America will Pay

The world economy and our environment are changing faster than most of us realize or want to admit. Growing populations, dwindling resources, job/income migration as well as natural disasters are putting a lot of pressure on society as we know it.

My guess is that we Americans are in for a reality check. We as a nation have run up a huge debt and because our government is printing money with no collateral other than their word, our dollar is becoming worthless. Think other countries might want their money back before it isn’t worth anything? Don’t get me wrong, I’m not predicting a run on the bank, that would be a disaster for everyone. What I am predicting is that Americans will live a much more modest lifestyle.

Within a decade, the days of SUV’s and McMansions will be over. The price of everything will be much higher than today and wages will not keep up. This will effect not only those that make minimum wage, it will trickle up the economic ladder to effect everyone so get ready.

Lock in as many necessities as possible at today’s rates. What I mean is don’t hesitate to spend today’s Dollars on things that will help you later. Lock in your mortgage for 30 or 40 years so that won’t go up. Buy a fence for your vegetable garden, purchase a motorcycle or a vehicle that doesn’t use much gas, install a wood burning stove and get ready for a wild ride to the poor-house.

This year we saw Wall Street buckle under the collapse of big banks and other institutions that deal in derivatives. In case you don’t know what derivatives are, they are money on paper. Promissory notes if you will. The trading of debt and stuff that you can’t hold in your hand, use or eat. As the Dollar becomes weaker, our derivatives will also become worth less so what’s the next logical step for smart investors? Switch to investing in commodities. Buy futures on things like wheat, corn, oil and other basics that everyone needs. It just makes sense. There are more people, less staples and the law of supply and demand dictates that prices will go up. Add lots of profit seeking investors into the market for basic foods and you have disaster. The poor won’t eat at all and the rest of us will also have to change our lifestyles.

I’m a bit apprehensive about what economic change will do to society as a whole. The tables are turning. People in developing nations are growing more prosperous because we moved production (and pollution) to their countries, people in under-developed nations are already starting food riots and we are loosing our toys. We are so used to living lifestyles of un-sustainable luxury that we can’t share if we want to keep it up. There’s not enough to go around for the whole world to live like we do. That’s a big problem.

Are we going to accept a large decline in our standard of living without a fight? Are the poor going to starve without trying to take food from those that have it? Are the Chinese going to be mad and want to break our knees when we pay our debt with worthless money or are they going to want resources that we don’t want to give up instead?

If we’re lucky the weather will hold and our plight will stay limited to financial distress. I’m not a doomsday priest but the evidence that climate changes real quick is there. We know it’s already happening so when will it snap? When will the oceans conveyor stop and quit bringing warmth to Europe? In 100 years? Next year? It has stopped before because too much fresh water was dumped into the northern oceans. Arctic ice is melting now. Are we ready for an ice age in the blink of an eye? Being poor won’t help. That’s just one example of the many time-bombs we have ticking. Any large natural disaster can throw humanity over the brink.

We can’t avoid change or disaster. The best we can do is to stick together, try to avoid conflict and prepare to the best of our ability.




1 Comment

  1. I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.

    Tim Ramsey

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