The tax rebates, the deficit spending, the continual hiring by government while the private sector struggles; why isn’t our economy getting better? That is the question that I would like for you to consider. Lay down your campaign signs and consider the question on a pure unbiased mathematical basis.
The fact that our banking and general monetary systems are in trouble is certainly not news. Just how much trouble, may well be the most under-reported news in the U.S.
Banks secure collateral to back up their loans. We know that housing has proven to have been significantly under-collateralized and has cost lending institutions untold billions in write downs (more commonly referred to as losses). No news there, but what about consumer debt collateral? What is the real value of the collateral that the banks have loaned against consumer debt in comparison to the values posted on the banks balance sheets?
A Denver Dodge dealer is currently offering new Dodge trucks at 50% off. You read that correctly. So then, what is a used Dodge truck worth? What amount does the bank have on their books for truck loans that they are carrying? What about the thousands of SUV’s or diesel motor-homes? What is the underlying collateral for credit card debt? How do the legions of unemployed repay any debt? We will soon find out.
Can our government pull us out of our current decline by distributing truck loads of newly printed money that is backed by foreign loans? In other words, can we borrow our way out of this? Of course not, we may well have reached the physical limits of growth necessary to balance our system.
If you in fact believe what I’ve written, that we have reached the predictable mathematical end of our flawed economic basis, then the obvious question is, “What can our government do differently?” But more importantly, in the short term, what can we do as individuals?
When an irresistible force is about to meet an immovable object, I suggest not standing between them. Debt is the immovable object, incurring unnecessary debt is the irresistible force. We must totally rethink our current personal lifestyles, while government must rethink our complete monetary and economic basis. This will take a colossal paradigm shift; one that will not come easily.
In the aviation world a common phrase is, “Every pilot knows how to execute a 180 degree turn; the good pilots know when.” The time has come to make that 180 degree turn before we enter the eye of the storm.
America remains the best place on earth. Our problems were not created by this wonderful land that has provided so well for us. Our problems lie in our leadership heading in the wrong direction over the past 60 years. The good news is that we don’t need to follow that lead.
I will continue this thread throughout the week. In the mean time, go on a picnic and enjoy all that we take for granted. Live Simple, Live Well.
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