I settle back in front of the computer with my morning feast, popping Fruit Loops in my mouth, patiently waiting for everything to finish loading. After typing in the appropriate information, my bank account opens.

The balance: $265.

As of yesterday, $1,062.88 had been posted from my bank to my credit card bill, my hard-earned wages busting/tearing through cyberspace to perforate the final outstanding payment owed (with interest, of course); digits whisked away on a lethal, one-way debt termination expedition. And now I’m left with …

The doubts start piling up – I peer suspiciously at the monitor. Surely there’s some mysterious purpose for this chunk of change still sitting on its ass in my account. An overlooked bill, perhaps, stuck on a dusty shelf somewhere, forgotten. In fact, I’m certain there must be a setback somewhere, something to muck everything up because this damned debt is so ingrained in me now and, Jesus, after all these years, how can it really just be … dissolved?

Holding my breath, I tap the keys again to prudently recheck the account balance — my fingers slip, I get the url wrong and pause to wipe dusty grains of cereal from my palms, to start over — suspecting that couple hundred bucks has suddenly, cruelly been gobbled up by some hellacious bank fee or other.

Nope. Still there. Two hundred and sixty-five dollars.

Exhaling slowly, I lean back and stare stupidly at the screen. I pick bits of stuffing from the arm of the chair as I evaluate this completely foreign transition of having an extra pile of dough at my disposal; so staggered, I haven’t even considered how to commemorate my new debt-free world.

With a cup of coffee, seems like a good place to start.

=^..^=

My friend and I are classic examples of two opposing views on credit. I charge almost everything to my credit cards and use my wallet’s cash compartment to store receipts. My friend (let’s call her Kate), however, could pay for anything from a pack of gum to an LCD flat screen with the cash she has in her wallet at any given moment.

Although Kate is of the ‘credit cards are evil’ mindset, her views on credit softened after her month-old iPhone was stolen from her purse on a Seattle Metro bus earlier this year. When she realized her phone was stolen, Kate called Seattle Metro and was told all she could do was report the theft to the local police department.

Kate was deflated when she called to tell me about the theft. Knowing her views on credit and doubtful of an affirmative answer, I asked if the phone was purchased using a credit card. I was surprised and relieved to hear that yes, the phone was purchased a month ago by her husband on his American Express card as an anniversary gift. I then told her why that was the smartest way to purchase her phone: a little something called Purchase Protection.

Purchase Protection is a standard insurance program offered by most credit cards, including all American Express cards, Visa Signature cards, Discover business cards, and MasterCard Gold, Platinum, and World cards. This program protects your eligible purchases in the event of theft or accidental damage within 90 days of purchasing the product on your card. That’s right, if you buy something and within 90 days it is accidentally damaged or stolen, your credit card may reimburse you the original purchase price! What’s cash got on that?

Each Purchase Protection plan differs depending on who is offering the plan (i.e. Visa, MasterCard, American Express, Discover), so be sure to review your card disclosures to read program rules. For example, not all purchases are considered “eligible purchases”. Perishable foods, motor vehicles, and custom-made furniture are examples of some products not covered by Purchase Protection plans.

Also, in cases of theft, proof of the theft is often required to help curtail fraud, which is why you should always file a police report or report the theft to local security. Most plans also require you to submit a claim within 30 days of the incident of theft of damage. If you’re able to prove you were unable to submit the claim within 30 days, then you may receive an exception and be allowed to submit a claim.

The day after I explained Purchase Protection plans to Kate, she and her husband contacted American Express and sent in the required documentation, such as the original receipt and police report. The claim was approved in two weeks, followed by an immediate credit to the credit card for the exact amount paid for the phone.

Kate still carries a lot of cash. But she now makes sure her husband is nearby with his credit card if she ever wants to buy anything she wants protected by a Purchase Protection plan.

As my supervisor scanned through resumes for screening, she never imagined she would have to turn down so many looking for a (any) job, let alone candidates with higher degrees. If overqualified applicants couldn’t find job placements in their respective field, what was the next step for them?

From Chicago Sun-Times:

Some of the dirtiest, smelliest, most dangerous jobs are suddenly looking a lot more appealing in this economy.

People who have been out of work for months are lining up for jobs at places they once considered unthinkable: slaughterhouses, sewage plants, prisons.

