2012 and debt - your opinion?

I don't post much but thought I'd write up this feeling I have in terms of 2012 "conspiracies" and the debt that we are in here in the USA (and abroad).

My opinion is a lot of economic up-turn may occur between now and the end of 2012. My thinking is people will be "partying into the end of 2012" since they believe there is some big event to occur at the end of 2012. I truly believe a lot of people are being convinced by movies and conspiracy sites that 2012 is something big and some level of doom and gloom is forthcoming. The Myan calendar - sure it ends on 2012 but nobody really knows that this means.

Full country-sized economies like the USA are doing 1.5 Trillion in budget deficit per year. Why? Are we stupid? Obviously, we could spend less through inteliigent governing - but over the course of many years since Clinton's administration, we've felt it was important to overspend now and figure it out later.

www.washingtonpost.com...

I have to think people on the gullible end of the spectrum will go into more debt going into 2012 and onward - helping feed the NWO and business leaders with their personal savings and economic activity. This means even more people ending up in heavy debt into 2013. I say "screw em". Save your money just like you normally would because you'll need it. The heavy debt of the USA is going to come back to hurt us in the form of devalued currency along with either deflation or inflation. Either can happen going forward.

Devaluation of currency will lead to inflation - causing stuff you buy in the store to go up in price. Costs of education is going up fast while the money you make on the job is not going up. Many of our kids are at risk of not even being able to attend college - or at least a good one.

Deflation happens due to lack of buyers, we see this happening now with the home prices dropping hard over the last two years. Since home prices are a form of savings - you have lost 30-50% of the "value" of your home and it's as if the savings account has been raided. Don't even talk about Detroit, Buffalo, Cleveland and other rust-belt cities which have been hammered even further. You cannot borrow against your home to pay other debts anymore, such as student or car loans, as HELOC loans are harder to get on lower-valued homes. I'm hurting myself as I haven't gotten a raise in pay for years (I like who I work for but company has had massive losses). Prices go up, home value down, kids education growing, etc. My highest-pay year was 1999.

I've got the feeling that many businesses and governments (local/state/fed) are at a tipping point in terms of ability to stay afloat. Their tax-bases are dropping due to fewer and fewer people in the work force (see www.bls.gov for real numbers - not this 9.0% unemployment dillusion, it's much higher). Some conspiracy says that countries like China and Russia will some-day band together and come "take back" the debts we owe them. This will not be a physical fighting war but a monetary war where we pay the piper through higher prices and taxes.

So, what's your spending plans going into 2012?
1) Are you going to Party Hardy and end 2012 in huge debt? Hoping to have bankruptcy save you if we make it to 2013?
2) Are you being responsible and saving - knowing we're going to have higher taxes into 2013, a new president, new issues and some type of responsibility to help pay the bills and cut the spending?
3) Are you looking at moving to a more fiscally-responsible state or country to work hard for an entity who acts responsibily and not mortgaging our children's future? Some rich folks (and some not so rich) have already moved out of the USA.
4) Downsizing - are you selling the McMansion and BMWs and going used mini-van in a smaller house? This is probably the best way to go for most of us who must fact higher expenses in the future.
5) Nah Nah Nah - can't hear you - I don't care, I'm not changing anything because it doesn't really matter to me. Free health care, free retirement government retirement, yeah!

Some part of me thinks the government wants poorer people in more debt to be less able to react to anything they do - sort of a captive audience. My problem with our government is their lack of accountability. Senators and Congress will vote in a policy to spend billions without concern of waste or return on investment - they don't seem to care because they some day will be out of office and will not need to worry about it. That's how government works but not how personal debt responsibility works. Lately, NJ governor Chris Christie has surprised me in how he is battling the budget there - we need more of him in Federal Govt.

Good questions.

I will not have money motivate any of my decisions. It is fake and I will not encourage currency as the new world religion.

Having said that, I would encourage people to learn a skill other than tapping a touch screen. Survival is a personal responsibility and there is no app for it.

