You just know that the GOP will fold and give the DNC a raise in the debt limit for the US.
They have, in fact, already proposed it, albeit with some concessions.
Eventually they will, like in the past, fold and let things happen the DNC way.
If they do this (again!), then everything you have saved, every dollar in your IRA and in your bank account, will be worth even less. That $10/20/40/50/80/100 thousand you have put back for your "Golden Years" will buy even less in your retirement than it does today.
Forget being able to go shooting and travelling in your retirement, you are gonna be happy you can buy enough to eat.....
Everytime they raise the debt limit of the US, they generate dollars out of free air. Just conjure them up into existence.
This makes the existing dollars worth, proportionately, less.
Now, if you are paying off long term debt, then this isn't a bad thing...sorta. If you are paying off a mortgage or business loan, then this is kinda nice. You are paying off a loan taken out in, say, 2000 in dollars that are worth about half as much in 2013. Same dollar number, they just have less value...they'll buy less.
This is part of why food and fuel and ammo cost more than they did 5 or 10 or 20 years ago. THat dollar you use to buy is worth less because it has no real value except for what someone else will give you for it. It is based, not in gold or silver or other tangibles, but on the "full faith and credit of the United States". Which means very little when the dollar supply keeps growing.The rest of the world has evaluated what the "full faith and credit" is worth....less every day.
Now if you were a Saudi, or a Chinese, and you were selling your oil or labor or tin or lead or whatever to a guy who just keeps making more money, with nothing backing it, would'nt you want more of those dollars for your stuff? They are only worth what some other guy will give you for them, and you can't buy as much with them as you did last year...
I sincerely hope that the debt limit becomes a hard ceiling. It'll stop the devaluation of my retirement.
I'd like to have enough to spend on wild women and good whiskey, rather than dog food and cheap wine.
I'm coming to your neck of the woods this weekend, speaking at ERM's Third Annual Winter Seminar in Portland, CT on Satu[...]
2 days ago