Senior Citizen Financial Planning: Prepare For Economic Downturn

May 17th, 2010 | By Sharon Shaw Elrod MSW EdD | Category: Senior Finances

AOL’s Daily Finance Page today reports the possibility of a financial crash–yet again–this year (2010).  Senior citizens everywhere need to stay abreast of this issue because our income is fixed once we retire.   Charles Hugh Smith wrote the article, and poses this question:

“Will the debt crisis ravaging European banks and the bursting of the Chinese housing bubble affect America’s economy and corporate profits?”  He goes on to talk about the still-struggling economy in the United States, and questions its ability to withstand another financial onslaught.

It is clear we live in an international community, in which countries around the globe are unconditionally tied to each other whether we like it or not.  What happens everywhere affects each of us.  Smith says, “Many of America’s premiere global companies earn most of their revenue overseas.” Thus, if China’s housing bubble problem worsens, as is predicted, that country’s ability to purchase goods from the United States will diminish, thus damaging our economy here even more.

There are more financial experts than we can count, and many of them claim expertise they in fact do not have.  However, those who are actually experts are clearly recognized.

John Kenneth Galbraith’s classic study of the 1929 crash and the Great Depression that ensued, identified five critical issues that created a fundamentally flawed economy in September, 1929:

  • Unequal distribution of income–too much financial distance between haves and have-nots
  • Poor corporate structure–businesses basically unsound financially
  • Poor banking structure–banks employing unsound financial practices
  • Foreign trade imbalance
  • Poor economic intelligence
Harry Dent has an economic think tank and research team that provides financial prognostications (among other financially-based programs) regularly, and has done so for the past two decades. While SCJ neither endorses Dent’s Internet sale products nor his advice regarding investments, we do recognize the wide range of acceptance his prognostications enjoy among financial experts globally.  He predicts the United States economy is on the road to a major depression due to the housing, commodity and stock market bubbles bursting.  He predicts it will begin in 2009-2012, and could last for a decade or more.

SCJ will continue to bring financial issues of this import to the attention of our readers.



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