Today, when a bank goes bust, the FDIC steps in, assumes control of the bank, provides insurance for a portion of the deposit up to $250,000 through December of 2009, (then the insurance rate drops down to $100,000), and works to transfer assets (such as outstanding mortgages and loans) to a different bank.

“…unfortunately, we’re going to have to charge more for it," Federal Deposit Insurance Corp (FDIC) Chairman Sheila Bair told reporters on Thursday

FDIC likely to double fees charged to banks – WSJ | Deals | Regulatory News | Reuters

In general people tend to think that the US Federal government is so rich with cash, that it can afford to do anything.  They feel that it can save any failed bank, or any failed industry, or any failed country.  Iraq, Katrina, and the banking sector have rapidly taught all of us how false that assumption really is!

The US government is now having to seize financial control of banks like Citigroup, raise rates for all banks, and raise taxes for the first wave of Americans to fund the trillions of dollars that are being spent each month.  This comes just a few days after China told Secretary of State Hillary Clinton that they too could not loan the US money indefinitely.

How to Survive the Global Depression When Banks Are Not Safe

It does not take a Wall Street banker to figure out that if banks are not safe, if the US Government can not pay the bill, if there is no bottom in the market, then people have to find an alternative way to protect their future income and their wealth.  (Wealth is by far the most difficult thing to protect during a time of economic turmoil.)

But wealth alone can not keep you alive.  You have to employ that wealth and put it to work to either earn more money, sustain its current level, or at least keep you and your family under a roof, eating food, and staying safe and warm.

So start thinking about how you can diversify your money.  Consider stopping direct deposit payments, or at least gathering up the forms to stop it someday.

If your company requires Direct Deposit, then set up multiple allotments that will send smaller batches of money to multiple different banks.  The FDIC might not be able to protect all banks some day, so you will need to spread your eggs around.

The obvious answer is to pull some of that money out in the form of cash.  True its difficult to manage paying your bills when you have scattered accounts.  However, you need to consider whether or not, now is the time to pay yourself first, and wait to pay other bills when there looks like there will be a future where paying bills will be an important thing to do.

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Years ago I served in the Army. One of the first lessons that I learned in the Army is that there are people that talk about how to do something and there are people that DO something.

The people that do things and avoid talking about things too much are the ones that thrive and survive. The ones that talk about things are bureaucrats and usually cause more harm than good.

The world is rapidly falling into a global depression. When this site was started, that was not a fact and more of a speculation on the future. Now, there are few people that would argue to the contrary.

Unfortunately, the people that used to throw up walls about the reality of what was happening to the global economy are now all to quick to stand there and do nothing. They choose to belabor the question of “How did we get into this mess?”

Well the answer is that it doesn’t really matter too much. We are here and the situation is so dire that there is not time to stand around debating it. If you must debate it at all, then plug your ear into a ear bud on a cell phone and work while you complain and debate.

This is no time for anyone to sit still, sit at home, or mill around without a purpose. If you have a job, make sure you are spending your spare time tightening up your home, your apartment, your car, your possessions. Stock up on food, on batteries, on necessities. If you do not have a job, spend time finding a job, but do not neglect to make some money while you are doing it.

Think that President Obama or the US government is going to solve your problems for you?  Consider that the smartest people in the world just reviewed his plans over the last few weeks and no one thinks those plans are good nor sufficient. 

Need more proof? Here’s a simple number.  The US government has given or promised almost $3 trillion dollars to Wall Street.  This was for the mortgage melt down.  This week President Obama rolled out his BIG plan to bail out people with problems with their mortgage or home value.  It was $75 billion.  That’s $8k for the 9 million people that Obama thinks have financial problems with their mortgage.  That number is so pitifully small that it is insulting. 

Your average person that did nothing wrong and bought an average priced house in the last 8 years, has lost more than 5 times that amount already!

Yes it IS possible to earn money, even when you are unemployed. Leave no sacred cow hidden anywhere. While you are doing something, put together a quick list of ways you can turn your skills, work, or stuff into cash.