“I have to just shut my mouth because I can’t do anything about it,” said Nichole McRoberts of Sedalia, Mo., who pictured more for herself at age 30 than working in a poultry plant, cutting diseased or damaged flesh off chicken carcasses.

Recessions and tight job markets always force some people to take less-desirable or lower-paying work than they are used to. But this recession has been the most punishing job destroyer in at least 60 years, slashing a net total of 6.7 million jobs.

Take Kristen Thompson. Before the recession, she worked at an upscale Los Angeles-area gym arranging pricey one-on-one personal training sessions. Now she’s a guard at a women’s prison in rural Wyoming.

After the gym laid her off last year, Thompson spent months looking for work. Even fast food restaurants failed to respond to her application. For each opening, dozens of other people seemed willing to work for less money. When she heard that a prison in Lusk, Wyo., (population 1,447) was hiring, she leapt at the chance.

In her new job, she patrols cellblocks and monitors the mess hall. Back in L.A., she never had to worry about inmates with weapons or drug stashes or prisoners getting into fights. Yet she’s hardly complaining. It’s a job.

“People have to pay the bills, so what we see is people kind of grasping at straws and taking anything that’s available,” said Matthew Freedman, assistant professor of labor economics at Cornell University.

The desperation of the long-term jobless has rippled through the labor force. More skilled and educated workers have filled clerical or restaurant jobs. So unskilled workers such as teenagers or high school graduates who once held most of those positions have displaced those even lower on the economic ladder, such as immigrants, Freedman noted…(con’t)

Link: Now Hiring: Everywhere You Didn’t Want to Work

Do employers still need to offer competitive wages in order to lure new workers in, or has competition in the job market and climbing unemployment resulted in shrinking wages for the working middle class?

=^..^=

Related Posts:

1. Rationing Cards – A Pictorial Journey Down Nostalgia Lane
2. Teenager During Great Depression Predicts DOW On Its Way to 8,500 – 9,000 Or Lower
3. Quick! Give Me Your Tax Dollars! …

So for now; one more month of subsisting on Cheerios, Ramen noodles and p&b sandwiches, with a festive splash of cheap Merlot before bath time. One more month of scraggly split ends and sweat pants, of creatively/desperately seeking innovative ways to somehow stretch those dimes into dollars. And what makes me most joyous — one more month of being overrun with credit card/car loan payment requests that have faithfully sprinkled my mail slot in perfect precision over the years. Sayonara.

Unfortunately, my bills haven’t much cared that I’d like to kick back on the hillside above the Mobil station with a Slurpee for just a god damned minute — those cursed creditors just creep on over to tap my shoulder and politely shake out every last bit of interest that can be mustered from my (threadbare) pockets. So I’d best be wise and plumpen any hard-earned income for their devouring.

Two years mired in debt. Will be over.

One. More. Month.

=^..^=

Related Posts:

1. Still Wrangling the Debt Monster
2. Paying Down Debt – What An Amazing Feeling

~¤~¤~

As a prelude, one of the things that gets the most heated debates and arguments is whether credit cards are good or bad! Write a post like this and you will have tons of comments from folks who either love or hate them. The folks who love them say it is just a tool. If you pay it off every month and earn rewards, that is a good thing and a great deal. The folks who hate them say carrying a credit card makes you spend more and that their teaser offers suck you into the debt game. They advocate that you should live a debt free life by steering clear of credit card debt.

Despite their arguments, both camps agree that one should not have credit card debt. I belong to the camp that loves my credit cards for the rewards that they give me. I feel that the main reason why people get into credit card debt is because they succumb to impulse spending. That is almost a result of not budgeting or asking yourself if you really need what you intended to buy. When I graduated from college, one of the things I “had” to buy was some working clothes. Now, being married with kids, myself and Mrs Credit Card occasionally succumb to sales and “nice clothes” which we do not really need. Since we are ok financially, I guess it is OK to splurge once in a while. But for new graduates, I thought I’d compile a list of “must have” guy clothes so that you can use as a check list.

For anyone who has just graduated or are about to graduate, it’s probably time to take inventory of your life, goals, and yes, your wardrobe. One aspect not to neglect before you hustle off to conquer the world is budgeting for a career clothing overhaul. Odds are, you’ve been living in the same college uniform for a while. My guess is, (being a guy) your daily collegiate wardrobe consisted of a couple dozen t-shirts, several sweatshirts with frayed sleeves and odd unexplainable stains and a few pairs of jeans.

