I Told You So

It seems the buzz around the media these days is the “R” word. Recession.

Are you freaked out by all of this talk? You should be. You should be paying close attention to what is happening with our policy makers.

Most recently, most of our own congressional policy makers voted (with your tax money) to bail out the credit crisis. Bad move congressional people. Especially any congressional person who has a lick of education in the history arena. You see, back in the 1930’s (aka The Great Depression) was period of time that lasted the better part of a decade. Why did it last so long you might ask? Because we tried an experiment in BAILING OUT our bad choices. What did we do? Simply put, we printed more money which (also simply put) devalued our dollar. Eventually we came out of it due to the policy makers making smarter fiscal decisions.

This begs the question. Why are we repeating this historical mistake? My own take is because this decision was politically convenient. The last thing a politician running for office wants to tell you is “sorry, things are going to be rough for the next couple of years”. Instead they want to buy some time to get elected by telling you they voted for the bail out because they believe it will work and make it less painful for all of us. HOGWASH! They are only prolonging the pain!

One of my financial guru’s (I have a few) is Peter Schiff. I started trading stocks back in the late 90’s and have been following Schiff ever since. His instinct is spot on and if you have never heard of him before, you should pay attention to what he is saying.

I suggest the following links to get you started:

Story One
Story Two

This video link is to Ron Paul who does the “in a nutshell” version of why the dollar will be punished.

Then google Schiff and read what he’s been telling us for a few years. “I Told You So”.

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7 thoughts on “I Told You So

  1. Don’t forget that the Great Depression was a global crisis … and we were one of the last countries hit by it (thanks to our mostly self-sufficiency). And that it mainly came to an end, again on a global scale, due to a world war. I’ve heard that unemployment during the Great Depression was about 25%, even with gov’t work camps. If WWII hadn’t put all those people to work, I bet the GD would have gone on for a while longer.

    Every time I talk to people about the current gov’t “bailout”, I remind them of a story my grandparents generation told … how the German money was so devalued -because they kept printing more trying to bail themselves out of the GD- that it took a wheelbarrow of money to buy a loaf of bread. I don’t know if the story is true or not, but it gets the point across.

  2. UW – I’d say we are headed toward a global crisis!

    Matt – Schiff called this thing (almost to a T) back in ’06. His call to alarm should be heeded and dealt with according to sound economic principals, not politically motivated principals. I’m sorry but bailout’s are not a sound way to fix what is broken. We need to shore up our dollar, not tear it down.

    We need sound fiscal policy and MORE regulation. And I can’t believe I said that out loud but we can’t afford not to.

  3. g – I hope you mean “more SOUND regulation”. Part of this mess was caused by gov’t regulations. Regulations that told banks to either lend money to those who couldn’t afford it, “or else”. And when the gov’t tells you to do something “or else”, you do it … unless you have no fear of the myriad gov’t bureaucracies that can make your life a literal hell on earth.

    And don’t forget the irony of this, either. For decades, our currency has been under attack by foreign gov’ts printing counterfeit bills in the hopes of weakening our dollar and economy. Another ironic twist, is that their efforts were never as successful as our own gov’ts bungling.

  4. There’s alot of things that need to be changed. We can hope that this is a call to action for some to reprioritize what is important in life. I think there are several problem areas in our society on a collision course and we might be seeing them converge at once. The economic crisis just being the opening act. I don’t doubt what Schiff says, he knows much more than I… but I can at least hope it’s not as bad is it sounds. In the meanwhile, we pay off everything we can and try to live a simpler life. Probably the exact opposite of what the economy needs.

  5. Nobody has really had an original economic idea since Adam Smith died. If you will look back through history, politicians are continually dusting off old ideas and putting their names to them thinking “Maybe this time, it will work!” There’s a law (I think it’s one of the laws of mechanical engineering) which states “Any device which is allowed to run without proper negative feedback will spin wildly out of control.” This is what has happened to our economy. A new system is needed if we are not wanting to do this every decade or so.

  6. darev: i think something more than a two party system would be a start in the right direction. I really wish Ron Paul could have fared better.

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