What if we all saved?

Thoughts just spinning around, after reading about how crazy our money system is, probably a useless thought, coming from a spoiled position, good job, no dependents, but what if we all saved rather than consumed more and more?

It's an impossible question. I mean the crazy thing is that the definition of saving suggests actual POSITIVE cash flow, while it seems merely now borrowing less IS SAVING!

I suppose a better question than savings is investing. What if we all invested? And by investing I don't mean stocks and bonds and all those abstract claimed investment centers, but invested in things that reduced our future cost of living!

Live somewhere I don't need a car every day to get everywhere - save money. Pay down my mortgage - save money. Install fluorescent - save money. Invest in energy saving appliances - furance, refrigerator, etc - save money. Improve home insulation - windows - save money. Install passive solar heating, PV cells - save money.

I mean there needs to be some analysis of costs and long term benefits, and benefits are guesswork, like not knowing what electricity or gasoline will cost in the future, but there's still noneconomic benefits - less stress with less debt, or pressure to earn income - and less pollution from less consumption.

So when I say save, I mean the sorts of things that make LESS NEEDED WORK in the future, rather than more. I admit I don't have a clear answer for "actual savings" - where to invest it. I almost have a thought that its better to "give away" savings in ways that make our community stronger, just like volunteering our time. Some will have more money than they need, some will have more time than they need, depending on opportunity and where you are in life.

Again, coming from a good position income and debt, I know I can't offer proper sympathy for those who MUST take on more debt than they ought (by my standards). There's times and places where you DO have to "sell your soul" to get by, take on debt.

I don't have an absolute standard against taking advantage of "easy credit", like holding a balance on a credit card in a "bad stretch" if you think the future will be better, but it is a slippery slope, a "new power" that can corrupt, especially when things are hard, and credit creates an illusionary "safty net" that once you get used to, it makes it easier to let discipline slide.

Oh, it's sad for me, sad people find themselves "forced" into debt, given choices that are limited, and the best choice is to take on debt just to pay for regular expenses. It's sad to me to think how "easy money" creates a flow of money from those who have too-little to those who have too-much, and those with too-much just get more which expands their power to extract more wealth from those desperate enough to take their sneaky offers.

It's hard - I accept the need for personal responsibility - I accept credit cards CAN be used wisely - sadly people like me benefit by "zero fee, grace period" payments and build a credit history at no cost, which allowed me to get a fair mortgage interest rate, and all. I benefit but I'd gladly go back to $30 annual fee cards if I thought I was helping a nicer system.

I have sympathy, and unsure what it would take for more people to find a way to get ahead without delusions of get-rich schemes. Debt is a curse to me. It is slavery of our time in an unknown future. I don't understand why more people don't see this.

The Great Disintegration

The world has followed a long route towards globalization, perhaps most triumphing through communication networks - radio - phone - satellite - internet.

Cheap energy has increased the speed and decreased the cost of going long distance as well. I have to think that the end of cheap energy will be the end of wide-spread air travel, and certainly it is a luxury unneeded by 90% of the population. The Al Gores of the world will be flying even in 100 years, even if not in as great of luxury as now.

But there is a slower flow of population that needs no fossil fuels at all. The mode of transportation is our feet, and the motivation is a desire for wealth and opportunity.

I don't have any clear progressive view of immigration, legal or illegal. I mean like the border with Mexico - fences maybe can slow the flow but the only progressive solution is to work with Mexico to empower people there to have what they seek here. Spending money on "national defense" is justifiable for nations, but part of defense is to strengthen your weaker neighbors.

It seems impossible to really imagine what the future might look like under population pressures and lower resources. On the issue of population there is a reality yet that nations and communities will set up "defenses" to their land, especially in a future where local land and resources support the population.

Well, all you have to do is imagine perhaps a decade like the 1930's where temperatures and rainfall make crops insufficient to produce enough food. Given the level of waste and food going to animals, I'd imagine there's a large margin for failure before actual wide-spread starvation, but there may yet be in our lifetimes and locales such challenges, and hard decisions.

It's said that civilization arose with agriculture and the ability to concentrate stores of food to support larger populations and free more people from food production to alternative occupations.

I give up, too hard to imagine how things might change. I don't trust our consumption levels, our collective debt, our population, our dependence upon economic growth and cheap energy to keep it all running.

