Dollars and sense

What is on everyone’s mind in corporate America? Money. Same thing that should be on your mind. If you have significant savings then you might be in good shape for the time being. Or your might not. Depends on whether the banking system collapses completely. While the chances are low, I think we may well see major riots in our biggest cities in the next five years. That depends on how well Congress and their myriad myrmidons can prop up our faith in their system of theft, graft and faith based electrons.

Today I had to go to my boss and ask him for money to buy computer hardware because our storage arrays are full. The idea was better recieved than I thought it would be considering that the credit markets have dried up commercial construction projects short-term. A LOT of chains have put all their new building projects on hold.

The world keeps spinning. Those of us based in the Southeast still have a hard time filling up the gas tank, compared to a few weeks ago we have to do a lot more searching to find gas. This adds to the sense of foreboding a lot of people have. I’m only surprised it took this long to reach a moment in time when we had to say, as a nation, what the heck is really going on here? After all we’ve been trained for at least three generations now to a sense of entitlement, instant gratification and complete lack of any real hardships in life. Reality doesn’t always work that way, at least for most people.

The big question is: where are we going from this point? At least a few people are hearing from Ron Paul again.

Roberts: OK, OK. So we recognize all of the things that got us here. But, right now, today, what would you do, if not this bill?

Paul: You have to liquidate those mistakes. Those mistakes were made due to monetary policy. So you have to allow the market to adjust prices downward. And that’s what we’re not allowing to do.

If there are too many houses and the prices are too high, the sooner we get the prices down to the market level, as soon as we quit trying to encourage more housing — this is what we’re doing. They’re trying to stimulate houses and keep prices high. It’s exactly opposite of what we should do.

So, we should get out of the way and not buy up bad debt. There’s illiquid assets, but most of those are probably worthless. They’re mostly derivatives. And we’re sticking those with the taxpayer. So we have to recognize that the liquidation of debt is crucial. And if we did that, we would have tough times, there’s no doubt about it, for a year. But if we keep propping a system up that’s not viable, we’re going to have a problem for decades, just like we did in the Depression. That’s what we’re on the verge of doing.

Congress will most likely do what they do best – put off dealing with these issues as long as possible. They’ll vote an “aid” package in. The dollar will be further devalued. You will be immediately a little more of an economic slave than you were yesterday, assuming you plan to keep adding to the system we live under. The system will be that much closer to collapsing under its own weight. Beans and bullets will be excellent investment vehicles.

There will be less grossly obese people waddling around.

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