What universal items should stock a working man’s wardrobe?

For those who need a traditional suit

• Classic Suit- Start with navy or gray. For those occasions when it comes in handy, a suit is a classic and should be a staple of every man’s wardrobe. Don’t skimp on quality, but do look for bargains. My best advice would be to get a reputable “local” tailor. A reasonable price might be about $450. Forget about designer for now as the going price starts at $800 and you will probably need alterations anyway. My suggestion (if you need working suits) is to get two. Either the classic 2 button or 3 button should work.

• Crisp White or Blue Dress Shirt- One of the most useful, adaptable items you can pick up. I suggest getting at least five (more if you are lazy about the laundry). Cotton polyester mix should be good. Places like LandsEnd selling decent working dress shirts. I would stick to the basic colors white and blue. You might get away with a yellow or pink you know how to color match. One word of advice, keep your shirt crisp and immaculately white. Nothing looks worse than an off white shirt masquerading as a white shirt.

• Ties- Try to pick up a minimum of three. A solid, a diagonal stripe and a basic pattern that incorporates several colors. You probably do not want to spend $150 on a Ferragamo tie. But you do not want one that is 100% polyester and looks cheap.

• Standard Shoes and Belt- Black or Brown, but keep it coordinating. Most guys find black is more universal in their wardrobe. Make sure your shoes are comfortable and try to buy reputable quality shoes. You do not have to break the bank but there are many poor quality brands that simply wear out very fast.

• A High Quality Overcoat- Like a suit, this is an investment. Buy as good a quality as you can afford. I personally bought my first winter coat at Century 21 in New York 15 years ago and I still use it!

• Underwear – need I say more. Consider your laundry cycle and get enough so that there is always one in the drawer!

Smart Casual Attire Wardrobe

If you end up with a tech firm or a start up and does not require formal wear, then here are some suggestions.

Khaki’s – The essence of casual classic. Again, buy smart, but quality. Pick up a few pairs; you’ll be glad you did. Suggested colors would be Navy Blue and Khaki Brown
Jeans – Go with clean, modern lines. Same with Khakis, at least a couple serviceable pairs.
Polo Type Collar Shirts – Get a minimum of five (once again more if you are not good at the laundry). Basic dark colors like Blue and White will do.
Dress Shirts – You should still get dress shirts as they go very well with Khaki’s.
Shoes – Casual shoes are a little trickier. But a pair of mocs should do.

Other non essential stuff which you probably already have

• Sunglasses – Alright, unless you are a lifeguard, this is not essential. But I think it makes sense to make a mental note of how many you should have so that you do not buy a new one every month just because “it looks cool”.

• Tuxedo – You will wear it a few times in your life – wedding, friends wedding, family’s wedding, funeral, the occasional black tie party. You can decide to rent or to buy. If you buy, then get it tailor made and have the most conservative design so that if you ever get invited to the white house for a formal dinner, you can wear it. (no fancy Versace’s).

I’ll stop here but the point that I want to get across is that I think that planning what you want in your wardrobe is very important. The reason is that, aside from budgeting, it helps prevent you from impulse purchases. For example, if I know you already have 7 dress shirts and they are all in good condition, then mentally, I will not be tempted to get a new shirt even if I see a really nice one. Same goes with Khaki pants and polo collared shirts. I find myself tempted when I hang at Factory Outlets with Mrs Credit Card! But when I remind myself that I already have all the T-shirts or dress shirts, then I’ll just move on and not be tempted.

Paying for your wardrobe

Suze Orman actually did say that it was OK to put your working clothes wardrobe on a credit card and carry the balance if you cannot pay it off because it is an investment in your future. My personal advice would be to disregard what she says and save up for your wardrobe way in advance. You do not have to buy them all at once. Chances are that you have half of the items I listed. In fact, I always recommend that on major purchases, you save up for it, and when you buy them, put them on either you student credit card. Better still, charge them to a cash back credit card or gas credit card or any type of reward card to earn reward points or cash rebates! Then make sure you pay it off at the end of the month.

For guys, I suggest you forget about cutting your own bangs just to save a few bucks!

Final thoughts: So here are some tips to stay on budget track and look your career best:

Before you go out on a huge shopping spree, I suggest you:

1. Evaluate what you have – T-shirts, sweaters, underwear, jackets, jeans, take a gander at all of it and determine what has any more life or can be resurrected in another form, (as in a T under a sweater, or anything still serviceable). Do not buy what you cannot afford, which is a basic rule of shopping (and budgeting). Therefore, try to salvage what you can within reason.

