Money, Money Everywhere

Money, Money Everywhere by Bill Roberts

Every newscast talks about the economy, the mortgage meltdown, and what the government is doing about it.

I'm sure that by now you realize that the housing crisis was brought on by the Fed's actions vis-à-vis interest rates. They (specifically Greenspan and Bernanke) destabilized the mortgage market, the housing market in general, and the very economy by reducing rates to zero and then sharply raising the rates back to a normal level. This kind of action does not take place in a vacuum. These guys torpedoed us. Anybody making excuses for them is in denial of the truth.

As for inflation, we've been on that path since Roosevelt "established" the value of an ounce of gold at thirty-five dollars, up from it value of twenty dollars the day before. Instant inflation. Then came WWII which was very expensive. To pay for it the U.S. floated a lot of bonds. So as not to have to pay them back, the government inflated the currency some more. Now over 75 years later, this process is too ingrained to expect change. The dollar will just keep getting worth less until its worthless.

But we can learn from history and prosper. Germany during the Weimar Republic suffered horrible inflation. The mark went from being a respected currency to nothing. Towards the end it took bushel baskets full of high denomination marks to buy a loaf of bread.

But the people were able to pay off their mortgages with these devalued marks. The banks took the hit. Every cloud has a silver lining.

What did you learn?

So what is the lesson? The more you owe and pay back with devalued dollars, the more you will make. Money buried in the backyard is going to depreciate. Money leveraged in real estate is going to yield huge returns. This might be called "Mortgage Planning" or just common sense. Take advantage of this. We know what's coming. It's not like it is going to be a surprise.

Call Bill Roberts (619) 244-4610 if you want to position yourself to benefit from the coming inflation.