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Dimmy Karter Redux or NoMoBama Part I

As Paul Harvey used to say "page 2, the rest of the story".  In this case its the story that almost NO ONE is talking about, but will be sooner or later.  Only I fear that when you hear the story it will be too late for you to do anything about it.

The forecast is for stormy weather, VERY stormy weather.  In fact IMO we are heading into unchartered waters and the roughest seas America has ever seen to include the 'Great Depression'.

The GD was simple, there was no money, folks did not have money and did not have jobs.  My mom and dad were there as adults and it was not a pretty picture.  But they lived on land, had chickens, hunted and manged to eat and trade for other food stuffs.  Those in the city did not fare as well.

Folks were hungry and there was not work to be had at any wage.

But our outlook is not even that bright.

Today, this morning 18 June '09:

China/Japan are holding nearly $2 Trillion in US Treasury notes.  But as of this morning, China has LOST $4 BILLION on its investment.  Japan slightly less.  Why?  Value of the dollar has gone down, simple as that.

Impact:  China/Japan are demanding (and rightly so) HIGHER interest on forthcoming T-notes are they are not buying.

How does this affect you?  Are YOU currently using ANY credit?  Home mortgage, car loan, Sears bill, credit card bill etc.  Any of these have an option to raise your rate? 

If the answer is YES then you can expect YOUR rate to go up, simple as that.  For those of you who are chuckling as you don't anything with a variable rate attached then you need to fret also...YOU are NOT out of the woods either.  Because in order for you to borrow you will need to pay a higher interest rate, money will get tight, REAL tight.

Results:  Interest rates go up (read inflation), money gets tight and tighter due to the Treasury trying to keep inflation down by LIMITING the money SUPPLY.  You cannot borrow, BUSINESS can NOT borrow, thus it cannot expand, you cannot buy a new car or washing machine, business slows, you get laid off.

China/Japan got us over a barrel, the US MUST borrow money to pay for it out of control spending the past 4 months and the expected TRILLION $ + medical insurance for those who don't have it.

The Treasury raises interest rates for them and the argument become 'circular'.

We lived in post-war Germany, one of the strongest economies in Europe prior to WWII.  The German Mark, like the dollar was the standard.  A Mark would buy a lot of food and 'stuff' in the early 40's.  In post-war Germany it too $1 MILLION MARKS to buy a stamp to mail a letter.  Mom would trade coffee and other food stuffs for services and goods.  German money became WORTHLESS due to inflation.

ANYONE NOTICED HOME % rates in the past 30 days?  They have jumped about 3/4 of a point.

What to do:  I am not any financial expert so my advice is limited here, but you should pay off any debt that has a variable % rate, borrow at only fixed rates if you have to borrow at all.

Looking at real estate as an asset you can expect it to keep pace with inflation, so will guns and ammo.  Invest in things that provide a hedge against inflation and gives you worth and can be sold or traded quickly.

Your home provides shelter for you and family and will grow in value with inflation.  So does stuff that folks NEED and use on a regular basis.  Buy washing machines, tires, used appliances...getting the picture.  Diamonds will rise with inflation, rare stones etc.  But no one NEEDS them to eat and hard to trade a diamond for eggs and bread.

Is there way to fix this:  Yea, "wipe the foam off your mouth".

In a herd of cows two were talking.  One asked the other, why is the rancher going around and shooting the other cows in the head and killing them?  The other said, we all got 'hoof and mouth' disease.  How do you know?  See all the foam around there mouth!  Anything we can do to keep from getting killed?  Yea, "wipe the foam off your mouth".

Tell the goverMINT to STOP printing and spending MONEY!

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