Fiscal heroin and TBS

Or is it crack?  If you want to continue to believe everything is fine, please go ahead and skip this post.  Have a nice day.

If you are concerned about what’s going on and how you could be affected, or how your future may be impacted, you should start to pay attention.  Have you noticed the stack market runup to new highs?  Have you wondered why?  I mentioned to Susan that I think that there will be a major market correction between March and September.  What’s the indicator, most average people are just getting back in.

I started reading The New Road to Serfdom this weekend, and in catching up on other reading, it all started with the WSJ and an article by Brett Arends:

It's crazy. There is plenty to worry about. As you battle to manage your family's finances, be aware that there are three reasons why inflation needs to be on your radar screen.

First, the official inflation numbers should be taken with a fistful of salt.

Over the past 30 years, the federal government has made a lot of changes to the way it calculates inflation. It's taken place under presidents of both parties. Each change in methodology has come with plausible-sounding justifications. But, as if by magic, each change has had the effect of flattering the numbers. Funny, that.

http://online.wsj.com/

Graph from http://www.shadowstats.com/

In doing a little background work, Unemployment if measured using real unemployment – is at about 22%.  That is a depression level statistic.   And just as FDR’s policies are credited with extending the Great Depression by 7 years, we’re at the same point, doing the same thing, possibly expecting different results.  But, what’s the reality?  Politically everything is fine and the politicians are squabbling over $20 billion in cuts to the budget.  Oy!

Inflation, using the measurement from the Carter administration, is close to 10%.  See graph above.  You can see an excellent presentation of routine economic information at Shadow Stats.  What happens when QE2 stops? - If ‘real’ inflation is about 10% now?

You already really know that real inflation is higher.  So what if the iMac is still at $1000.  Or coffee is about the same price (even though a pound of coffee is now 12 oz.).  What does gas cost, have you looked at vegetables?  Everytime that you go to the store, you know that  inflation is higher than 1.5%.  When the cotton and oil prices hit clothing, you will really see it.

For more see http://www.shadowstats.com/

Regarding the debt, we are in real trouble.  I strongly suggest that you read Mr. Lira’s post about the Big Splatter:

The American people have thrown in the towel. They collectively realize that the *%!#’s is gonna hit the fan big time. So in this little window of time before The Big Splatter, everyone’s pretending that nothing’s wrong, everything’s fine—we’re doing hunky dory, couldn’t be better. Any bad news—like the monster deficit? Ignored, blatantly.

You know those gamblers in Vegas, who go there and blow their house on the black jack tables? And then they go around town buying hookers and blow left and right, partying hard until the dawn, acting as if they didn’t have a care in the world? At least until the night runs out?

That’s the United States.

http://gonzalolira.blogspot.com/

What a weekend to start reading the NEW Road to Serfdom by D. Hannon (New Road to Serfdom).  I think it’s time to begin to prepare for a major calamity, either that or stock up on lots of Prozac.  For those of you who follow the New World Order conspiracy theorists, it looks like it’s almost here.

Put it all together, and watch out.  Beans, Bullets, and Bullion.  The Big Splatter.  C’est la Vie!