What to Do in a Grim Economy
Khmer Witica Staff Writer
by Alex
July 28, 2008

First, is the economy really that bad? And should it even matter to you if you’re a rice and prahok lover? A year ago, most economists wouldn’t think so, in fact, some thought the gloom was overblown. But let us be truthful. The situation is rough. It now cost 50% more to buy a 25 lb bag of rice at the local Khmer grocery and the worst part, the gas pump is costing you extra money that you would otherwise spend on eating kuyteav or bawbaw. No, “rough” would not be enough to describe this horrendous change in the market, especially when we’re deprived of noodles and porridge. It’s a crime against humanity if you ask me.

But just how bad are things really are?

This year, several US banks have gone belly up and there has even been a “run on the bank”, something we have not seen in a long time except only in the movies. The value of homes nationwide plunged more than 25% and is expected to drop another 10-15% by 2009. The costs of energy and food have risen significantly. Also, the unemployment rate is increasing. The economy is grim, and more is to come.

So what to do in this kind of economy and how do we salvage extra money for extra noodles?

Don’t panic, I got just what you need to get through this tough time. Here are some basic tips:

-If you have more than 100k in your bank accounts (if you really do, can I be your butler?) diversified them into separate accounts so that your money is insured by FDIC. Open different types of account such as savings, CDs, Bonds, etc., especially if you have your money in a small regional bank (many small banks are bellying up). Call your local bank and ask for more information.

-To hedge against inflation and the ever declining of the US dollar, diversify your portfolio with some commodities such as Gold and Silver. You can hold gold and silver in paper form just like stocks. Get back to the basics. Khmer parents know it best. We are a people of gold. In a decade gold has increased by 300%, hitting a record of $1,000 per ounce, and it is expecting to keep going up to $2,000 in ten to twenty years. When currencies fail, gold will always prevail.

-Conserve energy usage at home. Turn the lights off when you’re not using it. Shower cold water; okay maybe not, that’s bit too extreme. Drive less and carpool.

-Apply for a credit card (American Express) that offer 3% cash back on gas purchases and 1% cash back on any purchase (If you’re not financially responsible, don’t ever use a credit card). On top of that, apply for Costco executive card ($100 annual fee) and get 2% cash back on all your Costco purchases. This will help you hedge against rising cost of energy and food, giving you that extra money you need to super size your kuyteav from regular size to extra large.

Disclaimer: Please do your own due diligence. Alex is an unqualified financial advisor and admin and poker player.

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