The Great Crash of 2016
Perhaps you’ve been able to avoid the financial news since the beginning of the year and haven’t peeked at your financial portfolio. Maybe you hope it will reverse itself, somehow. Lower prices at the gas pump are nice, but it means your retirement savings are burning up too.
Financial gurus are busy explaining, but it can be summarized this way: we’re screwed.
- Zero interest. The world’s central banks zero interest policy has “encouraged” dutiful money savers to invest money in riskier ventures (stocks). This includes the holders of pension plans and those managing retirement accounts.
- Monopoly money. Globally, nations have chosen to print money that has no backing. This has accomplished building the largest mountain of personal and national debt—ever.
- Las Vegas-styled banking. Rather than being careful stewards of loaning money, banks have created “derivative products”. Most of us have no idea what these are. But know this: the contracts for these obligations are six times MORE than the world’s gross national product.
- Empty promises. Government programs are bleeding red. We can’t tax our way out of it either. Programs without funding are between 100-200 Trillion. That includes social security and medicare.
So as we watch the stock market gyrate, politicians speculate, and economic geeks articulate, just remember that it’s up to us to formulate.
Let’s plan on being better stewards of our resources. Get out of debt. Understand fiscal policies and their consequences.
It may not be as exciting as what’s on Netflix, but trust me, if we don't take an interest in this financial crisis, we’ll be standing in a bread line instead.