By: John Fisher
One day we will all come to realize that much of our stock values, our standard of living, our INCOME and our personal balance sheets are all based on a lie – the lie of constantly expanding credit.
Since the early 1980s, monetary growth has been increasing approximately twice as fast as US economic growth in real (inflation-adjusted) terms. And of late, the increase is almost parabolic. And because it has been almost 30 years, people have come to believe that “deficits don’t matter.”
But deficits do matter.
Deficits do matter because when you increase your debt faster than your income for 30 years, you end up with a tremendous amount of debt. More than can ever be repaid. You are at a dead end. And, bankruptcy is the only option left.
Our economy has come to depend on something that can’t continue. You can’t run up your debt levels forever. Eventually, forever “arrives” and then the lie is revealed. As is the case with all lies, it’s not if they will be revealed, but rather when they are revealed – and in the end, the truth always emerges.
All Things Considered – John’s Commentary:
There is no way to catch the debt. Even the extraordinary measures in play today are already running smack into the law of diminishing returns.
Action to Take: Hint: Buy that which exposes the lie – gold and silver.
Quote of the Day: “The new view is that the dollar is an instrument of policy and not a weight or measure of value.” – James Grant, Economist – Bloomberg Interview 10/16/2013