Money Principle Ideas Generator: economic meltdown and what would you do?

Lately I have been concentrating on thinking about the difference that mentality makes in all affairs of finance (well, other ones as well but this blog is about money). I am working on a test that will help place oneself on a continuum between ‘positive’ and ‘negative’ mentality; today was intending to post an exercise that goes some way towards moving you to the ‘positive’ side.

Then I started thinking about the headlines from the last several days and decided to do something entirely different and I hope that this will spice things around here a bit.

In my post ‘Who holds the strings?’ I said that ‘…we should stop asking whether there will be a global economic meltdown and start asking when there will be one’. Well, reading through the news lately, there are signs that this may be approaching faster than we may think. Greece is in turmoil, there are no ways to ensure that people pay their taxes (this will take some doing given that is a habit that has lasted for several centuries), pension reform is nowhere to be seen and all bets are that Greece will, sooner or later default. Italy’s rating has been lowered; this means it is harder to borrow, harder to repay and it is too large an economy to be bailed out. Portugal and Spain, are somehow keeping out of the news but things are not good. As to the UK and the rest…well have a look at this.

To top it all, politicians seem to be totally at a loss. The British Prime Minister deleted the part of his party conference speech where he implied that the way to solve the economic crisis is to pay our credit cards off but this kind of statement still gives a pretty good idea of the level of ignorance, lack of awareness and distance from any kind of realism.

So, what I thought is that this is a good time to start the Money Principle Ideas Generator: a competition for the best ideas to deal and/or cope with financial trouble/situations. As any respectable competition this one carried a prize – £20 or equivalent if the winner is from overseas.

Today’s Money Principle Ideas Generator consists of the following two questions:

1)      What are the three measures you would promote were you a World Leader, to prevent and/or alleviate a global economic meltdown?

2)      What are the three measures you would implement immediately to ensure that you and yours survive a global economic meltdown?

Rules: Each entrant is allowed one response. Responses have to be posted as replies to this post (I believe in openness and sharing of ideas). All entries will be judged by me and John on three main criteria: 1) how imaginative the measures are; 2) how realistic their implementation is; and 3) how easy it is for these to be applied by others. Sense of humour is always appreciated but silly entries are discouraged.

Deadlines: All entries have to be in by this coming Sunday (9th October) 23.59 GMT. The winner will be announced next Wednesday (12th October).

Go for it, my friends! I am very much looking forward to your entries.

6 thoughts on “Money Principle Ideas Generator: economic meltdown and what would you do?”

  1. If I was a world leader I would do the following:

    1) Stop asking governments to hand over money to countries who are warring with each other – money is used to fund wars and not food.

    2) Get rid of quangos which have been created to spend money yet provide nothing of benefit – e.g. if someone rings the dole office let one person handle their claim instead of having to speak to 2 people on 2 separate days. It would be more efficient for one person to deal with it in one call.

    3) Encourage all supermarkets to either give their food waste (food that is perfectly good yet is considered to be out of date) to people in need or sell it cheaply. Supermarkets should be penalised for wanting the perfect sized lettuce, straightest cucumber etc. etc and they should buy food that is natural regardless of size or shape – that way farmers do not have to plough acres of food back into the ground because their food does not conform.

    Things that can be implemented now:

    1) Encourage people to grow their own food and form food co-operatives so that excess crops can be exchanged with each other. Also if people grow fruit that they don’t pick rather than let it rot on the tree – they should open up the gardens so that people can come and pick it and either turn it into jam or use it (jam or pies could be given to the person whose tree has been picked by way of payment) Penalise supermarkets for wanting standard sized fruit and veg – make them sell normal looking food and give away their on date/out of date food or sell it cheaply.

    2) Pig bins in schools/canteens/restaurants so that waste from plates gets scraped into bins which is then given to pig farmers to feed pigs thus cutting down on the amount of food that the farmer has to buy in to feed those same pigs.

    3) Streamline government processes – by getting rid of quangos and training people to do each others’ jobs so that if one goes sick someone can stand in. Get rid of the system whereby you ring the dole office to make a claim and speak to one person who then tells you that they cannot complete your claim and that someone else will ring you to go through the rest of it – this should be done by one person in one call; then in the jobcentre when you speak to someone in person, you have to go through the claim again – so that is 3 people involved in one claim so that is 3 lots of salary (av. £14K per person) plus 2 phone calls, 3 offices to rent, heat and light for a claim of £67.50 a week (£3510 per annum)

  2. After giving this some thought, and having slept on it I have come up with my answers.

    World Leading Ideas – In no particular order of importance

    1. Since we are only a small cog in the international wheel we need to lead by example – Pay down our debt, and encourage other countries to do the same. Increase investment in public projects to help increase trade and real jobs for people.Whether we like it or not this is very painful for all of us, but it just can’t be avoided.
    2. Tighten and implement the international laws against greed and corruption amongst the ‘elite’, ie bankers, corporation big shots etc. If you or I made such a bad job of our work we would be down the road, so why are they all still getting massive pay, bonuses and pensions – for getting it all wrong! Something far wrong here. These people should not be rewarded, they should PAY for their mistakes. And they should not be allowed to move from one big job onto another having left a mess behind them.
    3.Invest in micro businesses here and abroad, help poorer countries to do the same, but first we need to be sure that any money spent is not being stolen or misspent by corrupt officials. ( Thinking about the Kits for Kids project here)

    On a Personal level my advice to my family would be.

