Popcorn and Austrian Economics

Austrian Economists believe the recession will only end when consumers and governments have paid their debt. Only then will it be possible to begin spending again.
If this is the case (and it makes sense to me) we are looking toward a Japanese type recession which may continue for twenty years. We entered this recession in a much worse state than Japan because both governments and households were in debt while the Japanese are great savers. Japan also entered its own recession at a more favorable time- when much of the rest of the world was doing well and thus able to buy Japanese goods.
In order to survive a long recession it is necessary to have a stock of very cheap treats. Not even survivalists can live without things to look forward to.
One solution is popping corn. This is cheap (65p per 500g) but makes a very large volume of popcorn. Simply lubricate the bottom of a saucepan with some oil to stop them sticking- but not too much or the corn will fry and not pop. Heat the corn under a moderate flame until you hear it pop. Do not take the lid off!!
You will end up with a saucepan of popcorn for about 5p. This is great fun for kids as well.
Popping corn stored in jars also give the kitchen a farmhouse feel.

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The economics of toast

I have just treated myself to the most expensive toasted sandwich maker I could find- a Cuisinart unit costing �50.
Nevertheless I hope to make my money back in a year- or less.
1. Toasted sandwiches are a good way to use up fridge scraps- particularly things like carrots and onions that are cheap and healthy.
2. A toasted sandwich is made of the same things as an ordinary sandwich but tastes like junk food. It is a form of healthy eating by stealth.
3. It is important to eat a good breakfast if you leave the house at 5.30 in the morning. Cornflakes simply will not take you till lunch while a full English breakfast will kill you over time.
So far I am very pleased with it. It is built like a tank and has removable heating plates- which makes it one of the few hygenic sandwich makers around. Furthermore it comes with a five year guarantee and has a timer so that there is no need to stand over the machine while it is working for you.
My only regret is that I bought it in the wrong place. I would have done better to use Amazon which charges �43 rather than �50.

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The economic outlook

Here, for what it is worth is my view of the main western economies (chiefly the UK and the USA).
I believe the main problem with both nations is too much debt. This is particularly dangerous because the government, the consumer, and business are all equally insolvent. This means that the state can no longer stimulate the economy by assuming the debts of other players the way it attempted to do with the banks.
I expect a series of short term apparent recoveries each of which will be followed by a further slump. None of these are likely to be as severe as the great depression but I do not expect a decisive return to health for a number of years.
Most governments understand the dangers of deflation (falling prices and wages) that was seen in the 1930's and the Japanese experience shows that there is no way to halt a deflationary spiral once it has started. This indicates that both the USA and the UK will adopt strongly inflationary policies designed to stimulate consumer and business demand.
Stimulus packages do work- for a while. The problem is that they work too well on some levels. Consumer confidence is only another name for the willingness to spend and borrow.
Recovery will only occur when consumers, government and business can spend once again. This will only happen when these groups are solvent. The problem is that both governments are going for a quick fix by encouraging them to borrow even more. This can only result in short term relief- followed by further decline.
IN CONCLUSION.
1) Do not rely upon government solutions. Sooner or later the government will be unable to borrow any further money.
2) Reduce personal debt.
3) Diversify. Have more than one source of income.
4) Devote 10% of your income and 10% of your time to Survivalism and the Alpha Strategy.

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