Why the Downsizing Trend Will Continue Globally

Several months ago I started a website called InnovativeDownsizing.com. At that time after the 2008 melt down, the unemployed were mainly affected by the recession that ensued from the collapse.

In the recovery that followed, big banks, large corporations, certain niches, and developing countries were solvent, profitable, and growing. The governments had pumped a lot of money into the economies and saved several sectors.

The problem we are facing all too quickly is that the last thirty years of over spending by the populations and governments of developed nations is reaching a point where servicing the debt and unemployment are crossing paths.

If productivity, exports, and therefore tax revenues were increasing, everyone could be whole.  When the opposite occurs in each sector for developing nations, consolidation follows. The stock markets are reflecting the consolidation predicted for the future.

How do individuals protect themselves? Even though I have been posting some mild articles about protecting health and considering food storage in a crisis, I see civil disorder ramping up. The fact that gold rising over $1,800 is leading to increased home robberies leads to concerns about safety if there is a shortage or difficulty in food supply.

This run on the markets will probably bottom out soon, but the trend has been established. There is no way out until the consolidation that could have been created by letting all the banks and big corporations fail originally, has played itself out.

That would have been an ugly scenario and we would be a few years into sorting it out at this point. The governments have forestalled that scene with massive injections of capital that have had no affect other than promising to make the final consolidation more frightening.

There is not enough real capital in the form of profits and wages being created to allow servicing of sovereign debt. Individuals will be caught in the squeeze as nations try to save themselves. There will be dislocations. In a sense, everyone will be on their own.

Hopefully, it will be years before we face the final axe of currency collapse, but as we see the reaction to recession in stock market drops, public concern could accelerate the panic.  We need to set up our security, if possible, in all areas.

Jobs are out of our control, but food and personal safety is still within our grasp. Families should be setting up supplies for short term disruptions and discussing personal safety in case of civil unrest. It seems that an orderly and cooperative solution to issues that make people fearful is going to be sorely tested.

**

You could read a sobering but not dramatic account of what will happen in Stephen Vickers’   “After the Crash of the Dollar”.  Available in libraries.