About a year and a half ago I became public with all my concerns about the American economy. The reaction at that time? “Oh this is just the media whipping people up in a frenzy.” Less than two months later all the stock markets cratered and a wave of bankruptcies threatened to take down the whole system. It has been a year and a half and the problem hasn’t been fixed. A few government bailouts eased some pressure on the banks and temporarily reflated the housing market but it had to borrow billions upon billions of dollars to do it. Even the word “borrow” isn’t so accurate as the Federal Reserve printing money out of thin air and started buying up US debt. What they have done is no better than a family using their low rate credit to pay off their higher rate credit card and the bank is about to jack up the rate on it too. All they have done is bought some time and changed the implosion point from some big bank to the US government or its currency.
It is hard to know what is going to happen. The gold market thinks that we are going to see inflation. The bond market sees deflation. The problem is monetary value is something of an illusion. Someone can save up thousands of dollars in cash and hide it securely in their backyard and a bout of serious inflation can make that money worth much less than it was originally worth. A house has value as shelter but its market price can rise and drop at the whim of the market. Without maintenance it depreciates. The value of gold and silver fluctuates. Even life insurance is only as secure the companies offering it. If I had wealth I wouldn’t know where to stick it right now. The easiest investment to make it to pay down debt. Aside from that I’d seriously consider giving a lot of it away. Go back to Jesus’ adage of building up treasure in heaven. If you have a whole lot of something that you aren’t sure is going to be worth much, use it to make the world a better place. Invest in things that matter, things that have value that can be never taken away.