The strange weeks continue and script 2 is well underway. Jase got married, Shaun is leaving for Vegas to get married, Kim gave birth to a girl, Chloe had a car accident, Jess is in Syria, Jack’s in the new AC/DC video, Franki’s left for LA, Dean is locked in at Heathrow, Stroop’s off to Australia and it just carries on. In a few months i will be in Jerusalem toasting that the first 30 bullshit years are done.

Today i also heard some very sad news. A body was found in Radford Park in Liphook, where i always used to walk every day (and still do when i visit). After speaking to Nat i found out it was an old friend of mine called Oli Softley who i used to hang around with occasionally back in the day. He became homeless and was living out of a tent in the woodland, and it seems his drug problem finally got the better of him as a walker found him dead. It’s scary how many of my friends died young. I’ve got used to it. although i know i shouldn’t be.

In case you hadn’t realised it yet, things really are very doom and gloom. If you study the history, you’ll find that despite the differing conditions in terms of war etc, the economic environment is very similar to that of the Great Depression of the 1930s. Now’s not the time to be stubborn and resistant about it, as you’ve already lost enough. The most important thing to know about the depression is that it started years before people noticed it. The main effects of the economic collapse only started to bite badly around 1935, when unemployment reached 25%.

9000 banks went bust back then. The climate of the day was one of “false prosperity” where moneylending was rampant and everything was financed on debt (ring any bells?), In the last few weeks we have seen the nationalisation of Northern Rock and Bradford & Bingley, the near-collapse of HBOS through deposit withdrawal, and RBS is down 50%. Tonight the government pledged to increase our national debt by a third of our GDP (400BN) to part-nationalise and underwrite the debts of a whole raft of high-street banks, which out every household in the UK in for £13,000. The Americans just did a 700BN bail-out. This is total fucking madness.

It’s like trying to hold a cupboard’s doors shut when there is too much stuffed inside that keeps collapsing back onto you.

The reason i’m writing about it is more and more people are asking me what to do. I’m no maths or economics genius, and to be honest i’m not sure. But what i do understand is the basic laws of business and survival, as i learned them in blood, fire and anguish. There are a lot of very lost and frightened people out there at the moment not sure if they’ll have a job in a few weeks or whether they’ll lose their home.

Let’s start with the bad news. Recessions, slowdowns and depressions always last a hell of a lot longer than we expect them to. We’re talking 5-10 years. There is a very good likelihood that you will lose your job and possibly your home. In the very least your standard of living will drop and you will have major troubles working out how to keep all the things you have now on the income you have. We’re at the beginning of the cycle and it’s going to get a lot worse before it gets better. We will have a lot of false positives on the economic curve – it’ll seem like it’s getting better, but then it will crash again. The point of a depression is that even though it goes up and down, the figures are always below a certain line – trading and throughput is depressed.

So what can you do?

First, you need to start jettisoning excess baggage and trim the fat.

The people who have loaned you money will want it returned because they think you won’t be able to pay it back and also need the cash themselves – banks, credit card companies, loan/finance firms, retail stores and others. Get your debts paid off fast and get out now. Now is not the time to go out spending and racking up more debts. If you have serious debts you need to consolidate them and get a plan worked out for the worst case scenario. If you own a business, the bank won’t loan you anything and your customers won’t have much money to spend on you.

Next you need to ditch all your superfluous expenditure – all the luxurious shit you don’t need. That means getting rid of Sky and Virgin Media for a Freeview box, and a cheaper telephony provider other than BT. Bye bye magazine and DVD subscriptions (read it online), gym membership (create a plan of exercise in the open), expensive life insurance and more. If it’s not essential, get rid of it. Sell your car with the repayments and get something cheaper. Sell what you can now whilst the price is still reasonable and cattle panic-sell and flood the market. Use the bus. If you like spending £200 on a meal, then it’s premium organic fruit and veg and a new cookery course.

The first wave of people hit will be those in retail (as they rely on people paying with credit/store cards) and finance (for obvious reasons). Recruitment will be frozen everywhere, and then the job losses will start, You need to look at your job and see how depression-proof it is, and maybe changing career temporarily to something safer for up to a decade. Think i’m kidding? I’m not.

If you work for a moneylender (including leasing companies), get out right now. It doesn’t matter how good you are at your job or how indispensable you are, it’s about how well the company is fairing and how good the CFO is. Your qualifications mean nothing on the company’s balance sheet.

Your house value is going to decrease, and so is your ability to pay back your mortgage. So if you bought high, you’re in for some serious shit. If you don’t have a lot of equity (less than 10%), it’s time to think about selling up and taking on more flexible arrangements. Now is the time to think about that travelling around the world you always wanted to do for a bit and missing out the carnage. If you do decide to travel and sit it all out, register yourself as non-domicile with HMRC and set up a savings account to put 10% of what you earn overseas into for when you come back and look for a job.

Look at a second/back-up career or a second home-based business (e.g. eBay) to top up your income. If you’re smart, you’ll see lots of stuff coming on to the market very cheaply that you can snap up and make a great profit from. Get on a training course and extend your working day to bring in more cash. Don’t rely on your main job, and don’t rely on the company you work for’s assurances. They give you the “we’re in a great position” talk to fend off competitors backchat and stop shareholders from pulling out their investments. It’s all bullshit and you’ll be the last to know.

