This is a posting about the impending dangers from the economic crisis that has yet to be unleashed. Get prepared. The worst is not here yet. Stockpile money and food. And brace yourself to help those you care about.

 

In many neighborhoods you see signs that warn criminals “This street is patrolled by Neighborhood Watch.”

 

Neighborhood Watch was a policy in the 1980s and 1990s that local police used to help reduce crime by engaging citizens. I remember writing a newspaper article in

1982 that read, “Nosy neighbors make safe neighborhoods.”

 

However, most of us think the Neighborhood Watch signs are window dressing. Who really gets together to discuss crime? We got together to party in the roaring 90s. In most neighborhoods during our economic boom, we really didn’t have to worry – except for the petty crook, the drug-craved addict needing money for a fix, or the wayward vandalizing teen.

 

Those days may be over – even in the best of neighborhoods. In other words, you might want to start enacting a real neighborhood watch with the folks who live near you.

 

I’ve recently spent time talking to local government officials and business executives here in Las Vegas. They’re frightened beyond what they’re saying publicly in the media.

 

Domestic violence is up. Murder is up. Arson is up. The number of families now congregating where the homeless go has grown considerably. And that is just the beginning. A respected real estate executive told me this week that foreclosures will skyrocket in March to June of next year, well beyond what we’re seeing now. This executive, sitting in a nice office building, told me, “I may stop paying my mortgage and my leases very soon.”

 

We are, it seems, on the verge of what will look like a Depression. Economists might not call it a Depression, but it will feel like one. And all of us will be under siege.

 

Could I be overreacting? Yes. We may see the confidence of the new president wash over us and give us hope. But I’m preparing just in case this optimism fails to materialize. I’m hedging my bets. Sure I’m looking at some potential investment deals that look spectacular – if consumers begin spending again. So, I’m ready for economic stabilization, but I’m not ignoring what seems so obvious. This financial mess took years to happen; it will take years to clean it out. Preparing for what could be an economic version of a nuclear winter, even in the short term, is prudent.

 

That means you should be stockpiling some cash and non-perishable food. You might also be called on to help friends who need food, money or shelter. I’m hoping in a year from now anyone who reads this will laugh at me and call me an unabashed alarmist. However, right now I don’t think I’m yelling fire in a crowded in theater … loud enough.

 

Besides my discussions with local leaders, I’m reading a lot of respected writers. In his column today, Tom Friedman says that certain stock prices are at Depression levels. He writes:

 

The stock and credit markets haven’t been fooled. They have started to price financial stocks at Great Depression levels, not just recession levels. With $5, you can now buy one share of Citigroup and have enough left over for a bite at McDonalds.

 

The problem is our national leaders, Freidman explains.

 

Right now there is something deeply dysfunctional, bordering on scandalously irresponsible, in the fractious way our political elite are behaving — with business as usual in the most unusual economic moment of our lifetimes. They don’t seem to understand: Our financial system is imperiled.

 

“The unity seems to be gone. The emergency looks to be a little less pressing,” Bill Frenzel, the former 10-term Republican congressman who is now with the Brookings Institution, was quoted by CNBC.com on Friday.

 

David Ignatius cites a similar failure of our federal leaders to the impending remake of the 1930s.

 

“I’m angry, too, and I don’t want to pay for this mess,” says Eugene Ludwig, a former comptroller of the currency who has accurately predicted each stage of this unfolding crisis. “But we’ve got to keep this country together and help people who are losing their jobs and their homes. Otherwise, we’re going to have bread lines.”

 

David Smick, whose book “The World Is Curved” provided an eerily accurate forecast of the economic disaster we’re now experiencing, was reviewing some numbers last week that help clarify the crisis. He noted that banks’ excess cash reserves, which normally total less than $7 billion, have recently approached $400 billion. A lot of that is taxpayer money that the banks aren’t putting to use.

 

Why? “You’d have to be crazy to lend in this environment,” says Smick. “They aren’t lending because it’s going to be a terrible 2009? and the banks don’t want to get caught.

 

Let’s hope they’re wrong.  Be balanced: look for the optimism of the future, but prepare for the worst.  — since the economic stimulus is not coming soon enough.

 

 

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