What a Dollar Buys Now and Then: Cool Online Tool Showing Decline of Dollar's Power

Over at CoinNews.net, they have a cool online gadget that is based upon the federal government's Consumer Price Index. You input YEAR, PRICE OF ITEM, and SECOND YEAR, and the gizmo tells you how much the same item would cost in the second year, compared to the first -- and it gives you the rate of inflation.  They call it their "Inflation Calculator."  

Examples:

If you bought a book for $18.00 in 1990, today it would cost $29.95, for an inflation rate of 65.8%.

If you bought a car for 20,000 in 1985, today it would cost $40,286.43, for an inflation rate of 101.4%.

For those of us that have been around awhile, this sounds about right.  The price I paid for a Lexus in the 1980s isn't gonna get me in the dealership door.  What I paid around $25K for back then, I'd have to walk into North Park Lexus with around $50K today. 

And, I think back to McDonald's visits growing up. I remember the little hamburger costing only 25 cents.  You could get one for a quarter, and maybe some pennies for tax.  I think the little basic burger is now 89 cents, but I'll have to double check this and get back to you, Dear Reader, the next time I drive thru McD's (which is rare, so bear with me.) 

For the detailed report on the Consumer Price Index by the Bureau of Labor Statistics, you can read their periodic reports in .pdf format.

Image: US Twenty Dollar Bills, Wikimedia Commons Public Domain.

Update: Should You Pull Your Money Out?

Last September, shortly after the FDIC Chairwoman's press conference announcing 117 banks were on the FDIC Watch list, I wrote about whether or not we should feel comfortable with our money in the bank - especially as we become more and more a cashless society, using debit cards and credit cards for even the smallest purchases. That article had lots of details that I'm not going to repeat here, but it's worth a re-read if you're interested in this sort of thing.

That post got lots of traffic, I got lots of emails, and it also appeared in several publications. And, today, when I read the news that last Friday, five more banks were closed across the country (bringing the total to 45 closures so far this year), I thought I'd look into this issue a bit more. And here's what I've found.

Spam. More sold every day, might as well laugh about it ....

Frugal Habits Feeling Good - Frugal Isn't Just a Trend

A new study of consumer shopping habits in the United States is revealing that people aren't planning are changing back from their new "tighter" ways of spending, should the economy bounce back.

Apparently, Americans like the feeling of getting good deals, looking for bargains, and living more simply. Good, right?

Well, the retailers aren't happy about it. They're busy trying to figure out how to deal with this new consumer mindset. Some retailers are planning on downsizing, others are considering being "one-stop" shopping stores.

And, of course, who's setting pretty among all these retail stores? The big warehouses like Sam's Club and Costco, and ... yes ... WalMart.

Video - How to Make a Solar Oven

and here's a short version of a nice homemade solar oven on wheels ...

Should You Be Stockpiling Food? How do you stockpile food anyway?

Last year, there was already talk of stockpiling food. As in, the federal government was stockpiling - buying up storable food in enormous volume from such places as Best Prices Storable Foods. Last month, there were news stories of China stockpiling food, too, because of the big drought it's been facing.

And, sure there's a need for a government to have food in ready demand when something like Katrina hits.

But what about our economy? Should we stockpile food in preparation for transportation halts, bank closures, or food shortages? And if so, how do you do that, anyway?

FDIC Letter Threatens FDIC Insolvency - This is Big News But What Does It Mean to You?

Today, there was big news that maybe isn't getting the attention it deserves: the head of the FDIC has sent a letter to banks and thrifts across the country, explaining to their CEOs that the FDIC must raise its fees, as well as be paid the big surprise extra premium payment that it voted for itself last week, otherwise the FDIC will become insolvent in a matter of months.

That the FDIC is even hinting that it may be insolvent at any time is spooky stuff, and I'm thinking more than adequate to start some folk on a run to their banks.

Goodbye to Circuit City: Are There Really Bargains at a Going Out of Business Sale?

Well, it's a sad read over at the Circuit City web site, where the company wishes its customers goodbye after being in business (previously as the Wards Companies) since 1949. Their farewell explains that almost 40,000 folk across the country are losing their jobs, and that liquidation managers have taken over running -- and liquidating -- the remaining Circuit City stores that are open.

Sad, sad. I always liked Circuit City. I found some really good deals there.

And, starting yesterday -- January 16th -- the clearance sales begin. Everything but personal checks will be accepted, and there are supposed to be some good buys to be had.

