Not worth the paper it's printed on

Wow I am back 6 months later and a lot I wrote about has come true, but who would have guessed this financial economic mess would be this bloody? Bear Stearns, Merrill Lynch, Lehman Bros, Wamu,Wachovia, HBOS, Bradford and Bingley all gone and a footnote in history. Billions of dollars written down and sadly now a $700bn bailout for Wall Street led by the clueless Hank Paulson.

I am not going to dwell on the causes of this crisis but will add that when this broke in August 2007 the lie by the media was that poor broke bad credit people were the cause. Nothing could be farther from the truth what about the guy who has two more properties and just carried on borrowing and stacking up debt on overvalued mortgaged to the hilt property? A economy built on debt cheap money, greed and more greed. The sooner we move away from Fiat currency and into Gold and Silver the better many of us will become.

Let's look at Fiat Currency what is it?

The terms fiat currency and fiat money relate to types of currency or money whose usefulness results, not from any intrinsic value or guarantee that it can be converted into gold or another currency, but instead from a government's order (fiat) that it must be accepted as a means of payment. The Central Banks can create inflation and other economic imbalances as the money they create has no backing ie Gold or Silver. Put in a nutshell the dis-advantage of Fiat money is that the Central bank can print as much as it likes this is a blessing and a curse as it normally leads to inflation or hyper-inflation (take a look at Zimbabwe) Where as with Gold it cannot be duplicated and is in limited supply.

So where do we go from here? The Dow like the most people's houses in America and Britain is still overvalued. There is a bigger fall to come and any banking bailout can only delay the inevitable. The underlying problem is that America's housing buble burst, making the mortgages beneath it untenable and sending the US economy into a tailspin. Buying off the banks does not address the issue; it merely removes $700bn that could have been spent on a proper stimulus package.

The dark truth about the US economy is that it doesn't benefit most people. That growth you always hear about means nothing to most of the population for whom wages have not risen since the 1970's

How many of you have read " The Dollar Crisis"? If you really want to get a true understanding of what is happening you must read this book. As McCain and Obama battle out the election campaign whoever wins will have very little room to move what great plans they both had for the Country will have to be scaled back simply put this generation and generation to come have been mortgaged to the hilt it will take years to un-ravel this almight mess.

I am going to check out my pension portfolio and seriously look at adding Gold and Silver.