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How to recession-proof your finances

How to recession-proof your finances

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build an emergency fund Out Of Cash slush fund for Wall Street credit and currency markets emerging countries

It has been a long time since the U.S. economy was in a recession. So don’t feel bad if this one caught you by surprise. Yes, it may not be official yet, but we are at the beginning of a recession. How financially prepared are you?

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What is a recession?

Recession is a fancy way of saying the economy has stopped growing for at least six months. The National Bureau of Economic Research defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months. Usually, recessions are noticeable in the real GDP, real income, employment, industrial production, and wholesale-retail sales.”

First, let’s start with the obvious. Preparing for a recession when it has already started is far from ideal. It’s like planing your evacuation route in the middle of a hurricane. It’s still worth doing, but it’s better to plan well before disaster strikes.

The United States has had quite the run. In fact, it is the first time the United States has spent an entire decade without entering a recession. So, if you’re wondering what you should do to prepare for a financial downturn, you are probably not alone. This is what we recommend you do.

1. Build an emergency fund

“In a recession, cash is king.” It may be a cliché, but that doesn’t make it any less true. One thing that characterizes recessions is uncertainty. This is why it’s essential to have three to six months in an emergency fund for life’s unexpected expenses.

Remember to pay yourself first. Consider personal savings as the first bill you must pay each month. If you haven’t been able to save because you have debts to pay, make minimum payments on all your debts and use any money left over to build your emergency fund.

How to build an emergency fund

  1. Calculate your basic monthly living expenses and multiply it by six.
  2. Open a savings account. Choose one without a monthly fee and a competitive APY, such as Betterment or UFB Direct.
  3. Set a monthly savings goal and stick to it.
  4. Automatically transfer funds to your savings account every time you get paid.
  5. Save your tax refund (if you get one).
  6. Sell stuff you no longer need.
  7. If possible, set up monthly automatic transfers to your savings accounts, so you take care of your savings goal before it even hits your checking account.

Having a healthy emergency fund will help you breathe a little easier during a recession. If you don’t have any savings, start with a manageable amount, such as $1,000, and then work towards saving three to six months of living expenses.

2. Pay off debt

Recessions often lead to layoffs and make it harder to find work. So, it’s essential to streamline your cash flow and focus on paying off non-mortgage debt as soon as possible. It will also help reduce stress during the challenging times ahead.

How to pay off debt

There are two main strategies when it comes to paying off debt: the avalanche method and the snowball method.

The avalanche method

  1. Make a list of all your debts. Write down the amount and interest rate you are paying.
  2. Start paying off the debt with the highest interest rate as fast as you can, while you make minimum payments on the other debts.
  3. Rinse and repeat until you are debt-free.

The snowball method

  1. Make a list of all your debts but organize them from the smallest to the largest amount.
  2. Pay the smallest debt amount (regardless of the interest rate attached) as quickly as you can. Make minimum payments on the other accounts to avoid late fees.
  3. Rinse and repeat until your debt-free.

In theory, the avalanche method is the best choice. You will pay less interest and get out of debt faster if you prioritize high-interest debt. However, the snowball method has the benefit of giving you a psychological boost every time you pay of a small debt. A study by a team of Kellogg School researchers found that people with large credit card balances are more likely to pay down their entire debt when they follow the debt snowball method.

Debt consolidation

If you have a lot of credit card debt but still have a steady source of income and decent credit, we recommend you consolidate your debt at a lower interest rate today. SuperMoney’s debt consolidation loan offer engine makes it easy to check what rates you qualify for across competing lenders. A debt consolidation loan can improve your credit score, get you on a path to becoming debt-free, and also free up credit for emergencies.

If you owe less than $15,000, consider applying for a balance transfer card.

Debt settlement

If you have fallen behind in your payments, your total consumer debt is more than half your annual income, or you can’t afford to repay your unsecured debt within 5 years or less, consider the path of debt settlement.

A debt settlement requires creditors to accept less than the total amount you owe. It has the benefit of lowering your total debt amount, but it will destroy your credit and the fees debt settlement firms charge can be expensive.

3. Be frugal and live within your budget

During tough financial times, we may be forced to cut back on unnecessary spending. Learning how to live (and love) a frugal life will help you increase your savings and give you the flexibility to adapt when money gets tight.

How to be frugal

Make smart financial choices and reduce your expenses. Here are ten things you can do today to save money.

