How to survive the recession

Economic bubbles always start with some rich people seeing an opportunity to make a quick profit. The speed by which the profit is made encourages the continuation of that activity. More importantly, other rich people join in. After a while, the rest of the population catch-on and want a piece of the pie. But by this time, the bubble is fully blown and is about to burst. Just when the average Mr. Smith thinks that he has discovered the sure way of beating the system, the bubble bursts. By this time the real wealthy have taken their money and left, leaving the majority of the population and the government to clean-up the mess. Cleaning will take time, sweat and tears.

	How to survive the recession
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OK, we are going into a recession, so what should we do as individuals?

The first thing that you should realise is that the world’s population is increasing while natural resources are either static or decreasing. For thousands of years human population was either static or increased very slowly. As a matter of fact this growth was so slow that the human population did not reach the 1 billion mark until ca 200 years ago. But suddenly it began to increase almost exponentially. In a relatively short time, 123 years, the population doubled to 2 billion. In the following decades this accelerated growth continued, so much so that it took only 33 years for the number to reach 3 billion (1960), and only 15 years (mid 1970s) to reach 4 billion. Today (2007) we have crossed the 6 billion mark, and if the current trend continues, by mid-century we will be close to 10 billion people.

While the population is growing rapidly the main source of our energy (i.e. oil reserves) is depleting fast. In addition we are running out of fresh water. Fresh water reserves are being depleted much faster than they are being replenished. Water, energy and land are the main ingredients of our food production. A few years ago the world’s total irrigated agricultural land began to shrink. If you combine the effects of the increasing population, diminishing water, food and energy, you’ll get the indication of how things will develop. In the long-term inflation is a given.

Ok. We now know where we are at and where we are heading; so how can I take advantage of this knowledge.

Things to remember

Before one can talk about investment opportunities, one should bring one’s economic situation under control. To start with get rid of your credit card debts. Credit card companies (including banks that support them) are the worst shylocks that ever existed. They entice you to spend the money that you don’t have and then charge you unbelievable interest rates. So minimise your exposure there.

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