Do you think the economy is getting better or worse?
If you think the economy is getting better, do you think that there could be another recession sometime in the next decade?
If you think the economy is getting worse, how bad can it get?
The Congressional Budget Office (CBO) certainly thinks things will get worse in the next few years. Losing our AAA credit rating would be very bad as that would cause interest payments to jump. Like all those people who got the ARM mortgages and could barely make the minimums then the rates reset and then they were underwater on their loans and they had to either go into bankruptcy or sell at a loss.
The country could go into bankruptcy and default on its loans. The government has an option the people don't and that is print more money but that would lead to inflation and possibly even hyper-inflation.
There are also two other options but they are only temporary:
Create a new global currency, and cap-and-trade would be one way of doing that, with all the derivates and insurance instruments of the housing bubble, which will only cause another bubble with an even bigger crash at the end, but by that point the current leadership will be out of power and it will be someone else watch. So they'll get the blame.
Or they could reset the dollar and back it with land, which the federal government owns a lot of. Germany did that during the Weimar Republic. That didn't turn out too well in the end.
So what can you do?
Build an emergency fund. They're doing it for the EU. It needs to be big enough to cover a major car repair, or major appliance replacement. A bout of hyper-inflation can wipe this out but that hasn't arrived yet.
The most important thing is to get out of debt. Debt is slavery. Inflation always puts the debtor behind the curve.
Store up food and plant a garden. "That's financial preparedness?" Yes, hyper-inflation can wipe out savings and dividends, but it can't touch canned goods and seeds. Growing food takes practice so get started now. There is still time to get plants in the ground this year.
