ALAN FRANKLIN tells how the President admits the US is broke - and says we had better learn how to grow vegetables!
24/09/2010

I don’t normally believe a word “President” Obama says. I do not believe he is entitled to hold office. But when he admits: “We are out of money now” I take notice as it sounds like the truth.

You would think that news that Uncle Sam is officially broke would get some airtime. But Obama’s admission, which many of us had long ago worked out, was carried only on little-watched C-SPAN, in an interview with Steve Scully.Said Scully:  “You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?”

Replied  Obama:  “Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far.” So the trillions to be spent on healthcare will also have to be spun out of thin air- or rather, the Fed’s printing presses. No wonder people are fast getting out of the Dollar!

The inability to pay your debts is called insolvency. Anyone who runs out of housekeeping money can grasp the concept. Well, America has run out of housekeeping. There is nothing in the kitty to fund healthcare, future pension provision and much, much else.  Just a black hole, where gold and other real assets used to be.

The Dollar is being debased as the Fed prints money to buy US treasuries. It’s a bit like a wife buying her husband’s debt. The couple still have the debt to pay back. The only green shoots to come out of this will eventually be inflation shoots. Of course, creating lots of funny money and tossing it in all directions may well inflate things like house prices, in the short term. People may even borrow money to buy GM cars, though I  doubt it.

Once all the trillions of new money hits the streets inflation will be out of the bottle and I do not believe that the Federal Reserve will be able to cram it back in.

So although I do not think inflation is an immediate threat, there certainly will be inflation at some stage down the road. I don’t know when, but it cannot be delayed too many years.

That’s when gold will come into its own, as the last store of value, the last man standing. This is why we have made it easy for ordinary people to put a percentage of their wealth into gold by running a link with BullionVault.com at the top right and left of this page. Just click on the illustration for details. We believe this is wisdom in these uncertain times. Gold has stood the test of time: paper money has not. Gold pays no interest and goes down in value as well as up. But it is accepted all round the world as a store of value. Soon, I believe, thanks to gross irresponsibility by spendthrift US governments and the Federal Reserve, the US Dollar will not be.

America could even go the way of Zimbabwe, where banknotes with face values of millions float around unwanted on rubbish tips, for the US, like Britain, is following similar banknote printing policies.

Finally, I watch a lot of business news and often hear people say: When recovery starts. Whatever makes anyone think that any kind of recovery is coming? The west, in particular America and Britain, has thrown away all the assets that made it great, namely a society built on the Bible. We have no divine right to wealth and prosperity – the soft life. In fact when I grew up in postwar Britain, with food rationing and a threadbare lifestyle, things were far from prosperous.

We have no intrinsic merit, nothing to make us naturally any wealthier than, say, a Chinese or Indian citizen. And they work harder. They are also better educated, for the most part.

Many young Brits and Americans can barely read or write, let alone analyze things or absorb difficult concepts. They are raised on soundbites and political correctness. They are at war with countries most of them couldn’t find on the map. No wonder con-artists like Tony Blair and the Obamanation get elected without scrutiny.

Better start learning to grow vegetables. And start a home Bible study to spread a little wisdom around. Prayer helps too. We are going to need it.  

 
 
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'But when you pray, do not use vain repetitions as the heathen do, for they think that they will be heard for their many words.' (People who say the rosary repeat the 'Hail Mary' prayer 53 times and the 'Our Father' six times.)
Matthew 6:7

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