Simple Inspiration & Frugal Encouragement -1: Thoreau

Times are tough and lots of people are scared. Some of them will just sit and stay that way; however, others -- like you, dear reader -- may be seeking inspiration to commit to a simple life and a frugal future, or you're already committed and maybe needing a little encouragement along the way.

So, during 2009 here at Everyday Simplicity, you will find weekly posts dedicated solely to encouragement and inspiration.

Like this one, bringing you some words from Henry David Thoreau. Now, if you want to read the entirety of Walden, you can, for free. It's on the web (the copyright has long since vanished), and it's broken down into chapters so you can take it in spurts if you'd like.

Sure, you may have studied it in college as an example of transcendentalism - but Thoreau's writing really does read as a concrete, comforting example of choosing to live a simple life.

In Walden, he begins with the first two chapters giving you, the reader, concrete information on his daily activities, like how he built his sturdy little cabin all by himself; how he tried to get going to beat the sunrise; what he ate and how he kept his perishables safe from spoilage. And, while he is journaling his progress in making a home for himself out in the wild, he shares his thoughts with you -- and it's here that you will hopefully find encouragement.

From chapter 1:

...But men labor under a mistake. The better part of the man is soon plowed into the soil for compost. By a seeming fate, commonly called necessity, they are employed, as it says in an old book, laying up treasures which moth and rust will corrupt and thieves break through and steal. It is a fool's life, as they will find when they get to the end of it, if not before....

Actually, the laboring man has not leisure for a true integrity day by day; he cannot afford to sustain the manliest relations to men; his labor would be depreciated in the market. He has no time to be anything but a machine. How can he remember well his ignorance- which his growth requires - who has so often to use his knowledge? We should feed and clothe him gratuitously sometimes, and recruit him with our cordials, before we judge of him. The finest qualities of our nature, like the bloom on fruits, can be preserved only by the most delicate handling. Yet we do not treat ourselves nor one another thus tenderly....

Public opinion is a weak tyrant compared with our own private opinion. What a man thinks of himself, that it is which determines, or rather indicates, his fate....

The mass of men lead lives of quiet desperation. What is called resignation is confirmed desperation. From the desperate city you go into the desperate country, and have to console yourself with the bravery of minks and muskrats. A stereotyped but unconscious despair is concealed even under what are called the games and amusements of mankind. There is no play in them, for this comes after work. But it is a characteristic of wisdom not to do desperate things. ...

When we consider what, to use the words of the catechism, is the chief end of man, and what are the true necessaries and means of life, it appears as if men had deliberately chosen the common mode of living because they preferred it to any other. Yet they honestly think there is no choice left. But alert and healthy natures remember that the sun rose clear. It is never too late to give up our
prejudices. No way of thinking or doing, however ancient, can be trusted without proof. ....

I don't know about you, but I love this stuff. Reading these words strengthens me, reminds me about what's important and what's not.

And, silly as it may sound, it makes me feel proud of my lifestyle choice.

Every morning, I awake to hear the boom! of the cannon over at Fort Sam Houston, awakening the soldiers at exactly 5:30 a.m. Every night, at 11 p.m., I stand outside and hear taps being played. And between those two bookends of my day, I try very hard to live a rich, peaceful, simple and rewarding life without that hamster on a wheel feeling I used to experience in my Suit and Heels past.

Living a simple (frugal) life really is just a better way to live. It's work to choose this route, and work to stay on track in this American culture we have today (I was just called "crazy" by an old friend last week at lunch) but it's so, so worth it.

Go read Thoreau. I'm really hopeful that you'll share that Attaboy feeling that I found there.

Predicting 2009: Faith Popcorn's BrainReserve Gives Insights: Simple Living Is the New Black

Faith Popcorn? Do I jest?

Nope. Faith Popcorn has spent the past 30 years successfully mapping out what the future holds, primarily for marketing purposes. She's a real person, and her company is a thinktank called the Brain Reserve.

And, here's what Faith Popcorn predicts for 2009 in her latest press release (emphasis added on the portion discussing simplicity or simple living):

NEW YORK, Dec 03, 2008 /PRNewswire via COMTEX/ -- Leading future-focused Trend consultancy Faith Popcorn's BrainReserve sees 2009 as a year marked by unprecedented fear, anxiety, and uncertainty.

A year in which we'll see a range of consumer reactions to a nation that has seen itself moving in the wrong direction.

