. Identify the things of real value in your life and learn to tell the difference between those things and the things that are truly valuable. Always remember that your loved ones are the most valuable part of your life.
Take the best advice I can give you as we move forward through and past this. If you want to follow trends and be fashionable, you are going to pay an inflated price for that fashion sense. Once the trend meets it’s apogee, values plummet till they find their perigee. Those fashionable things won’t rise in value until they begin their cycle to their next apogee; and if you factor in inflation and a lower sales base, that apogee will be smaller than the first. This applies not only the material things you buy; they also apply to the financial institutions we all depend on to operate efficiently in the background of our lives and they apply to the central components of our daily lives.
What I am saying is that we all need to think twice before we take drastic action in our daily lives. That gas guzzling SUV you bought in 2006 might drain a C note from you every week at the gas pump, but is it cheaper for you in the long run to ditch it for absolutely no resale value and take on another 5 year car payment, with a big maintenance expense for the battery around the time your car will be paid off? Is it worth dumping another $35K on a new car from now until 2013 when gas might reach $250 per barrel? If gas is $8 per gallon, how much is that damn hybrid still going to cost you at the pump? How much will groceries cost?
Pump and dump. The trendmakers are pumping the hybrid cars, the dump happens after they reach the end of the line with that meme. They did it with the land yacht SUVs. They did it with the McMansions. They did it when they sold us on re-education as an advantage of NAFTA. They did it with Reaganomics. They did it with winning the hearts and minds of the Vietnamese. They did it over and over and over and we always bite the hook with the big fat worm. We need to become the proverbial Eskimos and let the trendmakers become the refrigerator salesmen.
“So, tell me. Why do I need this Frigidaire?”
