Sooner or later, you pay
You run up your personal debt. You can
stall off the day of reckoning by moving your debt around. As it gets
worse, the moves become more frequent and desperate. Business runs
into this when they are failing. If the fundamentals do not change,
sooner or later comes a day of reckoning. One day the business is
doing just fine, (At least from the outside) the next day they are
out of business. Personal bankruptcies can eliminate that debt.
Business can sell off whatever assets they have and the investors
take the loss. (Not to mention the workers who are out of work) But
governments are different.
Governments can print money. When they
get into financial trouble, they just print more money. The problem
is, this is just another desperate move to prevent the inevitable.
(Unless the FUNDAMENTALS CHANGE) The United States has not entered
this phase yet, but we are getting much closer.
I have been watching for signs of
inflation for years now. The spike in the price of gold is a classic
indicator. Now I am seeing reports of how car prices are going to
start going up. Food prices (caused mainly by the drought) are also
expected to rise. I am seeing banks beginning to charge fees for
letting account balances drop below a minimum amount. These were
common in the late 1970's when inflation was reaching for 20%.
Remember how gas stations were charging more for use of your credit
card? The new regulations that went into effect will enable ALL
merchants to charge for the use of credit cards. It has not begun
yet, but it just may be an early indicator.
I am watching for these signs. So maybe
I am just seeing what I want to see. What is unsettling is that I
know that sooner or later, no matter how well you move to put it off, when
your finances are poor and you are spending more than you produce,
the day of reckoning comes. Unless you implement fundamental CHANGE.
President Obama is NOT doing this. In fact, he is speeding up the
process. Think that the gap between the haves and havenots is large
now and growing? We have not seen anything yet.