Faith Popcorn notes: "This is not a momentary correction, nor a down cycle -- it's the end of the world as we know it. What we'll be deciding in 2009 is whether we'll simply succumb, or whether through a new set of Rules of Engagement, we'll find a new way to set our priorities."
As has been their practice for over three decades, FPBR is applying their TrendBank, 17 insights that are predictive of consumer habits, practices, preferences and behaviors to the ever accelerating changes that drive our Culture.

The four New Rules of Engagement are: Reclaim, Retrench, Reset and Reinvent.

1. RECLAIM: Reframing our power relationship with Companies.

Driven by Icon Toppling -- A new socioquake transforms mainstream America and the world as the pillars of society are questioned and rejected.

Look for: The death of the Consumer, long live the Citizen. With the mutuality of responsibility, Citizenship suggests -- shared values, shared interests, democratic decision making, full disclosure and a free ranging, ongoing dialogue.

2. RETRENCH: Hunkering down and praying for survival.

Driven by Cocooning: Retreating to home to protect oneself from the harsh, unpredictable realities of the outside world.

We'll see that: Cuddles Trump Coupons. A premium based on brands that demonstrate "empathy"; an understanding of the consumer plight -- it's going to be a combination of messaging, price, and purchase continuity programs that offer progressive refunds, as just a few examples. The strategy is simple -- be with them when they're down; they'll remember you when they're up.

3. RESET: Voluntary cutback to find a new equilibrium.

Driven by Cashing Out: Questioning personal/career satisfaction and goals, people opt for simpler living.

It means: We're Scrooged: If you're looking for immediate proof, watch Christmas '08 sales. The worst downside estimate I've seen is -5%, it will be double digit. Black Friday's top-line sales growth is a false metric. Retailers can ignite a consumption spark via discounting, but will the operation survive at zero margin contribution? How many will resist the temptations of store visits and turn to online shopping? Will they ever come back?

4. REINVENT: A rediscovery and reaffirmation of American Ingenuity.

Driven by Fantasy Adventure: The modern age whets our appetite for roads untaken.

Watch the development of A Wampum Economy. A shadow economy will emerge; driven by a culture of haggling, swapping, bartering, hacking, and re-using. It all hearkens back to a time where a direct Citizen to Citizen relationship drove the economy, rather than being disintermediated by channel and manufacturing.

Ms. Popcorn is available to discuss The New Rules of Engagement, including additional predictions that are tangible manifestations of these New Rules.

Please call Kathleen Cantwell on 212-792-6333 to arrange an interview, or submit queries to kcantwell@faithpopcorn.com.

SOURCE Faith Popcorn's BrainReserve

Fr. Christopher Jamison's New Book On Simpliciity Gets Media Play By Taking On Disney as Promoting Materialism and Greed - Is He Right?

Over in England, Christopher Jamison is a Benedictine monk known as the Abbot of Worth in West Sussex, and he's a prominent figure in Catholic circles -- touted by many as the next Archbishop of Westminister. (You know, that Westminister.)

Jamison starred in a hit TV series on the BBC (The Monastery) and he's just come out with a new book that encourages people to live simply. The title? Finding Happiness.

In his book, Jamison offers advice in changing your lifestyle to one of simplicity by changing the way you think and upping your self-discipline. In fact, he argues that there are 8 thoughts that must be controlled to find happiness; they are:

anger
pride
gluttony
lust
greed
sloth or spiritual apathy
sadness
vanity.

Father Jamison isn't timid. He's boldly taken on the celebrity news media as helping people to become dissatisfied with their personal circumstances, encouraging envy. And, he's not stopped there.

Jamison is also getting a lot of news coverage for taking on Walt Disney's legacy. He argues that the current Disney conglomerate offers product that does have value (an example: Sleeping Beauty does give a lesson on good vs. evil) but Jamison decries the corporation for tying so many secondary products and services to its films - thereby encouraging the indoctrination of children into materialism and cultural greed.

For more on Jamison's position, check out the Telegraph's article, Disney accused by Catholic cleric of corrupting children's minds, and the quotes from one of his interviews in the Church Times, which includes this statement, where he is discussing Advent:

“We see Advent as a very seriously charged moment, in which we . . . refuse to behave as though the way to salvation is to spend more and to get into debt more, because that is what has got us into this trouble in the first place,” he said at the launch.

“The antidote to greed is waiting. It is not never shop,but shop less; not stand still, but go slower; but that is not what the politicians are going to tell us. The Chancellor is going to say ‘Spend like before.’ But that is what has got us into trouble in the first place.

