It seems like a lot of people are concerned about how to save money in a depression, or how to protect what they have in the near term. I’m getting queries like “moving to the country to survive a depression” and “How to earn money in a depression”.

You have to remember, when we think of what we might face in terms of a depression, that we know very little of true depressions (hardly anything in personal experience terms). In the 1930’s, the depression hurt a lot of people because there was no social security safety net, no unemployment benefits, no welfare and food stamps. It was because of that lack that these safety net programs where instituted.

In addition, it’s well known that Herbert Hoover let the depression sink in because he refused to spend any more. Guess where we’d be if some conservatives had their way? Why would they want to repeat the mistakes of Hoover? True, we are building up a huge financial deficit. But there could be – could be – growth to get us out of it, if all goes according to Obama’s plan.

Nevertheless – if a family faces job loss or downsizing, foreclosure, if big banks fail and consumers hunker down and stop spending, we could be in for some tough economic times. Yet I tend to see this as a step on a path to a new way of thinking about how we live – just like social programs resulted from the Great Depression of the 1930’s.

Here’s where things could go, IMHO. We could start learning to live with less money. OK, after we default on our homes and credit cards, we learn that we don’t need all the latest doo dads to keep us happy. We plant gardens. We keep the cars we have running. We barter and trade with our neighbors – lawn cutting for piano lessons or something. We turn to our communities for swap meets and recipe trades and getting back to basics. We start to be creative again, not just consumers of someone else’s creativity, that is, we bake and cook instead of going out; we play games and go for walks instead of spending hundreds a month on cable; we go to the movie at the town hall with our blanket and picnic instead of paying $50 or more at the theater. We take a composting class or a bike repair course and learn a new language with friends.

We find that we don’t need the things we have been conditioned to buy. We find that yes, if we save instead of spend, we put some people out of work, but we reach out to those people and help them become useful in other capacities. We learn that this too is just a phase, on our way to a more sustainable, friendlier, less consumption driven lifestyle, where there wasn’t much substance behind all that garbage.

My feeling is you’d do better in a community, not the country, where people can share and educate and lend and play and work together to make things work. You are not well served by harboring fear or complacency, but rather we can do so much better by harnessing the same “we can do it” strength that we felt after 9/11. We are facing difficulty as a country, not alone, but together, and only with constructive effort and creativity – not fear-mongering and ignorance and infighting – will be succeed and build something better out of our challenges.

And believe me – there are going to be amazing investment opportunities. I’ll be posting some of those to keep a watch on in the coming weeks and months.