I would just like to take this opportunity to say to all those who doubted my financial predictions: told ya so!

On a more serious note, yeah. Things look like they're going to go sideways very quickly. I know my parents are going to be alright. They got through the last one and they'll get through this. But with all the debt people have from credit cards and the such (Advice: USE DEBIT CARDS!) due to all the needless spending is really going to bite us in the bottom when the companies go to look for the money and find that, of course, it isn't there.

Good Lord, I've never seen such mass delusion as finances. Everyone knows there's no money at the end of the system, but we all pretend there is to try and keep everything running smoothly.

Anyway, it can't hurt to buy some bags of rice or get some water bottles just in case.

not exactly a bugout situation by my stadards, but it'd be wise to have the home ready

Currently a little surprised that the 75 bip cut actually worked, or at least stopped the bleeding for a whole DAY, but I guess it just goes to show that you can't underestimate the power of human stupidity. I guess that pegging government loans at under half of effective inflation really will save the economy... Or maybe Jesus will just show up before it becomes a real problem  We are so fucked...

While any implication that the world was going to end was somewhat tongue in cheek, I am really concerned about the markets right now. While the government cuts interest rates to the bone (debasing the dollar, and lots of old people's savings accounts in the process), real inflation is soaring, and stocks are plunging (wiping out lots of old people's retirement funds), leaving little to depend on except for social security (which is empty, except for some "IOU"s).

Good thing the US govt. wrote 62 billion dollars of checks (government bonds, but the difference in this case is academic) to itself to fill the account, huh? Too bad that when you write a check to yourself and deposit it, it is called fraud, except apparently when you are the US government, when it is called "reserves".

If you don't want to invest in Euros, you can always invest in yourself.  Using your money for extra schooling and training is a great investment.  Food and other supplies for long term survival are always a good investment.  My opinion is that you should do your homework before investing right now.  Not the best time to trade in currencies or precious metals because the value of the dollar is so low, but might want to watch the stock market, since it is low, MAYBE pick up some stocks in the future if they get low enough for you.  Personally, I try to keep as much money as I can as cash, and then I burry it in the back yard, and that's been working out pretty good for me.  If you go that route, don't bury / hide money when you are intoxicated, you might not remember where you hid it.

Well, you're lucky the fed cut the interest rates. That slowed things down a bit. This economic stimulus package is worthless. They're taking out a loan in the name of the American people for $250 billion and come ten or so years from now, they'll demand $350 Billion back for it. Good move.

Cutting the rates wasn't lucky, or even good policy; it is kind of like treating alcoholism with another scotch on the rocks. It will only make the problem worse in the end, by creating more dodgy debt.

So far, everybody has been talking about Bernanke printing money (a joke he started himself) to drag American out of this fix, but he hasn't even printed any yet (M1, the measure of hard cash circulating, is flat). The real problem comes from the banks creating too much credit, which is just as bad as printing bills, except the government has no control over it. The USA stopped generating the M3 metric (which includes cash, bonds, AND credit) in 2005. Coincidence? I think not.

I think the real problem lies in how the banks were able to generate bonds (collateralized debt obligations) out of their mortgages, which they were then able to use as reserves to back even more loans, and so on, and so on, and so on. When these loans start failing in large enough numbers, they will take the value of the reserves down, which then causes the bank to be below the minimum reserve limit. This results in a bank run as the bank goes insolvent, and depositors try and get their money out.

Current bank reserves:


What a modern bank run looks like (they had a lot of US mortgage debt converted into bonds as their reserves):
<a href="http://www.youtube.com/v/I20lMyYW83E&rel=1" target="_blank">http://www.youtube.com/v/I20lMyYW83E&rel=1</a>

Assume;

You owe bank X money. The bank gets into trouble. Bank demands money back that you can't afford to pay right now.
Your options are;
1) Arrange new payment scheme (such as placing a stop on credit account, and paying increased minimum payments)
2) Have bank take you to court, and have bailiffs auction off your possessions
3) Same as above, but declare bankruptcy, loosing all financial good records for many years

Get out of debt now.
I'm very aware of all this right now. So, I'm trying to clear my outstanding liabilities. However, some are large lump-sums that I cannot pay. So, I have gotten a credit card.
Crazy? No, it's for tactical use.
It will allow monolithic payments to be paid off immediately, and net repayment spread over a set period. And even then, it will be one payment at a time. Credit should be used to smooth over sudden demands in life costs, not lived on.
Plus, having a credit card shows a bank is willing to lend you money. This improves your credit rating, which makes it more likely for other banks to offer you credit.
Why would I want to be in debt? I don't. But a mortgage is a debt, and I want to be able to own my own home one day.

So, if I shift to using my credit card for my groceries (something I can always afford to do via debit), I can pay it off immediately and improve my record with the bank and credit agencies.

There are a number of agencies that allow you to check your credit rating. A number also have a free-trial period. I recommend signing up for them and seeing what marks there are against you. Some can be easily resolved.
I would also recommend spending a small extra amount to get your credit score. It's more generalised, but the higher the better. In the UK it's a rating from 0-1000.
I managed to boost mine by 68 points just by making my address history complete.

Don't use credit lightly. It is part of modern life though, so we should use it tacticly.

If the world is heading for a major recession, then this is a war fought with money. You need to secure your position.