“The economy is going through a readjustment, whether we like it or not. If we behave like we have in the last ten years, then we will just see another crisis. We have to work for an economy with a more solid foundation in order to skip the boom and bust. But the politicians have not done that.”

Surviving the Depression - 1: 100 Tips and Tools from E-Justice

I'm not the first to use that skeery word "depression" these days -- just surf around and you'll see lots of debate going on about how bad it's going to get and whether or not our next few years will be as stressful and cutting as those of the 1930's Great Depression.

It's both direct and indirect. There's blatant discussion of when or if we're in a second full-blown Great Depression (in the Wall Street Journal, Peggy Noonan calls it "GDII") and then there's the subtle references, when pundits compare our current economic situation to those of Herbert Hoover or FDR.

Simplicity as a Lifestyle - Great Rewards No Matter Why You've Chosen It

Once again, many of us chose a simple lifestyle long ago - consciously and proactively - for many reasons other than holding on during a major economic downturn. Living a simple life has such great rewards. (Really!)

However, I recognize that there are many, many folk out there that may come to investigate a simple lifestyle for no other reason than they've got no other choice. To them, I say "welcome."

I think you'll be pleasantly surprised with how much more life has to offer when you live simply. It's really great fun, and there's a peace and joy in it that's quite comforting.

Great Tip List Available for Surviving the Upcoming Economic Storm

I've written lots and lots (and will continue to do so) on how to simplify your lifestyle. However, one of the best overviews on dealing with making concrete lifestyle changes that I've seen in a long time was sent to me today by Kelly Senora at the Criminal Justice USA blog ... it's written by Alisa Miller over there, and it's a great index to info on the web about how to get ready for the Big Bad Storm we're facing:

How to Prepare for a Financial Apocalypse: 100 Tips and Tools to Secure What’s Yours.

Go read this. Even if you're an experienced simplifier, you'll find something of interest here.

And thanks, Kelly, for sharing. This list should really help a lot of people in what's becoming a fearful time.

Is the American Economy a Giant Ponzi Scheme?

MIT Professor F. Kriesel thought so, back in 1998, and reading his copyrighted article, "American "New Economy- a giant Ponzi pyramid," is eerie.

Go read it in its entirety over at the MIT site, HERE.

Some highlights:

Greenspan is describing a process where a huge percentage of the American public (70% of all households according to one account) have in the past few years put their savings into stocks, bonds, CDs and other financial instruments. The average savings rate in the US dropped to a historic low of 3% of income, but it is now possible to borrow money in many more ways than ever before. Mortgage companies will lend you 125% of the value of your house. -- Yes, that is correct, the banks will lend you more than your house is worth! -- Mortgage loans, personal loans, credit card debt, revolving loans, car loans have provided the funds for the American worker to buy more and more of this ever increasing mountain of capital....

When we bear in mind that most of today's investors put their life's savings into this scheme in the expectation of being provided with income out of it upon retiring, we begin to realize what human tragedy lies in store for them. If we now consider that the Gross Domestic Product of the United States was only $7.61 trillion in 1996 (the last year for which we have data) and compare it with the $12 trillion of the "miracle money" accumulated just since 1994, we can see the scale of the disaster looming over the American and world economy. ....

Should You Be Saving Dollars?

When I was very young, and he was very old, my Great Uncle Billy told me a story about how part of my family got to Texas. I can still see him, setting in the shade on my cousin MaryBeth's huge porch, me on the concrete steps with Texas Stars on each column that bookended the wide front stairs and Billy, in his favorite wooden Adirondack chair.

Uncle Billy, rolling his own cigarettes in trembling leathered, liverspotted hands, would spin tales of robbers and indians and wild beasts, beautiful women and brave gentlemen, and I would be spellbound for hours. And, one thing I remember very clearly: our ancestors had lost everything in Tennessee during the Civil War, and came to the Texas Hill Country to make a fresh start. For this trek, our great-grand-something, Tom, had lined his boots with layers of old Confederate Dollars to keep his feet warm and dry. That's all those dollars were good for anymore.

There's a similar lesson in Gone With the Wind, if you'll remember -- there are taxes to be paid on Tara, and Scarlett's father has put all his savings in now-worthless Confederate paper. Remember? That's when she sews up the green dress and goes to Atlanta....

Of course, we're not facing the devestation of war in this economic crisis - people are looking back in history to the Great Depression not the War Between the States - but the question of how much our dollar will lose value is still one of merit.

