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The Crashing Dow and Why Do I Care?

August 8, 2011, by Ken Jorgustin

the-crashing-dow-jones-industrial-average

Given the turmoil in the world markets, the Standard & Poor’s credit rating downgrade of the United States and other US entities, spiking gold prices… Why should I care? and what does it mean to me??

Really, what it all basically means, is that the ponzi scheme of debt upon debt may be reaching its limit. So many individuals, governments, banks, and corporations have been involved in the leveraging – borrowing – loaning – spending of money on top of money, that it has become increasingly difficult to find buyers (suckers) that will continue to ‘buy-in’ to the notion that the present ‘bloat’ of these entities will continue unabated.

Eventually, the fat ‘subject’ dies of a heart-attack. The United States is currently, metaphorically, grasping its chest as sharp ‘angina’ pains are bringing it to its knees.

There will be ongoing denial that the ‘subject’ is fat, while most of its ‘friends’ continue to say, ‘No… you don’t look fat, you look great’.

Those that have been able to see the girth of the ‘subject’ growing ever larger during these past few years, have known that this day and worse days will come. Apart from getting its stomach stapled, the ‘subject’ may well be doomed. It may take a few more fat-burgers, but the ‘subject’ probably doesn’t have too much time left…

Many of those that have seen the ‘subjects’ growing fatness have diversified out of close ties with the fat one, so as not to become caught up themselves in the doomed behavior.



OK, enough of the metaphorical speak… What can you and I do about it, or what does it mean to me?

Answer: Recognize that we are not living in Disney Land. Recognize that ‘faith’ in the US – Treasury debt – took a big hit. Recognize that their are real deficit and spending problems – spending beyond the practical means of the US. Recognize that you can’t borrow money forever without someday having to pay it back. Recognize that debt does not go away. Become more fiscally conservative in your own life – prepare for yourself – don’t depend upon government for never ending handouts. Adapt, and be prepared for worse times ahead.



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