Thanksgiving

Since Thanksgiving I have been thinking. Kristy and I have so much to be grateful for. This Thanksgiving will have a lot of people thinking of their blessings that they may have taken for granted in the past. If you have a job this year, you can be grateful. So many have lost their job!! If you have a home that nobody is trying to take away from you, you can be grateful. These are the type of things that you may not have specifically included in your grateful list last year.

The times have changed. I am afraid that it will be years before we see the “good’ol days” again, if we ever see them again. Japan has been going through their “economic downturn” or “correction” for going on two decades. They even “lost” a decade along the way. With no growth they basically stood still for a decade. Their problems aren’t over yet.

Japan had a “real estate bubble pop,” very much like we have had. In many respects their downturn was lightweight compared to what we are experiencing. That means our economy may not return to “normal” for years. In the meantime, we each need to count the blessings we have remaining, and know that the sun will come out tomorrow. A lot of people are going to have to swallow a lot of their pride, but losing your job and facing the piper, that nobody has paid for years, will sober up even the most prideful of people.

Debt is the monster that will eat you alive. Japan had an advantage we don’t have. The Japanese had an 18% savings cushion. Their people weren’t in debt. It was only their companies that were awash in debt. In the US today our companies are insolvent, and the people are insolvent. We don’t have an 18% savings cushion to buffer the blunt of the housing pop. We have a negative savings rate.

Cut up your credit cards. (I know you have to have one to survive, to rent cars, to etc., etc.) At least cut them up mentally, and start digging yourself out of the debt pit. Yes, you will have to forgo some of the toys you want, and you will have to “cut back,” but if you have any prospects of surviving the new economic world, you are going to have to be more conservative. This isn’t going to be an 18 or 24 month downturn and everything will be back to normal after that. This economic climate is going to be a permanent adjustment to “business as usual” and “life as normal.” The sooner people make the adjustment, the better off they will be.