Backyard Aquaponics
A place to discuss aquaponics

Ivan you can only be so ready, you can't hide money under the mattress (if you can, where do you live ), we ave already seen big financial institutions go down and they take you with them, if it happens then it happens, in my line of work I would be screwed, my super would be screwed because they can do what they like with it and I can't touch it or stop them, I almost am debt free my only saving grace, my kids, well can only help them so far.
OBO wasn't indicating that all city people were stupid, or was he just the ones that cry and aren't prepared to move around a bit, especially the younger ones (who could easily relocate) that need mummy to cook and clean for them and can't go without a nightclub etc, there is plenty of those

Nocky got it in one.

Sorry all you find under my mattress is dust... Can't remember the last time I vacuumed under there... Hmm.. maybe you
might find a few coins... probably not even enough to buy a drink...

Well yes, I agree I can only be so ready... I doubt that I am at the point of being "so ready"...

What do you suggest to "be ready"? My concern is not so much a depression, although extreme downsizing from the recently enjoyed livestyle is a struggle- it is still do-able- buy the basics and not much else. But hyper-inflation, where money becomes worthless, is a catastrophe that will cause wide spread civil unrest aimed mostly at the wealthy and the government. It is still a potential outcome from all of the government spending, if they do not reign it in in time to avert it.

I agree that a depression is what we are in now, contrary to all the hype that the media and the government are spewing about the economy bottoming out and starting to climb- the biggest player in the economy is still sitting on the sidelides- the middle class. In fact, they are so shell-shocked, their collective backs are to the game and they are not interested in playing anymore. Unemployment is still creeping upwards, although not at the accelerated rate as at the beginning of this mess. Houses are still being foreclosed on and the Obama's plan to save homeowners is not panning out as banks/investors are not playing along- they have their (taxpayer's) money so compomise is not necessary. Banks are failing at the regional level, although you seldom here about it and commerical real estate has yet to adjust- the banks are delaying foreclosures on these properties- a term called "kick the can".
Small businesses are using savings to keep afloat, which will only last so long. Credit is no longer free and easy and we as a nation are a service based economy, as long ago, the corporations gave the jobs to third world countries to exploit the cheap labor. The housing market is only getting better because investors are snapping up the distressed properties and the auto industry because of the great "clunker" deal- mini artifical bubbles caused by distressed properties and government stimilus, neither of which are sustainable or long term.

The U.S. government doesn't want to use protectionism to secure jobs here but they are going to have to do one of two things- increase the taxes on corporations, currently enjoying a 2.5% tax and have them pay for their own mess which caused this or they are going to have to bring manufacturing jobs back to the U.S. and put Americans back to work earning decent wages so that through higher payroll taxes, the government can increase revenue. Neither will sit well with big business as it will impact their bottom line but taxing the middle class, especially for something they didn't cause but are the poorer because of it, will not fly either and taxing the ultra-rich taxpayer is a small exclusive group and not enough to make a dent on the federal deficit as it now stands. The government looks to small business to raise the economy out of this and has said so repeatedly- but it won't happen this time as no one has the extra savings to start a business, credit and loans are almost non-existent and there is no home equity to tap either.
We are facing multiple issues at the same time as this financial crisis- fewer taxpayers to support the bill, an aging population that will weigh on the economy until their wealth can be redistributed to the next generation, our educated are financially burdened before entering the workforce-or forgoing higher education, and less people starting/sustaining a business during these risky times.
This is going to be a long and protracted economic problem and no amount of government spending is going to fix it- only worsen it as one day the bill will become due and payable.

On a side note, I found this article showing the arrogance of the ultra-wealthy back in 2007, just before the economic crash. It is interesting to note that they likened themselves to the ultra-rich, just before "the great depression" crash and their empires could not have been possible except for the fact that certain "depression era laws" had been repealed which allowed combining commercial and investment banking, insurance and stock brokerage operations possible. We have President Bill Clinton to thank for that one and Bush, when he was in office, just sweetened the pot. I had come to the conclussion a long time ago- before all of this- that we are a nation of middle class people who are taxed without representation, as no one there has our interests at heart.