2. Determine your career field-to-be – is it polished and totally professional in attire? Completely casual? Something in between? Spend a few minutes pondering that one. It will help you determine if you need trousers vs. casual pants, and/or how many of each.

3. Prepare – No matter how casual the job, odds are you are going to need a few pulled together staples for occasions such as client meetings, company events or even interviewing for a job.

Related Posts:

1. Uncluttering the Closet Monster
2. Clearing Away the Clutter

Instead of keeping up on financial news, the main focus has been on enjoying the outdoors and spending time with loved ones. Lately I’ve been digging around in the dirt and establishing an even bigger garden – along with veggies, there are now blueberry and raspberry brambles alongside some grape vines and strawberry patches. And, of course, the primary goal for summer is to trim away more debt.

It feels like my finances have been bleeding unexpected expenses and unfortunately my original goal of funneling $1,000 toward my debt each month hasn’t been met. Once the summer is over, my work hours will be cut back to 19 hours per week so I’m desperately trying to pinch every penny possible for the next two months.

Right now my debt is at approximately $3,000 and I’ve decided to shell out $800 for July. Although I really wanted to slap down more, my car insurance came up for renewal in June and I opted to pay for the full six months upfront instead of doing a minimum payment. I used my Cash Back Discover Card for my insurance payment and just finished paying the bill off online. Since using a Cash Back card a couple of months ago, my reward points have accumulated to $15 so far – not too shabby!

I have to keep reminding myself to be patient and feel proud over my progress over the past year because at this point, I just can’t wait to be debt free!!

I felt like the Mother Hen as they fluttered around and oohed and aahed over their refund amounts. (“Ok, where is your 1099-INT, dear? Whaaa..? You’re only receiving .25% interest on your savings account?? Dear god. And of course you have records of your dividend amounts. I need that documentation!”) I raised my eyebrow a few times at the thousand dollar plus refunds as they squealed in elation. (“Here you are, hon. But why are you giving the government such a large interest-free loan over the year?” – blank stare- “Sigh, never mind. Congratulations. But use it wisely!”)

I’m astounded by how many friends have no clue what interest rates are attached to their bank accounts, especially when their rates are so extremely low. As they deliriously indulged in the ‘happy money tax refund’ dance, I showed them how to access Bank Rate to compare more competitive rates for savings and money market accounts. At least I tried, although I’m not sure it did a lick of good.

~¤~¤~

=^..^=

Here are some simple tidbits which helped me enormously this past year.

• I stopped digging. This piece of advice (“For the love of God, stop digging!!!”) helped so much in emerging safely out of a burning financial hole. I stopped digging myself into trouble and ardently refused to take on further debt, no matter what.

Even when a sales associate plucked Crème de la Mer from the counter and enticingly waved it in my face, I politely declined. My skin may have cried in anguish and my MasterCard moped for weeks after but my piggy bank cheered the triumph.

I know it’s really none of my business but I cringe when I overhear friends breezily using credit cards as savings accounts. This may have worked in the past but rules for credit companies are rapidly changing and I fear they’ll get caught in a dangerous situation.

In fact, I’ve been a loyal customer of WaMu for over two years and never carried a balance from month to month on their card. Last week I received a letter from WaMu’s new owners JPMorgan and Chase, stating how my new rates are getting jacked up to 30% (!!!!) <- What, are they nuts??

My rule is firmly, a line of credit is not a personal piggy bank. If someone is in a bind and using credit to help close the gap, they’re compounding a previous problem with a whole passel of other complications – ie, going into even more debt. Credit companies are just waiting for you to slip up so please proceed with extreme caution here.

Which is why it’s critical to …

• Build up an emergency savings as quickly as possible. Let’s face it, unexpected expenses always crop up at inconvenient times, which is why it’s crucial to automatically set aside a certain amount to help zap these nasties.

When I started my financial journey with over $20,000 debt and zero savings, it felt absolutely suffocating. I would play with or quickly spend additional money and if anything came up, I was screwed.

One night I finally had some sense beat into me and swore from that moment forward, 20% of any amount of money I received would immediately be stashed away into savings (10% for short term stuff – like food or a night out with the girls and 10% for long term savings not to be touched. The remaining 80% went strictly towards my debt.)

