Capital preservation
The most unproductive part of our economy is the federal government.
Relative to the private sector, the federal government is growing dramatically
and is expected to continue to do so through ever increasing debt.
It is therefore obvious to us that US government borrowing is going
to soar as the economy sinks into the double-dip. Rather than declining
in 2011-12, the government is likely to run even higher deficits.
But what if the government decides, in response to the weakening economy,
to enact another round of stimulus? The deficits will be commensurately
higher. What if the federal government begins to bail-out state governments
facing funding crises, either explicitly or through less overt subsidies?
The deficits will be commensurately higher. Given the current political
climate and rhetoric coming out of Washington, what is the probability
that, in response to the double-dip, the government enacts additional
stimulus and bails out a handful of state governments? We consider
it to be quite high. --Reference
While the tax base is shrinking, the public debt burden is exploding!
The US is falling into a debt trap from which there is no escape. At
some point the US government will have to downsize, default, or both.
How far are we from that point no one knows. The belief of many economists/analysts
is that the US will face a general debt and currency crisis before the
end of 2012.
The CBO (Congressional Budget Office) projects that US debt could
rise to 87 percent of GDP by 2020, 109 percent by 2025, and 185 percent
in 2035. --Reference
Fiat money (i.e. unbacked paper currencies) and investing in precious
metals:
Current (or near current) news and events:
Other links:
The two reocurring themes on preparing for a future economic crisis
is to: (1) get completely out of debt, and (2) own a home with enough
land to grow most or all of your own food.
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