Current Times and Advice to Survive It
A Marier Business Advisory
by DM-Your Own CFO
As you’ve likely observed, there are many situations going on in the US and the World at large. We are involved in the Ukraine War which is in essence a war between the West led by the USA and Russia which represents the East including China. In addition, the USA has been experiencing the downside to interest rate hikes and the banking system is taking it poorly. This is probably just the tip of that iceberg and the WSJ says that 186 banks are in some degree of trouble.
The FDIC and the Treasury along with a complicit Federal Reserve have taken extraordinary measures to shore up the system but at some point will have to allow for a big consolidation of the banks letting the “too big to fail” banks buy up and absorb the regional and smaller banks. In the end we may well have just 5 or 6 big banks to work with. This could easily be construed to be a precursor to issuance of the CBDC (Central Bank Digital Dollar).
The Inflation that has us all paying more for basics will in my view continue and actually worsen. The ability of businesses to obtain needed credit will dry up and even if getting credit it will be very expensive due to current rates. This will slow the economy and a Recession or even Depression will follow soon.
The doom and gloom is baked into mistakes made over decades and exacerbated by the pandemic spending spree. The Biden admin seems dead set on continuing to spend spend spend and one can only hope something stops them. Hyperinflation is not off the table and believe me that would be very ugly indeed.
I am issuing this new Marier Business Advisory to provide a few sensible steps that businesses and families can take. For many, their family is dependent upon their business so the edges blur between the two in the symbiotic relationship.
Here are my top recommendations:
- Develop a stash of cash and keep this powder dry for future needs and/or opportunities
- Watch the banks and keep any banked money under $250K which is the max protected by the FDIC
- If trying to expand a business activity be aware that the inflationary and tight credit headwinds will be present
- Think Defensively to protect yourself and family...employees too
- Try to pay down debt, especially floating rate debt
- Develop a hoard of food...enough for at least 3 months in case supplies get disrupted
- Consider holding some gold/silver which will help in any currency collapse and position you for a better starting point in any newly adopted financial and currency scheme
- Be aware that social unrest comes with financial stress and hunger exacerbates it
- Watch alternate sources of news to get the full picture because the big national media is aligned with pushing politicized trash. I like Redacted but there are many others. Pick two or three and always see what rings true for you not them. Remain a free individual away from group think.
- Apply some austerity to your business and family life being conservative and not speculating on untried plans.
Making small changes can be effective and if I were to suggest the most important of the above, I’d say develop a cash hoard and hold some gold/silver while developing an emergency food bank. It’s easy if you add canned goods including meats, veggies, fruits and don't forget to store up a lot of water.
I understand that many have never seen tough times, but take it from history and those that have, when the SHTF you will be glad you took some simple steps to increase your survival.
If you’ve a mind to attempt cashing in on some money making ideas, try shorting the SP500 or stocks but unless you know this arena play it small. You can also plan for the eventual emergency lowering of interest rates ( yes that will happen ) and hold TLT or ZROZ which are both longer term bond funds which will rise as interest rates get lowered. It’s counter intuitive but that is how bonds work.
All in all, having cash, reducing debt, keeping expansion to proven areas and not speculations, and remaining aware of the bank and financial conditions effecting the big picture will help a great deal.
I am always available to discuss particulars but I felt that the times mandated some survival guidance.
Good Luck to All.
Donn Marier
DM-Your Own CFO