The Richest of the Rich, Proud of a New Gilded Age
http://www.nytimes.com/2007/07/15/busin ... 4QpSaJBiCw

Just my 2 cents worth. I have been following Harry S Dent's work since 1999, I also have close friends that have used his professional advisers team. My observation is that he is just like all the other forecasters, about as accurate as a six month weather forecast. He was correct in the dot com crash, but has been wrong an just about everything else, he keeps changing his reasoning on a regular basis and sells books by creating fear.

The way I see it economics is a chaotic system, it cannot be predicted and if you think it can I suggest you read the work of Nassim Nicholas Taleb http://www.fooledbyrandomness.com/

Don't get me wrong I'm not against investment but I believe investment is not about prediction it is about reaction when an opportunity appears you take it, while it moves in the direction you want you follow it, when it does not you drop it and look for the next.

Many people lose money on investments because they have bought into a prediction, either someone else's (an analyst, fund manager etc) or their own. Unconsciously it is difficult to acknowledge that they are wrong and they hold onto the investment even though it continues to fall. What people don't seem to realise is that when you analyse the value of a company that analysis is based on predicted future events and conditions, since the prediction itself is fiction so is the presumed value.

Angie, unfortunately I don't have a crystal ball to suggest what is required to "be ready". To me, it is about trying to educate myself as much as I can about the financial matters, investments and future trends. I came across Harry Dent's book by chance, and I thought I would drop a comment on this website about it. As you can see, there are varied thoughts about what lies ahead.

Well you make good points about the middle class suffering all the time. In fact, I read a book recently indicating that the middle class in years to come will almost cease to exist. Most of the people from the middle class will become poor, and those in the middle class that have learnt ways of the rich will move on to join the rich. We will have gone back to the days where there is Royals and Peasants... Two classes.

Well one good thing is that if Harry Dent is right about his forecast/predictions, it wouldn't be long before we find out if he is right. At this moment, unless your investments are pretty liquid, it may be too late to act on Harry's advice anyway. And if you have not had any investments yet, then I am not sure that it is the best time to get into one anyway.

Anyways, I reckon education on financial matters is the key to succeeding financially.

What you are talking about is called "mobility". I agree that there is a great chance that the majority of the middle class will, or have already, become the new working poor (the new serfs)- I'm seeing it now as many have lost their homes or walked away- so now they are renters and probably will be so for the rest of their lives. Their homes were their greatest source to generate wealth for them, second was stocks. The investors picked up their homes for a song and turn around and make rentals out of them. If housing is at it's lowest point right now, there is no where to go but up and make money on the rental income, tax breaks for landlords (know firsthand as I am one) and tap the equity after it hits the 20% threshold mark- even doing the repairs to some of the foreclosed houses will bring the equity up now (what is called "forced equity"). When I go back to doing taxes this year (took a two year break), the tax returns are very telling where people in general are now financially and where they are heading.

Add to that, the 20 somethings can't currently afford to save enough to buy a house and you have a landlord's/investor's paradise. Rents have dropped but soon they'll be creeping back up again.

This is an article about what Americans view as class distinction- education, occupation, income and wealth as well as mobility- it's a little dated but you get a general idea. I would love to see an article with current stats. I bet it would be sobering.

http://www.nytimes.com/packages/html/na ... ex_03.html

I'd hardly equate renting a house or apartment with serfdom.

Most so-called homeowners are nothing of the sort in that they owe money each month to banks. Since the majority of those people in our culture keep moving every so many years, they have those payments for their entire lives.

Tamo, I look at housing differently than you do. Let me share how I view owning versus renting and compare which way, in the long run, is better. This is a partial list so feel free to add or comment.

Owning
Pluses
Able to add/remodel to gain additional equity value
Able to use equity as collateral to start a business
Mortgage interest and property taxes are a write off on taxes so you pay less to IRS/state
Able to convert into a rental and receive multiple benefits, as well as some negatives
Able to downsize housing at a future date and use excess capital for living expenses and savings

Negatives
Maintenance
Property taxes
Less mobiltiy to move- must sell or convert to rental
House insurance


Renting
Pluses
None of the negatives of owning your home

Negatives
None of the pluses of owning your home
Plus you are paying your landlord's mortgage or making him profit as he is benefiting from you living there and paying rent. You are also at the mercy of him selling your home, losing it or just kicking you out.

