Governmental cowardice and the long-term viability of vending

[Bravo Duck]

The events of the last few weeks (government bailout of financial institutions at a cost of over 1 trillion to taxpayers) have concerned me.

Near term to medium term we're okay- I think the markets will be operating normally in 6 months, without the wild swings we're seeing now and a Dow above 10,000.

The long term outlook is more bleak. The government raises money to spend in one of 3 ways.

1. Tax its people

2. Borrow money

3. Print money

There is a practical limit on how much people can be taxed and once lenders realize they are throwing good money after bad the credit will dry up.

The government has shown absoutely no willingness to fix the problems that it knows are coming, ( social security, medicare, national debt ) and I have no reason to believe this will change. This means that the politicians will continue doing what they're doing untill it is physically impossable for them to continue. But a day will come when they can't tax the American people any more and no one will lend them any money, what will congress do then?

PRINT MONEY

Governments have long done this to get out of debts they can't pay, from Germany in the 20s to some countries in south america recently.

When a country does this inflation starts rising rapidly as the currency becomes more and more worthless. A loaf of bread that costs $2 this month costs $3 next month and $6 the month after.

What this means to us as vendors is our investment in equipment will become worthless because we will be unable to match pace with inflation.

Before we added 25% to our national debt in the last month I estimated the day of reckoning to be 20-30 years away, now I think a better guesstimate would be 10-20 years.

I don't wish to be a  "Chicken Little", but this is reality as I see it.

Analysis and comments welcome.

[guile]

While this will/should be moved to “the break roomâ€, I will share my thoughts/opinion. I agree with you for the most part. I study the economy and believe there is no time in history like today. I have been an advocate of the only true money on the planet (for centuries, Gold/Silver) for years. This is NOT something that can be printed! Anybody who is fooling themselves into thinking we can/will get out of this is unrealistic. One of the biggest causes of this mess is NOT the housing bubble like many “talking heads†would like you to think. While it is a big part, you don’t hear about the BIGGER problem, OTC Derivatives (google it)! This (OTC Derivatives) is a financial instrument that was misunderstood by it’s creators and is starting to unwind now. Do you often hear people talking about a “Quadrillion dollarsâ€? Well, some VERY respected people who value this garbage think notational value is well over that!

 

Bottom line: ANYTHING PAPER IS GARBAGE!! Again, as I have told family, friends, enemies, people on the street, animals and anybody else who would listen, BUY PHYSICAL GOLD AND SILVER! Protect yourself and your family because I do think it’s only a matter of time before the system is destroyed. And don’t let the fake “PAPER†Gold/Silver (Comex) prices scare you. Again, that is a CLEARLY manipulated market. We are heading for the next Weimer republic and it will happen (sooner then later). It don’t matter how many bailouts can be concocted by the financial wizards, Hank (Goldman Sachs) Paulson and Ben (Chopper Ben) Bernanke. Good luck.

g

[Beer980]

The banking system did it to themselves with greed and easy money. They preyed on people with little to questionable credit because "times were good". The cities followed with increasing the taxes paid on the false rising values of houses and property. Look at all this extra money we can bring in if we adjust the property values based on a bubble economy to begin with. We paid $7000 for the 1/4 acre lot to have our home built on 3 years ago. Just 6 months after we moved in the lot next door was sold for $40,000. That is a good value for our money if we can ever sell this house. It has been on the market since May. Now new home building has almost stopped.

It was 2006 when they decided to stop publishing the government monthly report (M3 report) on how much money was in supply. They figured without this tidbit others who are concerned with it would just have to guess on that number. Now I would guess the presses are being pushed to their printing limit. Yes a day will come but it will not just effect the quarters going into our machines, it will affect everything. This train has been off the track for a long time and I really think they don't know how to set everything straight again. Once we got away from backing our money with gold we were headed down the path. I think that one day they will just hit a giant reset button. The world leaders will need come before the world and say the system is broke and the world is broke. We have decided to start over with no world debt and go forward with a different mind set. Should I dare to bring in the sandbox war and what we have spent over there. Besides to loss of life or disabled citizens and military. Just the money spent could have bought at least one hybrid/electric car for each family here in America.

