Rather than stop the party and face the hangover, the Fed and our world leaders have filled the punch bowl with more debt and more counterfeit money, hoping the party lasts through lunch - all this free money will lead to two outcomes: higher taxes and higher inflation. This is good news for a few people and horrible news for most people.
If you’re a person who works for money in the form of a paycheck, commissions, per hour, or for bonuses, governments pouring more rum, vodka, and whiskey in the punchbowl is bad news for you because the taxman taxes those who work for money. It’s good news for investors and business owners because the taxman gives tax breaks to those who have money work for them.
The reality of rising inflation will suck the life out of those who save money and reward those who know how to use debt and commodities to increase their wealth.
Most people can already see gas, food, and medical prices going up. Now that basic commodities such as metals and cotton are going up too, it seems inflation along with higher taxes are here.
The really interesting news is the rioting in Egypt. If the rioting spreads to Saudi Arabia, another US puppet hated by Muslim terrorists, we could see oil prices go through the roof. Then we would see real inflation.
The most interesting aspect of the rioting in the Middle East is that the rioting is over high food prices and unemployment. The government of Tunisia was crushed because it took care of the rich and forgot about the poor and middle class.
These riots are not accidents. Well organized radicals, the same ones who toppled the World Trade Center ten years ago, take this growing anger and unhappiness, and use it as leverage to topple leaders who are friendly with the US. Can you imagine what will happen if these radicals that hate the Western world take control of the world’s oil supply?
A 100-year bond gives the government the power to push our exploding debt 100 years into the future at today’s very low interest rates. This is good news for the rich is that the rich will now receive interest payments for a hundred years on money they created out of thin air. On top of that, the rich who control commodities such as oil, food, and cotton, get richer as inflation pushes prices higher. To add more gas to the fire, the rich pay less in taxes.
Unfortunately, this system of funny money makes the poor and the middle class poorer because taxes must go up to pay the interest on these bonds and inflation eats up what taxes leave behind.
So, what can you do?
going to school to get a job, to work harder, to save money, and to invest in a 401(k) is foolish, given the state of the world economy. Those that follow the old rules of money are set up to lose during these volatile times.
I believe gold at $1,310 would be a good buy and silver at $24 would be great. But, I am probably dreaming.
when the governments of the world are printing money, gold and silver are your insurance against a world trying to solve its financial problems by printing counterfeit money.
Tragically, people work harder and save more as world’s governments print more and more. It makes no sense to me, but it must make sense to billions of people who still work, save, and cling to fake money.
My investment and self-protection strategies remain the same as always. I continue to learn and invest in my financial education. I continue to invest in things that are real.
it’s not an accident that there is little-to-zero financial education in schools. This is not a mistake. Controlling what we learn in school is as good as controlling the banking system and our money supply.
