As a "senior citizen" and now out of the earning cycle, I am observing several things going on in the economic world that directly affect me. When my credit union returns were reduced to less than 1 %, I purchased a property with a manufactured home on it from the bank. This was about 15 years ago. After making the necessary repairs and improvements I had about $100,000 invested. Over the rental period I have recouped several times more than the interest payments would have been in a positive cash flow in rent, and it is now valued at over $200,000. Sounds great but the real world has created a new problem, that of finding a buyer. In 2012 you could get a 30 year mortgage at about a 3.7 %, I had $100,000 invested, taxes were $1,500 a year and insurance was $500 a year. That with a $20,000 down payment would get you a 30 year mortgage for about $6,000 a year or a total expense of $8,000 a year. Today it is valued at $220,000 and at about 6,2 % interest rate and $40.000 down, would require a yearly payment of about $12,000 for the mortgage, $1,500 for the insurance, and $4,000. This has 2 major effects on a prepper. If he were to be looking for a piece of land, in 2012, this site had 6.6 acres, located at the end of a long driveway, with a 2 car garage, well, septic, and 3 acres of mature oak and ash trees for firewood and 3 acres of fields, a 12 year old well built manufactured double wide mobile home, in an area where the closest neighbor was about 500 feet away and 60 miles from Boston. While I had my own site, the new location was about 3 miles from where I live, it had 3 times the land, and my closest neighbors are now after all the building in the last 20 years located within 200 feet of me. It still has many advantages for prepping. The buyer will have to come up with $40,000 down payment and will have to pay $17,500 a year to purchase the property. This in the real estate terms means it is harder to sell and harder to finance. The government lists the average wage in NH at about $50,000 for 2012 and $65,000 in 2025. In spite of all the propaganda, it indicates that the average working man has in many cases had his effective income decreased by inflation to the point that prepping is becoming a dream. When I do sell the rental property I face several new problems. Being 88 years old and in ill health, I can't in all reality do what I wish, give my kids the money. If I do and I have to go to a nursing home, the state will see that the required $11,000 plus per month is paid and will claw back anything I may have given to them, within the last 5 years. Having no faith in the stock market, having been burned several times over the years, I have to find some "safe" area of investment that gives a positive rate of return. I have no faith in the system providing stability to those in my situation. The small investor who wishes to at least retain the buying power of his savings. Major changes have to be implemented in the next few years by the US government. We just don.t know yet in what form they will occur. The only thing that I can promise any prepper is that you will get older and that the actions you take now will determine how you fare in that future. Having stock in one of the major steel companies or Pan American Airways, a wise investment in the 1950's was a bad decision and I do not know anyone who bought Microsoft or Amazon stock on the day it went public and held on to it. I do know people who bought AOL and ENRON stocks when advised to do so by their financial advisors. The major problem in the public debt is both its creation and its roll over costs. The federal debt has 3 major sources of funding, they borrow money from people and institutions who have it, they create the money thru the Federal Reserve and the Treasury, and they borrow it from other governments. Much of the money "borrowed" from the people is in all reality stolen, Social Security Trust Fund, while on paper it is about 3 trillion dollars and interest must be paid on it, it is held by the government and used by the government as it sees fit. Experiences in other countries over time have shown that it may in fact not be paid. As a collector of social security over the years, the value of the benefit has been reduced in real dollars. Medical expenditures for Medicare and inflation have reduced the value. About 1 trillion is owed to government pensions. In addition about 6 trillion was created as far as I can see out of thin air by the Federal Reserve. The Federal Government Has Borrowed Trillions. Who Owns All that Debt? If the debt was static there would be very few problems. It is not however static, in fact at least 3 things influence the effect it has on how you and I live and the world we live in. It must pay interest on the debt to those who own it, It must repay or roll over the debt that comes due. It must finance any new debt and find sources to fund that expenditure. We are facing a crisis in the handling of the debt in all these areas. We will have roughly 9 trillion in old debt that is coming due and must be "rolled over" into new debt. The old interest rate was as low as 1.5 %, the rate now is about 3..3% and we are going to be projected to go about 1 trillion in the hole this year. That means the government has to borrow about 10 trillion to cover debt coming due and new debt and spend about 1 trillion in interest payments. Monthly-Debt-Update-website.knit And here is one view of what is going on as an actual policy, though no politician dares admit it. Kind of the behind the scenes actions taken by those who actually hold the power to control things. Who sets the interest rate? Does it have anything to do with reality? This is not a new problem, governments thru out history have always borrowed money as the easiest way in a political system to cover expenses. Higher taxes, inflation, and cutting benefits have never been an easy solution in any political system. This video explains the problem in a very superficial manner, but in a way that all the statistics and economics gloss over.. There is an old story about John Keynes being questioned on what the long term effects of Keynesian economics would be. Having no economic answer, he stated "In the long run we are all be dead" Not actually a reasonable answer to the living. In the short run I think it is time for all preppers to very carefully look at the economic world we live in. I have in the past with full confidence and excellent advice made decisions in which I lost everything and it took me years to recover from. The next time we may not have years. In my lifetime, my best investments have been in skills, land, and a network of like minded individuals. When I did make a bad decision, I was both helped and guided to a new career field and a new job by a good friend. The system was willing to furnish unemployment benefits, he was able to get me in contact with an individual who gave me a chance to start over. If TSHTF, it might well be the individual standing guard duty who protects you while you sleep or has a safe location and welcomes you, if he both trusts you and you have some resources. If in fact things do collapse for any reason, the likely value of an existing Federal Reserve Note being a thing of great value is slight.
That's a well thought out post. Thank you. I suppose you could give the kids bags of junk silver after the sale and tell the feds you spent it in an opium house with Asian hookers. I don't know what to say about economic degradation. I guess I will shoot the hell out of robbers and burglars if I decide to ever buy a gun. There will always be enough food of some quality for the welfare class to eat or the cities will burn. I can get on the dole.