[guile]

It was 2006 when they decided to stop publishing the government monthly report (M3 report) on how much money was in supply. They figured without this tidbit others who are concerned with it would just have to guess on that number.

 

I thought the Fed's reasoning behind stopping M3 was laughable. They cited "Administration costs"!! Pathetic. Btw, there are places that still track (and publish) M3 data.

g

[Beer980]

Well we all know it is a sham anymore from D.C. I am ashamed to admit I was born there anymore. The whole system is broke on many different levels including any actual money.

[G-man422]

     I agree with you Guile on the gold/silver thing.  I was going to start an IRA but instead decided to invest in silver.  I like the idea of having tangible assets (granted they do have their disadvantages), but there is only so much gold and silver in the world.

[antoniocinisi]

maybe all this will lead to this,because the world isn`t going to just end in one day:

http://www.vendiscuss.com/forums/view_topic.php?id=1279&forum_id=18&highlight=end+of+the+world

[guile]

     I agree with you Guile on the gold/silver thing.  I was going to start an IRA but instead decided to invest in silver.  I like the idea of having tangible assets (granted they do have their disadvantages), but there is only so much gold and silver in the world.

You have made a WISE choice:) Don't let the fake Comex price fool/scare you. Just cling to your gold/silver as tightly as possible:) I will ALWAYS buy on dips (when possible) and think it's only a matter of time before this ponzi scheme is truly revealed for what it is!

g

p.s. Don't get discouraged by sudden drops in Comex price. It's important to realize that is truly fantasy, and nothing more. Personally, I like Silver eagles and own several thousand ounces. I have been buying since $5.00 and will continue. You look at $10 on Comex yet I can STILL get (at minimum) $15 per oz for my eagles (if I ever wanted to sell of coarse:). Physical market is starting to detach from paper. This can easily be seen by shortages at just about every major dealer in the US!

[guile]

IMO, the link below is just an idea of what we can see (on a large scale) in the not too distant future.

Anybody need to rent an apartment in the San Fran area:P

http://sfbay.craigslist.org/sby/roo/889292171.html

Btw- if anybody is familiar with Robert Kiyosaki (Rick Dad, Poor Dad), he was asked (not too long ago) when would HE sell his Silver. He said, "When one box of Eagles (500) can buy a 3 Bed Room apartment in NYC, I'll sell". I'm not a huge fan of the guy but I found that interesting.

g

[guile]

Now THIS sounds like an ambitous plan!!

http://market-ticker.org/archives/622-Fiscal-Cat-5-Hurricane-Warning.html

 

Btw, I don't think it's crazy stockpiling food/water. I think everybody should have (at minimum) 3 months worth of food to live off. People said I was nuts years ago. Can the same be said today? WILL the same be said in the next 18 to 30 months??? I think not.

g

 

[Jay-Son Vending]

Seeing how we all think that Washington cannot help themselves and will keep spending our hard earned money...Most folks continue to VOTE for the same idiot that they have for years...

I think that the best bet is to send a message...NOT by the Party affiliation..That is just stupid...BUT

When you walk into the voting booth/station on November 4th...Just vote in the New GUY/Gal...If Washington wakes up on November 5th and 1/3 of all of the seasts have changed to NEW PEOPLE..I think a message will be sent...

Just think about the talking heads trying to explain that one...

[Beer980]

I have been voting since I was 18. That is 6 election cycles now. To date I have never had the presidential canidate I have voted for win. I am registered Independant but vote for 3rd parties. As for the other local and US seats I almpst always vote for the new canidate. The news outlets are going to have their hands full with exit polls being way off for actual votes. I really don't see how it help the process and should not be released until the polls close on the west coast. It gets sill every time with each news company trying to be the first to call the election here or there. Go to sleep like the rest of us and report it when you know for sure. Are there realy that many people facinated with the results that they can't sleep? I keep up with the news and politics more then most people I know but I will not loose any sleep with that circus. The winner is going to have his hands full either way and it will be quite a job to pull this country out of the dive it is in.