I tend to stay away from current events because I like the content of the site to be relevant no matter when you read it, but after some thought I figured this topic might be relevant at any time. A cautionary tale to some and a roadmap of what not to do with your country’s finances.
Currently – the day I’m writing this is April 6, 2011 – the U.S. is so far in debt that there’s no reasonable way that we will ever pay it off. I just checked the current debt clock and it stands at $14,277.050,300,000. The last six digits are changing so fast that in the time it took me to type this sentence (and I’m a fast typist) and take a telephone call it’s changed to $14,277,054,200,000. In the space of a couple of minutes that’s an increase of $3,900,000. Almost 4 million dollars. We have a 14 trillion dollar debt and we’re adding to it at the rate of roughly a million dollars a minute. (Rough numbers of course – subject to change.)
Most of us will likely never see that kind of money in an entire lifetime, yet our country is going intodebt at that rate every second! It boggles the imagination. If the country were an individual it would have been thrown in debtors prison a long time ago, yet somehow our government continues to keep the house of cards from falling down. Bernie Madoff is up the river right now (without a paddle) and he says that our government is the biggest ponzi scheme ever. He should know!
Unemployment remains high despite the promise of a budding economic recovery, the rich are getting richer and the poor keep getting poorer, Medicare and Medicaid will probably be gone by the time I get to retirement age (looming ever closer), healthcare expenses are totally crazy, food and gas are are being hit by shortages and inflation that the government says is not there, (but anybody who’s gone to the gas pump or been shopping lately will tell you otherwise.)
First of all, I don’t think that quantitative easing is the solution. I managed to get debt free a few years ago by working my ass off and not spending money on anything else other than eating, rent, and fuel to get to work. I did not get out of debt by buying more stuff than I could possibly afford then writing a bad check to cover it, and that’s basically what the government is doing with the QE series.
Wallstreet, flush with infused QE cash is riding a new high while Main Street is paying $3.75 a gallon for gas and struggling to make ends meet. God help you if you have a medical emergency because nobody else will. And what does our government encourage us to do? Spend! Stop saving and get out there and spend! It’s good for the economy! Don’t just sit there on your wallet. Leap to your computer and download from Amazon or go to the mall or take the family out to eat!
Folks, I have no problems with downloading stuff from Amazon, or going out to eat; however, if I don’t have the cash to pay for it don’t buy it. I don’t consider myself to be a financial role model by any stretch, but I think the government is a little over the top when we’re going into the hole at the rate of one million dollars a minute.
My biggest fear is an economic collapse brought about by the devaluation of the dollar. How bad or how deep is anybody’s guess. It might be not be that bad… lot’s of job losses, people buying only the necessities, probably the crime rate goes up a little because people are desperate, that kind of thing.
Worst case scenario is hyperinflation where a dozen eggs will cost about $100, or a deflationary spiral. Either way the dollar takes a big hit and we’re in huge trouble.
I’m no expert by any stretch, but anybody reading the news today will be able to tell you that we’re in deep trouble. Depending on who you read will tell you how bad it is. The mainstream media bounces back and forth from story to story and people like Chris Martenson will scare the life of you by assuring you the end of the financial world is upon us.
By no means am I going to try and predict an economic collapse. I have neither the educational background nor business experience to make a true analysis of the situation and, quite honestly, I’m not sure that there are many out there that can at this point. I know what I feel. I feel like things are speeding up and/or coming to a head. For what, exactly, I couldn’t say. The economy has been in trouble for awhile now and when you add in the disaster in Japan it just adds to the confusion. The more complex the problem becomes, the more variables added to the equation, the harder it is to see the outcome. And let’s not forget potential Black Swan events.
What do you think? Am I being overly paranoid? Can the government and economists drag us back from the edge of disaster? Are we near a disaster at all?
I do know one thing though. I’m making sure I’ve got all my preps in place!
If you have time you should check out the explanation for economic collapse.