Peter Schiff of Euro Pacific Capital writes, “The grim reality is that trillions of dollars were borrowed and spent that will never be repaid. No government program can alter that fact. Someone is going to have to pay the piper for all those granite counter tops and plasma TVs. The price tag is staggering and for all the bailouts and stimulus packages, all the government can do is exacerbate the losses and shift the burden through inflation. Nor can the government resurrect bubble home prices and the fantasy of real estate riches that went along with them. One way or another, rational home prices will be restored and the myths of our asset-based, consumption-dependent economy will be finally discredited.”
Our consumption-dependent economy is pretty much an oxy-moron! You can’t borrow to get rich, nor can you consume to get rich. It’s pretty simple math, but most Americans have been duped by their government to believe that up is down and black is white!
The Fed kept rates the same today, and this made the stock market rally and gold go down in price. Psychologically, the lies of the U.S. government and the Federal Reserve may sustain the stock market temporarily. But when this economy is discredited- and it most definitely will be- all the lies and manipulations in the world won’t stop the crash from happening.
I’m seeing signs of the recession affecting my business. I run swim clinics every now and then and charge $70/person. Normally, I fill them up with about 12-15 people. This last weekend, even with some decent marketing efforts, only 6 people signed up. I’m certain this is due to the economy, because August is typically a great time for swim clinics.
For now, I am holding gold, silver, mining stocks, a little bit of cash, and an investment into a payday loans business which I will discuss in detail in a future post.