This is a evolving area, and I will be re-editing this article.
I studied economics for two years at university, but my general knowledge of the area, especially of the theoretical aspect is superficial. How ever in my opinion economics is not always about theory/models etc, who has the best economic models, John Maynard Keynes or Milton Friedman. I believe sometimes it is about plain simple common sense, and knowing/understanding your country and society.
Third World countries and other emerging nations are of course as vulnerable as any advanced nation from any global recession. However there are as always basic simple strategies that can be followed when especially the American economy quickly slides into recession. The American economy can collapse, but that does not mean the rest of the worlds economy has to follow with them as it happened in 1929.
This area should be treated as a national security issue, as failure to take proper counter measures against a coming global recession can lead to massive social unrest, coups, and in some cases armed struggles within societies which lead to the break-up of that society.
In no particular order some rudimentary suggestions:
- Obviously if the American economy is going to collapse, you should hold as few dollars as possible, and you should diversify your reserve currency into as many currencies as such as the Chinese Yuan, perhaps the Euro, Brazilian Real or the Indian Rupee. In addition one should increase the stock of ones Gold, Silver, and precious stone reserves. So perhaps a mixed bag of reserve holdings. You should also take your money out of the USA, before their banking system collapses, and they are unable to pay your money back from their banks.
- I think the smaller the percentage of your economy engaged in global trade the better it is to with stand the full effects of a global recession. If only 7-15 % of your economy is engaged in international trade than the effects of global recession will be less on your country than that of an economy which is 20--40% active in international trade. Also the smaller the percentage of trade you have with the USA, than the better position you are in avoiding a global recession. Some form of a viable Autarky should be considered, and if ones economy is too small, than the next best thing is a regional autarky---linking ones economy more to the big economies of the region. China, Japan, India, Brazil, Russia etc.
- The global recession is partly/mainly about financial mismanagement in the USA. In the USA financial speculation and financial bogus scams have created this serious matter in the USA and consequently the rest of the world. America for quite a while filled with imperial hubris has been following banana republic economics, which to an extent, China, Japan and South Korea, along with the rest of the world has been paying for. The Americans have been dancing around the world with GWOT---a fake illusion, meant to distract the world, whilst enhancing their power viz the rest of the world. This situation cannot last for ever, and as this banana republic system of financial mismanagement collapses, it of course threatens the rest of the world's economies. One of the key counter measures is to reduce the activities of the speculating market in your economy, and as an extreme measure close the stock exchange down. Great nations have been built in the past without the need for a stock exchange. In addition tighten the activity of the financial sector, and regulate the printing of money, and the setting of interest rates. One should also consider closing all American banks in ones country.
- Many nations after the 1929 Wall street crash recovered quickly. The solution was well planned/central financed stimulus of the economy into asset/capital building projects such as industry and infrastructure. This requires an efficient bureaucracy, and incorruptible government which spends the nations money properly/efficiently. Corrupt governments such as those in Zimbabwe or Iran are obviously not going to succeed, they are doomed. In Iran with massive new oil revenues, the government tried to stimulate the economy through spending, but instead it has resulted in economic disaster----the managers of the economy are corrupt and worthless British backed puppets with their heads in the Koran, selling large parts of the economy to mysterious foreign capitalists, and a country of that size dependent on imported fuel, because they didn't achieve self sufficiency---autarky. So now the Iranian economy is very vulnerable. Obviously such a program to protect the economy and stimulate it relies in the central government being well organized, not corrupt and in control of their countries economy----anticipating in advance the collapse of the American economy and making all necessary contingency plans.
- Many revolutions around the world have been sparked by the lack of food, and that was certainly the case with the 1789 French Revolution, 1917 Russian Revolution and a few others. All governments need to make sure that food stocks, and supplies are well maintained developing good relations with food exporting nations such as Brazil, Argentina, Canada etc. Whilst there may be economic hardship, during the American recession, food supply must be well stocked in all nations. This is not a financial issue, as the cost of food can be covered quite easily by most well organized government through proportional taxation. This is primarily an organizational issue and about planning ahead. Obviously certain Third World countries need to rethink about exporting food in such a scenario of global recession, and concentrate on staple diet agriculture rather than cash crops export.
- Finally in the realm of security and national stability, the emergency services need to be trained for such a scenario. During a global recession, massive numbers of people will be traveling in search of food, and employment, and the situation will become desperate---quite, quite desperate. Depending on how efficient the national government is, much of the worst security implications can be avoided.
