What Do We Do About the Coming Market Crash?

I try to balance the doom and gloom on this blog with positive philosophies about life, but sometimes the topics I have available to me at a given time end up having certain priorities. Something has been brewing for quite some time but is only just now starting to percolate through the mainstream news media to begin making the public aware of something that will once again shock the nation to the very core. Experts are beginning to predict a serious crash sometime this year, perhaps within the next couple of months.

By itself, a stock market crash isn’t really that big of a deal. They happen on a semi-regular basis and most of the time it results in a noticeable but manageable downturn in the economy. Some businesses might close and many people might lose their jobs, but for the most part the country moves on without much notice. Well, people who work in the financial markets certainly notice, but average people like you and I pay very little attention.

What’s different about this crash is that we are adding in several factors that aren’t normally present during an economic downturn. The first of these is that we just spent the last year struggling to get through a pandemic that shut down much of the world, and we are already having to work much harder to claw our way back to any sense of normalcy. Second, the government has printed so much money to cover the various stimulus packages and bailout plans that we are either nearing or have already surpassed the point of hyper-inflation.

A crash alone is enough to make people reasonably nervous about the future. When the market starts to decline, it’s a sure sign that someone is going to lose. With any luck, it only affects investors who participate knowing what the risks are and are willing to accept them. Unfortunately, most of the time these changes affect normal people who just want to have a secure source of income to support themselves and their families.

This next crash is being hyped up as the next “Great Depression“, and while I normally wouldn’t bother to pay much attention to exaggerations such as this, the combination of different things all coming together at one point in time makes me believe that maybe this isn’t as far fetched as it initially sounds. Our money is rapidly becoming less valuable, our access to goods that were normally abundant has been significantly reduced, and energy costs have increased to the point where many are starting to struggle to cope with it. Here in California gas has jumped back up to more than $4.20 per gallon for basic unleaded.

So what do we do with all this information? For the average person, there simply isn’t much we can do. These are the kinds of things that require constant maneuvering over the course of our lives to buffer against. Making good investments can pull someone through relatively unscathed, even in the worst of economic times, but only if you have the ability to support yourself until the end of a downturn. If you end up having to sell off your stocks or real estate or whatever else you invested to put food on the table, no amount of investing will save you.

In the end, all we can really do is try to limit our spending and put away as much as we can in the event that the worst happens and we have to struggle through an extended period of time without whatever income we’re accustomed to. Our system of government is such that we are unlikely to starve, but guarding against repossessions or becoming homeless is a real concern that many people may deal with firsthand.

The first step in avoiding the hazards of life is becoming aware of them, and the true point of this article isn’t to tell you what to do but to make you aware that there is a potentially huge change looming on our horizon. Just like we would for a hurricane or other foreseeable natural disaster, we must start making what preparations we can to weather the financial storm that may be in our immediate future. Take some time to do some reading about what’s going on and start taking what actions you can to mitigate your risk. With planning and a little luck, we can come out on the other side unscathed.

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