After six months of following global economic turmoil and studying the analysis of many experts I have decided to issue a ‘cautionary warning or alert’ about the economic upheaval likely to be coming our way before the end of this year.( Apologies to Ray Bradbury )
First off, this is ‘not a doom and gloom report’ but rather a suggestion that you ask yourself a few questions about how prepared you might be in the case of some glitches in the International financial system. The difference between a little grief and panic can be as simple as being prepared to take care of yourself in case of a couple of scenarios play out that are related to sovereign Countries and banks defaulting on their debt.
The last crisis in 2008 was a result of banks having to much bad debt due to toxic non-performing mortgages. The coming crisis will be a result of Countries defaulting on their debt because they simply borrowed more then they can likely repay. The U.S. Government, for example, has a national debt of about $14 Trillion dollars which when added to the funding shortages in social security and health care adds up to over $60 Trillion or about $200,000 for each man women and child in the United States. Greece, Italy, Spain Portugal and numerous other countries are in similar situations and there is no big brother to bail these Countries out and so it is not so much “if” we have a problem but “when“ the banking systems starts to crumble.
The Canadian Government (thank you Prime Minister Stephen Harper) has done an exceptional job of preparing Canada to withstand the coming financial storm. Our Conservative Government has been astute and we have been lucky to be living in this great Country that is filled with commodities and natural resources the world increasingly needs. It’s not that we are going escape any downturn but rather we are probably going to be better off then most. As a former Mayor and business man I do feel like I have the responsibility to raise this issue with my friends and ask you a few questions that may help you prepare for the upcoming economic turmoil. It will not hurt you; but it might help a lot!
If you could not access your bank accounts for thirty days how would you pay for food and other necessities? You have to decide if is a good idea to have a little hard currency in a safe place in your home. The bank machines may be temporally unavailable to you for a host of reasons. I suggest you keep a little mad money in hard currency so that you can immediately buy necessities even if the banks were not there for you.
Second, If there was any natural or man made problem that even hinted at food shortages then the supermarkets would get very busy very fast. Do you have a modest stock pile of food in the cupboards to feed your family for a month or so? It would be a good idea to have a small stockpile of your basic foods and a perhaps a few treats such as coffee and candy to make the adjustment a little easier to deal with. ( Yes even a few bottles of good wine might be in order too)
Third, have you had a conversation with your friends and family about what to do in the case something awkward happens? There is nothing wrong with being prepared and there is often safety and security in numbers and friends by your side. It might even get others thinking about it and even a little preparation could head off a panic or an unpleasant month or two.
I think the answers to these questions will result in a having just enough flexibility to live comfortably through the tougher times after a banking crash. We in Canada are lucky since we have skills, the resources and capital to make the adjustment as the world changes. I am very comfortable that we will emerge from these challenges a stronger Country but it starts with you being prepared in the simplest of ways.
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