Hello again
It's coming up to the holiday season and there's a lot of uncertainty in the air. Am I going to lose my job? Where should I keep my money? What's going to happen in the markets? Will the price of food keep on going up? Will this be a long and deep recession and how can I protect myself?
These are many of the questions that people are asking themselves right now. Over the holiday period, it is a good time to take stock of your situation. Even if your work or income is not endangered by the crisis, take a long hard look at your life. Are you doing what you really enjoy doing? If not, what are you passionate about? Look at your interests and your aptitudes. You may be interested in a field but not have the aptitude for it, or you may have the aptitude but not the interest. The key to success is finding something for which you have both the aptitude and the interest, but also feel passionate about.
Give yourself small goals at first - this will give you confidence to carry on to your bigger goals. Set yourself targets that only only just outside your comfort zone - don't make it too difficult or you will get disheartened and you won't carry on. For example, this year, I have written two books and I have never written a book before. If I had set myself the goal of writing two books, I probably would never have got started. However, I started out with a goal to write just three pages a day. Once I had momentum, I was easily able to extend that goal.
Take a bit of time out to meditate, to visualise and to get in touch with that which really excites you this holiday season.
Even during the very worst times of the last Great Depression in the 1930's there were still only 27% unemployed. That meant that 73% of the population still had work. I am not suggesting that it will get so bad, but remember, there were many people who thrived during the Depression. It was just a case of thinking differently, finding new opportunities and thinking outside the box.
For example, in Mumbai, there is a cafe called The Leopold,where eight people were killed a couple of weeks ago in the terrorist attacks, which is now packed out with customers. The cafe has become a shrine of defiance against terrorism. Tourists come to buy T-shirts emblazoned with the cafe's logo. Sales are up five times what they were before the attack.
We are all exposed to situations in life some of which we like and others which are most unpleasant. However, it is our attitude and reactions to them that will shape our destiny. In this global crisis, we can focus on all the alarming issues and terrible outcomes, but we can also look at it as an opportunity to come together and to start to create the kind of world we want to see. No longer can we trust our governments and many of our financial institutions - more and more fraudulent activities are being unearthed around the world - so it is up to each individual to take the bull by the horns and to create the kind of life you want for yourself, and also to come together with like-minded people.
It's certainly a time to reach out more - to become more independent, self-sufficient and to help one another.
This can be a very exciting time to be alive - so I hope that I have given you some things to think about over the festive season.
Wishing you all a very happy, healthy and peaceful New Year.
Thursday, December 18, 2008
Friday, November 28, 2008
The Global Financial Crisis - new events unfolding
Two years ago, Citigroup was America's largest bank. Last week, the government moved to guarantee close to $300 billion in troubled assets. But Citigroup is not the only crisis that must be dealt with - there are the three huge automakers: GM, Chrysler and Ford who are also at the Fed's begging bowl.
This is only the beginning. Factor in the terrorist attacks going on right now in Mumbai, demonstrations throughout Thailand, fighting in Afghanistan, earthquakes, floods and all kinds of natural distasters and you can see that the world faces extremely uncertain and worrying times. 2009 will be one of titanic shocks and changes to the world order culminating possibly in the demise of the US dollar.
What could this mean for the everyday person?
I think that you should seriously consider the possibility of a shutdown of the global banking system. I hope this will not happen, but it is best to be aware that it is a distinct possibility.
Let's examine my reasons for this statement:
- despite the US government's massive Citigroup bailout, it is going to be very difficult for the global banking system to survive the shock to confidence for very long
- even if insured depositors do not withdraw their funds from the banks, uninsured institutional investors are likely to run with their money thus threatening to bring the system down
- even if you have your money in a "safe bank" with full FDIC coverage (in the US), or a government guarantee in many other countries, you could still be adversely affected.
Indeed, if everyone decided to pull out their monies at once, how could the governments avoid going bankrupt - or at the very least, how will we escape hyperinflation?
Why is a banking meltdown possible?
Here is a statement made by the Managing Director of the IMF (International Monetary Fund) on October 11th 2008:
"Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown."
You cannot get much clearer than that for a severe warning of how serious this crisis really is.
At some point, governments around the world may have no other choice but to declare a global banking holiday - a shutdown of nearly every bank int he world, regardless of size, country, or financial condition.
What could happen in the banking holiday? In the past, there have been some financial shutdowns that eventually helped resolve the crisis. And there have been others that have made matters much worse. Often, savers are forced to leave their money on deposit, giving up a substantial portion of their interest income for many years. In other cases, the only way they can get their money back sooner is by accepting an immediate loss of principal. But no matter how it is resolved, when banks have made huge mistakes and suffered large losses, it's the multitude of savers that ultimately pay the biggest price. No one else has the money.
Many people are probably thinking:
"If the deposits are insured - why would anyone want to withdraw them?"
The reason is that most bank runs are not caused by the insured depositors - people on the street who invest their hard-earned savings into banks and financial institutions.
No, instead they are caused by the exodus of the large, uninsured institutions who are usually the first to run for cover at the earliest hint of trouble.
During the banking failures in the 1980's and 1990's, the story was similar: we rarely saw a run on the bank by individuals, rather it was the uninsured institutional investors - the banks, pension funds and ohters - that jumped ship long before most people even realised the ship was sinking.
I am telling you here and now, the ship is sinking!!!
All you savers out there, wake up and listen - because a banking holiday would hurt you the most. The first hardship is that you could be denied access to most or all of your money for an indefinite period.
What about the government agency guarantees you might ask?
Well, a large proportion of those guarantees, unfortunately would have to be suspended in order to give banking regulators the time they need to sort out the mess.
