HARD TIMES


A REAL REALITY CHECK
This is the post where the gloves come off.

The information found in the previous posts is something similar to
what you may find almost anywhere. What you have read in those
posts is my take on it.

Itís in this post where the gloves come off and the material gets
heavy.

Itís necessary to go deeper into the global economy because the world
is changing faster everyday. As much as things change, much of the
population continues on as if nothing has happened. Because some of
these people have thus far been immune to the current problems with
employment, unemployment benefits and higher prices, they continue
to purchase the new vehicles and the ever higher valued homes. Should
the bottom of the economy collapse, these people could receive a reality
check instead of a paycheck.

The jobs that many have seen disappear will never be back. Millions of
people have been forced out of the labor market as they once knew it,
while others have given up hope of ever finding work in the conventional
sense. And the party isnít over yet. More jobs will continue to disappear.

In the meantime, lawmakers in Washington, D. C. and in every state
capitol still pass out the usual pabulum of how the economy is improving
and that the jobs will come. The jobs to determine if you qualify for food
stamps have been exported to India by a number of states. At the same
time, with fewer jobs and less in income taxes, the state politicians have
tried to raise taxes in order to balance their budgets. The lawmakers are
wearing rose colored glasses and are intentionally ignoring reality.

The jobs the politicians talk about will never come back, and the jobs that
are slowly surfacing come with lower wages and no healthcare benefits.
More and more people will be at risk of losing their homes and their
middle class status, and the poor will get poorer.

With fewer living wage jobs, fewer people will be able to afford the
products now produced overseas in the cheap labor pools.

Statistics show that wages are virtually frozen, and hardly anybody, on
average, is earning any more money with a JOB. In the United States, at
least, if the current differentiation in incomes continues, the country will
be split into two camps. The rich and the poor, or the haveís and have
notís.

As this is being written in 2004, there are people still earning 1970ís
wages, while others have been recently slammed back into the past with
1985 wages. At the same time, the jobs that have value canít compete
with jobs that suck up discretionary income. For example, teachers are
quitting because they are underpaid, and there isnít a future in their old
profession (Note: teachers are now being imported). On the other hand,
rappers and sports figures are earning millions for having bad attitudes.
Go figure.

Seniors are struggling to survive on pensions earned in the 60ís, 70ís
and 80ís. They have to find minimum wage jobs to pay for their health
care. Money they saved and earned income on is being taxed as regular
income instead of at capital gains rates. This is a good reason to rethink
the 401k you may be heavily investing in. You are investing dollars today
that will be lower in value when you retire, and you will pay ordinary
income taxes on money youíve squirreled away for 30 or more years.
Thatís quite a premium to pay for saving money.

The drug companies are raising the prices of drugs annually. To maintain
their health or to stay alive, seniors must go to Canada or Mexico to buy
their drugs, but the drug companies are trying to close those markets to
Americans. Letís hope this attempt to embargo drugs changes and soon.

OPEC, the cartel that controls oil production and, in turn, oil prices, will
continue to impact the world economy until other sources of oil are found
and in production. Do you remember when gasoline was sold for less
than a dollar?

The economy is tossing out the old and leaving nothing in its place. The
only way to beat this change in the economy is to acquire new talents and
ways of producing income. And while there are discussions of retraining
for new jobs, nobody can say what the new jobs will be. Many of the
people that were previously released and trained for new jobs are again
seeking training for newer jobs.


WHATíS IN YOUR FUTURE?
What if you donít believe any of this, or what if you are totally unaware
that this change in the world economy is happening? You may soon get
a reality check instead of a paycheck.

What if you are working at a great job with a great company and you
are fiscally sound? Letís say you and your family go about your daily
business without a care in the world. You may have just bought that
new house you and your significant other have been dreaming about,
and your kids will be able to go to one of the better schools in the
community.

Then, on a Thursday, with no particular warning, your boss comes to you
and tells you the company is closing its doors and moving operations to
China next month. BAM! Reality has just struck a home run in your mind.

