As we enter the second year of the 2009 Economic Disaster, and as the U.S. unemployment rate moves into eleven percent, it becomes evident that the “Financial Doctors” are injecting their medicine into the patient.
Before a doctor can provide a medicine for a patient, he needs to make a diagnosis. In the case of a sick U.S. economy, the diagnosis is very obvious: An Overdose of Debt.
The U.S. Debt Overdose is so enormous, economists falter in trying to measure it. Reading the internet and searching for Total Debt gives figures in the tens of trillions of dollars. The highest estimates are in the seventy and eighty trillions of dollars. These figures are so unreal that there is no possibility of ever repaying the creditors. But, the U.S. Government elite have obviously found a way to discharge the debt legally.
INFLATION AS MEDICINE
Central Bankers around the world are deeply aware of the potential for injury to their foreign reserves if the U.S. begins to inflate its way out of debt. The Chinese government, the largest holder of dollars, has repeatedly announced that it has concerns about the dollar and the U.S. debt. Other countries, such as Russia, are also calling for a new reserve currency.
The U.S. Government elite are stating that the U.S. will support the dollar. Simultaneously, the same elite, are pressing Congress for bills which would inundate the world with trillions of new dollars.
The dollar cannot be sustained by massive spending. This is the reality. The U.S. Government
has planned to debase the U.S. Currency and thereby eradicate the immense U.S. Debt.
MY PERSONAL SOLUTION
When the inflation will hit is a debatable problem. Whether inflation will hit is not. It will hit, with a vengeance, and destroy personal and governmental wealth. The U.S. population and governments around the world will see their dollar holdings turn into dust.
But, Americans and the American governments, local, state and federal, will see their debt vanish. Monster mortgages will also become worthless. Financing of any type will become bizarre. All legal paper will have inflationary protective clauses concerning repayment. Those that do not will become worthless.
But, if you have no debt and you hold assets denominated in dollars will be in trouble.
What to do?
1. Change currencies.
Take dollar accounts and change to other safer currencies.
Buy precious metals.
Gold and silver are finite. They are world commodities and have a price denominated in
all the currencies of the world. They are the ultimate safe haven.
3. Buy property in secure countries.
Property purchasing requires expertise. But, given expertise, properties in growing countries, such as, Canada and Australia, are stable investments.
I do not recommend taking on more debt, since the advent of inflation is indeterminate. The Government, knowing that the population will realize that inflation is coming, will try to persuade the public to buy on credit, thereby stimulating the economy. Let the buyer beware. No choice is ever perfect. Each of us will have to find an individualized solution.