It is simply not reasonable to expect that governments will have the resources to immediately meet the demands of thousands of institutionsa nd millions of individuals if they all want their money back at roughly the same time.
They are likely to tell you that your money is still safely guaranteed, but you cannot have it right now.
Imagine how frustrating that would be! So I urge you to take at least six months living money out of the bank or financial institution and have it somewhere on hand. All banks are frightening right now and none of them can be trusted - so at least cover yourself by having six months cash on hand.
The other possibility is that by the time you do regain access to your money, you will suffer losses. The governments may offer you a couple of options. For example:
If you opt into their programme by leaving your funds on deposit at your bank for an extended period of time, earning below-market interest rates. The bank is then allowed to use the extra interest that you are forfeiting to recoup its losses over time - that is income that should have been yours.
You may be given an option to opt out of the government's programme and allowed to withdraw your funds immediately. However, you might have to accept a loss that approximately correponds to the actual losses in the bank's investment and loan portfolio.
Neither opting in nor opting out will be a good option for you.
You either suffer a loss of income or a loss of principal.
To avoid many of these risks, I recommend seriously considering the following:
1. Get some cash on hand
2. Buy some gold and silver one ounce coins
3. Buy some short-term US treasury securities (or treasury securities from your own country)
The reason I suggest treasury bonds is that even in the worst-case banking scenario, the Treasury will do whatever is necessary for you to get your money.
Watch this space for more recommendations as the crisis unfolds.
This is only the beginning. Factor in the terrorist attacks going on right now in Mumbai, demonstrations throughout Thailand, fighting in Afghanistan, earthquakes, floods and all kinds of natural distasters and you can see that the world faces extremely uncertain and worrying times. 2009 will be one of titanic shocks and changes to the world order culminating possibly in the demise of the US dollar.
What could this mean for the everyday person?
I think that you should seriously consider the possibility of a shutdown of the global banking system. I hope this will not happen, but it is best to be aware that it is a distinct possibility.
Let's examine my reasons for this statement:
- despite the US government's massive Citigroup bailout, it is going to be very difficult for the global banking system to survive the shock to confidence for very long
- even if insured depositors do not withdraw their funds from the banks, uninsured institutional investors are likely to run with their money thus threatening to bring the system down
- even if you have your money in a "safe bank" with full FDIC coverage (in the US), or a government guarantee in many other countries, you could still be adversely affected.
Indeed, if everyone decided to pull out their monies at once, how could the governments avoid going bankrupt - or at the very least, how will we escape hyperinflation?
Why is a banking meltdown possible?
Here is a statement made by the Managing Director of the IMF (International Monetary Fund) on October 11th 2008:
"Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown."
You cannot get much clearer than that for a severe warning of how serious this crisis really is.
At some point, governments around the world may have no other choice but to declare a global banking holiday - a shutdown of nearly every bank int he world, regardless of size, country, or financial condition.
What could happen in the banking holiday? In the past, there have been some financial shutdowns that eventually helped resolve the crisis. And there have been others that have made matters much worse. Often, savers are forced to leave their money on deposit, giving up a substantial portion of their interest income for many years. In other cases, the only way they can get their money back sooner is by accepting an immediate loss of principal. But no matter how it is resolved, when banks have made huge mistakes and suffered large losses, it's the multitude of savers that ultimately pay the biggest price. No one else has the money.
Many people are probably thinking:
"If the deposits are insured - why would anyone want to withdraw them?"
The reason is that most bank runs are not caused by the insured depositors - people on the street who invest their hard-earned savings into banks and financial institutions.
No, instead they are caused by the exodus of the large, uninsured institutions who are usually the first to run for cover at the earliest hint of trouble.
During the banking failures in the 1980's and 1990's, the story was similar: we rarely saw a run on the bank by individuals, rather it was the uninsured institutional investors - the banks, pension funds and ohters - that jumped ship long before most people even realised the ship was sinking.
I am telling you here and now, the ship is sinking!!!
All you savers out there, wake up and listen - because a banking holiday would hurt you the most. The first hardship is that you could be denied access to most or all of your money for an indefinite period.
What about the government agency guarantees you might ask?
Well, a large proportion of those guarantees, unfortunately would have to be suspended in order to give banking regulators the time they need to sort out the mess.
It is simply not reasonable to expect that governments will have the resources to immediately meet the demands of thousands of institutionsa nd millions of individuals if they all want their money back at roughly the same time.
They are likely to tell you that your money is still safely guaranteed, but you cannot have it right now.
Imagine how frustrating that would be! So I urge you to take at least six months living money out of the bank or financial institution and have it somewhere on hand. All banks are frightening right now and none of them can be trusted - so at least cover yourself by having six months cash on hand.
The other possibility is that by the time you do regain access to your money, you will suffer losses. The governments may offer you a couple of options. For example:
If you opt into their programme by leaving your funds on deposit at your bank for an extended period of time, earning below-market interest rates. The bank is then allowed to use the extra interest that you are forfeiting to recoup its losses over time - that is income that should have been yours.
You may be given an option to opt out of the government's programme and allowed to withdraw your funds immediately. However, you might have to accept a loss that approximately correponds to the actual losses in the bank's investment and loan portfolio.
Neither opting in nor opting out will be a good option for you.
You either suffer a loss of income or a loss of principal.
To avoid many of these risks, I recommend seriously considering the following:
1. Get some cash on hand
2. Buy some gold and silver one ounce coins
3. Buy some short-term US treasury securities (or treasury securities from your own country)
The reason I suggest treasury bonds is that even in the worst-case banking scenario, the Treasury will do whatever is necessary for you to get your money.
Watch this space for more recommendations as the crisis unfolds.
