Last April, I wrote an article on protecting your family in hard times (http://www.tnonline.com/node/85298). Since that article was published, the world has continued on a downward spiral.
The economy remains sluggish and unemployment remains high. Many of those who are unemployed have stopped looking for work and have resorted to welfare or moving in with other family members. It is not uncommon to have three generations living in the same home, putting additional stress on the family unit. Some people have even turned to theft on occasion to feed their families.
Most of the newspapers and even the government call our current economic malaise a recession. I believe that in reality this is a depression as bad or possibly worse than the "Dirty Thirties." The availability of welfare and unemployment insurance eases the pain, but does not put people back to work.
Families are trying to make ends meet in these difficult times. Understating the effects of this economy on our nation and our citizens is an attempt to show that the government efforts are working. In reality quantitative easing and "investments in shovel-ready" projects have failed dismally. These efforts have only decreased the value of the dollar and increased the costs of food and fuel.
Price increases hurt our older citizens who live on fixed incomes, the poor, the underemployed and the unemployed. Some people are making choices between buying food and buying medicine. This should not be happening in the Land of Plenty.
Gray clouds are spreading over most of the world's economies. Political unrest is growing throughout the Middle East, Greece and other European Union countries. The Arabic protesters are not seeking democracy as we know it, but an Islamic theocracy under Sharia law. The protests, the cessation of oil shipments by Libya and the threat of supply interruptions from other Arabian Gulf oil countries have caused a steep rise in oil prices.
We are at the $100 per barrel mark as I write this. At this price, we can expect gasoline to rise to $4 per gallon in the near future. This could cause our fragile economic recovery to sputter and stagnate. In my opinion, at $5 a gallon the light at the end of the tunnel will be extinguished.
If the unrest continues, we can expect the price of oil to move into the $150-$200 range within a few months and possibly higher by the end of the summer. When gas prices rise above five dollars a gallon our economy will break down and Americans will greater hardship.
Today it was reported that the Saudi Arabian's would rescue us from this oil crisis by pumping more oil to stabilize the market. As a nation, we should not rely on the Saudis for our oil supply. I remember when they stopped shipments to the United States as part of the Oil Embargo (1973). We waited in long lines to buy gasoline that sometimes ran out before we got to the pump. Prices skyrocketed and our economy crashed.
We have tremendous energy resources in this country and they must be developed and brought to market. We cannot tolerate King Abdullah bin Abdul-Aziz of Saudi Arabia (with his four wives and 21 children) manipulating the oil spigot that controls our economic future.
When I buy groceries, it is obvious that food inflation is here. Prices are increasing dramatically each week. While the government states inflation is low, I believe that this is just propaganda. We have experienced a significant increase in our grocery and fuel costs over the last few months. Buying on sale is always a good idea but even the sale prices seem to be much higher than they were last year.
With all the unrest in the world and widespread cost increases, I believe it is time consider self-preservation again. We must prepare our families and ourselves so that we can weather the coming storm.
Last year in response to the economic downturn we started a vegetable garden in our back yard. This year, we are going to expand it. We will be growing more hearty vegetables that we can store through the winter. We are replacing some of our shrubs with raspberry plants and some of our flowerbeds with strawberries. We will also be increasing our canning efforts to preserve fruits and vegetables that are cheap in the summer months.
We will continue stockpiling other food items as our budget allows. Everything we buy now or grow ourselves will save us money as inflation rears its ugly head. I believe that it is time to start your own vegetable garden if you have not done so and expand your existing garden if you have the space.
Now is the time to save more and spend less. We can expect that inflation will continue. The food riots and civil disobedience occurring in other countries could spread to America. If so, there could be some social unrest or even rioting this summer.
My wife did some research that indicated that booze and bullets will be in high demand when the economy tanks. This makes these items useful in a barter economy. Gold is nice but you can't eat or drink it. If the markets shut down, there is no way to sell the gold at its real worth. I expect that some people will exchange gold and silver for food and shelter in hard times.
Those who prepare now will be able to barter for the other items they need. They will also be able to invest their savings when the financial markets hit low points, ensuring their prosperity when the markets recover.
Some of my friends think that my efforts at self-sufficiency and frugality make me a pessimist. Quite the contrary, I am an optimist. I believe that we will survive as a nation no matter what is thrown at us. We have to be prepared for the downside so we can sustain our nation and ourselves until the return of a robust economy. We plan for the downside and pray for the upside.
Being prepared is not pessimistic, it is just prudent. When disaster strikes, we do not want to be as desperate as the victims of Hurricane Katrina. They could not get out of harms way fast enough nor did they have the resources to sustain themselves after the disaster. Preparation is essential at the family level as well as at the national level. We must look after our families, our friends and our neighbors.
I expect that the hard times we are now experiencing will continue for several years. Inflation will destroy the pensioners' savings and make it difficult for families to afford housing and put food on the table. Those who prepare in advance will be able to survive the downturn. Those who do not prepare will have a difficult time indeed.
We must rely on ourselves. We cannot and should not look to the government to resolve the crisis. Instead we should work together to protect our families and rebuild our economy.
© 2011 Gordon Smith All Rights Reserved