A Day of Reckoning is Coming

Folks, I really hope I'm wrong on this, but I don't think so.....

This country is headed for a financial day of reckoning. I don't know when, but a guess is 18-24 months from now.

Why?

1) Obama and the Democrat controlled Federal Government are spending money at an unsustainable rate. Our deficit this year is projected to be $1.4 Trillion. That means we will spend $1.4 trillion more dollars this year than we take in in taxes and other revenue. That is just THIS YEAR. It will only get larger next year, and the year after that, and so on - as long as the Dems continue passing out hundreds of billions of dollars that we don't have, the debt is going to soar.

The public is getting numb to this. It used to be that figures in the 10s of millions of dollars caught our eyes. Now, the numbers are so large that they are just abstract - a trillion dollars to the average citizen means nothing - it is beyond comprehension.

The Democrats crucified the Bush Administration for doubling the deficit during his 8 years in office. They made it a principle point during the elections of 2006 and 2008. Fair enough, spending was way too much. However, the same people who were yelling the loudest about it are now completely silent on what Obama is doing. The Immaculate and his cronies have tripled the deficit they inherited from President Bush, and it only took 9 months.

2) Our national debt (which now is around $10 Trillion) is held in large part by foreign governments who purchase the debt with the commitment from our government that they will be paid back, plus interest. China and India are the biggest debt holders. This debt comes up for renewal every so often. If China, for example, decides not to renew their debt holdings, and demands to cash them in, there isn't enough money printed in the entire US to pay them off - and there would be nothing technically wrong with them doing that. China holds the key to our financial future. They have leverage over us that is far more powerful than any nuclear weapon.

If we were required to pay off what we curently owe in our national debt, it would cost us about $33,333 for every man, woman, and child in the US (including illegal aliens).

3) The US Government is printing money as fast as it can shove it out of the presses. There is no underlying wealth to support that money. This creates inflation, and devaluation of the Dollar. The Dollar is close to its weakest point against foreign currencies as it has ever been, and there is absolutely nothing that will prevent it from falling further given the current direction of our government.

This makes your money worth less. If you have $100 in the bank today, a year from now, you will still have that $100, but it may only purchase $80 worth of goods compared to today.

This makes investment in the US, particularly government debt, less attractive to foreign investors and governments. They will demand higher interest payments for them to pick up the debt. This will in turn drive the debt up even further.

This is why gold has soared to the level now seen, and why you see so many companies trying to get you to buy gold. Gold holds its value on the open market much more than printed currency (the Dollar).

4) Commercial Real Estate's bubble bust hasn't happened yet. We all know that the residential real estate market pretty much collapsed - property values have dropped, in some areas by a whole lot. This caused a lot of loan defaults and foreclosures, and a lot of financial suffering by lending institutions that were stuck holding bad loans. Well, the commercial side of that debacle hasn't happened yet. Experts I've heard on talk shows, and seen in print are predicting that the commercial bubble burst will make the residential one look very tame. The time frames I've heard on this are 12-24 months from now.

5) The Government doesn't have a magic reset button. There is no way for Obama, or anyone else, just to stand up one day and say everything is all better, all debt is gone, lets start over. It doesn't work that way, but the idiots in Washington seem to be counting on that to happen to bail us all out someday.

6) The Democrats do not understand that when they increase taxes, they reduce the amount of money the government takes in. It has been proven time and time again that if the government lowers taxes on citizens and business, that promotes growth, which generates more revenue for the government even though tax rates are lower. Tax cuts result in more revenue for the government and its citizens - that is a proven fact. For some reason, they just don't understand this, and their constant effort to raise taxes is actually putting the government farther into the deficit hole.

7) The far left, from which Obama comes from and is guided by, believe in socialism. They believe that wealth should be distributed evenly, to be fair to everyone. This has failed in every country it has been tried in, except for the most brutal of dictatorships. He even stated it in his campaign - redistribution of wealth. Folks, that means taking from the rich and giving to the poor.

The problem is, his definition of rich keeps changing. During his campaign, he initially said he though anyone making over $250K was rich. Later in the campaign, I heard him say $200K, and later on he let slip $150K. Where will it stop? Where will the have/have not line end up being drawn? He and the far left want to take your money from you, and then they will decide who deserves to have it and how much.

The historical precedent for this is clear - everywhere socialism and communism have been tried, the result is the population (except for the elite ruling class - who are writing the rules) is drug down to the lowest common denominator. In other words, everyone becomes poor. The lower economic class folks, the ones Obama is pandering to, want Him to take from the rich and give to them. What they don't realize that he's only going to take from the rich - they aren't going to get any of it. The lower economic class isn't going to see their situation get any better.

All of this, to me, points to a collapse of our financial system, and perhaps our government. There have long been comparisons of the USA and the Roman Empire - comparisons of how the mighty rulers of the world fall. Could this be happening to us as we speak? Lord, I hope not, but none of the signs are encouraging.

Frightening ....

I would like to say I am hopeful, but everything the Government is doing is pushing us to this, and very few (no one with any power) are standing up and saying NO!