Thanks to the government’s current fiscal policy, its economic stimulus and relief programs, aka TARP etc. It’s pouring huge amounts of money into the economy in an effort to curb the current recession. Thus we are looking at an astronomical budget deficit of $1.5 to $2 trillion dollars for fiscal 2009. What was once a few million dollars is now a few billion here, and a few billion there, and has us looking at a total national debt of $10 trillion dollars plus (that’s more zero’s than I can comprehend) and it’s growing daily. How are we ever going to pay the interest on that debt let alone pay it all off. If that doesn’t scare you, I don’t know what will?
In the real world when you spend more than you take in you end up going bankrupt, but the US government doesn’t have that problem, they just crank up the printing presses and increase the money supply by printing more dollars. In the end this leads to higher inflation and destroys your purchasing power. For every dollar the government prints the dollars you hold are worth less (did you catch that worthless!).
The inflation rate may not be a problem right now, but higher inflation is certainly not too far off.
So how do you protect yourself from this calamity? You should look at some hard commodities like gold, silver, oil, etc. You can buy coins, bars, or one of the ETF’s that hold these assets.
Good Investing
TC
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