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Unless you've been living under a rock, you've heard about all the problems with the U.S. economy and the up-and-down rollercoaster that is the Market nowadays. Things aren't looking too good for the economic outlook, at least for the short-term, with 3 out of 4 economists now saying they believe we are in a recession.

Short of sorting through pig entrails or other types of prognostication, some good guesses as to what the next big problem coming down the pike are;

• Continuing Subprime Meltdown - Duh!. But by some estimates, the continued mortgage problems and housing decreases could continue into 2011.
• Tightening Credit Market - Banks are starting to 'batten down the hatches' too. Credit is harder and harder to come by. No credit means businesses have to tighten their belts and work with existing capital. That means, cutbacks, layoffs, and other cost-cutting measures until the market recovers.
• Skyrocketing price of Energy and Commodities - With crude hovering around $100/barrel consistently now, transportation costs have shot up like a scalded cat out of a tub of water. To add to that, many U.S. farmers have switched to biofuel crops like soybeans or rapeseed. This switch is already causing food shortages on exports, and has been slowly causing food prices to go up domestically.

But Why NOW?

The main reason is that I believe the next major bubble to burst is going to be the Credit Card Debt bubble. With the three main squeezes of household money increasing (food, housing, and credit bills) the number of people pushed from 'just hanging on' to 'free-falling' is going to rise dramatically.

Getting out of revolving credit debt at least gives you a buffer when unexpected increases in everyday costs start going haywire. If you don't have to pay MasterCard, seeing gas go to over $3.00/gallon isn't 'quite' so bad.

With all the financial indicators starting to point South, there's no time like the present to get ready for the storm. If we're lucky, it'll be like a short thunderstorm, washing away overpriced houses and imaginary profits from over-inflated businesses, and then back to normal. If not, the more prepared for the long storm, the better.

Things to Look Out For

As always, having funds put back is a must, but there's lots of other things you can start doing to prepare for the storm.

• Downsize - Cut out recurring but unused expenses (gym you don't go to, movie rentals you don't use, etc.)
• Increase income - Time to sell those old items you don't need. It kills two birds with one stone; Clears out the cruft, and puts some cash in your pocket. Clean out the attic or basement and hit eBay.
• Pay off or Consolidate Bills - Work on getting the number of bills to the smallest number possible. It's easier to pay one $100 bill in an emergency, than 15 $10 bills, even if they're spaced out over the month. Pay off what you can, and combine the rest where possible.
• Adopt the Frugal life - Remember, Frugal doesn't mean poverty. Make a few cuts here and there, adapting to a simpler and/or less expensive way of life. Make your own coffee, take lunch a few days a week to work, car pool a couple days a week. Little things add up without making you feel like you're turning into a miser.

Better Safe than Sorry

As always, I could be wrong and my crystal ball could have a huge crack in it. In fact, I hope I am. It would be great if the economy turned on a dime and started heading back into the green.

But I'm not betting on it.

Other posts you might find helpful, even if it does specify the WRONG time to get out of debt.

Now Is the SECOND Best Time to Get Out of Debt Guest post from DebtFREE Revolution

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