The Fate of Paper Money

As time goes by, the past becomes clearer than it was when it was still the future. What I am seeing now is that the government is not going to allow Social Security to go broke, nor will they allow lines of credit to close – instead, our government has decided that they have NO spending limits. So if I were you, I wouldn’t worry about losing Social Security benefits nor your house – there appears to be no need nor benefit to pay off any debts early – in fact, it looks like there is a real possibility that the government will start paying off people’s mortgages and credit cards. Clearly, our government has decided that there’s no limit on their spending; if Ronald Reagan broke the bank with $8 billion for the S&L crisis, then what did George Bush Jr. do with $800 billion for the banking crisis? And Obama seems to be just getting warmed up as he blows through his first trillion dollars in his first month. With our runaway spending I can only see two potential outcomes three or four years down the road:

Option 1. Hyperinflation ala post-WWI Germany where the mark shot up from 4 marks to US$1 to 4 trillion marks to US$1, which makes all of our life savings, IRA’s, 401k’s, stocks, and bonds worth less than a slice of bread. In that eventuality only our year’s supply will have any value.

Or… Option 2. The government corrects their mistake by taking all of our money out of our accounts, like Argentina did back in 2001 – I remember it well since I was working with a semi-retired Argentine man on our Nicaragua project when it happened. The Argentine government had been cut off from too much credit by the World Bank and so resorted to printing money with no backing (like Germany did post-WWI or like the US is going to do later this year.) But Argentina didn’t want to go into hyper inflation, like Germany had, so they froze everyone’s bank accounts mid-week and no one could use the bank, write a check, tap their ATM, or anything until the next Monday morning. In the meantime the government divided everyone’s bank balance by the amount that the country was overdrawn (I don’t remember if it was by 10 or 20 or what – I should look that up.) So, a semi-retired man like my buddy Aldo, with whom I was working in Nicaragua, might have enough money to retire on in the bank one day, and then suddenly wake up the next day with a tenth or twentieth of that amount.

One of those two options seems to me to be the only possible outcome of our unrestrained spending. Unless, of course, George Bush and Obama are correct and there really is unlimited money for the US government to spend.

And just for fun, I’m attaching a photo of my Argentine buddy, Aldo, on the left, along with my other colleague and friend, Daniel, on the right, from NM. We got one day off during one of my stints in Nicaragua and so rented a car for the day and drove down the coast and found a little local seaside resort where we played in the surf for a while and then enjoyed a lovely lunch of fresh lobster.

Anyway, so what am I going to do? My plan is that I’m going to temporarily suspend my 401k contributions. That frees up $16,000/year to put toward a new house, new cars, more years’ supply items, and my kids’ college education. Then, when we have things in stock that we’d need in the case of either outcomes 1 or 2 above, then if things still haven’t come clear apart, then I’ll return to my regularly scheduled budget of maxing out my 401k and investing in the stock market. But for now my overarching strategy is to ask myself: “If all of my electronic assets suddenly became worthless, what will I wish I had bought when I still had money?”

So, for what it’s worth, that’s what I’m doing. I’m not recommending my strategy, but it’s what I think will work for me.

Whites need not apply

I guess it’s official now – I have lost all hope for the future of America: it is obvious that white people are no longer welcome here now that we have a black president. Obama and his minions exposed their divisiveness and belied their promises of unity and hope. See the video from the inauguration yesterday here: http://www.youtube.com/watch?v=HRf4tOP05fA. I knew that these people were flaming racist fascist socialists, but I didn’t think their ideologies would be so flagrant in the inauguration bacchanal – I had expected that they would ease their way into their party line. I assume that this means that they don’t need or want my tax dollars, because I’m guilty of being white and can see no solution to my transgression.

But wait, there's more: this administration just keeps getting better and better – at this rate we’ll only have to tolerate them for four (very long) years – this great and Obama-nable farce keeps rolling along, stream roller-ing everyone who is not a minority. I was shocked and appalled, but not surprised, to hear Obama’s chief economic advisor say out loud and for the CSPAN cameras (see: http://www.youtube.com/watch?v=opxuUj6vFa4) that he doesn’t want skilled, white, male construction workers building any of the bridges or power lines in Obama’s infrastructure stimulus plan – he wants those projects to be built only by the unskilled, chronically unemployed. Boy, that’s what I want – to drive my family across bridges built by people who never wanted to work a day in their lives. I hope they label them clearly so we can make an informed decision before driving our car across them. At least this is likely to stimulate the ferry industry in our county – we’ll have to hire some ferry experts from Bangladesh, where they also don’t have bridges. Bangladesh also doesn’t have electricity for large spans of time each day – something else to which we can look forward – I’m glad I had a few years living in Bangladesh to get used to that, because that’s our future.

Hobgoblin, again

Saturday, January 17th, was an all day 4-wheeler excursion to the “Hobgoblin” down in Nevada. We’d been there once before in December of 2006 (see: http://powerletters.blogspot.com/2006/12/trip-to-hobgoblin.html.) It was fun; it was a gorgeous sunny day, with temperatures ranging somewhere between 60 and 70F all day. All together we were 13 people on nine 4-wheelers. Our 4-wheeler ride started out at “Whitney Pockets” in Nevada, about 30 miles from Mesquite on a barely paved road; one of our new riding buddies was the grandson of the rancher who settled all of that land. We found many of the trails that we’d taken a little over two years ago now blocked off by the BLM which claims to be restoring the land. I’ve attached a photo of the group of us on a rock formation.

That night we got home just in the nick of time to change out of our dusty clothes, shower, get dressed, and dash up to Desert Hills H.S. to watch Kat play in the County-wide Honors Orchestra. She said that it was way fun to play in an orchestra that was really good.