How To Protect Yourself In The Coming Financial Crisis

As Portugal, Ireland, Italy, Greece and Spain move closer to the brink of a bank and sovereign debt collapse, fear of that collapse has begun to spread not only through the Euro Zone, but to the Asian manufacturing powerhouses. Most notably China, Japan and South Korea are seeing their economies already get hit, as is India.

And that impact is starting to be felt in Canada, Australia, Latin America and throughout Africa, all these nations major providers of raw materials to the manufacturing powerhouses. Even multinational corporate giants like General Electric, Heineken and others are moving quickly to protect their cash, restructure contracts and strengthen payment terms, as they prepare for the storm to come.

The U.S. is next to get hit and get hit hard, as illustrated by a dismal jobs report (6/1/12) and by news that many college graduates can't find jobs, or can't find jobs that pay a decent wage and are unable to pay their student loans, a possible trillion dollar exposure to U.S. taxpayers. Home foreclosures and a weak real estate market continue to burden any form of economic recovery, and 1 of 6 Americans get some or all of their meals from food banks. Many Americans are just one big medical emergency from facing financial ruin.

In addition, many major U.S. states are struggling to pay their bills, most notably the U.S.'s biggest state, California, which has a nearly $16 billion shortfall it is scrambling to close with as yet undetermined but huge spending cuts to come.

Meanwhile, the U.S. is by far the biggest debtor nation in the world and its government hasn't defaulted on its debts only because it has huge borrowing capacity. And because of global financial panic, money keeps pouring into U.S. T-Bills, thus briefly putting off the day of reckoning for a dysfunctional and corrupt government.

So how can you protect yourself in the coming financial crisis:

1) Take care of your health. Without good health, you can do little to protect yourself and your loved ones at such a crucial time. If you suffer from diabetes, heart disease and other often preventable but severe diseases, do something about it, starting today. Begin eating wisely, slashing junk foods and get some exercise. Your well-being depends on it!

2) Protect your job. Cross train so you have more to offer your employer, find ways to help generate revenue or cut costs because that is how nearly every organization is now focused, be upbeat because no-one wants to be near a complainer and word about complainers travels far and fast and tackle jobs your boss feels are essential but doesn't want to personally do. And with a smile, the more you can do to help others in your organization with their work, the more support you will receive from them and this is a time when everyone needs the support of others.

3) Slash your overhead. Sell-off unessential items such as an extra car, or a motorcycle, boat or other toys you may no longer be using but cost you money to keep. Pay down or pay-off your credit cards for those monthly payments are eating your budget alive. If need be, approach those credit providers to explain the dire nature of your finances and try to get a forgiveness of some of your debt or better payment terms.

4) Educate yourself with practical courses. Select online, extension or other courses that can put money in your pocket such as those related to computers, medical care or other much needed skills.

5) Make charitable donations. To the extent you can afford to, please give generously to charities for in the end, all we have is each other. And the donation you make now may help someone else get back on his feet and in turn he may later help you get back on your feet.

One final note: Together we will get through the horrors of this financial crisis, for the world has had many financial crises and after considerable hardship, it always survives them. During the 1930's Great Depression, people came together to help one another and as times grow worse that is what we will do now.

Dick
To learn more about the state of the global and U.S. economies, please see the following Wall Street Journal articles: "Euro-Zone Reports Deepen Gloom" http://online.wsj.com/article/SB10001424052702303640104577439701649201524.html, "Grim Job Report Sinks Markets" http://online.wsj.com/article/SB10001424052702303552104577440023931752902.html, [This was the print edition title] "Asia Weakness Heightens Fears Of Contagion" http://online.wsj.com/article/SB10001424052702303640104577439103464926734.html, "Japan Gives Warning on Yen" http://online.wsj.com/article/SB10001424052702303552104577439231435258876.html?mod=googlenews_wsj, "Asia Strains Under Euro Crisis" http://online.wsj.com/article/SB10001424052702304821304577437902057067054.html, "India Economy Shows Sharp Slowing," http://online.wsj.com/article/SB10001424052702303552104577437492971509410.html, "Business Braces for Europe's Worst" http://online.wsj.com/article/SB10001424052702304821304577438580578338886.html, GE: Best Approach for Continent Is to Pull Back,' http://online.wsj.com/article/SB10001424052702304821304577438750298427424.html "African Nations Begin to Feel Pinch," http://online.wsj.com/article/SB10001424052702304821304577438571874606282.html?mod=googlenews_wsj "Student Debt Rises by 8% As College Tuitions Climb," http://online.wsj.com/article/SB10001424052702303640104577438252890217584.html?mod=googlenews_wsj