Over the past few months I’ve spoken to top strategists at some of the biggest banks in the world, and they share my perception of the scenario. Most of them are “holding cash” as their main investment strategy, spread out over a few of the major currencies. Those making money are doing so by short-selling shares of other companies in the same finance industry that they supposedly work for.

The bigger picture, of course, is that speculation just worked too well for too long. The disparity between the market values and real values (rich people and poor people) got too large. Every asset class, even money itself, got too expensive. We became more valuable for our borrowing power than our labor—which also meant there was no way to work off our debt. Meanwhile, the people using reality as an investment vehicle have overwhelmed the real economy on which their “structured investments” are based.

Sure, this has happened before. It’s just that, traditionally, when wealth disparity got too great and there wasn’t enough money in the right places, the wealthiest bankers temporarily suspended their greed to bail out the system. Or progressive tax policies opened corporate coffers, permitting a “New Deal” that employed people while rebuilding the infrastructure required to make real things and provide real services to citizens.

Today, however, such temporary restraints on greed are systematically untenable and philosophically unthinkable. Conservatives are still so angry about New Deal reforms of the 1930s that that they have infused politics and banking with an economic ideology that sees any regulation of worker exploitation or predatory investment as anti-capitalist, anti-American, and even anti-God.

So instead we are the beneficiaries of “wink” reform: stuff that’s supposed to make us feel good while reassuring the speculators that their interests will remain paramount. A few hundred dollars mailed to every American family creates the illusion that government is lending a helping hand, but this money is not redistributing anything. It’s being taken from the same people who are receiving it, in the hope that they’ll just pump it back into the system at Wal-Mart or the Exxon station.

Whether the coming economic crisis will be deep or shallow is left to be seen. We may be at the start of the kind of depression our grandparents lived through in the ’30s, or we may simply experience what our parents lived through back in the ’70s. Foreign investment trusts may come in and buy our biggest banks and turn us into global citizens through the very World Bank policies we were hoping would turn all of them into US vassals.

Whatever the case, the best thing you can do to protect yourself and your interests is to make friends. The more we are willing to do for each other on our own terms and for compensation that doesn’t necessarily involve the until-recently-almighty dollar, the less vulnerable we are to the movements of markets that, quite frankly, have nothing to do with us.

If you’re sourcing your garlic from your neighbor over the hill instead of the Big Ag conglomerate over the ocean, then shifts in the exchange rate won’t matter much. If you’re using a local currency to pay your mechanic to adjust your brakes, or your chiropractor to adjust your back, then a global liquidity crisis won’t affect your ability to pay for either. If you move to a place because you’re looking for smart people instead of a smart real estate investment, you’re less likely to be suckered by high costs of a “hot” city or neighborhood, and more likely to find the kinds of people willing to serve as a social network, if for no other reason than they’re less busy servicing their mortgages.

The more connected you are to the real world, and the more consciously you reject the lure of the speculative ladder, the less of a willing dupe you’ll be in the pyramid scheme that’s in the process of collapsing all around us at this moment.

Think small. Buy local. Make friends. Print money. Grow food. Teach children. Learn nutrition. And if you do have money to invest, put it into whatever lets you and your friends do those things." Link