I held myself accountable to the promise and soon that svelte percentage of savings blossomed into a respectable amount. This also brought an immense peace of mind with it.

The beauty of this is, I can still strategically plan for and afford everything I want. But now I’m saving first as opposed to being devoured by the ravenous debt monster over it. Instead of thinking, “I can’t afford to!” my new mantra has become, “How can I afford to.. ?”

• Manage money well. Being stretched too thin was a surprisingly beneficial lesson because it helped me value each dollar more. I became an extremely resourceful chica and nimbly learned how to use available ‘stuff’ more wisely.

If you’re forced to crack into your savings by the way, don’t beat yourself up too harshly over it. But do try to build the amount back up as quickly as possible. I’ve done some really stupid maneuvers where I’ve been forced to dip into some of my long term savings. But take comfort in the fact that feeling stressed or guilty over unexpected expenses defeats the entire purpose of having an emergency savings in place to begin with.

Although it has been a financially challenging year, I’m so grateful for the lessons I’ve absorbed. I was caught in a damaging cycle of inaction and denial until I became angry enough to take back control of my finances. I finally had the courage to ask myself, whose life is it anyway?

=^..^=

My friend works as a legal aide and felt her company was pretty secure. Yet over fragrant sips of ginger and spicy Chai, it was her parent’s business she was most interested in discussing. Her family specializes in appraising and selling jewelry.

“Business has really been booming for my parents.” She tapped her mug and frowned. “But it’s been a disturbing change over the past few months. More frequently, financially desperate customers are coming to the shop.”

She paused and sighed.

“There’s been a surge of people bringing in wedding bands, precious keepsakes and family heirlooms – treasured pieces held in the family that are now being sold to cover basic financial costs. The stories my parents hear of why people are parting with such sentimental objects is heartbreaking. It’s getting pretty bad out there.”

A woman yesterday was forced to sell a gold diamond necklace and ring set inherited from her grandmother in order to cover family health insurance costs. And a recently laid off man came in to sell his pocket watch to pay utility bills – for him, every dollar counted. This type of situation, my friend mused, was increasingly becoming the norm. To make ends meet, people were raiding jewelry boxes and other personal items to sell whatever they could to turn assets into immediate cash under economic pressure.

On the way home from our lunch, I noticed a neon sign outside a pawn shop that had sprouted up a few blocks from me. “PAYING TOP DOLLAR FOR YOUR GOLD AND JEWELRY!” it screamed.

I didn’t have far to go before I was greeted by the next lurking signboard – “I buy diamonds! Sell us your unwanted gold! Fast Cash Now!!”

Another harbinger of lackluster economic times?

=^..^=

† †

Featured Resources

Compare prices and read helpful product reviews to make smart buying easy through Ciao! – Price Comparison and Product Reviews for the savvy shopper.

Some Tidbits From Around the Web

The 2009 Carnival of Personal Finance “The Fairy Tale Edition” has made a spectacular debut over at Clever Dude. Be sure to check out all the latest submissions from the financial blogosphere compiled in a storybook format. A big thank you to Clever Dude for hosting this week!

~¤~¤~

Those with fuzzy little sweethearts may be interested in this email I received:

Because of your online presence on Broke-Ass Student, I thought this might be something you would like to share with your readers and check out yourself. Anamigo.com is having a photo contest with a daily prize of $25 and a weekly prize of $125, totaling $300-a-week for the cutest pet photos (voted by users).

Anamigo.com is a new online community for pet lovers and their pets. It doesn’t cost a thing and all you have to do is join. I’ve put together this minisite which explains everything:

http://anamigo.smnr.us

~¤~¤~

CNN will be broadcasting the financial documentary “I.O.U.S.A.” regarding the U.S.’ monster debt on Saturday, January 10 at 2:00 p.m. EST and Sunday, January 11 at 3:00 p.m. EST.

I had an opportunity to view I.O.U.S.A. when it was released in theaters this summer and am pleased to see a broadcast premiere. As David Walker, the former comptroller general of the United States and the nation’s top accountant, describes: It’s the dirty little secret everyone in Washington knows – “We suffer from a fiscal cancer.”

In response to demand for information about our country’s financial challenges, CNN/U.S. will air the broadcast premiere of the acclaimed documentary I.O.U.S.A. on on Saturday, January 10 at 2:00 p.m. EST and on Sunday, January 11 at 3:00 p.m. EST. Accompanying the documentary will be an unscripted panel discussion with policy leaders about various economic solutions currently under consideration.