How Many Dollars Will You Need Next September to Buy What You Bought This September?

We all know that today's dollar doesn't buy as much as it used to purchase. Your grocery bills over the past few months provide that information. But how weak will the dollar get -- how many dollars will you need next September, to buy the exact same necessities that you bought this September?

1. Krista Das over at the Australian version of the Daily Reckoning interviewed Bill Bodner last December, and here is part of what Bill Bodner had to say (emphasis added):

"In looking at the dollar from a long-term standpoint, it's almost sure that the dollar is going to decline, and someday, go where all paper currency goes, which is to money heaven. That is to say it's going to die. ...

"But the U.S. dollar forecast for 2008 is very, very hard to predict. It depends on what you think is going to happen in the world at large. What I think is that there is going to be a continuation of the credit crunch. I think that we've reached the top, and in fact, that we are past the top of the credit expansion that began more than 25 years ago.

"So we're looking at a major, major top and a major, major turning point in which, now, you could expect asset prices to start down. And if that's true, you're going to see a lot of people who are going to need dollars. They're going to need currency to pay their bills. The credit expansion pushed up the level of debt all throughout the system, not just in the U.S. but worldwide.

"A lot of those debts, most of those debts, are calibrated in dollars so that when people go to pay off the debts, they have to come up with real money. And so I think what we're going to see in 2008 is the first stage of a credit decline, and that's going to mean that people are going to need dollars. They're going to want dollars, and the price of the dollar is probably not going to go down too much. But again, I'm purely speculating on this."

2. Budget Travel reports that right now, the US Dollar buys "about half as much" in 13 western European countries (Spain, France, etc.) than it did only 7 years ago.

3. In November 2007, one "trends researcher" at Information Liberation predicted a Panic in 2008 with the US Dollar "free falling"as much as 90% and gold reaching $2000/ounce. He predicts "the Panic of 2008 will lead to a lower U.S. standard of living."

What Does This Mean to You? Should You Be Saving Dollars?

1. If you are already simplifying your life, then lots of folk that used to think you were crazy, strange, or just plain cheap (have you been called bohemian or a hippie-wannabe yet?) may start looking at you in a whole different light. Heck, they may even ask you how they can simplify too, wouldn't that be nice?

If you're an active simplifier, good for you! Attaboy! Feels good, doesn't it?

2. If you've got excess cash right now, I think I'd be thinking about buying gold with my dollars. I'd save gold not sawbucks. All the folks at Daily Reckoning have been recommending this for years - and history (whether you're looking at the Civil War or the Great Depression) proves it true, gold is a good asset to hold in troubled times.

3. Of course, this assumes that you SAVE. According to the statistics I've been reading on the Web, odds are high that if you are an American - you are not saving, and haven't been in quite awhile. Here's an idea: START.

For more information:

Gold

Very Skeery Stuff

The NestEgg Index and 12 Tips on Saving

The FDIC Watch List: Should You Pull Your Money Out of Your Bank?

Yesterday, I was buying groceries at the local HEB and as usual, I whisked my debit card through the little black box, inputed my passcode, and waited for my receipt ... only to have the cashier ask me to run the card again - it hadn't gone through.

Now, I always know the balance in my checking account and my first thought was Identity Theft! But with today's economic mess, right on its heels was my second thought, My Bank's Gone Under!

Turned out that the cashier hadn't pressed a button, and my second attempt worked just fine ... but I got to wondering about the security of my bank deposits and went surfing on the web to investigate.

Here's what I learned:

1. On August 26, 2008, FDIC chairwoman Sheila Barr had a press conference where she announced that 117 banks were now on the FDIC "watch list," up from 90 banks at the beginning of the year. So, they've added 27 banks to the list in the past 8 months. It's the highest number in the past 5 years.

2. At this press conference, the head of the FDIC didn't release the actual list. The feds don't want to give out that actual information, because they are afraid that depositors will read the list, and run to take their money out of those banks on the list. The FDIC Watch List is as big a secret as the recipe for Kentucky Fried Chicken, it seems.

Of course, there's not enough cash in these banks to cover a run - banks loan money, that's how they make a profit (think Jimmy Stewart in It's A Wonderful Life) ... and the FDIC would have to step up and provide cash to cover the depositors' demands - and that's true for the healthiest of banks. The problem these days, apparently, is that loan business hasn't been profitable.

3. So far this year, 13 banks have failed in the US (WaMu was number 13). Only three (3) banks failed in 2007. A banking analyst interviewed by ABCNews opines that we'll see over 100 bank failures by the end of 2009, although most will be "small institutions."

