Wednesday, October 1, 2008

Bailout or Breaking You

FDR's Economic Philosophy / The New DealImage by Tony the Misfit via FlickrFor everyone who didn't understand the bailout and are now sitting happily on their couches thinking their 401K's are safe your wrong. Yes there insurance and la dI dA, but here's what really happened today. The Senate has just voted on a bill that tells you to go into more debt, so companies can prosper. On top of that they have assured that we are going to go into a depression for the next seven yeas. The catch is that this depression will be accompanied by an astronomical inflation rate when the, now, 800 billion dollars hits circulation in the money stream. But guess what. That will not happen until after the election.
What does this mean to me?, you ask. Well basically your money isn't worth as much, which means your not going to be able to afford as much. Basically this money is like crack is, when it comes to the economy. For those of you not familiar with crack, it's a stimulant. Now your saying, stimulating the economy is good and I will say it is, but there's a catch. In economics 101 they will teach you that there is a very delicate balance in our economic system. This means when you break it down, not enough, and you don't get a higher standard of living, but too much and it's an overdose and the economy dies. Now your really confused right? I'll break it down for you. Buying and selling makes the economy go, but the amount of money that is available, determines what things cost. If everyone has a lot of money, then the dollar may or may not be good. Borrowed money means that the dollar is worth less, because it has to get paid back and that reduces the amount of money people have to spend. Just like you can't borrow until you can't pay your bills. In the same way,the government can't borrow more than it can pay back or the value of the dollar goes in the toilet, because the only thing backing the dollar is the government's word that it will pay people back. Other countries want what they lent us back plus interest. Well you say, just print it. Well, the problem with printing more money, is that, the easier dollrs are to get the less they are worth. You know this because when there was, supposedly less oil the price went shooting up, but when there was a lot of oil it was 99 cents a gallon. Yeah, I know, you don't remember those days, but ask grandpa. Well right now there is a lot of dollars in the world, so the dollar is cheap. Too cheap. That means when you go to buy something from another country, they want more dollars than they did before to make up for the fact that dollar's aren't worth as much as money in their country. Now this makes sense, right?
Well there were trillions of dollars floating around the world, so the dollar fell and as you know prices went up. What's my point, Right? Those dollars got into the world economy slowly and look at the damage they did. Four dollar a gallon gas. Food prices through the roof. The economy is on crack. Prices are getting higher and higher. This 800 Billion dollars is the kicker. All in the sudden there's all these dollars and the government can't tell other countries that there is enough property, possesions, and goods to back it up. This is when the bank comes to you and says pay up everything now. Countries can do that too. They can say pay us the actual amount you borrowed with interest and guess what we can't. Now, no one wants dollars and they start asking the country to pay them in goods. Well the government doesn't have enough goods, but it starts sending what they have to the people who have dollars. This means that there is less of everything in this country. The price of everything goes through the roof, because here in the states there are shortages of everything.
Now here is the bad part. The money in your 401k won't buy as much, because everything costs double. You thought I forgot that, didn't you? No not at all. You can't afford to pay the bills so you can't retire and there you go your screwed.
Guess what? The cost of things are about to go way way up and the money in your 401k might get you a new car without the gas. But wait, it gets even worse. Your company can't sell anything because of the prices, so they close. Then a lot of companies close and jobs are as scarce as platinum and that's scarce. No one has a job everyone has bills and everyone owes the bank for their credit cards. If you haven't got the idea yet your not employed or employable, but basically there's not enough room in the rescue mission for everyone. Now the great Depression was like that, but this is going to be 100 times worse. My recommendation empty your 401K's and buy someone else's money. or gold or better yet platinum. Don't call your financial adviser, because, guess what, His money is already there. The rich people's money is there. the only ones who don't have there money there are people who believe George Bush and people like you, who didn't understand until it was too late, that they were about to lose everything. Of course you don't believe this and neither did the people who thought that buying a million dollar house would result in doubling their net worth and making them rich. By the way they are not living in those houses any more. The bank's and foreigners who bought the mortgages own them now. Why didn't they double their money? Now I know your either stupid or super rich. Only, so many people can afford to pay the mortgage on a million dollar house and the people who are going bankrupt and losing their houses are the people, who didn't know that there were no more people to buy their house and thought that they could get rich quick. so what's the point of all this.
The point is that the government is desperate for you to borrow money, so your neighbor keep his job and the hell with whether you can pay it back. Your collateral damage. They also want your neighbor to borrow, so you can keep your job. Wait, that doesn't sound correct right? Wrong, that's exactly what they want. Your congressman knows this is a game of musical chairs with all of you and guess what, when they stop the music a whole hell of a lot of people are not going to have a chair, but they will be out of office or working for a foreign government or any place they can find that will assure them of having a chair. Sorry that this was long, but I actually thought that you might want to know it's time to grab a chair and sit in it until the music starts playing again, in about seven years. This mean's buy nothing. If it doesn't keep a roof over your head,feed you, or clothe you, don't buy anything. Put every dime you have in the safest investment you can find. Some of the aforementioned are good. Pay all your bills asap. Yes credit cards too. Too many or too much, two words, go bankrupt or wait and go bankrupt in any case you are going to go bankrupt. Don't get caught holding the bag when they make it impossible to go bankrupt. Guess what I am doing now. Paying off everything. I shopped for xmas and i'm done. I am not going to get caught with the bag or without a chair in this game.

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