What would you do if an insider told you that in six months we would have an economic meltdown that would make the Great Depressions look like a walk in the park?
I want you to think about this seriously for just a bit.
What steps would you take? How would you prepare from a physical, emotional and financial standpoint? What measures would you take to help not only your own family, but your skeptical loved ones as well?
People today are largely divided on the economic security of America. Some say things are going great. Others say we’re headed for disaster.
Although I’m not certain we’re headed for disaster, I am concerned about the massive debt loads that both governments and individuals are carrying these days.
In the era preceding the Great Depression – also known as the Roaring Twenties – people we living the que sera sera life. Borrowing money when they could for cars and houses, living life of grandeur in many place thanks in large part to a booming stock market and a booming industrial era.
The Great Depression
The Roaring Twenties, the decade that followed World War I and led to the Crash, was a time of wealth and excess. Building on post-war optimism, rural Americans immigrated to the cities in vast numbers throughout the decade with the hopes of finding a more prosperous life in the ever growing expansion of America’s industrial sector. While the American cities prospered, the overproduction of agricultural produce created widespread financial despair among American farmers throughout the decade. This would later be blamed as one of the key factors that led to the 1929 stock market crash.
Despite the dangers of speculation, many believed that the stock market would continue to rise forever. On March 25, 1929, after the Federal Reserve warned of excessive speculation, a mini crash occurred as investors started to sell stocks at a rapid pace, exposing the market’s shaky foundation. Two days later, banker Charles E. Mitchell announced his company the National City Bank would provide $25 million in credit to stop the market’s slide. Mitchell’s move brought a temporary halt to the financial crisis and call money declined from 20 to 8 percent. However, the American economy showed ominous signs of trouble: steel production declined, construction was sluggish, automobile sales went down, and consumers were building up high debts because of easy credit.
We know the rest of the story: the market did indeed crash and America spent the next decade+ digging out of a economic meltdown that caused a 25% unemployment rate and a 10% foreclosure rate at its worst, according to sources.
To this day, survivors of the Great Depressions are keen on avoiding debt and squirreling away cash as they live with the constant reminder of the tough economic times people faced during that period in American history.
These stories from the Great Depression will give you an idea of the specifics of what people went through to merely survive during that massive economic meltdown.
I remember one story in particular that a dear friend of mine tells: her father and his 9 siblings living with their parents in a chicken coop and catching frogs for dinner because there were no other options for the family.
Another Economic Crash?
Having studied the Great Depression quite intensely, I fear what would happen in America should we fall on hard times again. We saw a glimpse of that during the 2008 recession, and some report that the 2008 meltdown was equal to or worse than the Great Depression in terms of numbers, but people seem to have already forgotten those hard times.
In this culture where credit is readily available to just about anyone and TV ads and the Joneses work to remind us that life is about “living in the now”, there is little thought for preparing for the future.
And this led me to ask myself the question, “What would you do if you were told than an economic meltdown would happen in six months?”
For us, the plan would be simple but solid:
- We’d sell the house for something cheaper
- We’d take the proceeds from the sale and finish dumping our debt
- We’d stockpile big time the things we need for everyday life
- We’d work to warn others as best we could
I have no idea what financial future lies in store for America, our dear friends to the north in Canada and the rest of the world, but something deep in my spirit says we’d better prepare for tougher times. I work to pray and seek God as opposed to listening too much to the rhetoric of those more involved with the financial goings on of the world – whether those with sunshiney outlooks or those predicting gloom and doom. And my spirit feels agitated these days when I think about the financial future of the world.
So, we prepare. Hoping for the best but planning for the worst.
And if no financial crises hit these shores we’re in a better place anyway, and that’s a good thing, right?
What steps would you take if you were told that there would be an economic meltdown in six months?
*Image credit via Flickr and Pamela B