Unsustainable US Debt Projections: Part 4

Unsustainable US Debt Projections: Part 4 Image

Part 4 of 4: Individual Responses Proposed (Review Part 1, Part 2 and Part 3)

What Do We Do From Here?

What do we do with our investments to be good stewards of God’s money He has provided to us to manage?   From this analysis, clearly Washington is not our savior.   It is suggested that each individual prepare for the inevitable financial collapse of the US financial system and do it soon.

Presented are two possibilities among an infinite variety.  First is the modern portfolio theory which is quite good and well thought out.  Many people adhere to this theory and have done well for themselves over the long term.   If you believe in this theory and not in what has been presented as a view of the future, it is highly recommended that the modern portfolio theory strategy be followed.  However, if what was presented makes some sense then read on under the heading Financial Collapse for some thoughts to ponder.

Modern Portfolio Theory:

First, a brief excursion into modern portfolio theory.   This theory says to invest in two assets, some sort of short term cash or equivalents and a market weighted basket of all other securities in the world.  With modern ETF’s this is becoming possible.  This is the most efficient way to have the highest return for the lowest level of risk.  And it incorporates all classes of assets in the world at their weighted proportion in the world today.  So stocks and bonds in all countries, real estate, cash, and all forms of commodities including gold are represented in the asset purchased.

Financial Collapse:

What assets are there to invest in and what will be the likely winners in times of financial collapse, meaning that the dollar will hyper inflate to nothingness as has all past fiat currencies in the world?

There are five classes of investments:  cash, bonds, stocks, real estate and commodities.

Clearly cash and bonds will be utterly devastated as the dollar hyper-inflates to zero.

Stocks may be OK if companies are astute in understanding  the financial times.  How astute is the company you are invested in?

Real estate can not be destroyed, but many property owners will not have the money to maintain their properties or pay the ever increasing tax burden.  While prices may go up, other than owning your home outright, this does not appear to make the most sense.

Commodities: These will always be in demand.  There are many classes to consider.

Shelter:  Housing, building supplies and the like.

Water:  For drinking, growing food, cleaning etc.

Food stuffs: Corn, rice, wheat, porkbellies and the like.

Clothing:  Cotton, polymers and the like.

Storehouse of value:  Platinum, silver, gold and the like.

Energy:  Natural gas, oil, coal, wood, nuclear, hydro and the like.

Weapons:  Strictly and solely for self defense.  And do not forget the ammunition.

But of these only water, food, shelter, weapons, and gold make sense.  You must have the first three to live, the fourth to protect your self and your family, the fifth as the storehouse of value of your lifetime of labor.  Gold is valuable due to scarcity.  All the gold ever known in the world would fit into a cube 63 feet on one side.  It has no other claims against it when you own it.   It is portable since a small amount of it is quite valuable.  It is recognized around the world as money!  Who do you know that will not accept gold in exchange for other goods?

Lastly, the fall of the world’s governments is predicted to come in the end times setting up a one world government and the rise of the Antichrist.  The rest is revealed in the Book of Revelation.   Do you know God by confessing your sins and asking for His forgiveness so that you will be in heaven with Him when you pass from this life?  If not, now is the time to ask Him into your heart.

About the Author: William J. Michie, Jr. has a BS and MS degree in Chemical Engineering from Drexel University and an MBA degree from Rutgers University.  He has had a 32.5 year career in Polyethylene Product Development with Union Carbide and Dow Chemical Corp. and is the holder of a number of patents. H. Marsman and D. Madio also contributed to this article.

About The Author: William has a BS and MS degree in Chemical Engineering from Drexel University and an MBA degree from Rutgers University. He has had a 32.5 year career in Polyethylene Product Development with Union Carbide and Dow Chemical Corp. and is the holder of a number of patents.