    1. Cut up your credit card and use cash money – You will find out what things really cost. Join your local credit union.
    Take your money out of the bank (it might crash – again), cash in the pension you think you are going to get (it will not be worth the paper it is written on), buy gold / stash cash,
    2. Stop feeding the machine – Don’t shop at the big supermarkets, buy locally. Make do and mend. Grow food, keep chooks, barter with your neighbours, forage for free food, use freecycle, minimise your spending, go back to frugal ways, be happier and teach your children valuable lessons for life.
    3. Reconsider how you earn your money – If you have a dream go for it, because you only get one life. Easier said than done I know, but why not? Why should you work as a postman if your degree is in the Arts, develop and use the skills you have to find a better way

  3. Six ideas? You’re asking a lot!

    In answer to the first question:

    1. Rather than putting money into the economy via QE and buying back Government Bonds, I would invest the money in things that would generate jobs, address the environmental issues we are facing, help people who are facing fuel poverty and improve the balance of payments – so creating ‘green’ jobs in energy efficiency, micro generation, and stimulating local economies by investing in micro businesses through credit unions and local building societies

    2. Fund research into sustainable economics. Perpetual growth is impossible, particularly as the earth has finite resources. We need to find a way to break out of the current economic norm. Encourage local initiatives such as LETS, Time Banks and local currencies that encourage local reinvestment.

    3. Require politicians (local, national or international) to have had at least 20 year’s experience in the real world and a proper job before entering politics. Being on the staff or another politician, or part of the Westminster establishment for example would not count.

    For myself and my family:

    1. Think about where I keep my money. I try to invest ethically, and have just located my local credit union with a few to opening an account (the local office is only open once a week and I can manage my account online). While interest rates are so low, it is a good time to try alternatives without feeling that you are making huge sacrifices. I also have an appointment booked with the pension advisor at work to review my investments there.

    2. Continue to live my values – and when circumstances mean I can’t shop at the farm shop/farmers’ market/village shop/health food shop, don’t beat myself up but find e next best/least worst option. Within the limits allowed by my current work and lifestyle, grow my own (this was surprisingly successful this year) and think more carefully about what we are eating. Use local small businesses for non-food needs.

    3. Invest in the skills needed to make do and mend… My DIY skills aren’t great, so I need to improve. I can cook, but with just me most of the time, I try not to cook too much except when I’m entertaining! Rediscovering my sewing skills and learning to knit and crochet are things I would like to do over the next few years as an investment in the future.

  4. Firstly, one would have to be THE world leader to have any effect. A short term outlook by politicians is an unfortunate consequence of regular elections. Given that I have serious reservations about that much power being passed to anyone (except me, of course), I would suggest that a world leader should :

    1. He should consider that, if the global meltdown does occur on his watch, he will be remembered as the man who allowed it to happen.

    2. Therefore, he should make every attempt to convince other leaders to co-operate instead of compete.

    3. He should make his overtures public and open. He should bluntly warn the public that they are facing potential disaster and that, if it happens, they are on their own. He should not let anyone hide behind false hopes.

    It is a forlorn hope but the only one we have. Otherwise any efforts will be sabotaged by competition.
    For ‘me and mine’, I have already set some things in motion.
    1. We have enough cash to last a month for living expenses if we have to. I am adding to that stash as I can. That does not include utilities or other expenses which are paid by direct debit. So long as the money is in the right account, I feel that we will have done what we can.

    2. As inflation is rising, I am buying staples to store. We might get very bored but we would not go hungry for 2 months with what I have in stock. A balanced diet would take some planning but is achievable. I am buying as much locally as I can to encourage out local producers to keep in business.

    3. I am watching the markets and news very carefully to try and anticipate when the crunch is likely to happen.

    I do hope that I am wrong. In the mean time, I don’t think it helps to let it paralyse me and I carry on with a normal life, with my fingers crossed.

  5. I already shop locally – I prefer my greengrocers and butcher over the supermarket. I will use LVs or cash to buy stuff. I will not waste food – everything will get used.

  6. I found this really challenging and I’m afraid didn’t generate any “new” ideas or “new” thinking. Funnily enough, I found that my ideas for a country or a family were exactly the same:

    1. Network / Barter / Trade – develop a skill / product (NOT money) that people need / want
    2. Be self-sufficient – grow your own, make your own, reduce-reuse-recycle, make-do-and-mend
    3. Spend wisely – buy one with longevity in mind ensuring the best quality for the cheapest price

    It has been really interesting reading the replies, Annexxx

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