One recent article in U.S. News and World Report related to recouping 401k losses, asked the question Ã¢â‚¬Å“How long will it take to get back?Ã¢â‚¬Â. The article made it sound so easy to accomplish the rebuild but there is a problem. The problem is with the word “IF”. If the market grows at a specific rate . . . If neither spouse loses their job or has to take a cut in either pay or hours . . . If neither spouse gets sick or has an accident . . . If inflation does not strike . . . If taxes don’t increase . . . If loan or credit card rates don’t climb . . . etc. Another recent headline from the Associated Press read: “Obama: Global economy Ã¢â‚¬Ëœback from the brink”. We have not even hit the worst of it yet and he is claiming that we have come back from the brink. This is not a perfect world folks and we know that some specific negatives are going to hit. Here are some examples:
(1) At least one more round of foreclosures because the President and Congress have done nothing to promote legislation to help create jobs in America, Keep jobs in America, or bring jobs back to America and the President could have promoted and requested such legislation from Congress.
(2) Failed mortgages on commercial properties will be the number two item to hit us and it will hit us hard.
(3) More bank failures are on the way and again . . . a very hard hit.
(4) Insolvency of the FDIC, which has already started. The FDIC is currently active in trying to borrow the taxpayer dollars the government used to bail the banks out, back from the banks. Nice isn’t it when they borrow our money and then charge us a much higher rate of interest to loan it back to us?
(5) Continued rising numbers of unemployed American Taxpayers – more jobs are being lost every day than are being created and with the restrictive laws we have in place, it isn’t likely to change soon.
(6) Inflation – it is not possible to hold off forever the inflation that we are bound to experience from the insane level of spending that this administration has been doing. Eventually, the piper must be paid. Some economists are predicting hyperinflation. Even if we do not experience hyperinflation, we will almost certainly experience inflation that will surpass even the worst seen during the Carter years. The question is when? . . . not if?
This is actually frightening! Our President simply has no clue what so ever . . . . or does he?
So, the issue really is Ã¢â‚¬Å“Is the President really that out-of-touch or is this just another smokescreen from the Whitehouse propaganda machineÃ¢â‚¬Â? There is an old saying . . . Ã¢â‚¬Å“If ifs and buts were candy and nuts, what a wonderful Christmas this would be!Ã¢â‚¬Â That saying could be applied to the economy right now. My suggestion is to pull in whatever you can convert to ready cash and sit on it in a guaranteed interest rate account of some type, where it has some protection. I believe that the market will drop below 7,000 long before it ever hits 14,000. There are just too many negative happenings waiting in the wings.
Robert M. Collinsworth
PO Box 119
119 Hancock Rd
Harrisville, NH 03450-0119