It would be nice to think things like the internet may survive a depression, but I couldn't hope for it. It is curious to question what technology is "sustainable" through depression. Maintaining and protecting infrastructure is vital to our world now, but what will be the priorities under harsher conditions?

To infinity and beyond?

Prediction is very hard, especially about the future - Yogi Berra

Sometime in the near future humans are going to try to see what they can do without fossil fuels, at least without as much fossil fuels.

Some think under good conditions there'll be a smooth transition to alternative technologies and energy sources. I'm not very confident about this story considering the size of humanity's scale since we first starting burning coal, oil and natural gas. Ideally the future always has a backstep in case things turn tough - we can go back to old technologies, old energy sources, but there's a small problem - not all energy sources can scale to any desired level.
http://www.eia.doe.gov/emeu/aer/eh/frame.html U.S. Energy usage graph
http://en.wikipedia.org/wiki/Image:Population_curve.svg World Population graph

Back when President Bush thought of sending people to the Moon and Mars, I thought a better mission would be to see how we could live on the Earth. I mean since we'd have to depend on solar power in space, why not on earth? Its much easier - breathable air, liquid water, nice temperatures, soil, microorganisms, a whole freaking biosphere at our service. But it's not as romantic to imagine merely surviving on earth I guess. Too easy?

I thought it would be good to build "sustainable cities" from scratch. Fill them with people willing to live within local means, local energy, local resources. Let them use the best technology possible, and see what it takes to live. Make it a school for research and learning. Seems like a good experiment.

Why isn't it as fun as it seems? Because there's a whole "world" of opportunities created by living within an advanced connected modern civilization, and it's a royal pain to try to build up something 1/10 as good over many years. So the experiment is left untried.

I sort of do take it in the "lifeboat" ideal - just in case things turn out bad for our monster global empire, we might like to SEE the alternatives. See what can be done without depleting every corner of the global of its wealth as fast as possible.

It would be interesting - perhaps a group would try their fortitude at local self-reliance, boosted by some good initial funding, but looking to create a system that can keep going even if the external imports disappear.

Then I think of the spaceship theory - going to the stars. One GOOD reason to NOT try to send humanity to the stars, even assuming we had the technology is it would take thousands of years, and it is as likely as not future technology would improve to a level that speeds could be increased. Imagine sailing along at 0.25% of the speed, traveling for 17 generations in isolation, when along comes a new spaceship traveling at 2.5% the speed of light, passing them by so fast that they don't even bother slowing down to do anything more than say hi - since it'd waste too much energy.

Technology can be a similar sort of experiment - well along with evolution at a different rate. And human changes to genes another acceleration!

Whatever future you imagine, you can take your best guess and jump at it, and find in 5 years a fully different approach has fully "out competed" yours and all your efforts are wasted, assuming your way is abandoned.

Nature perhaps doesn't optimize as much - allows more variations - AND of course speedy paths can lead to deadends much faster. That spaceship travelling at 2.5% of light speed might break down half way and have no way to slow down, while the tortoise prods along and wins the race eventually. Sometimes future winners and losers are not what you'd expect from a linear extrapolation of short term success.

Will human's experiments in culture and technology lead us to a deadend? The evidence seems high on mere probability, even knowing nothing of our methods or bottlenecks.

I suppose the best paths are ones that are fun on the way, and adaptable if circumstances change. Big is generally less adaptable all will admit. Nuclear power seems great by many measures, but much harder than a windmill. I'm not willing to bet which will WIN, but I'm betting a windmill seems a safer bet knowing nothing of the future, not to say there's not a million designs for either.

Plodding may win the race, but I know I'm a reluctant hare, wishing I could slow down, but still in awe of the speeds we travel, so I keep pretending I can slow down when circumstances change. I don't know.

Emergency Savings

Good article in the strib on savings, one link at
http://www.startribune.com/148/story/1031572.html
And references:
http://www.americasaves.org/ America Saves is a nationwide campaign in which a broad coalition of nonprofit, corporate, and government groups helps individuals and families save and build wealth. Through information, advice, and encouragement, we assist those who wish to pay down debt, build an emergency fund, save for a home, save for an education, or save for retirement.

Considering the recent reports of a negative savings rates, seems a good goal to promote!

The strib article dealt with keeping a savings for covering emergencies, contrasted the advice to keep 3-6 months of income for emergencies, accepting it may not be practical for everyone. Also it say certain expenses shouldn't be considered emergencies.

