If you've accidentally looked at a newspaper in the last couple days, you may have noticed confusing headlines screaming about market turmoil and woe. Large fonts scream at you about banks going out of business and the accompanying pictures of downward trending graphs and mopey men wearing ties look worrying to you. But you're far too simple-minded to make heads or tails of what's going on. The articles are all gibberish to you - "counterparty risk" sounds like something you have to be mindful of before engaging in certain sadomasochistic sex acts. Evidently "safe words" aren't a viable solution in the financial world.
So who do you turn to for help in this confusing time? Fucking Cracked.com that's who. We've got your back Chester. Below we present a completely artificial Q&A session to help you wrap your head around something that is so much bigger and more important than you, that it's actually kind of sad.
What do you mean by "financial meltdown?"
A financial meltdown is when banks - whose entire business is repeatedly phoning other banks and then declaring they've made or lost money based on those phone calls - suddenly realize that all the money they made is partially fictional. At the same time, they find out that all the money they borrowed from other banks is worryingly real - at least according to those other banks, who are saying as much over the phone in shrill tones. If that sounds confusing to you, don't worry. It's confusing to those inside the business as well, and completely impenetrable to outside observers. Sort of like a crowded sauna with poor lighting.
The end result of all this is that banks can eventually start to fail, and in the process drag other banks down with them. This continues until you get to a situation that looks a little bit like this.
So is this a recession?This is a bit different than a recession, although we'll likely have one of those as well. A recession simply means that the economy stops growing for a little while. Countries typically shake those off within 6-12 months or so. What effect some of the largest banks in the world collapsing upon one another will have is as yet unknown, but public policy experts can't rule out the possibility that we'll soon all be clad in leather clothes, wandering a sun-parched wasteland searching for petrol. The experts also state that they can't discount the possibility that the survivors will envy the dead.
How will this affect my retirement savings?
If you're an average Cracked reader (statistics say you are) then your "retirement savings" are an Xbox 360 and 6 games. Those should hold their value fairly well until the electrical utilities crumble in late September.
But what if you're a "high-net-worth Cracked reader" (perhaps an Assistant Manager at Sunglass Hut), and have a few thousand dollars saved in a checking/savings account. Although this amount is insured by the FDIC in the event your bank fails, there is a non-trivial chance that the FDIC is inadequately funded to insure all deposits at failed banks in the event of a financial meltdown related zombie outbreak.
With that in mind, the wisest course might appear to be to withdraw all your money immediately and stuff it into whatever it is you sleep on. However by mid October, financial experts agree cash will be essentially worthless, after the United States Government collapses following the seizure of the capitol by a faction of lost and confused New Jersey separatists. For that reason, I suggest you immediately convert your savings to hard goods. You should purchase goods that will have a high intrinsic value in the World-To-Come. Obvious suggestions include petrol, shotgun shells and hockey pads, but really anything that can be improvised into a weapon will be extremely valuable for bartering purposes. Buying a case of double ended dildos now could be the smartest investment you ever make.
Is the price of gas going to keep going up? Should I consider getting a more fuel efficient car?
Neoclassical economic theories as espoused by the Chicago school of economics generally suggest that the best car to have during times of financial turmoil is a Ford Falcon XB GT coupe with a V8 engine. Depending on prevailing rates of inflation the installation of three large spikes on the front bumper may also be warranted. However the diminishing capacity of existing oil fields and the recent history of commodities markets has given rise to a group of so called "peak-oil" theorists, who suggest that the ideal vehicle to have in a CHUD-infested recessionary cycle is something with a converted bio-diesel engine and a mean-spirited dog in the passenger seat.
If you're like me and don't have the means to change your method of transportation so dramatically, you'll have to improvise. As an example, I'm going to be duct-taping some num-chuks to the side view mirrors of my Protege.
Is it time to murder my neighbor and steal his canned goods?
That's probably a little premature, unless he's wondering the same thing, and is planning on murdering you. In that case you're probably justified in murdering him a little bit, or at least sleeping in the nook behind your bedroom door with a loaded crossbow cradled in your lap.
I think you're getting a little carried away. Surely with the support of family, friends and our local community, we'll be able to weather any financial downturn, no matter how dramatic?
I agree 100%. If we all remain calm, work together and help each other out, this coming turmoil will be manageable. In fact upon further reflection, I recommend you do all of that. But while you're doing all of that I'd also recommend that if you ever see a 2002 Protege on the horizon with a cattle-catcher on the front and Jackyl blaring through the shattered windscreen, that you get the fuck out of my way.