and for the downside of deflation....

[MushCreek]

I just posted in the General area about how lumber prices are dropping, which seems like a good thing, at first blush. And for us, and other potential builders, it is a good thing, sorta.

There's a new and ugly trend where I work, though, and I think it might be the first signs of industry reacting to deflationary trends. Obviously, if prices go down, companies cannot keep paying the same salaries. So people are starting to have their wages re-negotiated downward. I've read of numerous instances on another forum I frequent. The wonderful (major sarcasm) place I work seems to be taking another tack, though- firing long-term people that have worked their way up to a reasonable wage, and replacing them with new hires for less money. We have profit sharing, but you are not eligible until a year from January, so they skip having to pay it for the rest of this year, and all of next year for that individual.

I honestly thought I was going to get the sack this last Friday, since others have been falling regularly. I told the wife that if I got canned, the homestead in SC is going to get moved up to NOW. I still have my job, though, and got a good review, and a raise! Still, I don't trust them, and will live out the rest of my time there as if every week were my last. My secret weapon is that I'm leaving in March to go build my house, so the worst that will happen is that I'll get an early start, and have a little less money in my budget.

As a discussion- What do you folks see coming at us if de-flation continues? I've read that it's bad, really bad for many things. I have my property, and I'm sitting on plenty of cash, so I think we'll be all right for a while. We may have trouble selling our old house, though. I'd be curious to hear what our financial wizardfs on here think about it. Any thoughts?

[considerations]

You'll have to keep waiting if you want a wizard's answer.. I wish I knew where this was all going as well.   

I think for us ignoramuses we just have to keep offloading all the debt we can, continue developing a network of trusted friends that have necessary skills we will likely never acquire, and self assessing to see what we can learn/acquire that will serve as a popular bartering item in the event that "things" get worse, as in really bad.   

Then, be ready with the requisite celebration supplies should the boom times reappear! 

Either that or go back to college and join the Wall Streeters....they never seem to lose out.

[glenn kangiser]

No wizard here either but I am proceeding with caution and trying to be prepared for whatever comes along.  Worked the first half of the year but no company jobs in sight.  Got a few fill in jobs of my own to keep going for a while.  Put in the winter garden, fattening the steer and hanging on.

Enough fuel and food and other necessities for at least a year - but likely enough for several years.

If they can keep it together I will participate.  If they can't I'm OK.

[Onkeludo2]

In my case I am riding this job in Iraq out as long as I can.  There is work for me back in the 'States but it means continuing to be on the road...what is the point in coming back if I still do not get to live in my home.  We are focusing on stock-piling liquid assets so that when I do come back, I can wait on a job that has me home every weekend at the least.  We have even given up (short term) on the idea of moving to a place where both my wife and I can reasonably expect to find work after she graduates because the short-term costs outweigh the 5-year-plan gains.

I will say that looking at the economic indicators from a distance, it appears that we have finally started the recovery.  The first step is stopping the slide and stabilizing which it looks like the US economy has done.  Real growth in GDP and jobs has not happenned but will likely follow just not at the pace anyone had hoped for.  Overall, long term deflation is unlikely but we are in the firm grip of stagnation.

[peternap]

No wizard here either but I'm sticking with my meltdown prediction...In fact, I think it's already happened and we're seeing the pieces crumble.

I agree with Glenn. Be ready for whatever comes.
Don't get in a panic and move to a commune, just become more self sufficient. That doesn't involve radical measures, just common sense.

I'm adding onto my barn/house now. This time with straw bale construction for super insulation in the winter.

[Windpower]

I have to agree with Glen and Peter


The worst is yet to come

They are desperately trying to pump the economy with make work contruction on roads etc (I have hit detours every day here near Chicago -- never seen it this bad

but that is just till the elections -- then the stuff is really going to hit the ventilators


This guy has been  making alot of sense for at least the last couple years I have been reading it


http://urbansurvival.com/week.htm

new every day at 8:00 AM

free too (but his peoplenomics reports cost $40 per year )

[peternap]

This is an interesting article. Maybe a little to the right and dramatic, but interesting.

http://www.infowars.com/the-ecstasy-of-empire/

[glenn kangiser]

I agree with you guys - the stabilization right now is just temporary.  When they run out of excuses and resources to make work I think it will be back downhill.

[muldoon]

I don't know what the future holds for us but I do think it is important the take a careful look around and absorb where we are today.   It is very common for the world to change in small gradual shifts, and for us to take them without fully realizing the impact.  Pretty soon you stop and look around and just go wow, how did we get this far?

Here is an article that I found thought provoking, http://www.activistpost.com/2010/08/10-signs-us-is-becoming-third-world.html
Basically it lies out some facts that compare how the US has slipped and is being ran much like any other tinpot third world nation.  From decimation of middle class, to outright corruption and fascism in politics, to militarization of the police forces to government censored media.  These are all inexorably linked to the financial collapse, just as these things have played out in other countries as they have had economic and credit market failures. 

As for what the future holds, I dont know.  I still hold firm the belief that we are in roughly year 3 or so of a 10 year event.  In many ways the big pieces have yet to fall.  States and munis are the next big trouble spot, and the pension system is going to be the crack in the damn I believe.  We'll see how it plays out, but I am pretty sure it leads with continued reduction in the amount of credit in the system.  Which in turn "looks" like continued deflation. 

I am a big fan of boxing.  I was recently watching an old fight, the Buster Douglas vs. Mike Tyson fight.  Anyone who knows boxing knows this fight.  Tyson was favoritet like 1000 to 1, he was undefeatable back then.  He did very poorly in that fight and indeed lost.  However, when I watch it -- it's inconceivable that he is going to lose.  Yes he took some blows, and in retrospect it begins to sink in that he lost that fight in round 1.  I think the analogy the the US is close. 

It's inconceivable that the US will bankrupt or break up into regional chunks.  But if history tells us anything it is that it is possible.  I wonder if 20 years from now I will look back on this time like that Tyson fight.  That each progressive "round" it was clear as day and obvious to anyone paying attention that we were on the losing track.  Inconceivable as it may, who knows. 

As for what else, I am focusing on what matters.  My family, my trusted friends, hard work, plenty of sweat while working or playing.  Laughs, good food, good drink.  I hate credit in nearly all forms and think of it like a yoke on peoples back. 

[John Raabe]

Whatever the next few years hold, I think the self-reliant CountryPlans folks who show up here will be doing fine.

If needed, I'm sure we could collectively build an Ark.  

Now who has that ruler in cubits?