Peace

No spending plans for 2012. I'm getting completely out of debt before the end of this year. I'm half way there already. I already own my land (well if you can call it that, don't pay your taxes and see if you own it) so the next step is to dig in and wait and see. I've already got a good stash of food but I do that anyways because you never know what tomorrow may bring. I would like to get off the grid but that's easier said then done without spending a lot of cash and going into debt over it so I'm building my own VAWT wind turbine and thinking about water power using a creek beside my property.

If you are in debt I would get out of it anyways. Owing someone else sucks.

Personally, I am leaving the rat race behind. I am starting my own small business with me as the only employee. I will write off everything I do and pay zero taxes. My plan calls for me to leave my current job in 6-9 months, depending on how things pan out.

No plans but have been wondering about this as well. Wondering if we do go into hyperinflation (seems likely), what happens to creditors like banks and credit card companies? If your rates are fixed and you have wheelbarrows full of worthless money, doesn't it seem like it would be very easy to pay off your debts? Perhaps this is too simplistic of a view and I feel like I'm missing something because the bankers preference/agenda is clearly to keep everyone in debt.

My plan is to run up the credit cards by buying everything I think I will need when this crisis hits. Conservative estimates put our currency at 30% of its current value, which means for every dollar I spend now, I will only have to pay back 1/3rd of that because the dollar will be severely devalued. Plus, when food and water and safety become scarce, I'm going to want my BOB stocked to the brim with survival gear and ammo for my rifle. You can pretend that this is not coming, but anyone with half a brain can look at how every major power before the USA failed and then look at the situation we are currently in. In every case, the superpowers overextend themselves with war and public waste spending and then fail due to economic collapse, its been going on for 1000 years or more. I hope you all are prepared for what is coming, because it's going to be of biblical proportions, like book of eli type ^&*%. Wish you all well ... GO PACKERS!!!!

Well, the problem with paying it back if there is inflation is: Your salary will not go up in tandem with the inflation. If your expenses go up 50% due to inflation, your salary is not going to go up 50%. If my power, gasoline, food and housing expenses go up 20% - my boss isn't going to be generous and give me a 20% raise because the company is also undergoing such expense rise.

The only way I see it being "easy" to pay off debts is to have lower expenses (deflation) where the things you buy cost less so you can spend money on debts rather than milk and gasoline. If things cost more with inflation, paying things off becomes even harder - unless you are leveraging your resources (have rental homes you can raise rents on to make more money). Your strongest ability to handle debts is to have higher incomes.

My example is this. Since 1999, I have had flat income. Basically, the same annual AGI on my taxes. Very fortunate not to have been through any layoffs. However, since then my home school tax has gone up 25% since 1998, my kids school tuition has gone up 30% (private school, I just can't send them to our local sub-par public school) and electricity has gone from 0.11 to 0.18 per kWh. Propane per gallon has gone up about 40% and gasoline has roughly gone up 80% per gallon. Things creep up every year by 3-5% but over the course of 10 years, it's painful. We don't go on vacations anymore, hardly ever to the movies, fewer restaurants - but I've also been saving cash for emergencies for a year+ and it's working out pretty well.

A lot of us middle-class income folks are feeling this now. Unless you work at a generous company which has increasing revenues annually (some software firms, government jobs, government contractors or other similar leverageable companies such as banks or trading firms) - there is going to be fallout that is pretty far reaching over the next 10 years. The past 10 years have been hard for many families, the next 10 years seem harder still.

The income and spending by the McMansion crowd (bankers, lawyers, pharmaceuticals, etc.) won't sustain the economy forever and I just fear that after 2012 ends in a whimper, we will have millions of people deeper in debt, higher unemployment and lowering GDP which is the beginning of the downfall snowball that leads to the inflation people talk about.

Meh i said this another post, but chances are to celebrate 2012 - 2013 im going to buy a new motorbike ride about the country getting stoned a lot and generaly enjoying life as usual.

Not sure what all the fuss is about.