Monday, November 17, 2008
Solutions to the Crisis
So far, there seems to be little news about the G20 meeting in Washington this weekend. However, it's increasingly evident that governments cannot keep on pumping money into the system with little or no effect. There are always consequences to all actions.
We need to be thinking about new solutions. Once you have protected yourself best you can, then it's time to join in with the global movement for change. This is a time for participation from the masses and for us to start to take control of our lives. In my view, we need to move toward sustainability and community and then design a money system that takes us in that direction.
Let's look at this seriously. Information technologies increasingly allow us to attain very good economic growth without increases in employment. It is quite likely that jobs are not going to be there any more for the majority of the population. What does this mean???
This is potentially very exciting. No longer will you have to stick it out at a job that you do not enjoy, but there is the opportunity for you to be working and exchanging skills that you enjoy doing for services that you need. I would like to make a distinction between jobs and work. A job is what you do for a living. Work is what you do because you enjoy doing it. I expect that jobs will become increasingly obsolete, but there will still be an almost infinite amount of fascinating work to be done.
The way of the future could well be in creating local currencies. How would they work?
For example, in Italy you find people offering piano lessons and requesting lessons in French. Neither would pay in Euros. What's great about local currency is that when people create their own money, they do not build in a scarcity factor. They do not need to get the currency from somewhere else in order to have a means of making an exchange with a neighbour.
With all the redundancies and job losses happening round the world - today Citigroup announced it was cutting another 26,000 jobs, making the total loss so far a massive 75,000. We have to start to find other ways to create what we need. For example, there are lots of people who enjoy gardening, but who cannot make a living from it in the competitive world. If a gardener is unemployed, and I am unemployed, in the normal economy we might both starve. However, with complementary currencies, he could grow my vegetables, which I pay for in local currency earned by providing piano lessons to someone else. By using a local currency you create greater local sustainability.
One of the biggest issues that humanity is facing today is sustainability and the inequalities and breakdown in community. In many towns and cities, people do not even know their close neighbours. These issues can be addressed by creating currency systems that will enhance our communities and our sustainability.
Exciting times ahead!
We need to be thinking about new solutions. Once you have protected yourself best you can, then it's time to join in with the global movement for change. This is a time for participation from the masses and for us to start to take control of our lives. In my view, we need to move toward sustainability and community and then design a money system that takes us in that direction.
Let's look at this seriously. Information technologies increasingly allow us to attain very good economic growth without increases in employment. It is quite likely that jobs are not going to be there any more for the majority of the population. What does this mean???
This is potentially very exciting. No longer will you have to stick it out at a job that you do not enjoy, but there is the opportunity for you to be working and exchanging skills that you enjoy doing for services that you need. I would like to make a distinction between jobs and work. A job is what you do for a living. Work is what you do because you enjoy doing it. I expect that jobs will become increasingly obsolete, but there will still be an almost infinite amount of fascinating work to be done.
The way of the future could well be in creating local currencies. How would they work?
For example, in Italy you find people offering piano lessons and requesting lessons in French. Neither would pay in Euros. What's great about local currency is that when people create their own money, they do not build in a scarcity factor. They do not need to get the currency from somewhere else in order to have a means of making an exchange with a neighbour.
With all the redundancies and job losses happening round the world - today Citigroup announced it was cutting another 26,000 jobs, making the total loss so far a massive 75,000. We have to start to find other ways to create what we need. For example, there are lots of people who enjoy gardening, but who cannot make a living from it in the competitive world. If a gardener is unemployed, and I am unemployed, in the normal economy we might both starve. However, with complementary currencies, he could grow my vegetables, which I pay for in local currency earned by providing piano lessons to someone else. By using a local currency you create greater local sustainability.
One of the biggest issues that humanity is facing today is sustainability and the inequalities and breakdown in community. In many towns and cities, people do not even know their close neighbours. These issues can be addressed by creating currency systems that will enhance our communities and our sustainability.
Exciting times ahead!
Saturday, November 8, 2008
The Good News
The Spirit of Christmas
Whilst its true that the global economic crisis will affect us all in one way or another, there is another aspect to this situation that has a really positive side.
Yes, we are going to have to pull in our belts, cut back on excessive, unnecessary spending, stop taking out debts that we might not be able to repay and generally find ways to make the best use of the resources we already have.
However, where we can still improve is in the reaching out to others within our community on a regular basis. The spirit of Christmas is all about giving - about generosity of spirit. This is the time of year when people around the world do give of their time and energy to help out at the homeless shelter, play music in the rest homes to bring Christmas cheer and in countless different ways consciously attempt to bring light and love into those who most need it.
We are facing a serious economic crisis and as Napoleon Hill said: “In every crisis are the seeds of opportunity.” We now have many opportunities in which to change our world and it starts on our own doorstep. With the energy crisis, we will be forced to work together more, to create sustainable communities where our food is locally grown and not shipped in from hundreds, even thousands of miles away. This can be such a wonderful blessing, to quote Charles Dickens: this period could well be “the best of times and the worst of times.” Many are focused only on the “worst of times” and whilst it is important to be aware of what is happening and of the likely consequences and to take out adequate protection for you and your family, it is vital to see that we are coming into a whole new age.
This Christmas could be the start of something really magical - where we think about the world that we wish to create. Where we are not only doing charitable works over the Christmas period, but where we are literally creating a whole new caring, hospitable and hopeful world for ourselves and our children.
It is a time to celebrate and also to think about the world that we can now create together.
Think of a world where our old people are given free food and utilities, a world where we take care of the earth not by fighting nature with chemicals, but working with it. A world where there is more friendship and more love. We have only one world and it is for all of us. You don’t actually need that much to be happy. Think this Christmas of sharing, cooperation, solidarity and working together for a better world.