When others start jettisoning the excess baggage, they will try and sell everything they can, including all the stuff they bought on loans and credit cards. It’s an opportunity to pick things up very cheap. So wait for all the lemmings to sell their stuff, as they’ll take any price. And that is business markets 101 – buy low, sell high. Just wait it out. The cattle have bought high, and will be selling low out of panic to get money to keep up the payments on their house. That’s also an interesting point – if you haven’t bought yet, wait. There will be a whole wave of repossessions and you can get a place for 20% of what your trendy “property ladder” friends paid.

And that is why i personally haven’t bought a house yet.

As panic sets in, everyone will try to raise prices in a desperate bid to raise revenue. Household bills will go up, rent will get high and customer service will be slimmer. It’s a blip. Give it time and they will all lower prices once their existing customer bases deserts because they can’t afford it. It’ll keep getting lower so just wait.

It goes without saying not to put your money into stock markets or PE-based start-up companies. Invest in physical wealth (true wealth – things that retain their value) and unusual areas, like entertainment. You can’t afford to speculate. When times are hard, you can guarantee people will drink more, take more drugs, gamble more, watch more shit TV, fight more and commit more crime. Movies make great returns. Art grows its value. Gold is the all-time security. Debt collectors will be making a lot of money. If you make an investment now, it will be a long-term one and you can’t expect to cash out or make a return for a decade.

Most companies will look to save money, so they will outsource what they can. If you’re a computer programmer, it’ll be cheaper to hire someone from India or the Baltic states. If you make things in the factory, it’ll go to China, as it already is. If you’re a project manager, someone else’s job will get doubled up and yours will go. If you’re in recruitment, no-one is recruiting – move on. Don’t start a business that offers obscure or new products or one in a different market. Adapt your sales strategy to appeal to your customers need to save money. Don’t get involved in anything that involves customer’s spending excess cash as they won’t have it.

Whether or not you take your money out of a bank is up to you, but i’d be inclined to spread assets. The Bank of Ireland is guaranteeing 100% of savings, unlike the limit of £35k in the UK. If the bank collapses, you’re going to lose your money. Even if the government guarantees it, you won’t see it for a long time. The government’s backup is linked to the economy – if the economy goes, so does the government’s bonds.

What you need to understand is that cash does not have a constant value, and it only constitutes less than 5% of the money system. There is a very distinct difference between wealth and cash. A painting you own that is worth 500k won’t deviate and it is an asset. You sell that asset to exchange it for generated cash you can use. Cash in the bank is not security – physical wealth is. Put your money into wealth that is sustainable and will act as a preservative for your money.

You need to get a plan going, and face the things you don’t want to face. This is uncomfortable so you will procrastinate and find anything else to do other than work out what to do. You need to have 3 plans – a) if it stays the same, b) for when it gets worse, and c) the very worst case scenario. The sooner you deal with it, the less you will lose. Yes, it may be an inconvenience, but bankruptcy and homelessness is a lot more of an inconvenience.

If you think this is drastic, think back to last year when i wrote about the banks “battening down the hatches”. Everyone i know who is very rich or materially wealthy who can afford good advice pulled their money out a long time ago because they knew what was about to happen. That’s why they are still wealthy and very secure.

A lot of the way i have lived in the last few years have been about this depression. I didn’t buy a house, maintain a constant home or work for a corporate employer. I sold my business whilst i was ahead, have never trusted debt or credit of any form, and am actually financially conservative in terms of my resistance to buying high. Perhaps the reasoning behind many of my decisions will become clearer now and there will be less of the cynicism about my motives and so called “achievements”.

I saw a lot of this coming and reconciled my position by thinking ahead for the next 10 years. I didn’t buy a house when the price was sky high as everyone i know did, as i’m waiting for it to go bottom-low during re-possession time like a vulture. I didn’t saddle myself with debts and vaults of consumer high street bullshit because i knew it would be impossible to repay once the credit boom wave broke. You have to see the big picture and understand where you are going instead of just reacting in the moment blindly. If i want to get married and have kids, there was no way i was doing it having bought high, lost all my money and in the middle of a recession. Better to consolidate, wait, and do it when the cycle turns so my family are more secure.

If i am going to have a family, i want their home set on a rock foundation of stone rather than being a rudderless ship in a storm-drenched ocean. True security for me is not about wealth, it is about smart decision-making, conservative management and planning ahead. It’s about doing your research, choosing the right timing and being wise. You may not be able to anticipate everything, but the economic and scientific laws that govern us allow us to offset enough of the risk to avoid the worst of the trouble. I will never allow my wife, kids or extended family to know the pain and vulnerability i felt of losing your security, or the pain i will feel for allowing them to get anywhere near it.

I’ve learned a lot in the last few weeks about leadership, and the most profound part of it being the massive responsibility towards others that you have. Kate was telling me a story about her and her mum frantically locking up the house and hiding when they heard noises in their back garden, and i remarked that what they needed was the strength and presence of a man in the house to fend off the burglar in the dark at 3am.

It was around then when i saw what Virgilio said in a clearer light about most people being helpless and vulnerable – they put their trust in authority and look up to leaders for hope. When you fail, so do the hearts of those who look to you for strength, confidence and security. I realised that i spent the first 30 years of my life scared, untrusting and being betrayed by corrupted authority for one very simple reason – so that when i became an authority, i would never let the same thing happen to those who put their trust and hope in me.

“For the heart of the king is in the hand of the Lord.”