When you get home that evening, your significant other and your kids
donít understand the look on your face. Your eyes stare off into space,
your manner is abrupt, and your mind is trying to calculate how you are
going to get the money to pay all the bills that will be coming soon. You
even envision losing the home you just bought.

Then, as you are staring at one of the kidís toys on the floor, you see
something you have never paid much attention to before. You pick up the
toy and look closely at the label that says, ďMade in China.Ē What? You
never knew toys were made in China. You go over to the phone and turn
it over and see, ďMade in China.Ē You go into the spare room where the
treadmill is standing and find the label that says, ďMade in China.Ē You
pull your PDA out of your briefcase, and it says, ďMade in China.Ē Even
your briefcase says, ďMade in China.Ē

You say, ďDamn! Isnít anything made here anymore?Ē


THE NOT SO BRAVE NEW WORLD
We are not talking politics here folks, we are talking economics and how
to make money in the new economy.

With the advent of technology, here are some jobs that could disappear
in the next ten years: Teachers, accountants, stock market analysts,
newspaper reporters, corrections officers (prisoners will be exported),
software developers, computer makers (all that havenít left yet), and so
on.

The only jobs that will remain are those that cannot be done by someone
overseas. Cable installers, power company workers, plumbers, cement
layers, truck drivers, taxi cab drivers, delivery people, some TV people,
and the politicians, the very people that helped cause this problem. The
majority of scientists and engineers are currently being trained overseas.

China. Do you think China gives a hoot about you? This is a country that
wants your money and your job at the same time itís developing nuclear
technology for itself and rogue nations. Every time you buy something
made overseas, you are buying another nail that will eventually close the
coffin on another job. How long do you think this can go on?

With all the jobs disappearing, there are fewer taxes being paid to state
treasuries and the Treasury of the United States. A few politicians have
figured it out, but thereís no sign the others ever will.

This is blunt talk folks, but I do it to make you aware that only we as
citizens can stop this outflow of money, jobs and opportunity.

Until there is real fair trade, the problems we face today will continue.


THE NEW ECONOMY
Do you remember reading somewhere in the history books that the
American population was largely dependent upon itself as individuals?
There were farmers, miners, merchants, blacksmiths, and more. There
were more people working for themselves than people working for
others.

This is the forecast for the future.

Instead of reverting to the past, more Americans will start working for
themselves again, but this time, they will be working from their homes.
Their most powerful tool will be their computers. And the trend has
already begun.

Will you be there, or will you continue to dwell in the past?

Youíll have to change your way of thinking. If you are willing to forget
about the old ways of doing things and willing to come into the new
future, you will do very well economically. Otherwise, you could very
well be unemployed and broke.

In some areas of the country, and in varying degrees, real estate will take
a temporary hit until the economy settles down. With so many people
losing jobs, there will be a flood of homes on the market. However, those
people will need a place to live. It will be an opportunity for those that are
ready to take advantage of lower prices.

In some markets, people are selling their high-priced homes and buying
new homes in states where the economy is growing. This impacts others
trying to buy homes because they are competing with people flush with
cash.

If a lot of people are buying, the market skyrockets. When there are no
buyers, the value of real estate evaporates. If prices fall far enough, more
people will lose their homes.

This happened during the Great Depression in the 1930ís. It could happen
again. Will you be ready?

More people will consider precious metals. With the collapse of the U. S.
Dollar, more and more people in countries that invest in the American
economy may start to pull their money out. These sellers of the American
portfolio could then buy gold in order to regain the value lost in dollars.

Itís happened before, so why couldnít it happen again?


THE OLD TOOLS WONíT WORK ANY MORE
So how do you protect yourself and your family?

Well, it will be tough to do it with a JOB.

As stated earlier, you have to change the way you think.

Buying houses, cars and trucks, and boats you canít afford can put you
into the poor house eventually. None of those things are assets. Your
home may make you some money, but you canít depend on that alone.

