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<p>[QUOTE=&quot;Rono, post: 1083328, member: 6492&quot;]Howdy,</p><p>&nbsp;</p><p>Nice discussion.&nbsp; </p><p>&nbsp;</p><p>Will we have a financial meltdown with a collapse of the dollar and all that misery?&nbsp;&nbsp; I see the probability as being very low - say 10%.&nbsp; Much more likely we&#039;ll muddle along in a quasi-depression for another 10-15 years - probability 60%.&nbsp; The chance the Fed will get it right and jump-start the economy while not causing serious inflation or a collapse of the dollar - 30%.&nbsp;&nbsp; </p><p>&nbsp;</p><p>That said, the consequences to friends and family during a financial collapse are sufficiently gruesome that it&#039;s only prudent to take some precautionary measures.&nbsp; Having gold and silver, particularly some 90% circ U.S.;&nbsp; having a garden; staying engaged in your community; diversifying your wealth;&nbsp; keeping your skills current;&nbsp; eliminating any debt;&nbsp; having an emergency fund; et al.&nbsp; [you guys know the drill].</p><p>&nbsp;</p><p>The official debt is now $14T and even if they get thru the political process of raising the ceiling, this is not the problem.&nbsp; It&#039;s the Unfunded Liabilities of between $75-105 TRILLION FREAKIN DOLLARS - social security, medicare/aid, various trust funds, debt service, etc.&nbsp;&nbsp; The problem with these obligations is that you can&#039;t come up with a combination of benefit reductions and tax increases that will cover it.&nbsp; That leaves the gov&#039;t with no option but to monetize it.&nbsp; Er, this means printing up shiny new money to pay for it (e.g. these days it&#039;s more of an electronic process but net/net it&#039;s the same thing).&nbsp; I&#039;ve read that their estimating they&#039;ll have to halve the value of the dollar over the next 10 years to be able to attack this problem by normal means.&nbsp; This should come as no surprise at the dollar has decrease in value by 96% since 1913 the year the Fed was formed.</p><p>&nbsp;</p><p>I remember as a kid going to the store to buy a loaf of bread with a quarter.&nbsp; Well, I could take that same quarter from 1960 and sell it for melt value&nbsp; . . . and go buy a loaf of bread.&nbsp; [actually I&#039;d have about 6.25 and that would enable me to buy a real loaf of organic whole wheat bread that has the same nutritive value I was getting in 1960]</p><p>&nbsp;</p><p>I still like silver because of simple supply/demand features.&nbsp; Fixed, if not declining supply and rising demand.&nbsp; feh.&nbsp; Easy money.</p><p>&nbsp;</p><p>As for the statistics - they&#039;ve changed the formulae numerous times over the years.&nbsp; Some interesting things - rent is 20% of the CPI and they use Rental Rates.&nbsp; 50% of the market basket is subject to Hedonic Adjustments.&nbsp; Neat trick a hedonic adjustment -- if it&#039;s new and improved, they can charge more and it doesn&#039;t count.&nbsp; Ok, I can see that.&nbsp; However, I feel this is only valid if the consumer is still able to buy the old Unimproved version.&nbsp; I replace my 2000 Montana with a 2005 that cost me $5K more for stuff I&#039;ve never used.&nbsp; I&#039;ve got wireless headsets for a DVD player I&#039;ve never used.&nbsp;&nbsp; Part of the package, it were.</p><p>&nbsp;</p><p>If you really want to see the real stats, surf over to <a href="http://www.shadowstats.com" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.shadowstats.com" rel="nofollow">www.shadowstats.com</a>&nbsp;&nbsp; John Williams recalculates everything by the formulae used during the Reagan admin.&nbsp; Inflation is 7-9% but unemployment is about 22%.&nbsp; Oh, and if inflation changes, it cascades thru to the GNP that now stays negative since the dot.com bloody meltdown.&nbsp; </p><p>&nbsp;</p><p>And that&#039;s the issue, boys and girls.&nbsp; You&#039;ve an Economy of Yes and one of No.&nbsp; In the Economy of Yes, you and spouse both have jobs with benefits.&nbsp; You have a retirement, an IRA, a 401K, some savings and investments.&nbsp; The mortgage is 30 fixed and either paid off or nearly so.&nbsp; Kids are in college.&nbsp; &quot;nice cabernet, don&#039;t you think?&quot;</p><p>&nbsp;</p><p>Ah, but in the Economy of No, things are different.&nbsp; You lost your job at the vacuum cleaner plant back in &#039;02 when they shipped it overseas.&nbsp;&nbsp; You weren&#039;t there long enough for a pension, but had some in a 401.&nbsp; You worked a few years in construction until the real estate bubble burst and you&#039;ve been looking ever since. Wifey works at Walmart for $10 but no benefits.&nbsp; You had to spend your 401 and savings to keep up the mortgage payments but now you&#039;re behind and they&#039;ve started foreclosure.&nbsp; Son&#039;s a druggie and daughter&#039;s preggers.&nbsp; &quot;Hey, you gotta another of those beers?&quot;</p><p>&nbsp;</p><p>Alas, there are way too many in the latter group.&nbsp; How many baby boomers will never be able to retire?&nbsp; Will work until they die?&nbsp; And what&#039;s salt in the wound, is there are so many in the former group that aren&#039;t even aware of the latter.&nbsp; You see the Kudlows and Cramers on CNBC cheering on the stock market gains.&nbsp; Well, sh*t, you give me $600 Billion and I&#039;ll throw you a great party too&#039;.&nbsp; [jim rogers].</p><p>&nbsp;</p><p>As for trusting the gov&#039;t in washington.&nbsp; You really must be kidding.&nbsp; I spent 20 months in &#039;nam being disabused of the notion that my patriotism was to washington.&nbsp; &nbsp; Instead it lies with the people.&nbsp; 90% of politicians are crooks when they take office and 90% of the rest are corrupted within their first term.</p><p>&nbsp;</p><p>[rono steps down offa soap box]</p><p>&nbsp;</p><p>peace,</p><p>&nbsp;</p><p>rono[/QUOTE]</p><p><br /></p>

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