8 Reasons Why The US Economy Sucks
I have generally had a negative outlook on the economic future for a while. I'm not even a negative person... that is the scary part. I see the world from an entrepreneurs viewpoint... the world is filled with needs and problems that are there to be solved and in solving them you can make the world a better place and make good money doing so! With innovation and invention we can continue to make the world a better place where the standards of living improve for all. But we need to acknowledge the problems our society is facing so we can begin to address and SOLVE them. THAT IS WHY I'M WRITING THIS.
It all began several years ago when I first started to develop an interest in economics and investing. It doesn't take a genius to realize there are some extremely large problems. I'm not a doomsday preacher but these are simple facts that must be addressed. The worst part of the situation is that nobody else seems to be paying any attention! That is, until October 14 when Peter Grandich released an article titled, "Man Your Battle Stations". That was the first time I've EVER seen a non-doomsday preacher signal that trouble is ahead. He is the first investment guru to take notice and publicly talk about it. FINALLY! I HIGHLY SUGGEST YOU READ IT!
It's no secret that the U.S. is having some money problems. In order to pay for increased security, wars, social services and health care, the U.S. is beginning to bleed money. At the same time the U.S. is spending record amounts the economy is beginning to falter. The U.S. is also printing a massive amount of money and no longer publishes the M3 index that tracks the money supply!!! This is a recipe for disaster. Even with the increased government spending the country's infrastructure is getting old and tired.
2. Mounting Debt
With the rising deficits comes rising debt (duh!). The debt is now the largest its EVER been and increasing at an alarming pace. This MUST STOP. What happens when a household or company takes on too much debt? Eventually if it continues it will BANKRUPT the country! Some of you are probably thinking I'm not backing this information with numbers... the numbers are in plain sight. That fact that you may not know them is part of the problem! You probably know the latest gossip on Britney Spears but nothing about these important issues the United States is undergoing.
3. Shrinking Middle Class & Exporting Jobs
At the same time the U.S. is spending record amounts the middle class is shrinking! Jobs are being exported to foreign countries where the labour laws, standard of living and cost of living are all much lower. The large middle class is what makes the U.S. Market a powerhouse in the world's economy. It is slowly being eroded.
4. Fiat Currency is Flawed
I wrote an article about Fiat Currency Flaws a while back. It still holds true. Read it. Then read Safe Investments Like CDs & T-Bills Are No Longer Safe! After you have read these articles you will see why I don't hold too much trust in any fiat currency that isn't backed by a tangible resource. This is also why I'm so bearish on the USD. Combine these facts with the M3 index ceasing to exist and you have the beginnings of the end for the USD. James Dines of the Dines Letter fame only further confirmed this!
5. USD Value
In the last five years the value of the dollar is now 60% lower against the Canadian dollar. This marks a SIGNIFICANT change and is one of those alarm bells that must be ringing! 60%!!!! Think about that. The Canadian dollar is worth more than the USD now. The worst part is the trend is continuing to get worse and the USD is VERY weak. I wouldn't even rule out a currency collapse in the future if this continues. I hope it doesn't.
6. Retirement (Retire What?)
The nations first baby boomer's will being to retire shortly. The baby boomer's make up the largest well educated group within the economy. I think they deserve a retirement after all the years of work... but this is part of the problem. A large portion will start retiring at the same time the country is going through lots of problems. I'd hate to be a baby boomer on the tail end of the generation as the economy and value of your portfolio may not easily allow for retirement.
Think about this: What if every baby boomer began selling stocks each year, all their stocks over a period of just a few years to help pay for retirement? What if the baby boomer's started cutting back on spending as most retiree's do? What if they begin to retire in droves?
7. Present & Future: Wars & Proxy Wars
Wars happen, they always have. There are wars going on right now... both real wars and proxy wars... and the economic war that is always present.
The biggest problem is the baby boomer generation will start retiring in droves at the same time the nation is undergoing severe deficits, expanding debt and a falling dollar.
8. U.S. Economic Outlook
These are but a few of the many problems that the nation will face over the coming decades. Go read Man You Battle Stations for more information WITH numbers to back it up. My next task is to identify some ways to safeguard your investment portfolio from the risks. You don't want to become part of the problem by being just another victim, instead try to be part of the solution. It will help you sleep at night a whole lot better knowing that you have some safeguards in place to ensure your retirement and that you won't lose your home or have trouble feeding your family. It's all just precautions that everyone should take, even if the outlook is good. Even natural disasters (New Orleans!) can do dramatic harm and it pays to be prepared!
It's my belief that the U.S. wants to create a North American Union (like the European Union) so that it will essentially own all the Canadian/Mexican resources. That would help increase the U.S. balance sheet overnight. I also believe a North American Currency would be involved, as the USD is looking like it could collapse or get so bad it would cause an economic recession/collapse. This North American Union is BAD for MANY reasons, for all countries involved and perhaps I'll also detail it at a later date. So much stuff is going on right now in the world! Stay tuned.