Throughout I.O.U.S.A.’s broadcast premiere, Velshi and Romans will engage a distinguished group of panelists, including Pete Peterson, Chairman of the Peter G. Peterson Foundation and former U.S. Commerce Secretary; Dave Walker, President and CEO of the Peter G. Peterson Foundation and former U.S. Comptroller General; Alice Rivlin, noted economist and former Director of the Office of Management and Budget; and Bill Bradley, a Managing Director of Allen & Company and former U.S. Senator and Democratic presidential candidate, in discussions about issues raised in the film and their ties to current economic events.

You can learn more about this film at www.IOUSAtheMovie.com.

~¤~¤~

Suze Orman is scheduled to appear on The Oprah Winfrey Show tomorrow, January 8, 2009, and will be launching her new financial book, Suze Orman’s 2009 Action Plan, which addresses “every question you may have about credit, savings and spending, paying for college, retirement, real estate and protecting your family.” But here’s the best part. According to this press release, Suze Orman’s 2009 Action Plan will be available as a free eBook download for one week after the show. Nip on over to grab it while you can.

[Edit: Here's the link to the Free Suze Orman eBook.]

Do you have news you’d like to share? You may contact me by email.

=^..^=

Last year I would never have imagined making as much headway on my bills as I have this summer, and it’s been extremely encouraging. The challenging part is sacrificing in order to stash away as much of my paycheck as possible, instead of splurging on tempting little extras for myself. But it’s truly worth it every time I see the balance of my debt shrinking before my eyes.

Whenever I feel discouraged, it helps to remind myself how I didn’t get in this much trouble overnight and thus it’ll take time to claw my way back out of the black debt hole again.

If I remain focused and stay motivated for another few months, the bulk of this debt will be gone by next year. I can hardly believe it! That means all my student loans plus my 2007 Dodge Caliber will be paid off in less than three years. It will be sooo nice not to repeatedly have to make one monotonous payment after another every month, and what a relief when my money will finally be mine again.

I can’t wait to be debt-free!!

=^..^=

† †

Featured Resources

Compare prices and read helpful product reviews to make smart buying easy through Ciao! – Price Comparison and Product Reviews for the savvy shopper.

Panelists Warren Buffett, CEO of Berkshire Hathaway; William Niskanen, chairman of the CATO Institute; Bill Novelli, CEO of AARP; Pete Peterson, senior chairman of The Blackstone Group and chairman of the Peter G. Peterson Foundation; and Dave Walker, president & CEO of the Peter G. Peterson Foundation and former U.S. Comptroller General engage in an informative panel discussion LIVE from Omaha, Nebraska this evening. The discussion will explore the growth of the U.S. national debt and what can be done to make our nation more fiscally sound.

Tonight I’ll be attending an 8:00 p.m. showing at a local IMAX theater and I’m really looking forward to seeing this documentary. Hah, now I know I’m officially a financial nerd!!

=^..^=

Large U.S. Bank Collapse Ahead
Yahoo! News
August 19, 2008

The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world’s biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said on Tuesday.

“We have to see more consolidation in the financial sector before this is over,” he said, when asked for early signs of an end to the crisis.

“Probably Fannie Mae and Freddie Mac — despite what U.S. Treasury Secretary Hank Paulson said — these giant mortgage guarantee agencies are not going to exist in their present form in a few years.”

Rogoff said the U.S. Federal Reserve was wrong to cut interest rates as “dramatically” as it did. “Cutting interest rates is going to lead to a lot of inflation in the next few years in the United States.”

Legendary Wall Street investor and commodities guru Jim Rogers is back on the prowl and seems to be in agreement with Rogoff’s stunning assessment, as seen during an exclusive interview with Money Morning this week.  I have to admit, every time I see Jim Rogers on television sporting his little bowtie during interviews, I just want to reach through the screen and give him a great big big. His direct, no nonsense and no holds barred way of speaking somehow reminds me of a crabby but wise grandfather.

Exclusive Interview: Jim Rogers Predicts Bigger Financial Shocks Loom, Fueling A Malaise That May Last For Years
Money Morning
August 19, 2008

Jim Rogers believes that “America had such a magnificent and gigantic position of dominance that deterioration will take time … it takes a lot of hard work by a lot of incompetent people to change the situation.”

