Hurricanes Are Coming!
Hurricane Dorian
is traveling (September 1) toward the United States. The destruction could be impressive.
Hurricane Federal Reserve
has devalued the dollar for over a century. The destruction has been large. A few benefited, many lost wealth, purchasing power, pensions, jobs, and homes.
Hurricane National Debt
has reached Cat 5 status, over $22 trillion in unpayable debt that weakens the U.S. economy, strains the government budget with half a trillion in annual interest payments, and sucks capital away from more beneficial uses. This debt hurricane should reach Cat 6 soon.
Hurricane Pension Default
sits at only Cat 1 status today, but it will strengthen during the next recession. Low and negative interest rates will make it worse.
Hurricane Crazy Politics
is building into a major force, expected to reach Cat 5 in October 2020.
TOO MANY DANGEROUS HURRICANES…
- We can’t stop winter from coming. Tornados and wildfires occur every year, and hurricanes form every summer. Plan around what you can’t control.
- Hurricane Federal Reserve is politically powerful. Many people, governments, and businesses benefit from this “gravy train.” Work around it!
- Hurricane National Debt is too large and growing. Debt will expand until it resets.
- Hurricane Pension Default will grow and become a political nightmare. The mathematics make it inevitable.
- Hurricane Crazy Politics: Enjoy the show. It happens every four years.
SO WHAT? HOW TO PREPARE FOR CAT 5 HURRICANES IN OUR LIFE?
First: What do we know for certain?
1)
Debt will increase until it can’t. Every system has limits.
2)
When debt increases, the quantity of currency units (dollars, euros etc.) in circulation expands. The currency units devalue, and everyone pays higher prices. We have suffered dollar devaluation for over a century.
3)
Productive debt can be beneficial. Borrowing $10 million to earn $50 million makes sense.
4)
Unproductive debt used for consumption is destructive. The capital is gone, but the debt remains, and we must pay the interest. Borrowing to pay for bombs, personal and corporate welfare, interest on debt, and hundreds of other unproductive uses… leads to a dark place.
Second: Make Wise Choices.
1)
If Dorian is coming, prepare or leave.
2)
Spend less, save more. Avoid debt and interest.
3)
If the Fed and government are devaluing currency units, invest in something that retains value as currency units buy less. Think gold, silver, real estate, stocks, whatever.
4)
You can time long-term market decisions. Stocks are not always a good choice. Buy and hold no longer makes sense. Gold was a poor choice between 1980 and 2000. Real estate prices move in cycles.
Third: How do I learn about Good Choices?
1)
Usually by making bad decisions and learning from them.
2)
Did you buy Internet stocks on margin in late 1999 or early 2000?
3)
Did you buy homes with no down payment in 2007?
4)
Did you buy stocks on margin in 2007?
5)
Did you buy silver in January 1980 because it “was going to the moon?”
6)
Or did you buy silver bullion at less than $5 early this century?
Fourth: What Can I do?
1)
Question the narrative.
Would you buy a used car from our national politicians? Do you believe the Fed cares about “Main Street USA” or unemployment? Why does Asia buy hundreds of tons of gold annually? Is gold useless and unimportant as the media proclaim? Is Wall Street helping anyone but Wall Street?
2)
Examine long-term trends.
3)
Compare ratios
between markets to determine what is over-valued and under-valued.
Fifth: WHAT TRENDS AND RATIOS?
Debt increases more rapidly than the population
. Examine this (scary) log scale chart of official national debt divided by US population.
