Thursday, March 26, 2009

Pedal to the metal

Since the War in Iraq against some vague imaginary threat cost so many lives and wasted so many of our financial resources, Obama has decided to expand the War in Afghanistan. This is a disaster and will only increase the calls to diversify away from the U.S. dollar and away from the United States as a world superpower.

Fighting third world countries that pose no reasonable threat to our country is a sure sign that we are an empire in decline. Those who drink the Kool-Aid and buy the 9-11 bullshit about terrorism being an imminent, constant threat have already lost the battle against terrorism because they are terrified.

Don't worry, I do have a financial point to this rant. The government is spending money it doesn't have based on the future earning power of we, the citizens. How many Americans really give a shit about Afghanistan? How many truly believe that securing our borders would be less cost effective and result in fewer lives being lost than sending our bravest citizens half way around the world to risk their lives blowing up shadowy figures in caves?

When you spend more than you make, you are living in the moment at the expense of the future. Think how many Americans now regret buying that expensive house, SUV, or boat. Almost everyone has had to tighten their belt and pay down their debt (if they are able to and still have a job), yet our government responds by spending like a drunken sailor (I mean no offense to drunken sailors, of course) using other people's money on things of little value to its citizens. Keynesian economics demands that governments pick up the slack when its citizens start acting irrational and try to save money and pay down debt.

Handing money to the worst run banks, insurance companies, auto companies, and hedge funds is corporate fascism. Almost everyone who pays attention now recognizes that our political system is broken and beholden to whoever gave the largest campaign contribution last election. A system like this is inherently unstable and investing in such a country is as risky as investing in any emerging market economy.

By pushing the petal to the medal using debt and playing chicken with the value of our currency, the government has made only one thing certain: those with any assets to protect need to be invested in physical gold held away from the prying eyes of our overbearing government. I missed my chance at $880 and decided to take the plunge in buying more when the price dipped to $920/ounce a few days ago.

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