Don’t miss Barbara’s latest book coming out in a couple of weeks’ time: “Handbook for Surviving the Global Financial Crisis.” To order your copy or for further information contact:
www.financemoneybusiness.com
bg@financemoneybusiness.com
Whilst its true that the global economic crisis will affect us all in one way or another, there is another aspect to this situation that has a really positive side.
Yes, we are going to have to pull in our belts, cut back on excessive, unnecessary spending, stop taking out debts that we might not be able to repay and generally find ways to make the best use of the resources we already have.
However, where we can still improve is in the reaching out to others within our community on a regular basis. The spirit of Christmas is all about giving - about generosity of spirit. This is the time of year when people around the world do give of their time and energy to help out at the homeless shelter, play music in the rest homes to bring Christmas cheer and in countless different ways consciously attempt to bring light and love into those who most need it.
We are facing a serious economic crisis and as Napoleon Hill said: “In every crisis are the seeds of opportunity.” We now have many opportunities in which to change our world and it starts on our own doorstep. With the energy crisis, we will be forced to work together more, to create sustainable communities where our food is locally grown and not shipped in from hundreds, even thousands of miles away. This can be such a wonderful blessing, to quote Charles Dickens: this period could well be “the best of times and the worst of times.” Many are focused only on the “worst of times” and whilst it is important to be aware of what is happening and of the likely consequences and to take out adequate protection for you and your family, it is vital to see that we are coming into a whole new age.
This Christmas could be the start of something really magical - where we think about the world that we wish to create. Where we are not only doing charitable works over the Christmas period, but where we are literally creating a whole new caring, hospitable and hopeful world for ourselves and our children.
It is a time to celebrate and also to think about the world that we can now create together.
Think of a world where our old people are given free food and utilities, a world where we take care of the earth not by fighting nature with chemicals, but working with it. A world where there is more friendship and more love. We have only one world and it is for all of us. You don’t actually need that much to be happy. Think this Christmas of sharing, cooperation, solidarity and working together for a better world.
Don’t miss Barbara’s latest book coming out in a couple of weeks’ time: “Handbook for Surviving the Global Financial Crisis.” To order your copy or for further information contact:
www.financemoneybusiness.com
bg@financemoneybusiness.com
Friday, October 31, 2008
Massive Changes Ahead - Economic, Financial, Social
The world is changing rapidly and our lives are not going to be the same again. I am sure that many of you can both see and feel the dramatic events that are unfolding. Uncertainty is huge and this causes fear and panic in the mass consciousness. Through all this it is vital to stay as calm as you can and to look at your options.
The G20 nations are meeting in a couple of weeks' time to discuss the future of the world economy. This is going to be a crucial meeting and likely to affect our whole future. Why?
It's obvious that all the billions of dollars, euros and other currencies that have been injected into the financial systems has had little if any effect. Stock markets are plummeting, people are losing their jobs, their homes, their wealth, their security.
What are the possible outcomes of this meeting?
It has been dubbed as the Bretton Woods Part 2 which could mean that there will be a revaluation of all the currencies and in some way tie them back to a Gold Standard. There is a possibility that gold will have to come back into the system as a fractional reserve asset. The US will have to come up with a huge quantity of gold in order to back the currency and there is a strong possibility that sooner or later they will resort to confiscation of gold. Who knows which other countries will follow suit and at what price people will be able to redeem their gold when they sell.
This is very frightening for the average person who has bought gold maybe as insurance or protection of their fast-eroding wealth.
The answer right now is that no one really knows what will happen. I would expect that over the next three to four months, everything will be extremely volatile and that the uncertainty and panic will continue to escalate. We have not seen the worst of this situation yet. There is much more to come out and we are at the start. This is not to be pessimistic, but to make you aware that you do need to think about protection in every possible way: your home, your finances, your possessions, your job, your work...
At the end of all this upheaval we will hopefully have a much better and more honest world, however, these will be hard times and the more prepared you are, the better.
My suggestion right now is that you stay as aware and awake as possible about what is happening around the world. If you are unable to do this, make sure you have a professional who is helping you through it. For example, should you sell your house right now, should you buy some land, which currencies should you invest in, should you try to buy some physical gold, should you sell your gold before the governments confiscate it?????????
These are huge questions and you either need to keep abreast of the changes moment by moment yourself, or get some help. It is very hard right now to just preserve the wealth you have, never mind grow it. I hate to see people lose their hard-earned money and there are ways to stay afloat, but you do have to keep on changing and adjusting depending on what happens around the world both politically and economically.
You have to be flexible and you have to devise new ways to stay on top of the situation.
My recommendations:
Start making a plan for the future but be flexible and ready to change it should circumstances dictate
Have some cash on hand - at least 3 months
Have an alternative means of transport: bike, moped, scooter
Start thinking about alternative ways of creating income
Store canned goods, dried goods, toiletries, paper goods
Get out of debt totally
Watch world events with an eagle eye and think about the consequences of new policies and regulations - how will they affect you.
Start thinking about being as self-sufficient as possible
Make contact with people around you - reach out to others
These are challenging times, but they can be very positive in creating a much better world where we waste less, where we have a simpler life, where we reach out to others and help the less fortunate in our midst.
The G20 nations are meeting in a couple of weeks' time to discuss the future of the world economy. This is going to be a crucial meeting and likely to affect our whole future. Why?
It's obvious that all the billions of dollars, euros and other currencies that have been injected into the financial systems has had little if any effect. Stock markets are plummeting, people are losing their jobs, their homes, their wealth, their security.
What are the possible outcomes of this meeting?
