Feb 13
California has recently been in the news as being in big financial trouble. Basically they spend 30% more then they bring in through taxes. In comparison the US spends 67% more then it brings in through taxation.
I am still pessimistic on the US economy even though some believe the worst is behind us.
I also still believe we will see a major depreciation of the dollar vs commodities over the next few years if not sooner. The Federal Reserve as increased reserves in banks by 17 times. I believe once that money is lent out and put into the real economy is when we will start to see a stronger devaluation of the dollar.
So I still recommend people buy storable food and hard assets.
February 14th, 2010 at 6:17 am
Amazing! The worst and the best are always behind us. Meet the day the lord has given. The birds of the field need nothing, it is provided. Flowers need not worry what to wear, the father has coloured them in all their glory. Worry, worry, worry! Amazing!
February 14th, 2010 at 8:43 am
@Liam – When I say the worst is ahead of us I am referring to this current economic crisis.
It is possible to believe that something bad is on the horizon without being constantly worried.
I also don’t think that verse is a case against being prudent and prepared. I think it is a case against worrying and trusting that God is looking out for you.
I am not even close to being as prepared as I should be. I have storable food but I trust God to fill in all the gaps as my efforts are inadequate anyway.
February 20th, 2010 at 1:15 pm
@Dave
I’m wondering what you and Austrian economists make of the CPI (consumer price index, a key measure of inflation) falling for the first time since 1982? Are you less concerned now or do you think this is the calm before the storm?
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/19/AR2010021905362.html
February 20th, 2010 at 4:07 pm
I think it’s the calm before the storm. I suspect inflation will kick in once we start “lending” again.
Basically once the money the FED created gets into the real economy then prices will go up.
I don’t like CPI because it doesn’t include food or oil. It may exclude other things too. I don’t know.
February 21st, 2010 at 12:42 am
Brothers in Christ! If your not too busy predicting the end of the world as we know it check out the U.S. council of Economic Advisers during the Ford Adm. report, Gary L Seevers files; 1973-1975. Talk about history repeating itself! Good ole Nixon, Ford, Carter passing the ball to the gipper action. Just like back at Cambridge execept we played cricket with the Iron Lady!
February 21st, 2010 at 9:24 am
@Liam
Not really sure what you are talking about. Could you rephrase?
February 21st, 2010 at 10:38 am
@Dave
CPI excludes food and all energy. It was designed that way because those prices tend to fluctuate more and historically haven’t been a good indicator of inflation.
Anyway, I guess we’ll see… I’ll keep reading positions on both sides of this, but I’m not about to buy gold bars and hide them under my bed.
February 21st, 2010 at 1:55 pm
@Andrew
Not sure you could afford a gold bar anyway.
Inflation as defined by the Austrians is an increase in the money supply. We have already seen much of that. The side effect of inflation is rising prices. It’s only a matter of time.
February 21st, 2010 at 6:30 pm
@Dave
Hey, I could at least get a few ounces
With the dollar doing a lot better than last year, I’m not worried. From what I’ve read, the Treasury’s public debt sales is a huge drain on reserves, and the Fed could let its lending programs expire.
Even if hyperinflation does occur, there’s probably not much we can do to prepare but move out of the country. It’d be absolute chaos.
February 21st, 2010 at 9:17 pm
@Andrew
We could still have very high inflation and it not be hyperinflation. Ron Paul thinks the government would come to it’s senses before it get’s that bad. I hope he is right.
February 23rd, 2010 at 1:48 am
Sorry Dave. I was taken away from this lovley little chat by some service work. What I was refering to was a paper that came out during the Ford admin. making the same predictions. Intresting read. You seem to have the time. I started buying gold at that time. Nice to have a third of ones investment in hand metal. Precious stones work well also. 10% at least.
February 23rd, 2010 at 10:19 am
@Liam
I agree with diversifying within the category of hard assets. Real estate is on the line as cost of ownership will likely go up as well.