The U.S. financial crisis has cut so deep – and the government has taken on so much debt in misguided attempts to bail out such companies as Fannie Mae (FNM) and Freddie Mac (FRE) – that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning.

Indeed, the U.S. financial debacle is now so ingrained – and a so-called “Super Crash” so likely – that most Americans alive today won’t be around by the time the last of this credit-market mess is finally cleared away – if it ever is, Rogers said.

The end of this crisis “is a long way away,” Rogers said. “In fact, it may not be in our lifetimes.”

Some key points Rogers stated:

• U.S. Federal Reserve Chairman Ben S. Bernanke should “resign” for the bailout deals he’s handed out as he’s tried to battle this credit crisis.

• The U.S. national debt – the roughly $5 trillion held by the public– essentially doubled in the course of a single weekend because of the Fed-led credit crisis bailout deals.

• U.S. consumers and investors can expect much-higher interest rates – noting that if the Fed doesn’t raise borrowing costs, market forces will make that happen.

• And that the average American has no idea just how bad this financial crisis is going to get.

The entire interview is worth reading through and here are a few snippets.

(Q):What would Chairman Bernanke have to do to “get it right?”

Rogers: Resign. (Hah! Love it.)

(Q): Is there anything else that you think he could do that would be correct other than let these things fail?

Rogers: Well, at this stage, it doesn’t seem like he can do it. He could raise interest rates – which he should do, anyway. Somebody should. The market’s going to do it whether he does it or not, eventually.

The problem is that he’s got all that garbage on his balance sheet now. He has $400 billion of questionable assets owing to the feds on his balance sheet. I mean, he could try to reverse that. He could raise interest rates. It would cause a shock to the system, but if we don’t have the shock now, the shock’s going to be much worse later on. Every shock, so far, has been worse than the last shock. Bear-Stearns [now part of JP Morgan Chase & Co. (JPM)] was one thing and then it’s Fannie Mae (FNM), you know, and now Freddie Mac (FRE).

The next shock’s going to be even bigger still. So the shocks keep getting bigger because we kept propping things up and this has been going on at least since Long-Term Capital Management. They’ve been bailing everyone out and [former Fed Chairman Alan] Greenspan took interest rates down and then he took them down again after the “dot-com bubble” shock, so I guess Bernanke could try to start reversing some of this stuff.

(Q): Earlier this year, when we talked in Singapore, you made the observation that the average American still doesn’t know anything’s wrong – that anything’s happening. Is that still the case?

Rogers: Yes.

(Q): What would you tell the “Average Joe” in no-nonsense terms?

Rogers: I would say that for the last 200 years, America’s elected politicians and scoundrels have built up $5 trillion in debt. In the last few weekends, some un-elected officials added another $5 trillion to America’s national debt.

Suddenly we’re on the hook for another $5 trillion. There have been attempts to explain this to the public, about what’s happening with the debt, and with the fact that America’s situation is deteriorating in the world.

I don’t know why it doesn’t sink in. People have other things on their minds, or don’t want to be bothered.

(Q): What do you think [former Fed Chairman] Paul Volcker thinks about all this?

Rogers: Well, Volcker has said it’s certainly beyond the scope of central banking, as he understands central banking.

Volcker’s been very clear – very clear to me, anyway – about what he thinks of it, and Volcker was the last decent American central banker. We’ve had couple in our history: Volcker and William McChesney Martin were two.

You know, McChesney Martin was the guy who said the job of a good central banker was to take away the punchbowl when the party starts getting good. Now [the Fed] – when the party starts getting out of control – pours more moonshine in. McChesney Martin would always pull the bowl away when people started getting a little giggly. Now the party’s out of control.

(Q): This could be the end of the Federal Reserve, which we talked about in Singapore. This would be the third failure – correct?

Rogers: Yes. We had two central banks that disappeared for whatever reason. This one’s going to disappear, too, I say.

[/end snippet]

With my limited broke-ass financial knowledge, I do believe we’re in a painful but necessary cleansing period of massive global deleveraging and (unfortunately) tremendous inflationary pressure. When the system is corrupt, it becomes prudent for people to embark on personal wealth preservation protection and with current shoddy interest rates, savers continue to suffer as we struggle to find creative ways to protect purchasing power.

My generation may experience a radical financial transformation from the insatiable consumerist lifestyle we’ve grown so accustomed to.

=^..^=