May 15, 2010

Jim Deeds

We all know by now every new bailout “buys” the free world led by America a little more time. The world economy and our good life can continue without end...Amen, Amen!

But whispers of doubt have appeared in the world financial and currency markets after last week’s trillion dollar bailout of Greece and their shirttail relatives. The Euro currency, at least momentarily, continues to sink in its value (and purchasing power). Rick Santelli might have said it best this morning on CNBC (May 14). “What makes them think that if they give Greece, who’s already stone broke, and the rest of the heavily indebted Euro-countries a trillion dollars today to “tide them over”, that they won’t be deeper in the hole two years from now...plus having an additional trillion dollars more in debt to pay interest on?” Good question!

Can more debt bail us out from a current worldwide debt overload? For the past year and a half...that’s been the Bernanke formula for everlasting prosperity. Do you agree? More importantly...will this work for you and your family? Do you see a larger and larger current income flow in your family’s immediate future? Will your higher income “that’s coming” cover not only increased interest expense from the new debt you incur today, but allow you to reduce “principal” debt now owed in future years? This appears to be a simple question, but the answer could be complicated!

Greece today: Spain, Portugal, Italy, Ireland tomorrow. Then the Euro? And then, the world’s greatest debtor nation ever...the good old U.S. of A.? Wait...we forgot! A rudderless spendthrift former world empire called England is already financially “stone broke”! Printing new debt-backed pounds is their only way out too!

Back to today’s reality. Are you ready for all of this? If what you believe today to be “real money” (paper dollar bills in your wallet, your bank accounts, and your credit cards and “line of credit”) all goes POOF tomorrow in a worldwide debt collapse, what will you do?

Like Jack Nicolson in the movie, The Shining, we may all hear a voice out there in the (financial) dark say... “ READY OR NOT...HERE I COME”!