Looking at this list, which is better???
While it may not be surfdom to rent instead of own, for all those years of renting, you will also have nothing to show for it- if all things remain equal (job, neigborhood, friends) you will be poorer financially than a person who bought a house. And for those homeowner who are constantly moving upward to bigger and better houses, by using their equity from their previous house- they may have bigger mortgages, but they are also moving into better neighborhoods, better schools, better networking contacts for jobs and who knows what else. As long as they don't bite off more than what they can afford and no disaster befalls them, they are actually improving their situation in life, as well as better chances of sustaining it and giving their children a better chance as well, as it has already been proven that the better schools are located in better neighborhoods. There are more perks for those who are better off (or the illusion of it) than those who are not.

Please feel free to disagree but also state your case.

I totally agree with you Nocky. Where I am sitting in this sleepy little hollow in Onslow.....we are about to bring Australia to anouther great mining boom. It is already happening, and will only grow at an accellerated pace in the next 12 months. I expect my own business to grow by at least 2 fold in the next 12 months and others will tripple and quadruple there business turn over in that time. Employment growth will be massive. Now we just need more housing to house all the working people and there families. To put in more Basic infrastructure.

I feel blessed to have made the decission 4 years ago to come here and do what I do.

Thanks Jessy, must be the first time someone has agreed with me
Angie where I live rent is around $250 per week, my minimum house repayment is $200 (I must admit we have almost finished paying, man that will be a party), I live in a rural area as well, but rent is dead money to me anyhow, most houses here are cheaper to buy than rent, even if you decide to move before paying house off you should still get more for your house than you owe, I can't understand why people are loosing their houses, you still have to find rent money, and in bad times rent goes sky high due to some profiteering land lords, I think I read somewhere here that a US member had been renting the same dwelling for 19 years, surely he could own a big chunk of that if he had bought, I think a lot of people are scared of buying, but when you do the maths, in a lot of cases you wouldn't be any worse off.
Man I think I am going to get a lamb basting here for that, but I have chosen for the last 25 years to live rural, my first house I bought 400k's north of perth was going to cost $60 a week to rent, we had a chance to buy it for $12,500 so did that and paid it off in under 4 years paying around $75 per week, lived in it for 10 years and sold it for $50,000, for the last six years land and water rates would have been about $20 per week, so good investment, Moved here got a house at the good buying times for $69,000 on 2 big blocks, had it valued a couple of months ago at over $250,000 and was offered $120,000 for our spare block, so another good move, if I had rented I would now be around $200,000 worse off

Angie, I wasn't saying that renting is better than owning. I'm just saying that the hyperbole of calling it serfdom isn't warranted . Renting a house or apartment is a voluntary contract between the lessor and the lessee (regardless of whether it is or isn't the best financial decision on the part of both).

Now paying taxes is a form serfdom. We are required to pay because we were born into this particular system, and have no choice in the matter. Of course, like serfs, there's nothing we can do about on an individual level.

Sorry I have not come back to this thread for a while, so if I am replying out of topic/line, please excuse me.

Tamo, I believe Angie was replying in context to what I wrote before about the "shrinking middle class" and that in the way the society is heading, like what you agree about in taxes, as individuals we do not have a say. But the corporations and governments have always been setting up loopholes and such to benefit the rich, hence the rich get richer and the poor get poorer.

And the way it is heading, soon there will only be two classes, the rich and the poor. And it would be pretty close to the days where we have Royals and Peasant (slaves?). Hence serfs...

In fact, although our society has advanced, we have still kept many of the terms that were once used to by the royals.. It is like why is real estate called real estate? From memory through reading books, it used to be called royal estate. In other words, the Royals owns the land, you buy rights to stay on that land.. How is it different from now?? Nothing, the government "still" owns the land, you buy rights to stay on that land... Although there might be a bit more laws in place nowadays but that's the idea.

Also the term "mortgage", from memory is something like a death pledge... Pretty much similar to the days where if you don't pay up, you get tortured or hanged by the Royals... It less drastic nowadays but the term is still being used today.

Hence possibly why the term "landlord" is still being used.