Actions You Should Move on Now Before It is Too Late

Get a PayPal account to Receive Money– If you do not have a PayPal account you are behind the eight ball and slightly unplugged from the global economy. PayPal is a payment transaction service owned by eBay. It can help you sell things on eBay. It can also help you get paid instantly when ever you do work for anyone around the world.

Quick Tip! Don’t put all you eggs in one basket, PayPal is US based, you should also consider an International account option. I recommend and use MoneyBookers also.

• 
• MoneyBookers – Online Payment transfers, a useful and cheaper alternative to PayPal, especially in the UK and Europe.

Sell Your Stuff and Useless Luxury Items – If you are reading this and you are American, then you have stuff in your possession that you do not need. SELL IT! Have an extra car, have extra toys, games, books, CD’s, DVDs, etc. Sell that junk. Its not going to keep food on your plate or keep you alive. Turn it into cash, and turn that cash into useful necessities that you will need to survive what is coming next.

Get Smart, Get Educated – A few months ago the potential for a Global Depression seemed remote (to some people). Now the break down of society seems like a remote possibility as well. Maybe it is, but if you are smart you will get prepared now. Do you know how to take care of yourself if your local services, support, government, stores fail? Can you purify water? Can you cook without gas or electricity? Can you grow your own food? Can you hunt? Can you defend yourself and your family? If you answered no to any of those questions then you need to help yourself now. If you can do those things already, you are ahead of the game but not out of the woods, figure out what you need to do next!

What to do with your remaining Credit? – If you are one of the people that still has that soon to be mythical tool known as ‘Available Credit’ you need to consider how you are going to leverage that tool to take care of yourself. Let me say up front, I am NOT a lawyer, I am NOT a financial advisor. I have studied both finance and law. I take no responsibility for your actions. We’re approaching the point where it will be every person for themselves. Its ugly and it’s the way things are going these days. That said if a bank is getting bailed out enough to risk continuing to give you credit, then you have power to protect yourself and arm yourself with more resources and necessities. Put that credit to good work for yourself. Get the necessities you need. Don’t be stupid. Don’t get luxury crap that you cannot use. Picture yourself in a movie where you have seconds and minutes to grab the most important things for your imminent survival and then go get them.

What to do about your Bills? – As I’ve mentioned before I am not an attorney nor a financial advisor. You have to decide how to deal with your bills. My advice to you is pay what you can afford, but consider with fresh perspective the definition of ‘afford’. Just because you have the cash to pay a particular bill, doesn’t mean that paying that particular bill is your top priority.

You need to hoard some cash like a Wall Street banker for a rainy day. If you don’t have your own private hoard, then consider paying yourself first, even if that means paying bills of lower priority last. These days everyone has slightly different priorities with their bills. I can not help you prioritize.

However, consider that cable packages, cell phone packages, even medical bills (for services rendered already) might be lower on the totem poll than your mortgage or more importantly even, your car payment. Credit card payments are a tough one. If you still have available credit, then your credit cards are STILL useful. If you do not have ‘available credit’, then your credit cards or not worth anything. Worried about your credit rating?

News Flash – Everybody has bad credit these days. Put that in your pipe and smoke it, but only while you are doing something because this is no time to stand around morning the loss of your credit.

Getting rid of that over priced car – If you are making a big fat car payment, you are in trouble. You need to find a way to unload that expensive car payment. Get a more affordable vehicle (and possibly one that is capable of driving through ditches). Get a car that you can pay cash for. One that does not require a payment and therefore will not be repossessed if you have to prioritize your cash flow away from a car payment!

Learn how to Make Money on the Internet – If there are no jobs in your area, odds are that will be a long term trend. You can consider moving to an area that has work (I don’t recommend it because you will find yourself somewhere without any local support or knowledge of the area.) That said, earning a living on the internet is possible. Will you get rich? NO. Can you make some money? Yes Can you make a lot of money quick? No It takes time to learn how to do this and build nothing into something, but it can be done. It can also offset your unemployment or savings. Do you have to report internet earnings to your local unemployment office?

I have no idea. Do what you have to do to survive. I know what I would do!

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