I Told You So 66

I have been telling you for some time that we are actually in a depression instead of a recession and definitely not in a recovering economy. I just read an article by Forest Jones at Newsmax where it quoted Peter Schiff, CEO & Chief Global Strategist at Euro Pacific Capital as saying, "The U.S. economy is stuck in a depression, not recovering from a recession, thanks to lax U.S. monetary policy, so investors would be wise to ditch dollars and invest in gold." Finally, one of the top economist in the US has realized we are in a depression and has dared to say the "D" word.

The article goes on to paint a pretty bleak picture of our economy and the future. He said the dollar could lose 50 to 70 percent of its value. He is also quoted as telling Newsmax.TV, "I actually think we are in a depression, and a depression is interrupted briefly by the phony expansion that we get from the stimulus." He also stated, "All we are doing is spending more borrowed money, so we are not stimulating the economy, we are stimulating all the problems in the economy and we're making them worse."

In the article, Peter continues to tell you much of what I have been telling you for some time. We need to get the government out of the way and let this depression run itself out in order to straighten up the mess our politicians have made of things. Then he tells everyone to avoid the dollar and the housing industry. Gee, where did we here that before?

Next, he told them the same thing about the stock market that I told you about gold. He said, "It creates the illusion that the stock market is going up when it's not. Our money is losing value and we are simply measuring stock prices in cheaper money, so it looks like stocks are going up but really it's our money going down, and so people might on paper be richer but in reality they are going to be poorer." Note that this helps explain the increasing numbers of millionaires in a time when people are losing money and the economy is dying. More people who have invested in the stock market are looking like they are becoming more wealthy because we measure stocks in dollars but it is just that the dollar is becoming less valuable so the stocks are costing or worth more dollars causing the appearance of increasing wealth when they are actually losing wealth. He said we are going to feel a lot poorer when we go shopping because our money will buy a lot less. He also confirms what I have been telling you when I have been saying that housing is going to decrease in value a lot more by saying it has "room to fall".

Basically, the longer you hold onto your money, the less it will buy so it is best to buy things now that you know you will need, especially in the future. If you are sitting on top of $10,000 and the dollar drops by just 50%, it will only buy half as much as it will today. Therefore, it is best to buy those things you will need today to get the extra value from your money and maintain a better wealth down the road. If this gets as bad as it looks like it will, you will quickly learn to spend your money as soon as you get it to keep from losing wealth by holding it, even just over night.

Peter makes the mistake of telling people to invest over seas but you have to be careful because most countries are in about as bad a shape as the US or worse and, when the US goes down, she will take all of those other countries with her. So what do you invest in?

With things going the way they are currently going, what would I invest in? Food, it is the one thing which is required by everyone and will go up in value because of the global food shortage. It is only natural to save money "for a rainy day" but only if the money doesn't lose its value the way the dollar and all other currencies are losing their value. Of course, you will want to save money to pay bills but I would only save exactly what I have to until the fecal matter hits the fan and then I would save even less.

Think about it, after the price of food begins to soar and the value of the dollar drops like a rock, the money you have won't buy anything and all your bills will cost a lot more because your money will be worth less. So how do you beat this? You stock up on extra food so that when others start needing food because the stores are out of food, they will pay higher prices for it and you need cash to pay the higher bills, you just sell some of your food at a higher price than you paid for it to family and friends to help them out and use the extra cash to pay your higher bills.

Like I said before, some of them will even pay you in more stable commodities such as gold. Increasing numbers of states in the US are passing laws accepting gold instead of dollars for currency because they know the dollar is tanking. When things get bad enough, every state will do it and, when people start trading their gold for food, the value of gold will also drop in relation to food because fewer people will want gold than will want food. Therefore, the best investment is food. It will get so bad that some businesses will prefer you pay in food such as canned goods. If nothing else, you will eventually eat it all. :-)

Now, what is an even better investment? For you to...

Pray long, pray hard, pray often!!!

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