It has been dubbed as the Bretton Woods Part 2 which could mean that there will be a revaluation of all the currencies and in some way tie them back to a Gold Standard. There is a possibility that gold will have to come back into the system as a fractional reserve asset. The US will have to come up with a huge quantity of gold in order to back the currency and there is a strong possibility that sooner or later they will resort to confiscation of gold. Who knows which other countries will follow suit and at what price people will be able to redeem their gold when they sell.
This is very frightening for the average person who has bought gold maybe as insurance or protection of their fast-eroding wealth.
The answer right now is that no one really knows what will happen. I would expect that over the next three to four months, everything will be extremely volatile and that the uncertainty and panic will continue to escalate. We have not seen the worst of this situation yet. There is much more to come out and we are at the start. This is not to be pessimistic, but to make you aware that you do need to think about protection in every possible way: your home, your finances, your possessions, your job, your work...
At the end of all this upheaval we will hopefully have a much better and more honest world, however, these will be hard times and the more prepared you are, the better.
My suggestion right now is that you stay as aware and awake as possible about what is happening around the world. If you are unable to do this, make sure you have a professional who is helping you through it. For example, should you sell your house right now, should you buy some land, which currencies should you invest in, should you try to buy some physical gold, should you sell your gold before the governments confiscate it?????????
These are huge questions and you either need to keep abreast of the changes moment by moment yourself, or get some help. It is very hard right now to just preserve the wealth you have, never mind grow it. I hate to see people lose their hard-earned money and there are ways to stay afloat, but you do have to keep on changing and adjusting depending on what happens around the world both politically and economically.
You have to be flexible and you have to devise new ways to stay on top of the situation.
My recommendations:
Start making a plan for the future but be flexible and ready to change it should circumstances dictate
Have some cash on hand - at least 3 months
Have an alternative means of transport: bike, moped, scooter
Start thinking about alternative ways of creating income
Store canned goods, dried goods, toiletries, paper goods
Get out of debt totally
Watch world events with an eagle eye and think about the consequences of new policies and regulations - how will they affect you.
Start thinking about being as self-sufficient as possible
Make contact with people around you - reach out to others
These are challenging times, but they can be very positive in creating a much better world where we waste less, where we have a simpler life, where we reach out to others and help the less fortunate in our midst.
Saturday, October 25, 2008
Financial Crisis - more tips
I am continually surprised at the lack of concern generally about the gravity of the financial crisis that we are facing. Through these blogs, my website and my newsletters I am doing my best to raise the general consciousness so that as many people as possible can protect themselves and their hard-earned assets.
We are in the early stages of a massive financial crisis. There is still a little time left to take some action. I am not a doomster, and for many years, when I ran a very successful property investment company in the UK, I was one of those who was optimistic and invested very profitably between 2001-2005. During that time, the press and media reported frequently of an upcoming recession or depression, but nothing happened. However, in late 2005, I started to notice some cracks in the system and I could see that the market was changing.
It was becoming harder to sell properties, it was becoming more difficult to deal with tenants. The writing was on the wall, but only faintly. When I started to sell up my portfolio of properties in 2005-06, many colleagues and clients were astonished that I was getting out.
However, by summer of 2006, I could see that the property and investment business was not going to be fruitful for me for the foreseeable future and I decided to move to New Zealand.
It soon became clear to me that the NZ market was over-inflated and I chose not to go into the property business here either. Instead I focused on learning all I could about the stock markets, especially in the US, the currency markets and the commodity markets.
I did not like what I was seeing.
Bit by bit I could see that a major disaster was impending.
That disaster is only just beginning.
Here are my tips that you might wish to consider.
Time is running out.
Even if you think there is a very slight risk of systemic bank failure, you may wish to look at these actions as taking out insurance. Just as you have fire insurance on your property and the likelihood is a very small one that your house will burn down, you still take it out.
Look at these actions as insurance against the worst happening.
After all, isn't it better to PREPARE FOR THE WORST AND HOPE FOR THE BEST.
1. Get out of debt. Any kind of debt. Pay off those credit cards and each month pay off any balance you incur.
2. If you have a mortgage on the house you are living in, try to negotiate a better deal with the bank. Interest rates are coming down and the bank would much rather you kept the loan than defaulted on it. So there is negotiating room. Maybe more than you think. Be prepared to talk to your bank. They will be listening in ways that they have not been open to before.
Each time I go into a bank here in NZ, I can see that they are cutting their staff. In fact, one of them has done away with the reception and welcome area altogether. These are insidious signs and if you are aware, you will see that times are changing rapidly. Sooner or later, you will know someone who has lost money through a failing bank, or who has funds frozen for an indefinite amount of time and cannot access their money. How much closer to home does it have to get before YOU TAKE THIS SERIOUSLY?????
So, back to the debt on your home. Renegotiate a better rate. Work on it. Talk to different banks. Discuss the fees. Refuse to pay them. You will be surprised at how amenable they will be eventually. You just need to be very firm and not take no for an answer. It can be done.
Keep an eagle eye watch on the interest rates and check out what each bank is going. Be a "rate tart" and go from bank to bank. See what you can negotiate.
If you are on a fixed rate, make sure you are aware exactly when the fixed rate is ending, and be ready to go onto a floating rate. That will be much more to your benefit at the moment.
3. Have some cash on hand. Preferably at least 3 MONTHS LIVING EXPENSES. No one knows which banks will be all right and which ones will run into trouble. Think of how difficult it will be if you cannot get to your funds and how frustrated and angry you will feel if you do not have any cash that you can easily access. You really have nothing to lose by doing this - other than maybe a few dollars in interest, but why not consider this an insurance premium that you are paying in order to protect yourself.
It is going to get much much worse.
