Sustaining the Unsustainable

By all reasonable, quantitative measures, the global financial system is spinning out of control. Those of you familiar with fiat currency know that it is a giant Ponzi scheme where everything appears to be functioning well until it all comes tumbling down.

We all know that happened in 2008, but the numbers show we are due for another go-round soon. Of course clowns like Bernanke and Geitner will deny it and do everything in their power to build the pyramid higher and higher - making the inevitable crash even worse. Take the U.S. debt, the Greek debt, the Irish debt, for example. As Mike Shedlock says, "What can't be paid back, won't be paid back." But in the meantime, the financial policies coming out of Washington and New York just keep kicking the can down the road.

In other words, they are sustaining the unsustainable and doing it with more and more debt. We are destroying the planet at an accelerated rate on credit. And why? Maybe this headline has something to do with it.

(Source: The Wall Street Journal)

It is a disturbing and unsustainable trend.

Over the last 5 decades the share of food and energy as a percentage of consumer spending have decreased. Meanwhile, wages have remained stagnant for the last decade when considering inflation. At the same time, state and local cut-backs (aka "austerity measures") require individuals and families to spend more on what were formerly public services. Ultimately, a combination of debt, loan repayments, government cut-backs and higher food and energy prices will force "consumers" to cut back. That is when the unsustainable cannot be sustained anymore, although I suspect Bernanke will continue to "print money" and keep interest rates ridiculously low as those seem to be his only strategies.

So the moral of the story is, if you have any money in an American bank, 1) you are not earning any interest on it, and 2) it is becoming worth less and less every day through Bernanke's policies of "monetary easing." So get your money out of a bank and put it...

...under your mattress. Not exactly. Put in in your ceiling, in your walls and on your roof.

Insulation and solar hot water are about the best investments you can possible make at the moment. They will return more in savings that any bank, and they cannot be de-valued by the Federal Reserve. Being eco-thrifty is not about not spending money, it is about spending it in the right places. Along with immediate energy savings, these types of investments will add to the long-term value of you home more than any other "home-improvement" project.

Peace, and preparation, Estwing