Stocks and bonds will finally be discovered to be a game the common
man canít win. With all the scandals that have been uncovered, and with
those that havenít yet seen the light of day, how does a regular Joe or
Jane compete with that? The house will always win, just like the casinos.
And even if you get lucky and have a 1000 percent return on your stocks
and bonds in your 401kís and IRAís, you are going to pay high ordinary
income tax on that gain. If youíve got to do the IRA for your retirement,
do a Roth IRA. The gains are tax free.

Besides, you arenít using the tool of leverage when you buy stocks and
bonds. You are gambling with your future. This is what would happen if
you buy $100,000 in stock when the economy suddenly freezes in place.
Your stock could freeze at $100,000. On the other hand, if you were to buy
two pieces of property with your $100,000, you may be able to control an
estimated $500,000 in real estate. With 30-year loans on the two pieces of
property and with people renting your property, the rents would reduce
the loans on the properties. In 30-years, if both markets were still frozen,
guess which investment would make you money? (Hint: real estate, by
$400,000). A frozen economy for 30-years isnít likely to ever happen, but
this example still loudly echoes some truth.

I could be wrong about my predictions, but Iím usually more right than
wrong. What Iíve said above is already happening, and it has probably
happened to someone you know. There are more bankruptcies and
foreclosures happening every day. What amazes me is the disregard for
what is going on. Some people will be stunned when the bottom finally
falls out for them, and it wonít be pretty.


OPTIONS
Ok, so whatís the answer?

First, seriously consider a business of your own. Make it a business
that can NEVER be exported in any way. Or at least, a business that has
a minimum potential of being fully exported.

If you would like an internet business, make sure your products are NOT
made in a foreign market. Buyers will soon be more sensitive to buying
local or homemade products than before. Products ďMade in ChinaĒ will
soon be out of favor, and the companies that went there will soon be
trying to shore up their plunging bottom lines.

Get involved with a company in your home country and in one that
produces consumable products. If your product is air horns, the buyers
of air horns ďMade in ChinaĒ will probably go elsewhere else to buy their
ear plugs.

When you buy products made in your home country, you provide
employment opportunities to your fellow citizens. There will always be
people in need of a job. In turn, some of those citizens will then be able
to buy the products you are marketing. If people cannot earn an income,
regardless of the source, they canít buy anything, regardless of where it
is made.

Learn how to use your personal property in your business and save on
taxes. This would include the gas you purchase for your vehicles. Let the
high price of fuel be subsidized by the government.

Learn what you can about computers and how they work. A good solid
knowledge of how your computer works will help you make money. With
the diversity in the computer field, there is bound to be something there
at which you can become an expert.

Seniors, many of whom experienced the Great Depression, are learning
how to use computers. They have seen many changes in their lives, and
this is a change they want to participate in. Seniors are using their
wisdom; learn from them.

I have been advised that Gold will rise in value. If you think the same,
check with your local coin dealer because you will probably get a better
price, and there wonít be a shipping charge. What to buy? Gold coins that
are about the same price as the price of the metal itself. Donít overlook
silver, and consider buying a bag of coins from your coin dealer. Silver
should rise in tandem with Gold, but probably not as well as Gold. If you
are broke, donít worry about it. This suggestion is good only if you have
cash to spend now.

Instead of borrowing against your home, start paying it off as fast as you
can. Instead of buying stocks, pay down your mortgage. Even if both go
down in value, you can still live in your home. Your stocks wonít keep
you warm unless you burn them in your fireplace.

And what if what I am predicting doesnít happen?

Well, youíll have a business.

Your credit should be in better shape, if it isnít now.

Your home could have more equity, and you may own more real estate.

Youíll own a few Gold coins you can give to your grandchildren or to
your children.

Youíll probably be happier knowing you didnít fall victim to the old
economy; no job, no income, and broke.

You may have assets you otherwise would never have. You could very
well be very wealthy and more comfortable than when you had a job.

Even if it takes ten years to happen, and even if it doesnít happen
completely, you will be better off taking action now. Donít wait.

Do something, even if itís wrong. At least you will be headed in the right
direction.

If you are willing to admit that what youíve been doing hasnít worked to
make you wealthy, isnít it time to Think Differently?