I was sitting down Sunday morning as I always do, drinking coffee, eating a bagel, and watching Sunday morning news shows.  I can't help it; I'm a news junkie. It was an interesting morning financially speaking because of two issues facing the country today which are being addressed right now, the first being the president's trip to Canada for the G8/20 meeting and the second being the defeat in Congress this past week of extended unemployment benefits.  Both issues are connected.

First, the president is at the meeting in Canada to persuade other countries, notably the big world economies (the G8 includes the traditional power houses of the US, England, France, Italy, Japan, Canada, Germany and Russia and the G20 throws in emerging countries like China, India, and Brazil) to follow our lead and continue stimulating their economies through the printing, borrowing, and spending of money on government programs designed to get things moving.  His argument is that without the spending that has already happened and as disappointing as the recovery is so far - it would be worse if we hadn't spent what we already have and will get worse if we don't continue full bore.  The Europeans are resisting, along with pretty much everyone else, as the Greek debt crisis is fresh on their minds and they know they must get their financial houses in order.  Add to this, our national memory is dominated by the Great Depression of the 1930s and 40s and its deflation while the Europeans and in particular the Germans have the opposite concern and the memory of the hyperinflation of the 1920s.

President Obama and Treasury Secretary Geithner say that our economy is doing comparatively better than Europe’s and therefore this is proof that our policies are working and should be copied.  The others respond that artificial stimulus is just that, artificial.  They see mountains of debt with no plan whatsoever to control it.  In fact they are both cutting spending and raising taxes to do that at home and think we should do the same.  Both sides are wrong, as the key ingredient in all of this is across the board world governments are raising taxes and increasingly interfering in the everyday workings of the free market.  There is no way that either plan will turn out well.  The sheer hubris of economists and politicians believing that the free market needs them to function properly is so stupid on its face that it would be laughable if the stakes weren't so serious for all of us.  The bottom line is that the president will have no more luck persuading the other G8/20 countries to follow us than he did in attracting the Chicago Olympics which is to say he will end up with no results at all, as usual.

Meanwhile, the Senate threw out the extension of unemployment benefits to some 1.2 million Americans who have been unemployed longer than 6 months.  The republicans and one democrat, Ben Nelson of Nebraska, killed the bill with the basic explanation being that we can't keep adding debt without paying for it somehow which this bill failed to do.  Further, they correctly point out that when we subsidize something, whether it is unemployment or easy mortgages to people who shouldn't have gotten it, you get more of whatever you are subsidizing.  In this case, paying people to not work will assure that they won't try very hard and as every day passes that they are unemployed, they are losing their key job skills that they once had making this problem one that will not go away easily. Personally, I get the quandry that the well-meaning find themselves in on this issue of paying folks out of work.  On one hand there are not enough jobs being created to absorb them back in the economy and on the other hand if we keep paying for no work that is exactly what we are going to get.  I get the human need for help but as in any family there has to be a limit -  just as there are limited funds to pay for this sort of thing.  Heck, we ran out of money a long time ago and are now just printing up paper to cover what we are spending, a pigeon that will certainly come home to roost - and soon. 

The bottom line is that we need to cut spending A LOT and cut taxes A LOT.  It is this second part that really is the most important as without money being freed up for the private sector, there will never be a meaningful recovery of any kind.  We will be doomed to a very, very long recession at best and a devastating depression at worst if we don't get our collective heads out of the sand and see what is really happening. None of us regular folk can control these events and therefore we can only observe, analyze,

and take action to protect ourselves.  Since the predictable outcome of all of this is going to be more spending, more taxes, and more printing of money, we need to anticipate a continuing bad economy.  We need to get in the best position possible career wise to earn the most money that we can, get our budgets under real control as incomes will not climb enough to cover what is coming, and get our debt as smartly organized and either paid, negotiated, or discharged as quickly as possible.  Then we need to build cash as fast as we can, convert it to gold and silver, platinum, or palladium, and wait for the inevitable inflation.  In this way we can get rich while others just sit and hope that things will work out on their own and in the end find themselves in real trouble worse than anything that they can imagine.  This is why I created SOS and this is why you are in the right place, at the right time, doing the right thing the right way.  At least I hope you are - and have not just gotten the box, put it on the dining  room table, and are just looking at it!  It does not have a magic genie inside and it requires some effort as it is a partnership between us and you to create wealth.  We both have to pull our own weight to make it work.  I pledge to continue to be here to help.  Will you pledge to meet me halfway and make the effort?