Wednesday, December 23, 2009

Left, Right, Center

It is a crazy time in American politics. The country is divided pretty much down the middle which gives the power to those who can swing back and forth from left to right. That is apparent with the current situation we are seeing in the senate. Those centrist Democrats and Republicans are making some big bucks for their states and who knows what other sweat deals they are making behind closed doors. I am currently worried that what may have started out by them voting for what their constituents wanted, has now turned into them taking bribes. I do not know how this is legal nor do I know how this can be done without a vote.

It seems to me our democratic system is going down the drain, there will be repercussions, and who knows what will come out of the ashes. What closely as our politians continue to make sneaky deals and shit on the constitution.

As for our economy, I keep seeing reports of 2010 being a huge year. Our recovery if you will. I am highly skeptical but I am not an economist. Not that an economist ever correctly predicted the future, they are sort of the meterologist. But like a meterologist in Arizona, I as an every day ordinary investor can look out the window and see what the weather is like. I see stocks and gold/silver going up, while our dollor is going down. Gold and the dollor are usually inversly proportional. What I am confused about is how stocks can be rising when the dollar they are run on is going down? To me, that means the stock is inappropriatly priced.

I have been slowly selling my stocks and purchasing gold and silver (mostly silver). I wish I was purchasing actual hold in your hand gold and silver but I have no idea how to do that without being ripped off. I am lowering my debt, just paid off the wedding ring. I have only my house and car to pay for.

I have heard different situations that could occur with inflation and one was not bad while another was horrible:

1- Inflation goes up, interest rates go up, pay goes up. Now in this situation I don't see a real down side for a person in my situation. I have a fixed morgage, no variable rate debt, and a good job. I am skeptical about the pay going up, but I guess that would have to happen eventually. If my payment was $1000 and my pay was $2000 today, the with inflation my pay goes up eventually but my mortgage goes stays the same.
(this is something I read and it sounds too good to be true. But everyone talks about their parents home costing only $100 dollars a month back in the 70s and back then that was equivelent to what we are paying now.)

2 - Inflation goes up, interests rates go up, pay stays the same. Think of all the expedetures you have that are not fixed and imagine them going up. Not a good thing and with no more pay you now have less money. All basic math, but are you ready?

3 - Hyper inflation and a loaf of bread costs $100. We are all screwed and the end of America comes to pass. This is the worst case scenerio that people are talking about. Food riots, murders, general anarchy. The only way to prepare for this is to stock up on food and ammo.

We, Americans, do not believe a catastrophe can happen here, but there is no data to support that. Just because we made it through the great depression and other crisis does not mean we will make it through another. We are not as prepared as our great grand parents were. They were farmers, canners, and tough people. We now have a grocery store on every corner, 24 hour conveinent stores,and instant gratification. We are soft and unprepared to go back to their time.

This really should have been two different posts but I like to free write and this is where I ended up. Leave a comment and let me know what your thoughts are.

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