  1. Cancel your cable account and settle with what you get from Amazon Prime. Or get free T.V. with a digital antenna.
  2. Cut back on your phone and internet services.
  3. Stop eating out.
  4. Stop smoking.
  5. Reduce your insurance premiums.
  6. Avoid expensive vacations.
  7. Consider downsizing your home.
  8. Shop at thrift stores.
  9. Cancel your gym membership. Go for a run or do home workouts instead.
  10. Sell your second car and carpool as a family.

4. Diversify your investment portfolio

Picking stocks and timing the market is difficult. Unless you are a full-time professional trader, you are likely better off buying index funds.

How to diversify your investment portfolio

If you are not an experienced investor, it’s probably best to use a brokerage or an investment advisor, such as Betterment or Personal Capital to create a diversified portfolio. However, if you want to try to diversify your portfolio on your own, try this.

  1. Spread your investments across different asset classes, such as equities, bonds, emerging markets, real estate investment trusts, and commodities.
  2. Invest in index funds whenever possible. Index funds make it easier to achieve your target allocations and help you avoid putting all your eggs into one basket. For example, for U.S. equities, you can invest across the entire S&P 500 by buying shares of SPDR S&P 500 ETF Trust (SPY). Or, if you want to target tech stocks, you can buy Vanguard Information Technology Index Fund ETF Shares (VGT).
  3. Select investments across different sectors and industries. This increases your chance of picking a winning investment and reduces the risk of losing money in a recession.
  4. Rebalance your portfolio every six months. You may not have to change anything, but it’s good practice to check your portfolio is consistent with your financial goals and risk tolerance.

Doing all this yourself can be difficult if you are not an experienced investor. As mentioned above, investment advisor companies, such as Betterment and Personal Capital, make it easy to determine the best way to diversify your portfolio based on your financial situation.

5. Continue investing in your retirement fund

It’s tempting to sell off your investments during a recession because it looks like you are losing money every day the stock prices drop. However, those losses are only on paper. They aren’t real losses until you sell those stocks. If you chose the assets in your portfolio wisely, you should probably not rush to sell just because the market is hurting. On the contrary, holding your position and even buying more as prices go down could increase the return of your savings over time.

How to continue investing during a recession

  1. No matter how grim things look, don’t stop investing in your retirement accounts. The only exception should be if you don’t have an emergency fund.
  2. If you don’t have an emergency fund, stop investing until you have saved at least three-months-worth of living expenses. Then get back to making regular contributions (even if it’s just $50 a month).
  3. Check your long-term investment plan is still sound and commit to it.
  4. If you are close to retirement, consider moving your money into low-risk fixed-income securities, such as bonds.

6. Diversify your sources of income

Relying on a single source of income is particularly risky during a recession. If the economy tanks and you lose your job, your entire income stream will vanish. You can only cut so many expenses, but there’s no set limit to how much you can increase your income.

How to diversify your sources of income during a recession

  1. Pick up more shifts at work or volunteer for overtime.
  2. Get a second job or side hustle, such as working for Instacart or Doordash.
  3. Start a small business.

Although you can set up several streams of income by getting a second job or starting a small business, diversifying your income doesn’t have to mean more work. For instance, if you have a partner that also works outside the home, try to choose a job in a completely different industry to your partner. That way, you still will be able to pay the bills if one of the industries you work in collapses.

7. Invest in your education

One of the best ways to recession-proof your life is to invest in learning marketable skills. Instead of focusing exclusively on subjects you are passionate about, consider certifications, degrees, or diplomas that will help you qualify for a job that is in demand.

How to invest in your education

  1. Choose careers and specializations that provide the best return on your investment. The Bureau of Labor Statistics offers regular updates on the growth rate and median pay of the jobs that have the highest demand.
  2. Start by checking your state community colleges. Sometimes it is possible to get free (or very low-cost) tuition in an associates-degree program or vocation school. If the program you are interested in is not free, check what student loan rates you qualify for.
  3. Go to your local library and get free textbooks and manuals available in your field of choice.
  4. Take free (or real cheap) open online courses at top universities with platforms like Coursera and edX.
  5. Check for government adult training programs available in your area.

Stay calm and recession-proof your finances

The key to weathering a downturn in the economy is to make a solid plan and stick to it. Recessions are, unfortunately, a natural part of the business cycle. They don’t have to wreak havoc in your finances if you diversify your investments and sources of income.

A recession might require you to make changes to adapt to the “new normal,” but if history tells us anything is that all recessions end. If you are relatively young and retirement is still decades away, you can even view lower stock market prices as an opportunity for growth. However, that only works if you stay the course and continue to invest your savings at lower prices.


About the Author:

Andrew Latham is the managing editor for SuperMoney and a certified personal finance counselor.

The post How to recession-proof your finances appeared first on ValueWalk.

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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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