4. Inflation is inevitable as the governments take on more and more debt, print more and more money out of thin air, and you are going to have to work harder and harder just to stay afloat. One way to protect yourself from inflation to a degree is to stock up now on dried goods, tinned goods, toiletries, cleaning supplies. Anything that will keep for a long time. Stock up and store it. Another reason is that there could well be a disruption to the distribution chain and supermarkets may not have products to sell and if there is a panic, you will at least have the basics.
5. Buy some gold and silver coins before they are unobtainable altogether. There is a widespread purchasing going on worldwide of these commodities and even now many places are reporting that they have no reserves or that there is at least a 3 month delivery time before you can take possession of your coins.
I do hope that some of these points will resonate inside you and that you will take steps to protect yourself.
Obviously each person has a very different financial situation, attitude to risk and ultimate goals. However, these are a few straightforward tips that can be applicable to everyone.
If you need more specialised advice, please do get in touch with me.
My websites:
www.financemoneybusiness.com
www.yourastrologysigns.com
Barbara Goldsmith, MBA, CeFA, CeMAP, Cergi.
Qualified Financial Adviser, Business Consultant, Economist.
We are in the early stages of a massive financial crisis. There is still a little time left to take some action. I am not a doomster, and for many years, when I ran a very successful property investment company in the UK, I was one of those who was optimistic and invested very profitably between 2001-2005. During that time, the press and media reported frequently of an upcoming recession or depression, but nothing happened. However, in late 2005, I started to notice some cracks in the system and I could see that the market was changing.
It was becoming harder to sell properties, it was becoming more difficult to deal with tenants. The writing was on the wall, but only faintly. When I started to sell up my portfolio of properties in 2005-06, many colleagues and clients were astonished that I was getting out.
However, by summer of 2006, I could see that the property and investment business was not going to be fruitful for me for the foreseeable future and I decided to move to New Zealand.
It soon became clear to me that the NZ market was over-inflated and I chose not to go into the property business here either. Instead I focused on learning all I could about the stock markets, especially in the US, the currency markets and the commodity markets.
I did not like what I was seeing.
Bit by bit I could see that a major disaster was impending.
That disaster is only just beginning.
Here are my tips that you might wish to consider.
Time is running out.
Even if you think there is a very slight risk of systemic bank failure, you may wish to look at these actions as taking out insurance. Just as you have fire insurance on your property and the likelihood is a very small one that your house will burn down, you still take it out.
Look at these actions as insurance against the worst happening.
After all, isn't it better to PREPARE FOR THE WORST AND HOPE FOR THE BEST.
1. Get out of debt. Any kind of debt. Pay off those credit cards and each month pay off any balance you incur.
2. If you have a mortgage on the house you are living in, try to negotiate a better deal with the bank. Interest rates are coming down and the bank would much rather you kept the loan than defaulted on it. So there is negotiating room. Maybe more than you think. Be prepared to talk to your bank. They will be listening in ways that they have not been open to before.
Each time I go into a bank here in NZ, I can see that they are cutting their staff. In fact, one of them has done away with the reception and welcome area altogether. These are insidious signs and if you are aware, you will see that times are changing rapidly. Sooner or later, you will know someone who has lost money through a failing bank, or who has funds frozen for an indefinite amount of time and cannot access their money. How much closer to home does it have to get before YOU TAKE THIS SERIOUSLY?????
So, back to the debt on your home. Renegotiate a better rate. Work on it. Talk to different banks. Discuss the fees. Refuse to pay them. You will be surprised at how amenable they will be eventually. You just need to be very firm and not take no for an answer. It can be done.
Keep an eagle eye watch on the interest rates and check out what each bank is going. Be a "rate tart" and go from bank to bank. See what you can negotiate.
If you are on a fixed rate, make sure you are aware exactly when the fixed rate is ending, and be ready to go onto a floating rate. That will be much more to your benefit at the moment.
3. Have some cash on hand. Preferably at least 3 MONTHS LIVING EXPENSES. No one knows which banks will be all right and which ones will run into trouble. Think of how difficult it will be if you cannot get to your funds and how frustrated and angry you will feel if you do not have any cash that you can easily access. You really have nothing to lose by doing this - other than maybe a few dollars in interest, but why not consider this an insurance premium that you are paying in order to protect yourself.
It is going to get much much worse.
4. Inflation is inevitable as the governments take on more and more debt, print more and more money out of thin air, and you are going to have to work harder and harder just to stay afloat. One way to protect yourself from inflation to a degree is to stock up now on dried goods, tinned goods, toiletries, cleaning supplies. Anything that will keep for a long time. Stock up and store it. Another reason is that there could well be a disruption to the distribution chain and supermarkets may not have products to sell and if there is a panic, you will at least have the basics.
5. Buy some gold and silver coins before they are unobtainable altogether. There is a widespread purchasing going on worldwide of these commodities and even now many places are reporting that they have no reserves or that there is at least a 3 month delivery time before you can take possession of your coins.
I do hope that some of these points will resonate inside you and that you will take steps to protect yourself.
Obviously each person has a very different financial situation, attitude to risk and ultimate goals. However, these are a few straightforward tips that can be applicable to everyone.
If you need more specialised advice, please do get in touch with me.
My websites:
www.financemoneybusiness.com
www.yourastrologysigns.com
Barbara Goldsmith, MBA, CeFA, CeMAP, Cergi.
Qualified Financial Adviser, Business Consultant, Economist.
Thursday, October 9, 2008
Financial Turmoil in Markets
Financial Crisis –It’s worldwide.
No matter where you live, you will be affected.
Ireland and Greece move in early and guarantee all bank deposits
Germany’s govt has to rescue its fourth largest bank.
