The U.S. housing bubble but has not yet popped, but it is starting to make funny noises. (See: http://biz.yahoo.com/ap/060306/housing_slowdown.html?.v=2) You have probably read that the Federal debt ceiling has been raised to nine trillion dollars. (See: http://www.foxnews.com/story/0,2933,138881,00.html) What is the point of calling it a “ceiling” if Congress keeps raising it every year? The U.S. Treasury is now technically bankrupt, but from a practical standpoint, how can you call the man with the printing press bankrupt? He just prints more, as needed. There are just more and more “fun tickets” in circulation, and their value gradually melts away. Ask anyone that has lived in South America. The same drama gets played out over and over again, in country after country. The biggest losers in an inflationary spiral will be bank depositors and pensioners. Is it any wonder that the savings rate in the U.S. is at an all-time low? Starting this week, the Federal Reserve will stop reporting the M3 aggregate money supply. This gives “Helicopter Ben” Bernanke carte blanche to monetize the Federal debt without public scrutiny. Meanwhile, both Iran and Norway are opening oil bourses that will transact their business in Euros rather than dollars. (See: http://www.europe2020.org/en/section_global/150306.htm) The U.S. trade deficit has blossomed to huge numbers–far beyond the level at which Warren Buffet issued his stern warning a year ago. (See: http://www.parapundit.com/archives/002652.html.) Taken together, this does not bode well for the U.S. Dollar. Methinks we are headed for some deep Schumer. My advice can be summed up in one word: tangibles. I recommend that you put your money in productive farm land in lightly populated dry land farming regions, precious metals, and guns. Unlike dollar-denominated investments, at least those can’t be inflated away to nothing.
America’s Economic Woes–Some Deep Schumer in the Near Future?
