In today’s Uncommon Money News post, one of the articles, entitled “Impending Destruction of the U.S. Economy,” detailed the fragile state of the U.S. economy. The author cited several statistics including how a few years ago the euro was worth 85 cents (US), but today it is worth $1.48. My opinion is that with the rest of the world economies continuing to inflate (meaning their prices continue to increase) and a war that costs $500K a minute, it is possible (not certain) that we are headed for a recession.
Believe it or not, the problem isn’t too little money but too many dollars. The world is choking on too many U.S. dollars. Due to the subprime meltdown, we can’t simply raise interest rates to correct the problem, as it would wreak havoc on overextended mortgage holders. Consequently, the international economy is essentially dumping the dollar by not buying U.S. bonds.
You may ask what does this have to do with a personal finance site. I would never claim that doom is on the horizon; still, it is now more critical than ever to appropriately manage your finances. This includes minimizing your financial risk and considering a portfolio that includes both domestic and international stocks/mutual funds/ETFs. Set yourself up to weather a financial storm. Even if one doesn’t occur soon, you will be in a better financial state.
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Copyright 2012, Roshawn Watson, Pharm.D., Ph.D. All Rights Reserved.