A Nervous World

We live in a world that is very nervous. This nervousness is making the financial markets act like a herd of spooked cattle – just waiting for the next lightning bolt to make a panic dash in some direction. Will it be the next news of more ballooning debts, criminal manipulations of just about everything, threats of new wars starting when old wars are not truly finished, economies all over the world struggling to avoid recession (or worse) – or some other bad news event that sends the crowd into a frenzy.

I sometimes wonder how the average person manages to keep their composure with all the tensions – and then I remembered the old adage; “ignorance is bliss.” The so called, average person is blissfully ignorant of the reality surrounding them. Sometimes I envy them – sometimes I wish that I could just close my eyes and make it all go away. But it won’t work – reality will have its way in the end. Ayn Rand is quoted as having said; “you can ignore reality, but you cannot ignore the consequences of reality.” Smart woman!

The US government finances are completely out of control – having already borrowed more than we can ever pay back, it plows blindly ahead spending more and borrowing more. This is going to end very badly – and probably sooner than most expect. The only ones that are more stupid than our government leaders who are doing all the spending are the ones loaning them the money with which to do it. And it get worse – really – it gets much worse. Not being satisfied with borrowing all this money to spend from foreigners, the Federal Reserve has been the principal purchaser of US debt for some time now – currently to the tune of 85 BILLION dollars per month! The FED now has about 3 and a half TRILLION dollars of our own debt on its balance sheet.

I am not a PhD economist – I am just a plain Joe – but I did take a little math in school and the numbers easily tell anyone bothering to look at them that this is not a sustainable path – we are rapidly reaching a point where the implosions will start, and when that happens all of the glib talk from the FED chairman – and hollow promises from politicians – will matter not. There will be pain – much pain – and sufficient pain to go around.

What can the little guy do? A good start would be to wake up and smell the “crap”. If you are aware of what is going on you will be in a better position to help yourself. There are a few people out there that offer advice to weather the coming financial holocaust. There is a little time left – no one knows how much – but it is probably more than some think – and definitely less than many think.

Many think that I am too pessimistic about our future. I am, by nature an optimist (humans are hardwired to be optimistic) but reality must be dealt with – and in my mind, sooner than later. I simply do not want to be blindsided by something that I could have seen coming, if only I had bothered to look.

In the mean time short term technical trading helps me sleep at night. You might try that.

Phil Elrod

phil@tradingbetweenthelines.com

 

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