Does Uncle Sam Need You?

Does Uncle Sam need you? I sure think so. Now more than ever.

Yesterday, the Federal Reserve lowered the Federal Funds rate by another .75% which is being hailed as a great thing by many newspaper columnist and market watchers. While the benefits of this action will be noticeable for the players on Wall Street, they will be short lived at best. This is a short term solution to a long term problem, and it will actually serve to make the REAL problem worse.

So, oh wise one, "What IS the real problem?" you ask. Well grasshopper, the REAL problem is a dollar that is falling at a speed that would make Dale Jr. nervous. If Dale is nervous, we should be too.

If you are realizing that prices on the things you buy seem to be a lot higher these days, you are absolutely correct! I am not just talking about the cost of gas at the pump. I am talking about milk, cereals, meats etc. You know, the basics. Good grief, a gallon of milk costs more than a gallon of gas!

I don't think I can get out of the grocery store these days for less than about $160 a week. Although, if you read the newspapers and believe what they are saying, inflation hasn't actually shown up at the economic party yet. You had better brace yourself, because if it isn't here, it is on the way. BIG TIME.

The only reason it hasn't reared it's head yet is that our government has removed the cost of oil, food and how much currency that is in circulation from the calculation. The result is low numbers and a false sense of security. This new formula makes the math on Global Warming look like Einstein himself did it.

I don't know about you, but I kind of think those things are a little important to our economy. We are being given only a part of the truth when it comes to our real economic state. So, is a half truth really a lie?

When the Fed lowers the federal funds rate; banks and consumers ultimately, have more ready access to cash, which can be borrowed. This puts more currency into circulation, which serves to deflate the "value" of a dollar. If a dollar is worth LESS, then it will take MORE dollars to fulfill the true costs of a particular good or service. Thus, INFLATING the price.

THIS is exactly why a barrel of oil goes for $110 these days, and why families are now having to pony up $400 to $500 a month for gasoline to get back and forth to work. It now costs as much every month to actually RUN your car as it does to buy it! That's what is going on here in OUR country.

On the international scene, nations like Iran and Venezuela, two oil producing countries, (who are not exactly our pals) are now selling their oil on the open market for other currencies and they will not take the U.S. Dollar. At the same time, China is currently booming economically, and they are buying oil like it is going out of style. Purportedly, to increase their strategic petroleum reserves, which is driving the price even higher.

When the United States came off the the gold standard, the "dollar" replaced gold as the standard for many economies around the world. Our country has benefited from this enormously, and in order to remain an economic super power we need it to remain that way.

The falling value of the dollar is causing many countries to rethink their strategy of using the US Dollar as a standard. In fact, several countries have already begun to transition to a different currency. This is not good for the home team.

Converting to a different currency requires them to sell or unload their dollars in the currency market. This selling off will ultimately lead to substantially higher inflation, similar or worse than what the United States experienced in the mid to late 1970's. For those of you who remember, we had gas lines and 16% mortgage rates for people with good credit, and polyester leisure suits too. None of it was good.

So, what does all of this have to do with becoming debt free, which is the main topic here? The ONLY way to stop the bleeding of the the U.S. Dollar is to have our government reduce spending (good luck with that), decrease our dependence on foreign oil (stop laughing!) and for the average American family to get themselves out of debt. You may not be able to do much about the first two, but you can sure control the last item. You need to save yourself or you will go down with the ship.

By getting your family out of debt, you will have more disposable cash and you will save thousands of dollars in interest expenses, and have choices about your future. Choices, that is what freedom is all about. Freedom to choose where you live, who will represent YOU in our government, what you do for a living, etc. Quite frankly, I believe this is the single most important financial step you you can take for yourself. It has never been more important than it is now.

If most American families did the same, the banks would have increased liquidity and not need the Federal Reserve to help them. This will help to prop up the dollar and most importantly, it is our duty as freedom loving Americans to do what we can to protect our economy and our country.

I believe that the best America has to offer is yet to come, but we face a world unlike anything we have known before. Our enemies know we have the worlds most powerful military, and they cannot win on the battlefield. The only way we can be defeated is economically. The first step is to devalue our currency, and it is happening NOW.

So, in case you haven't noticed, there is a war going on, and it is not just being fought in Iraq and Afghanistan. The fight is on, and I hope you join me in becoming debt free. Your country and your future needs you. Will you answer the call?

Email me at jimsetters@debtmastersllc.com to learn more on how you can become debt free faster than you ever thought possible. God bless you and May God continue to Bless America.

The Real Reasons the "Mortgage Meltdown" is happening

Today I read an article in the paper that stated HUD was going to implement new rules that would protect home owner's from the big bad, predatory lenders. I have been seeing this kind of drivel in the papers and on the evening news for a while now, and I have had enough.

Every good story needs a hero and a villain, and in this case mortgage lenders and mortgage brokers are being made out to be evil, predatory, foul and untrustworthy. If there wasn't a market for these products no one would use them. Now that is not to say that there aren't bad people in the lending business, because every industry has their share of pirates and crooks. These people definitely need to be driven out of the business at a minimum. But, I can attest to my experience over the past 17 years, that the people I know in the financial services are good, honest hard working people who truly care about their clients and work very hard to help them.

So, rather than be complacent and not speak the truth, which most people don't want to hear, I would like to share what I believe to be the REAL reasons of the so called housing crisis. Stand back, because here it comes, (this has been brewing for a while)

Lack of Jobs, Loss of industry, ridiculous taxes on businesses and payroll, insane gas prices, a lack of refining capacity because of weird and wacky environmentalism, food costs going through the roof, inflation numbers that are cooked to look good, credit card debts that are out of control, credit card payments that were doubled in 2007 by the governments own rules, a banking industry that could care less about the damage it creates much less be held accountable for it, repeated Fed rate increases to stop inflation (which according to them wasn't really happening but could happen), Alan Greenspan recommending adjustable rate mortgages be offered by mortgage lenders in greater numbers, a mindset that the American public is too dumb and cannot make good decisions about their own finances and therefore are not responsible for any of their decisions, and last but not least...


Drum roll please..... a government that is so out of touch with the people, it is utterly ridiculous to think they can solve the problem when they have created it. The national mottos is "In God We Trust" but somehow we are supposed to make the leap, once again, that the government can stop their own carnage and solve our problem. the truth is that they ARE the problem or at least a big part of it.

The image of the Department of Housing and Urban Development riding in on a white steed, frantically waving additional regulations to save the day, is enough to make a person wretch. Call me silly, but to me, it is tantamount to letting a convicted thief come in to your home and charge you to explain how HE would rip you off in the guise of helping you. He still got your cash.

Did I miss anything? Whew! That felt good, now on to what we must do to fix this mess.