I am to blame for deflation. I am a saver. I have always been a saver.
I never liked borrowing money, even when buying my car or my house. I felt very happy when the car was paid off. I felt ecstatic when the house was paid off.
By the summer of 2008, my wife and I had saved up a substantial amount of cash. At the time, the price for many things were going up: oil, gasoline, food, etc. I felt that our cash savings was losing value due to rapid inflation. So, I hatched a scheme to preserve that value, and even increase our nest egg, by betting that the price of oil would continue to climb.
From mid-Summer of 2008 until the late Fall, we watched the price of oil fall, fall, fall, as the impact of the high oil prices eventually worked its economic turmoil, leading to the collapse of the housing markets and banks.
With our nest egg gone, and a great aversion for going into debt, we are back at it... not spending. We've managed to save up a bit, but not close to what we had only half a year ago. Still, we have enough to keep on top of everything, and to start thinking about the next big purchase.
Our cars, which we purchased new in 1994 and 1999 now boast 240 and 260 thousand miles. We talk about buying a car, but the more we think about it, the less we want to do it. We see the prices declining on the new cars, as the auto makers offer "Employee Discount Plus" sales, to try to tempt us into the show rooms. I expect that these prices will continue to fall, as the auto makers, and dealers, try desperately to sell the glut of cars that built up over the past year. Why should we buy now, when we can wait for a better sale, keep our emergency cash liquid, and save wear and tear on that future car?
I am to blame. I am not spending money during this economic crisis. To spend is to be a good consumer, a good American, a good person.
Deflation is here.
I'm not the only one in this boat. The vast majority of us are trying hard to save. We are delaying purchases until the last possible moment. We are watching the prices decline on homes, automobiles, electronics, and more. We are saving, we are waiting, and we are helping the global economy on its way to a severe and perhaps catastrophic recession.
By saving up, we are slowing down the money. This might not be severe, if the quantity of money hadn't already been shrinking. But with both of these happening at the same time, the deflation has begun.
We may be in for a repeat of what our great-grandparents experienced in the 1930's, a global depression.
So, what to do, what to do?
Unfortunately, now that the global economy is so inter-tied, there is very little we can do to stem the tide of deflation and job loss. For us, it is a matter of making sure that each of us, as individuals and families, can take care of ourselves. By extension, this means that we need to make sure that our neighbors, and our communities can take care of themselves.
It is time that we start getting serious about taking care of ourselves. In fact, the only way we can take care of others is by making sure to take care of ourselves first.
Yes, we should Buy American.
Yes, we should Buy Michigan First.
Yes, we should Buy Local.
Yes, yes, yes.
We need to make sure to take care of our families and our communities first.
What should we be doing?
We should be creating jobs by buying fresh produce grown by our neighbors, and our community members, and our local permaculturists, and our local organic gardeners, and our local farm market.
We should be generating electricity at our own homes, and in our own neighborhoods, and our own communities.
We should be reviving and inventing ways to share, reuse, barter, and trade without the use of money.
We should be creating local currencies to help our families, neighbors, and communities to meet their own needs.
There are many things we should be doing.
I would be perfectly happy to buy things only from my neighbors.
Is that a protectionist attitude? Yes.
Does it help my family? Yes.
Does it help my community? Yes.
It is time to face reality, this current form of global economy has failed. It is now time to get off the couch, and to start to create the new economies of the future. Economies that improve the environment, not destroy it. Economies that encourage conservation, not consumption. Economies help us find the better parts of ourselves, and in turn, help us make a better world for all.
The future is at hand. Deflation is our call home, to community.