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Financial Crisis-How to survive the financial crisis and its effect A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. There are signs all around us that the world economic crisis is worsening; hence it is clear that hard economic times are ahead as the world financial crisis continues to intensify. Here are some ways that you can survive hard economic times. Reduce the amount of debt that you have. Most households have at least some credit card debt, as well as other kinds of debt such as mortgages and car loans. These debts could quickly spiral out of control if you lose your job or even have to suffer a pay cut. You can reduce your deficit by paying more than the minimum amount every month and paying down more than you usually do. This requires that you reduce your monthly expenses to free up more money for debt payments. Hence, you will have to sit down and make a list of your monthly expenses to see where you can cut down. You might be surprised at how many ways you can cut back your costs without having to sacrifice your quality of life. Look for ways to augment your income. The best way to do this is to build a small home business that you can take care of in your spare time. For example, you can enroll to be an affiliate marketer and market a vendor's products on your website or blog. You will be given a unique link to the merchant's site, and whenever a visitor to your site clicks on it and makes a purchase, you will earn a small commission. In order to effectively do this, you will have to drive traffic to your site and then place exciting and unique content on it that will encourage visitors to buy the products you're promoting. Avoid getting into new debt. Once you've paid down a lot of your loans, stay debt-free so that you won't be burdened again. One way that you can do this is to cut up your credit cards once you've paid off the balances on them, and avoid availing of new credit cards, even if they are offered to you on a pre-approved basis. Another is to manage your credit more wisely. Effects of the financial crisis The financial crisis is an ugly situation that no sane person would want to experience because it comes with very drastic results that can reduce wealth and standard of living. Unfortunately, a recession is sometimes unavoidable. Unavoidable cases occur as a result of bad government policies, unemployment, and unfavorable economic conditions. The good news is that human beings can find solutions to any problem they face, so when there is hyperinflation, it's still very possible to survive. Earlier before, top countries in the world have witnessed several economic recessions. Their downfall also affects other countries, especially those that depend on them for the supply of goods and services. One of the indicators of recession is hyperinflation. Hyperinflation is a situation where the prices of goods and services rise to unreasonable levels. The condition is usually caused by currency debasement. This happens because currency's value depreciates and salary earners find it more difficult to buy products since they have risen higher in price. In most cases, people doing business usually cope better than salary earners because they can increase the costs of their goods and services. Those in the middle class face more trouble because most of their earnings come from salaries and since their salaries are not high, they are unable to get what they want during hyperinflation. Another problem that the middle class may face is that their savings will depreciate by the time they make a withdrawal. Interest rates on deposits are low at this time so people who have been saving in the bank for years will lose a lot of money. Unfortunately, economic recession lasts several years, and government strategies to effect reformation can take years before the results are seen. The government may also face a challenge from the population unable to believe in their policies even when sounding great. Some governments still make things worse by implementing the wrong policies. For instance, printing fiat currency in high amounts will make the economy worse because this can cause inflation. When inflation is caused by too much money in the hands of people, printing more notes is merely a bad idea. Instead, a better strategy would be to reduce the money in people's hands by implementing reasonable programs. More so, the government can increase interest rates so that people will be encouraged to do business which in turn can cause economic recovery and growth. If the right things are not done on time, people will lose faith in the government. Already, many people are considering gold and silver as a smart way of investing because their values rarely depreciate. Instead, their prices increase especially when there is debasement in currency value. Silver is also a good choice, and it is most people's alternative for gold. People without so much money to invest in gold can invest in silver without any fear of losing their money. Silver is also known for its industrial and technological applications. When the economic recession is very severe, banks and the stock market do not perform well. In times like this, people can react aggressively and cause anarchy. Survival measures such as hoarding water and staple foods increase, and some people even look for defensive facilities such as guns to protect themselves if any alarm arises. In some other cases, the people may transfer their reserves to other countries where they feel their investment will be safe. A recession is severe, and it's something you would not want to experience. It's necessary to pray that these problems will never occur. Apart from prayers, helping the government to implement the right policies is also important.