I don't quite see the point of a special category for "emergencies", just see keeping a level of savings as good, so like my good minimum is $5000, originally from what was left over from life insurance when my mom died, and I only went below that limit once when I was self-employed, when I didn't renew a CD investment for a few months until things got settled.

Admittingly what my actual savings is a tricky thing with seriously thousands of dollars following around every month with a mortgage and a rental property. I track monthly balances, and "precount" mortgage payments at the beginning of the month on the last month balances, so my bank statements always exceed my own balances.

I've supported the idea of holding savings for some period of expenses, rather than a period of income, since ideally expenses can decrease on times of hardship. That "ideal" is a luxury of course, and it can be some people can't cut back a majority of their expenses no matter what - without like selling a car or home or something drastic.

At the moment, I've cut extra payments to my mortage to save for a new driveway, so with luck by late spring I can pay cash.

I understand there is a sense of security having credit cards there to cover short term unexpected bills, and I'm not against holding a balance short term, just been lucky to not have had to do it myself so far. I understand the danger exists - to LEAN on a card a few tough months and convince myself perhaps things will smooth out later, and then find it not working out. I've heard of people using credit cards to pay medical bills, and then falling behind. I mean I heard that was the biggest reason for bankruptsy apparently.

I have some sympathy, and no great love for credit card companies for their marketing that encourages debt, but really I think it is inexcusable to use a credit card to cover expenses unless you have strong reason to believe you'll have money available soon to cover it. I think it is better to try to negociate with paying a bill than to just pass it off onto a credit card to end harressment by bill collectors. CREDIT is NOT MONEY, and it is just asking for trouble to treat it that way.

A couple years ago I accepted a 6-month interest free loan for getting a new furace/AC installed. I took it because it seemed to have no strings. I got more than a little paranoid by the terms. Incidentally it was through Wells-Fargo. So the terms had minimum monthly payments such that the principle would be repaid in 12 months. Second on 6months+1 day, ALL of the accumulated interest from the last 6 months is added to the loan (at some rather ugly interest rate), plus new interest of course until it is all paid. So I imagined EVEN if I calculated how to pay in 6 months, perhaps 1 day late and a multihundred dollar interest charge would be added. Who knows? It was a total scam to me - encouraging people to pay it too slow, offering NO help for how much to pay to finish in 6 months (like a suggested payment amount), or a clear due-date when the interest charges would begin. So I divided the amount by 5, and paid that every month to be safe.

In contrast I also bought a Sears Clothes driver for $400 with a 12 months, zero interest, and it seemed honest. After 12 months, a normal Credit card interest would be charged from that day on if not paid. And there was NO required payments either. I still felt guilty over it and paid it off after 6 months so I wouldn't have to worry about it.

Overall I get pissed by all the credit card offers, the equity loan offers, and fear too many people get suckered into good deals - like the zero interest credit card deals which jump to 20% with one late payment on a DIFFERENT bill! It's horridly dishonest. And of course there's refinancing your home with a second mortgage to cover credit card debt - like taking candy from a baby from some people who haven't learned yet.

I am glad credit card usage allowed me to get a history to get a good mortgage interest rate, and so I can't despise the completely. I don't even know what laws if any ought to be made to protect people. I'm paternalistic enough to believe many people are not emotionally capable of dealing with temptation. People ought to be accountable BUT mostly I'd say "one stike, you're out" - owning a credit card should be banned from people who declare bankrupsy at least. You'd think the CC companies would learn anyway, but maybe the risks are still worth it.

I suppose the BIG GAME is there's so much money out there looking for investment. It's crazy to me how easy some sorts of credit is now. We're lucky, but I fear there's too much money thrown around for greed over investing in things that support a better world.

I fear the idea our economy is lifted too much by leveraged debt and too much faith that the powers above (Federal reserve) will save us from our excesses. It's really a form of corruption when you're so powerful that you can't fail because if you DO fail too many people are hurt. I mean that the government will bail you ought.

It's a scary world and I recommend to everyone:
1. Keep debt down as you can.
2. Keep expenses down as you can.
3. If you have money to invest, invest it closer to home.
4. If you have more to invest, find other like-minded people and collect your power to bigger projects. I can't condone any investing in the stock market unless you really are sure you're willing to throw it all away (i.e. take the loss when things fall)

The reality that our economy can be wrecked because of fearful selling is insane.

Lots of thoughts from savings, and I still don't know how much to save - enough to buy nearly everything on cash, including emergency spending. That's clear right?!