RallyCry (< 20)

Doctor administer QE3, Keep the patient comfortable

July 08, 2011 – Comments (3)

The U.S. economy is an ailing patient. QE1 and QE2 were shots of morphine that masked the pain but did not hide the true problems on our economy. The private sector may have crashed but the public sector is just starting to crumble. Its only a matter of days before the politicians and central bankers ready their syringes to shoot up the patient again with QE3.

The deficit is stagering but there are big structural problems holding back the economy. State and federal employees are losing jobs at a rapid clip and this excess inventory of unemployed workers will only hold down the economy for the next several years. Citizens are already taxed out of their houses and to raise revenues fees on everything from water to trash to toilet paper will be put in place. You sure you want to wipe, it will cost ya... Meanwhile our roads will continue to crumble and bridges will become even more dangerous. 

How does the average person get by? I would suggest holding 10-20% of net worth physical gold and silver. The other 10-20% in an actively traded volatility index or ultra long/short fund. Hold the other 10-20% in enough preserved food and drinking water to last atleast a year or more. Hold atleast several thousand gallons of gasoline and a sidearm with plenty of ammo. That way if riots and unrest that have hit Greece make their way here to the U.S.A, you can ride it out and protect yourself with tangible goods worth infinitely more than the cash circulating in our economy more freely than love at Woodstock.

Is this too bleak an outlook? Probably. Is it an impossible scenario? No. I think its worth considering. The alternative is more morphine.