Belgium and Iceland govts are bailing out their major banks.Australia drops interest rates by 1% and stuns the market.What next???
Maybe you are sitting calmly thinking that this crisis will not affect you?I hope not.
This is a worldwide situation and in one way or another, nearly everyone will be affected: Job losses, cutbacks, redundancies,
Pension plans dropping in value
Property prices plummeting
If you have investment property you may find you cannot let it easily if at all
Uncertainty in the banks – maybe a freeze on your hard-earned monies
Inflation – meaning that the value of your money is decreasing – NZ already at 5% at the moment and going up.Why should we all suffer due to the greed and irresponsible lending of the banks worldwide?? It seems grossly unfair, but that is the situation we find ourselves in. Is it similar to the Great Depression of the 1930’s? In some ways yes and not in others. Well, here the banks are more centralised and can communicate with one another and can pump liquidity into the system. However, there is great distrust between the banks and in order to keep the system alive, they have to be able to lend to one another, especially in the short term markets.
Governments are buying up tons of bad debts that they cannot hope to ever recover – what is going to happen to all this money? How much information has yet to come out? Probably a lot more.
The European banking system is much more secretive than other parts of the world and so likely to produce some startling news as time goes on. The US is still trying to be optimistic in the face of an upcoming election – yet once the dust settles and the new president is inaugurated – then the true situation will be revealed. There are still rose-tinted glasses on despite the heavy drops in stock markets worldwide. There is still manipulation of the gold price keeping it as low as possible – however, panic is setting in, and sooner or later, the price of gold will skyrocket.
What on earth can you do? I do not mean to be a doom-monger – that is not my style – however, I do believe in protecting myself, my loved ones and in alerting the rest of the world to the current unfolding situation and giving ways of insuring yourself against the worst scenario.
Do not take on any debt. If you already have a mortgage, try to get a better rate as interest rates start to fall. If you are on a fixed rate, make sure you check the date the fixed period ends and be ready to transfer onto a floating rate. This is likely to reduce your monthly payments.If possible, pay off larger amounts so that you redeem the debt earlier.
Pay off your credit cards. Do not use them if you can possibly help it. If you have several cards, just keep one and get rid of the rest.
Keep 3-6 months cash on hand. Just in case your money is frozen for a period in the bank, at least you will have enough money to live on.
Stock up on dried goods, canned products and toiletries. Prices will continue to rise, and these goods will last – so at least you will have bought them at more reasonable prices.
Buy some gold or silver. Do not keep it in the bank. All banks are scary at the moment. It is hard to know which one is going to be all right and which one will not be. Also, although governments are guaranteeing the monies (excluding NZ at the moment) – be prepared to have something that will insure your money should all else fail. Gold and silver are your insurance in case of systemic failure. Buy the one ounce coins in the gold.
Sit tight. Do not invest in property at this time. Wait it out. These are turbulent times ahead – and although there are high-risk takers out there who will know how to invest and ride out the storms, for the average person, this is too risky and will have you up at night worrying about your finances. Do nothing. Wait.
Rent rather than buy. If you do not own a property at the moment, do not buy. Rent and negotiate on the rental. There is an over-supply of rental properties out there at the moment and you should be able to get a good deal – maybe with some extras thrown in e.g. garden maintenance, cleaning etc.
Investing If you are a very high risk taker and have spare cash, then you may want to invest in the stock markets as they are plummeting. However, this is not for the faint hearted and should only be considered if you have a large sum of spare cash. This is only an option once you have NO DEBT, own your own property, have at least 6 months cash on hand, have some gold and commodities. Then you might consider this option. It is vital to study the markets and to be on top of your investments on a day to day basis.
Remove the intermediaries -Wherever possible remove intermediaries between you and your money and assets. It’s very hard to know who is sound and who is not, so best for you to take control as much as you can. Then you will have no one to blame.
Pensions - If you are near to your final pension and you can draw the money out at a small discount now, then consider this option very seriously. Stock markets worldwide are in for severe volatility for the foreseeable future. If you are able to get a lump sum out and you are near to retirement, this could be preferable to watching your investments fall and then receiving hardly anything for all your payments. If you are not near to retirement e.g. 5 years plus away, then hold tight and wait it out.
Foreign currency-If you have spare cash and have already done the above points, then you may want to consider diversifying your risk into different currencies. This is something that you will have to watch on a daily basis, however, and you cannot leave it to your financial consultant or bank. Minute by minute the exchange rates change, and you need to be abreast of the changes.
Also it is important to know what your options are: If you are exchanging cash, you will be charged a premium at the bank. For example, the general rate for the Yen to the NZD might be 0.63, but the bank will only give you 0.67 for your Yen.However, if you have a foreign exchange account with your bank, you may find that they will give you a better rate even if you have to pay a 1% handling charge. For example let’s say they will give you 0.65 for your Yen.So 800,000 Yen at 0.65 is NZD $12307 – plus their 1% commission of 8000 Yen at 0.65 is NZD$123.00 - so your total is NZD$12184.00However, if you exchange your Yen at the Forex counter at the bank you will get 0.67 which amounts to NZD$11940.00So, in knowing about this option, and checking it out fully, you would have gained $243.00.
Check out all your options with Forex – it can be a minefield, but it is worth taking the time to do this and you will make money. If you are unsure, you may want to consult an independent financial adviser who specialises in this field. This is a risky option generally, and I reiterate – ONLY if you have no debt and have some spare cash.
If you would like some impartial advice about your finances during these volatile times, please contact me at:
http://www.financemoneybusiness.com/
bg@financemoneybusiness.com
No matter where you live, you will be affected.
