I applaud your post since it is filled with Insight and honestly confronts the major issues facing the US and global economy.
The best way to describe the present situation is to see it as two people sitting in a tree and taking turns to saw away at the branch they are both sitting on. What one can say about such a situation is only that if they keep sawing, the branch will break off and they will both crash to the ground.
No problem, if it was only Bush and Greenspan on the branch. Sadly, all other Americans are sitting below the same branch, as are most people in the rest of the world. If the branch which is the US Dollar falls, it will land with a crash on everybody all around the world. The other problem is trying to time the fall.
Since most people really do regard the problem as "unthinkable", timing their actions is impossible and trying to do it is dangerous. The solution is to pre-position oneself for the fall.
Currently, the world's bond markets are in an uproar. Longer term interest rates are climbing right across the world financial markets. This means that debt is DANGEROUS. Further, a private or productive property held up in part by borrowed money is now, to the extent of the gearing, also at increased risk.
CASH WINS, every time throughout history, where and when financial or monetary upsets occur. And by Cash, I do not mean merely Paper Money.
The United States has lost 2.6 million manufacturing jobs since mid-2000, a 15 percent employment drop.
This is a rolling economic calamity. Manufacturing is the last step in the chain of production before the goods are transported towards the final consumers. The jobs that these many individual men and women have been marched away from will likely not return for a long time to come. Have a factory stand idle for too long and it makes no economic sense to restart it. Much better to build a new one with far better equipment. But then, all the previous workers with experience on the old equipment stand unqualified.
PS When one Fool goes astray, he takes several others with him. |
