There are many who believe that America’s economy has gone beyond the point of no return. In other words, we’re going down, and it’s just a matter of how far and how fast.

If that’s the case, what should you do? First of all, houses and buildings will continue to stand. Personal property will continue to exist (i.e. tools, cars, appliances etc.). With that in mind, will we be able to hold on to them? If you’re in debt, you may not be able to. For example, you buy a home for $500,000, and you have a $450,000 mortgage, and then the bottom falls out, and your property drops 50% to $250,000. It’s still a house and it provides the functions of shelter, but now, you have a $450,000 mortgage on a $250,000 house. Sadly, mortgages don’t go down when the price of homes go down. If you can keep your income in line, then you can continue to pay for it, but if you have to take a pay cut, or worse yet, you lose your job, then what? This is a real problem that takes place in a declining economy.

The following factors determine economic health; Inflation which is the increase in the supply of money and credit, deflation which is the decrease of the supply of money and credit. Currently, we are in a deflationary cycle with the supply of money having been reduced by 5% over the last year, while interest rates (credit) have gone up. Debt is becoming more expensive, and the money to pay for the debt is becoming harder to come by. What is the logical conclusion of that dilemma? Bankruptcy! SVB or Signature bank anyone? Watch out for Credit Suisse as well.

An additional factor in the price of goods and services is supply and demand. The destruction of over 10 million chickens because of the avian flu, has decreased the supply of eggs so that even in a deflationary cycle, the demand for eggs exceeds the supply, and so you see rising prices in a deflationary economy. What do you do in times like this? Hold cash, precious metals, art, real estate (if you can afford to hold on to it), gem stones, and most of all, be out of debt. We, Americans, have a rough road ahead of us and only the prudent will survive.

ED DOWD SAYS “AMERICAN ECONOMY IS GOING DOWN”; IT’S JUST A MATTER OF HOW FAST!

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