- What is QE? Quantitative easing is a extreme measure used a central bank to stimulate an economy. Literally speaking the central bank creates new money to buy assets, in this case the Fed will be primarily buying treasuries issued by the U.S. Government. In other words they are taking extreme measures to protect the value of the U.S. Dollar by buying the paper that backs it – which ironically technically devalues it.
- Why should we care? It’s a sign that things are going very badly for the economy. Since most folks have bought into the current paradigm lock stock and barrel its understandable why the powers-that-be are taking such measures. Today it’s considered normal to live in perpetual debt, commute long distances to work for multi-national corporations, rely on the steady supply of goods from overseas, an so on. That doesn’t sound ideal but these are realities of the current paradigm. Well folks… the current paradigm is fatally flawed and a paradigm shift of some kind is on the table. I can say this with certainty because we see evidence everyday that the powers-that-be are prepared to do anything to protect it. There’s no way to know how long these extreme measures will work but one thing is for sure, big change is needed to fix it or it needs to be replaced.
- What does this have to do with tiny houses? Everything. Beyond being adorable functional homes, tiny houses represent an idea – that extreme downsizing doesn’t have to mean hardship. Extreme downsizing by choice, or even the mental preparation to downsize, is a step away from the current paradigm and toward a better one, one that doesn’t have to require going into debt. It’s the realization that there is another way to live with dignity and comfort.
At this point I think the 2007-2008 recession never ended and was only bandaged-up, and I’m in good company (Forbes). Most of the evidence comes in the form of monetary policy, as it’s the most publicly visible. Some say that market rigging like the Libor scandal and high frequency trading also show signs that the powers-that-be will do anything to protect the current paradigm. But looking at the crimes committed to protect the current paradigm shifts our attention away from what we can do to move to a new one.
Make a Plan for a Paradigm Shift
For a moment lets say we knew for a fact that the way things are today will change. What would we do? I’m going to suggest we begin by looking at the things we rely on today, and then build a plan that helps account for rising costs and availability reductions. Here’s a quickly brainstormed list of things we rely on in no particular order:
- Rule of law
- Affordable transportation
- Ability to borrow money
- Ability to pay rent and mortgage
- Uninterrupted global supply chain
- Affordable energy to heat and cool our homes and workplaces
- Municipal services like water, sewer, and trash
- National security
These are also the things that the powers-that-be are working tirelessly to protect – which on the surface is a good thing. But we also know that these these things may be difficult to maintain indefinitely under the current model.
So any step we each take to account for each of these things is a step toward a new paradigm. This approach doesn’t require that you walk-away from how you live today, it actually leverages how you live today and allows you to begin paving a path to another kind of future.
So here is quickly brainstormed list of things we can do to account for the rising costs and the reduction in availability of the things above:
- Paycheck – Lower living costs and build alternative income streams. Take your hobbies, expertise, experience, and skills, and begin finding ways of making them available to others. Peer to peer commerce is a very small entrepreneurial step each of us can begin augmenting our paychecks.
- Rule of law – Improve physical home security, reduce vulnerabilities, build connections with neighbors, and stay vigilant. No matter how high or low the crime rate goes, working toward improving your personal security is always sound advice.
- Affordable transportation – Downsize your vehicle and length of commute. If you plan to move include the walkability in your decision making process.
- Ability to borrow money – Reduce spending to a level where borrowing is not needed. Diversify savings in tangibles (food, gold, silver, land, tools, etc) and intangibles (paper financial investments, savings accounts, retirement accounts, etc). Pay down and eventually eliminate debt.
- Ability to pay rent or a mortgage – Downsize and bring housing expenses to a more easily manageable level, and/or build a tiny house backup plan.
- Uninterrupted global supply chain – Shop locally and discover local producers of food, goods, and services – in other words shop with those those that don’t currently rely heavily on transportation to bring those good to market.
- Affordable energy to heat and cool our homes and workplaces – Downsizing helps tremendously here since it’s cubic feet of space you must heat and cool. Learning to live more frugally can also provide added protection.
- Municipal services like water, sewer, and trash – Reducing consumption, increasing recycling, and learning how to manage waste yourself can reduce your reliance on these services.
- National security – We might assume that this is the job of the government. But I’m going to argue that it’s a citizen’s responsibility. The more of us that choose to live within our means, improve our own self-reliance, and prepare for uncertainly, the more secure our nation (and economy) becomes.
Now just image… if the majority of us lived in sustainable homes without debt & mortgages, had diversified incomes and savings, worked in the communities we lived, and had the means to ensure our own personal safety, would there be a problem at all?
The paradigm shift is a shift in thinking. Think tiny.