(posted with permission from
http://www.saneramblings.com )
The U.S. is going broke! There are no if, ands or buts about it, America is going bankrupt.
I wish Barack Obama every success in trying to resurrect the U.S. financial system but he has gotten in far too late and he is going to fail. If you'd like to watch the stunning speed in which our national debt is mounting by the second, please click on:
http://zfacts.com/p/461.html The corporate bailouts have been a colossal failure at a staggering cost to you and me, as the U.S. sinks so far into debt, it has no idea how it will pay it back. And if this wasn't bad enough, it is accumulating a stupendous amount of "toxic assets" from these giant corporations, as it races to insolvency.
The bailout process has been a sham perpetrated to save some of the most mismanaged but powerful political contributors using the money of hard working Americans.
But the situation is far worse than that, as so called "Stimulus" programs have also been a disastrous waste of money. Yet more of these programs are coming, and as Mr. Obama said, the U.S. will have "trillion dollar deficits for years to come."
So what is the answer? The U.S. must face the consequences of its horrendous actions. Wars, massive military spending, gigantic record breaking deficits, long importing goods it couldn't afford and shifting most of its manufacturing elsewhere.
Add to that unparalled corporate greed masked by false accounting, still not fully disclosed and lax, if any regulation. Now add rapidly growing defaults that started with real estate and are quickly spreading to car loans, credit cards and other debt and you have a towering tidal wave heading for us.
The U.S.'s creditors see this too and are beginning to wonder how the U.S. will pay them back. If such creditors as China and Japan close their check books, the U.S. government won't be able to pay its bills. That's how bad this mess really is.
The U.S. government can't borrow enough money right now to pay its bills, let alone for new "Stimulus" programs and so starting last September, it began running the printing presses to simply create more cash. This action in itself is a disaster waiting to happen.
Historically, the value of currencies have been tied to something other than the whims of governments. Usually, gold has been the underlying value. But since 1971, the U.S. has been off the gold standard.
This means the dollar has only the value you and I and others think it does. If we lose our confidence in it, it collapses into run away inflation. This is the track America is on.
So what can you do? If you want to protect your financial security and you can afford to invest, invest in useful tangible assets. As a 32-year real estate investor, I prefer residential real estate for even in the worst of times, everyone has to live somewhere and most people will pay their rent. As the dollar loses its value, the asset's value will rise.
To invest, select an area within an hour's drive of your home and get to know the area, its residents, its job base, its businesses, its shopping, its medical services, its schools, its police, etc. Do not buy in a second home community, because in bad times many of those properties are foreclosed.
Then, unless you are an experienced investor, start small. Buy a house or a duplex or a triplex. Finance its purchase with a down payment and a 30-year fixed rate mortgage. As time passes, you'll be paying back that mortgage with ever cheaper, inflated dollars using part of the money your tenants pay you.
Wait patiently for now as real estate values continue to fall but later this year and likely into next year, you'll have many attractive investment opportunities.
Other smart investments include businesses that will stay strong as the dollar declines. Well managed medical care and security businesses are two examples but don't invest if you're not knowledgeable and not going to be involved.
And here's an investment I strongly urge you to consider. Buy at least a small amount of gold. Buy it by the ounce or by a fraction of an ounce. Don't buy a "collector's set" or other TV promotions. As a safety net buy gold, such as U.S. Gold Eagle coins, as a commodity that will retain value as the dollar declines.
The current gold price is about $800 an ounce, and its price will fluctuate. But if the U.S. doesn't get off the track it is on now, over time it will soar in value when measured in U.S. dollars.
I'm no "gold bug" or "the sky is falling" type person. But this is a measure of the times we are confronted with and I'm encouraging you to diversify your holdings to include gold, even if it is in a tiny quantity.
If you are not an American, or you live outside the U.S. the value of your currency is likely to be affected by the U.S.'s irresponsible actions and so please consider what I've recommended for Americans.
Fortunately for all of us, life is about far more than money. I also encourage you to pray and/or to seek serenity through the pleasure of your family, meditation, exercise, smelling the roses or in reading good books or in so many other relaxing ways. And please help others.
Together we will get through this global economic collapse and times will become much better. We will hopefully also learn some valuable lessons from America's grossly irresponsible actions and even tragic conduct in Iraq and Afghanistan and become much wiser, more compassionate people.
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