Ireland and Greece move in early and guarantee all bank deposits
Germany’s govt has to rescue its fourth largest bank.
Belgium and Iceland govts are bailing out their major banks.Australia drops interest rates by 1% and stuns the market.What next???
Maybe you are sitting calmly thinking that this crisis will not affect you?I hope not.
This is a worldwide situation and in one way or another, nearly everyone will be affected: Job losses, cutbacks, redundancies,
Pension plans dropping in value
Property prices plummeting
If you have investment property you may find you cannot let it easily if at all
Uncertainty in the banks – maybe a freeze on your hard-earned monies
Inflation – meaning that the value of your money is decreasing – NZ already at 5% at the moment and going up.Why should we all suffer due to the greed and irresponsible lending of the banks worldwide?? It seems grossly unfair, but that is the situation we find ourselves in. Is it similar to the Great Depression of the 1930’s? In some ways yes and not in others. Well, here the banks are more centralised and can communicate with one another and can pump liquidity into the system. However, there is great distrust between the banks and in order to keep the system alive, they have to be able to lend to one another, especially in the short term markets.
Governments are buying up tons of bad debts that they cannot hope to ever recover – what is going to happen to all this money? How much information has yet to come out? Probably a lot more.
The European banking system is much more secretive than other parts of the world and so likely to produce some startling news as time goes on. The US is still trying to be optimistic in the face of an upcoming election – yet once the dust settles and the new president is inaugurated – then the true situation will be revealed. There are still rose-tinted glasses on despite the heavy drops in stock markets worldwide. There is still manipulation of the gold price keeping it as low as possible – however, panic is setting in, and sooner or later, the price of gold will skyrocket.
What on earth can you do? I do not mean to be a doom-monger – that is not my style – however, I do believe in protecting myself, my loved ones and in alerting the rest of the world to the current unfolding situation and giving ways of insuring yourself against the worst scenario.
Do not take on any debt. If you already have a mortgage, try to get a better rate as interest rates start to fall. If you are on a fixed rate, make sure you check the date the fixed period ends and be ready to transfer onto a floating rate. This is likely to reduce your monthly payments.If possible, pay off larger amounts so that you redeem the debt earlier.
Pay off your credit cards. Do not use them if you can possibly help it. If you have several cards, just keep one and get rid of the rest.
Keep 3-6 months cash on hand. Just in case your money is frozen for a period in the bank, at least you will have enough money to live on.
Stock up on dried goods, canned products and toiletries. Prices will continue to rise, and these goods will last – so at least you will have bought them at more reasonable prices.
Buy some gold or silver. Do not keep it in the bank. All banks are scary at the moment. It is hard to know which one is going to be all right and which one will not be. Also, although governments are guaranteeing the monies (excluding NZ at the moment) – be prepared to have something that will insure your money should all else fail. Gold and silver are your insurance in case of systemic failure. Buy the one ounce coins in the gold.
Sit tight. Do not invest in property at this time. Wait it out. These are turbulent times ahead – and although there are high-risk takers out there who will know how to invest and ride out the storms, for the average person, this is too risky and will have you up at night worrying about your finances. Do nothing. Wait.
Rent rather than buy. If you do not own a property at the moment, do not buy. Rent and negotiate on the rental. There is an over-supply of rental properties out there at the moment and you should be able to get a good deal – maybe with some extras thrown in e.g. garden maintenance, cleaning etc.
Investing If you are a very high risk taker and have spare cash, then you may want to invest in the stock markets as they are plummeting. However, this is not for the faint hearted and should only be considered if you have a large sum of spare cash. This is only an option once you have NO DEBT, own your own property, have at least 6 months cash on hand, have some gold and commodities. Then you might consider this option. It is vital to study the markets and to be on top of your investments on a day to day basis.
Remove the intermediaries -Wherever possible remove intermediaries between you and your money and assets. It’s very hard to know who is sound and who is not, so best for you to take control as much as you can. Then you will have no one to blame.
Pensions - If you are near to your final pension and you can draw the money out at a small discount now, then consider this option very seriously. Stock markets worldwide are in for severe volatility for the foreseeable future. If you are able to get a lump sum out and you are near to retirement, this could be preferable to watching your investments fall and then receiving hardly anything for all your payments. If you are not near to retirement e.g. 5 years plus away, then hold tight and wait it out.
Foreign currency-If you have spare cash and have already done the above points, then you may want to consider diversifying your risk into different currencies. This is something that you will have to watch on a daily basis, however, and you cannot leave it to your financial consultant or bank. Minute by minute the exchange rates change, and you need to be abreast of the changes.
Also it is important to know what your options are: If you are exchanging cash, you will be charged a premium at the bank. For example, the general rate for the Yen to the NZD might be 0.63, but the bank will only give you 0.67 for your Yen.However, if you have a foreign exchange account with your bank, you may find that they will give you a better rate even if you have to pay a 1% handling charge. For example let’s say they will give you 0.65 for your Yen.So 800,000 Yen at 0.65 is NZD $12307 – plus their 1% commission of 8000 Yen at 0.65 is NZD$123.00 - so your total is NZD$12184.00However, if you exchange your Yen at the Forex counter at the bank you will get 0.67 which amounts to NZD$11940.00So, in knowing about this option, and checking it out fully, you would have gained $243.00.
Check out all your options with Forex – it can be a minefield, but it is worth taking the time to do this and you will make money. If you are unsure, you may want to consult an independent financial adviser who specialises in this field. This is a risky option generally, and I reiterate – ONLY if you have no debt and have some spare cash.
If you would like some impartial advice about your finances during these volatile times, please contact me at:
http://www.financemoneybusiness.com/
bg@financemoneybusiness.com
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