I cannot stress this enough…get out of Dollars and into Gold and other commodities as soon as possible.

Visit BullionVault Gold Exchange – Click Here.

LIBOR

As I’ve mentioned before, the real economic problem isn’t on Wall Street, it’s in the credit market. Basically, confidence that loans will be paid back has disappeared and banks are now resisting lending to other banks.  For the first time since July, the Libor Rate (London Interbank Offered Rate) has dropped slightly. (Read Article)

This is good news but I expect it will be short-lived. Central Banks everywhere have been injecting large amounts of printed currency into their economies in order to bailout failing banks. All of this new money is going to give the illusion that the economy is beginning to prosper again but once the market adjusts to the buying power of this newly inflated money things will become very expensive. There is no easy way out of this, we have to start changing how we spend and save now.

Another symptom of this system is the Coming Credit Card Collapse. Very much like the Sub-prime Mortgage scheme, credit card applications (your written promise to pay) have been used as securities and traded, bought, and sold without your knowledge. This has created yet another massive bubble of “speculative” money that is on its way to bursting. (Read Article)

Of course, the original $700 Billion Bailout (I’m sorry, “rescue plan”) won’t cover the credit card issuers. Will the Government and Fed continue to turn to the printing press in order to avoid this situation?

If you have a great deal of credit card debt (or other unsecured debt), it would be wise to negotiate a settlement with your credit issuer. Why? Because at this point they will be willing to settle for a much lower amount in order to save themselves from the next Credit Crisis to add to this Recession.

Free Debt Settlement Consultation – Click Here.

The Great Depression was by no means the first depression this country ever had, but it was clearly the worst. What made it different than the rest? At the time of the Great Depression, government intervention in the economy was higher than it had ever been and a special government agency had been set up specifically to prevent depressions and their associated problems, such as bank panics.

Prices in Food Rise

With all the media coverage of the Financial Crisis, the growing Food Crisis is going completed unnoticed. Today, October 16th, is World Food Day yet all eyes are on the Stock Market and still-frozen Credit Markets. (Read Article)

The World Bank Predicts that the amount of Malnourished people in the World will increase by 44 Million this year. This is a very large number and it should worry us. It should especially worry us because, with inflation and the coming crash, those 44 Million people would be US Citizens. This is not a scenario that most people expect to face…the illusion of American Stability has been a long-running one, but it is quickly coming to an end.

If you aren’t used to pinching pennies and stretching your dollar then it is time that you start getting used to it. Stop buying “instant foods” and start buying bulk products that can be turned into more than just one meal. These “Penny Pincher” Ebooks are a great help and will teach you the Art of Living on a Dime (Click Here).

Decline of Health Care Coverage

The Cost of a DeValued Dollar is just beginning to show its ugly face in the public. The most obvious effect (or the one most people complain about) is the price of oil, but what about the future of US Health Care? Most employees in the US are confident that their employers will have Health Care coverage or that coverage can be purchased easily…this is no longer the case.

A Briefing from the Economic Policy Instute of Washington, DC recently said that Employer Sponsored Health Care has dropped from 68.3% in 2000 to 62.9% in 2007. Public Insurance Coverage has dropped from 18.5% to 14.9%. Click here for a copy of the Briefing.

When the Dot Com bubble exploded in the late 1990’s, the US government and Wall Street had a choice…to let a Recession happen so that the dollar and the market could fix prices to where they were supposed to be…or to flood the market with more “liquidity”. Greenspan (Fed Chairman at the time) chose to flood the market with liquidity, giving the illusion of prosperity for the United States but delaying the inevitable decline that we are experiencing now. The decline HAS been happening rapidly since that time (though most didn’t see it because of the brief properity offered by an inflated money supply), which means the dollar has been steadily getting weaker, and health care has become harder to provide.

Bare in mind that the numbers listed above only discuss the change from 2000 to 2007, none of the recent downturns in the economy are being discussed. This drop in coverage will continue and the rate of decline with become faster with each day that the dollar drops in value. If you rely on your Health Insurance then it would benefit you to look into another form of coverage from a more reliable source than your employer.

Visit the Online Insurance Advisor (click here).

The Austrian School of Economics has been predicting these Ups and Downs in the Economy with stunning accuracy for most of this century. They accurately predicted the Recessions of the 70s and 80s and even the inevitable decline that we are now facing. The Age of Inflation is a 5 Ebook collection from the Austrian School of Thought that is absolutely worth reading if you want to understand what is happening as Peter Schiff and Ron Paul understand.

“If Americans ever allow banks to control the issue of their currency, first by inflation and then by deflation, the banks will deprive the people of all property until their children will wake up homeless”
-Thomas Jefferson

Market Plunge

Despite the plan of Secretary of Treasury Paul and Fed Chairman Ben Bernanke, stock markets dropped again today. The Dow was down 733 (7.87%), the nasdaq was down 150.68 (-8.47%), and the s&p 500 fell by 90.17. These are not good numbers but it’s not the problem, it’s a symptom of the problem. The problem is the credit market. (read article)

The United States has borrowed itself into oblivion. Nobody is really to blame (or everyone is), the entire monetary system is based on debt. The more debt there is, the more money there is. This is why it is so tempting to create more debt. We see advertisements and promises for “no collateral” credit cards, loans and mortgages every day.

Unfortunately it doesn’t stop there. When you go and apply for a loan or mortgage, the bank exchanges your written promise to pay for money that it creates on the spot. The piece of paper with your written promise to pay on it is then considered a negotiable instrument or Money. This negotiable instrument is then bought, traded, and sold by people you have never met so that they can create even more debt by gambling with it for enormous amounts of money.

Often we think of money as the Physical Paper that we hold in our hands, but to the majority of the financial world money is numbers in a computer. That’s it, just numbers in a computer.

United States Money Supply

If you look at the diagram, you will notice that actual Cash (Currency) is the smallest fragment of the actual money that is being circulated. But remember, all of this money is Debt and that means that it is borrowed. And it is borrowed with Interest.

The United States Deficit is over $10 Trillion Dollars. This is just the debt of the United States Government, this does not include the debt of all the banks and insurance agencies in the united states. All of this debt is what creates the American Dollar. Unfortunately, each and every dollar that is created lowers the value of the dollar itself.

The United States Dollar is in for some hard times. Printing Money will not solve this mess (as the Stock Market showed today). If you can, exchange your US Dollars for Gold now.

Basically, the original plan of buying troubled stocks has been changed into purchasing stock in major banks to inject liquidity into the market. Will it Work? Jeffrey A. Miron breaks it down in his Commentary: Why this bailout is as bad as the last one.

Ron Paul News

This behavior is going to continue, I highly recommend reading my post Where To Buy Gold & Why You Should Buy It