Posted on September 27th, 2010 No comments
The level of destruction on our financial system is incredible compared to what even Timothy McVee did as a domestic terrorist. You have to ask yourself who do some of these bankers and investment firms work for when you look at what they’ve done to the once wealthiest nation in the world.
Right now we’ve got $2 trillion in short-term debt that has to be refinanced this year of 2010 and China, India and Russia are not buying. This is not counting the extra deficit spending which should top $1.35 trillion this year…more or less. The fact the countries we’ve relied on are not buying means we have to fire up the printing presses again. We would already acknowledge that we are at a 10% inflation but the money folks have been using tricky phrases like “core inflation” which ignores half the things we spend money on so that way they can keep the numbers looking low.
A great book called This Time Is Different: Eight Centuries of Financial Folly by Carmen Reinhard and Kenneth Rogoff shows that EVERY TIME a nation’s debt went above 90% of GDP or Growth Domestic Product…the nation failed. The book studies 25 countries over 800 years and there were NO exceptions to the 90% rule. Every nation that ran their deficits to this 90% ratio is now off the map or turned Third World.
Right now, the US is above 90% and there appears no way to bring it down for decades unless some obscure genius comes out of the woodwork as they are not in the White House, Treasury or Fed.
It is unclear what Americans will do, especially for their retirement as the very tool our bankers use against us (stock market) they expect us to hand over our life’s savings and just be ok with negative 30 or 40% loses. You know, its just the market reacting and it goes up and down. Why is that Ok? Why should we accept losses that take us forever to recover just to get back where we started be considered alright?
We need to redo some of the Healthcare Reform Act that President Obama so valiantly promoted before 2013 when our investments could be ravaged with a sur-tax just because we are in a certain income bracket and that bracket is not hard to be in if you live in a state with a high cost of living. Where is Sarah Palin and the Tea Party when we need them.
It is time to look at guaranteed opportunities that does not go down when the market goes down. When Wall Street was once honorable a man named Benjamin Graham (mentor to Warren Buffet) extolled what was an investment. It preserved principal and gave an adequate return. We need to get back to this simple idea and quit trying to find home runs since base hits get you to home plate just as well.
We also need tax-free strategies to weather the storm our own government and their brainy bankers have left before us. It was like turning on the gas to an already smoldering economy.
James Burnsasset protection, business, estate planning, finance, life insurance, money, News, retirement 401(k), 401k plan, 529, al-Qaeda, annuities, asset allocation, Ben Bernake, bonds, capital gains, China, commodities, consumer protection, credit cards, credit scores, debt, defaults, deficit, dividends, domestic terrorism, economy, equity indexed annuities, estate tax, ETFs, family finances, family money, Fidelity, fiduciary standard, finance, financial advisers, financial aid, financial reform, fixed annuities, foreclosure, GDP, Growth Domestic Product, healthcare reform, inflation, insurance, IRA, Managing healthcare costs, marriage penalty, money, mortgages, municipal bonds, mutual funds, Obama, Pimco, President Obama, real estate recession, retirement, risk, Sarah Palin, saving for college, savings, savings plans, SEC, social security, sovereign debt crisis, stock market, stocks, stocks strategic, taxes, Tea Party, terrorism, TIPS trusts, US Treasury, Vanguard