Sunday, March 7, 2010

The Eve of Destruction?

Well it’s been 2 years since the whole notion of the importance of acquiring inflation proof assets entered my world, and let me tell you, it couldn't have happened at a more opportune time. I sat wide-eyed as I watched the whole Fanny Mae and Freddy Mac saga unfold before my eyes. This was what the likes of Richard Martin, Peter Schiff and Marc Faber had been predicting for months, and I had just finished taking it all in when it hit the mainstream media. I was on the phone with a friend when the news feeds hit the net. We could not believe our ears. “Is this it?”, I thought, “is this the beginning of the end of life as we know it?”

Then the ensuing images of regular families who so ill-advisedly “bit off more than they could chew” ending up in homeless shelters, motels, parking lots, or “tent cities” were unbearable. And to watch the audacity of the media as they blamed the families for purchasing something they couldn't afford, all the while, begging for a bail out for Fanny and Freddie; the culprits who caused the crisis to begin with.

Well it turns out that that the sky was not falling that day, but it was definitely a warning shot. With the Federal Reserve continuing to print money into existence, and the Federal debt growing exponentially, the foundation of this 100 year experiment called “non-gold backed, fiat currency” has been eroded and the economy is definitely on its slow decent into hyper-inflation.

Many seem to argue that things are turning around, the economy is getting better. We are told to cheerfully continue buying stocks and watch the stock market “rally”. But common sense simply dictates to take a look around you. What are we actually seeing in our lives today? Increased unemployment, record inflation, increased homelessness and the existence of “modern day shanty towns” N.America.

Can we rely on the government to rebalance the economy? As Chris Martenson so succinctly described it in the “Crash Course”, he states we are now in a situation with an outcome, and it is just a matter of how we are going to handle the “outcome”. What are some things we can do to lessen the blow of the outcome?

More and more it makes sense to store your wealth in something that is inflation proof. I for one will be buying gold and silver in a variety of forms.

Kirsty Hogg


  1. This comment has been removed by a blog administrator.

  2. All of what you said is so true Kirsty. However, in some cases I think the buyers of some of the foreclosed homes share the blame. I saw on a news show where a fellow had gotten a no money down, adjustible rate mortgage for a 300K+ home. His take home pay was $900/month. I believe some people were duped and not as finacially savy as you and I, but no one in their right mind would get a 0 down, 30 year adj. rate mortgage making less than $1000/month. Where do you work thatg pays 250/week? I guess P/T at McD's or Walmart, I dont blamehim for having a low paying job, I hope he does better, but I wasn't always making a comfortable living. I managed to rent suitable quarters. I did not go crazy in debt, though. It all boils down to, I think people should take responsibility for their actions. That does not excuse the government bail-outs of those to large to fail.

  3. Hi Greg, I agree with you that personal accountability is crucial. Individuals should be accountable for their decisions. At the same time Corporate America should be accountable for their fiscal errors and blunders too. Instead they get a bail-out package in the Billions and buddy is living in a tent. They would have been better off in their affordable digs before the lure of the subprime mortgage home.

  4. Great story, The housing crisis is not over and a second wave maybe coming in terms of 5 year ARMS . Like you I feel that now is a great buying opportunity in gold and silver.

  5. It is a great story, and I don't believe we have seen the last wave of massive foreclosures. And the way the current administration is spending money (fiat money), not real money, but saying that they can pay for it (yea, 4 years of benefits for 10 years of increased taxes on everything) is all smoke and mirrors. I would not be surprised if they came up with a tax tax. You are taxed on when or how you file your taxes! File by Jan 31, 5% tax, and inceases 5% weekly. So if you R like me and wait till the last minute to file, you pay a 50% tax on your tax. I better stop, big brother may like that idea. Steve Forbes had it right, and i think Ron Paul is for a flat tax. I think 20% for everyone, and no deductions. You could even get rid of the IRS. If you cannot multiply your net income x .20, you could never understand the concept itself. Later Kirsty

  6. Greg, you're right. On tax reform, he was quoted as saying “I lean toward a flat tax. But I want to make it real flat, like zero.” --Ron Paul It isn't over yet, by far!

  7. Right on! Right on!

    Thomas Jefferson said, “If the America people ever allow private banks to control the issuance of their currencies, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered.”

  8. Mark - Agreed. I love TJ quotes. They make so much sense in our times. Thanks for the quote. Best! Kirsty Hogg