4. LACE Financial (a company that monitors the banking industry) reports that for commercial and savings banks, net income was 74% lower in the 2nd quarter of 2008 (April, May, June) than it was for the first quarter (Jan, Feb, March) -- and that the 2nd quarter of 2008 was 87% lower than it was last year, in 2007. This is industry-wide: sounds like banks are not making any money, huh?

The FDIC Watch List -- and Other Bank Ranking or Watch Lists

5. There are companies or groups that rank the safety of banks, independently of the FDIC. These include:

• Bauer Financial (go to their site, find your state or your bank)
• LACE Financial (LACE doesn't offer up its "Watch List" online for free; however, it does report that in the second quarter of 2008, its D List (next to the lowest ranking) rose by 40% and its E list (lowest ranking) rose by 64%. Right now, LACE has 684 banks on its D List, and 490 institutions on its E list. And, LACE also finds its List to be more accurate than the FDIC Watch List, because the FDIC List has to await the bank examination process and the CAMEL ratings - the LACE list is simply faster to finalize. )
• VeriBanc (you're invited to call and chat with them -- but there's a fee)
• The Implode-O-Meter (a non-industry participant that has created its own ranking system and website list -- "implode," defined as "the "imploded" status is somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or a "firesale" acquisition. The Companies include all types (prime, subprime, or a mix of both; retail or wholesale; subsidiaries and entire companies). Note: Companies listed here may still be operating in some capacity; check with them before making assumptions." According to this Watch Group, 286 major financial institutions have "imploded" in the US over the past year and a half (since 2006). )

So, with this scary news, what do you do? Do you pull your money?

6. If you've got money in a bank, the first thing you should know is whether or not your money is deposited at an institution that is protected by the FDIC. Go check the FDIC online list to find out. Whether or not the FDIC is strong enough to handle the hits it may be facing is one issue (watch for an upcoming post on that concern)but not having your money in an account that's even offered FDIC protection is another. If you're banking, then you want FDIC protection.

7. Next, remember that the FDIC doesn't cover everything -- the contents of your safety deposit box aren't covered; any amounts over $100,000 in your checking account and $250,000 in your IRAs aren't covered; money market funds, etc. are not covered. Move your funds around, as needed, to make sure you are within the guidelines -- and if you've got cashed stashed in those safety deposit boxes, think about whether that's the best place for it to be.

8. If your bank fails, and it's protected by the FDIC, then you may face a couple of days where access to your account might be hampered. Keep some cash on hand, if you can, to cover the necessities -- diapers, gas, things like that.

9. If you choose to take your money out of a bank, then you're faced with difficulties. First, how to protect it. That's one reason for a bank, right? Fire, burglary - these are real threats to your nest egg. Also, you're going to face a difficult time paying your bills if you've been accustomed to writing a check, or paying online. You can pay by money order, but it's a hassle. Maybe you stash cash and keep an account open at an institution you consider safe, just to pay bills - keeping as little cash there as possible, depositing right before you pay the monthly invoices?

What does all this mean?

10. Here's LACE Financial's outlook:

The financial condition of the U.S. banking system is rapidly deteriorating as the increased number of banks on the LACE Watch List reflects. It appears to us that nineteen of these banks should have already been closed and thirty-two other banks require capital infusions or regulatory assistance. A major cause of failure for several of these banks will be due to high concentrations in real estate construction lending. Given the likely resource constraints of Federal regulators, we would expect a measured closure rate of approximately ten banks by the end of 2008 with failure rates accelerating after the first of the year. As such, LACE Financial maintains a negative outlook for the U.S. banking system.

11. For me, this means that this Fall will be bad, but next year will be worse -- unless some major events transpire. In my surfing around, I've started to see the phrase "slow depression," mentioned quite a bit. I'm going to pray and study a lot, take it a day at a time, and a step at a time, and I'm going to read those folk over at the Daily Reckoning, among others. They've been warning about this crisis for a long time now.

Fear is Your Enemy

Fear can hurt you, even destroy you. This is no time to panic, it's time to be smart. You will get through this. Everything is going to be alright -- maybe not the same, but you and yours will be okay. And, if you're already in the process of living a simplicity lifestyle, you're ahead of the game.

For more information:

What is Simplifying? Should You Do It?
Starting to Simplify - Step 1
Starting to Simplify - Step 3
Are You Brave Enough to Read Empire of Debt?