I watch Doomsday Preppers. I don’t believe everything they say on the show, but I watch it. I know that the producers have their own agenda and they want to include some variety, so they have the featured preppers say that they’re preparing for a volcano to erupt in Wyoming, or an earthquake to hit the Midwest, or an epidemic of some exotic disease. Exciting stuff, but at the end of every episode the voice-over dude comes on and calms our fears by telling us how astronomically improbable these doomsday scenarios are.
The Real Danger
Back in the real world, most preppers are preparing for an event that experts from many, many fields agree is extremely probable in the not-too-distant future: a global economic collapse.
Let’s face it — there has been no real recovery from the Great Recession, as reported in this recent article from the Chicago Sun-Times. (Note: I’m not as rosy about our housing market recovery as their article is.) The government of Cyprus is stealing money from the private bank accounts of their citizens and some have speculated that such options are on the table for handling the debt crisis in this country, too. Greece, Portugal, Spain, and Ireland have been in the news with alarming tales of their economic problems. New stories are coming out about how Japan is printing money like mad (as is America) to try to stimulate their economy.
One of the many problems with America’s economy is that we’ve become a consumer nation. We consume more goods than we produce. It wasn’t always that way. We used to make a lot of stuff here and sell it to the rest of the world. But then the big corporations discovered that they could save a buck by moving their manufacturing centers overseas and exploiting cheap foreign labor. Corporate profits went up as expenses went down, but America lost its manufacturing base. Look at the labels on the products that you buy. Where were they made? A lot of it comes from China, but you’ll find other nations as well. It’s become pretty rare to find a consumer product made in the USA. We’re not just dependent on foreign oil; we’ve also become dependent on imported manufactured goods.
It seems like the only booming economy is China, where (surprise, surprise) all of our manufactured goods are coming from.
Things Aren’t Always What They Seem
Not so fast, there. China’s economy might not be booming as much as it appears and may in fact be the biggest economic bubble of all.
We said that America has become a consumer nation. China has the opposite problem. Even with their staggering population, they produce far more than they consume. China’s economy is dependent on exporting manufactured goods. For a couple of decades now, we’ve had a vigorous trade relationship with China. We send them our money and they send us their goods. (In case you didn’t catch that, that’s not a good thing.) If the money stops flowing into China, they’re going to be in a world of hurt. It should be obvious that with all the American national debt that’s held by China our eventual inability to pay off our loans will send a shockwave through the Chinese economy. But for now, the money is still flowing.
So what are the Chinese doing with all of
our their money? For starters, they’re building factories to manufacture more stuff. Just as it was in America 100 years ago, people are leaving the countryside to move into the cities because that’s where the jobs are, so the cities are growing by leaps and bounds to accommodate both the growing businesses and the influx of new residents. Because of their booming manufacturing base, China has seen a rapid expansion of the middle class, and now they have more expendable income than they know what to do with. Due to Chinese governmental regulations, there are limited investment opportunities for the average person, but one investment opportunity that they are allowed is real estate.
On March 3, 2013, CBS’s news show 60 Minutes ran a chilling story about the building boom in China. You really need to see this video. You’ve hung with this posting this long. This is the pay-off. Here’s the link: China’s Empty Cities.
The implications are scary. The bursting of America’s housing bubble sent us into the Great Recession which we have not recovered from. We’re in a weakened condition. What happens if/when this Chinese real estate speculation bubble pops?
What Can I Do About It?
The reason why I write stuff like this is not to scare you, but to prompt you to not be caught unaware and unprepared. Proverbs 22:3 says, “The prudent see danger and take refuge, but the simple keep going and pay the penalty.” It’s time that we start constructing our place of refuge. You can do it right where you are by stocking up on food and supplies that you might not be able to find or afford when the next economic downturn hits. You can learn skills that will help you through hard times. You can search out other like-minded people and form a supportive community. And you can keep reading this blog…And share it with your friends – click on any of the share buttons below. Thanks!
We welcome your comments.