Well the US Congress, Senate and our El Presediente, with great drama and fanfare, just raised the debt limit once again.
This is the umteenenth time in a row they have done this. But they have never ever reduced it!
Wouldn’t it be great if you and I could do the same with our credit card limit?
Well money and the struggle to obtain it is somewhat of a distasteful subject. But just abandon this struggle and don’t give a whiff about the mighty dollar; well how then are you going to eat and keep a roof over your head?
Interestingly though, our politicians claim to actually reduce spending. The Democrats very optimistically project an increased spending budget of some 20 trillion dollars over the next ten years. Then the Republicans attempt to make it 15 trillion. And laughingly they call that a 5 trillion decrease!
I think it’s a good idea to learn the basics of money, investing, wealth, etc. This may sound materialistic in a way, but you deal with money every day. And as something I heard when I was quite young: fools and their money are soon parted.
Well money, per the US Constitution, was to be gold and silver coin only. Then along came the dollar. However, it was backed by gold for a good length of time, so it was relatively sound.
But gradually the government withdrew its backing of gold and silver from the US dollar.
This enabled their creation of almost unlimited amounts of excess dollars in order to grant favors, buy votes, remain in office and expand their power and military control. And here we are today with near limitless money printing, impending runaway inflation and insolvency.
But this is not a polite subject to bring up and discuss in public. And like Scarlet O’Hara in “Gone with the wind”, our great leaders would prefer to worry about this... Tomorrow.
And our once great country, the “shining city on the hill”, the great American empire is rapidly dwindling into a third world banana republic. But this is just something between you and I, dear reader. The vast majority prefers to deny or ignore it.
And the big public scare tactic recently used by Janet Yellen, Biden, politicians and media members has been that for the first time ever we must avoid default at all costs.
But would not the mass seizer of US private citizens gold holdings by FDR in the 1930’s constitute a default? And was not the removal of the gold peg to the dollar by Richard Nixon in 1971 a default? And how about the 40 percent increased creation of new dollars in our recent covid mess?
Well sorry to have to say this but we have been in default for many years already. Not only can the US government never ever repay its humongous debt of tens of trillions (hundreds of trillions in future unbacked liabilities) but pretty soon it will not even be able to manage the interest payments on its ever increasing debt obligations.
Still none dare to consider reducing the DC swamp, cutting back on military spending, pensions and those who benefit from the ever expanding US debt. It would be political suicide for both political parties to cut social security, medicare and medicade. So on we go to the bitter end. Just kick the can one more time!
So let’s say you were hard working and prudent in the earlier years of your life and you saved a percentage of your salary for your old age.
And after all these years you one day pull out your nest egg to afford and enjoy your retirement. But, low and behold, you find it has lost 90 percent of its original value!
This would not be an isolated case. It’s been going on from time immemorial worldwide. It’s a government hidden tax they call inflation.
The more new money created, the lower the value of the funds you have on hand. Inflation is the preferred term but you could also call it legal theft or swindling!
They say a dollar is a dollar and a dime is a dime. But what they called a dollar in the 70’s is now only worth a dime. Think housing, gas, food, etc. But they still call it a dollar.
With all of this doom, gloom and difficulty, you might say, where are the possible solutions?
Well I’m glad you asked. You can prepare for hard times by stocking up on food , equipment and supplies that you will need in the future.
And for survival insurance in the times ahead you can still today convert your almost worthless dollars into gold and silver coins.
They have retained their value over thousands of years and will undoubtedly continue to do so in the future.
Dan is at danhughoconnor@gmail.com