Disclaimer: I'm not a financial expert, I'm a software developer. But in this role, I've worked and developed software for the military, for intelligence services, online game studios (seriously, see below why) and banks, and have a bit of an insight about what is going on and what will happen in the near future.
If you watched the news recently, you might be a bit amazed about the strange contradicting headlines. On the one side, we appear to be in a economic recovery phase (or even boom) but are surrounded by failed states, exploding deficits and failing currencies. How does this make sense? And what does this mean?
What is going on?
Basically: Currently we have a financial industry which is bigger than any other industry. It manages and generates more money than anything else, although it doesn't even produce anything. It basically generates money out of thin air. If you ever worked on the game design of a virtual world it's pretty clear that this doesn't work for a long time. Sooner or later the money system in your game world will stop working. That's what nearly happened in 2007. But instead of 'resetting' the game world, the politicians decided to let the banks continue. They 'fixed' the buggy system by pushing out more non-existing money out of thin air.
This worked for a short time, since this whole system now is based on trust in the system and confidence in the future development of the system. People simply believed that the bugfix worked. But it didn't, because they actually didn't fix anything. And now it is breaking down again. There are so many signs for this, you only have to take a look into a newspaper, for example from today:
- The FED is currently literally printing 200 billion dollars per month. This is basically theft: For every printed dollar, the dollar in your pocket is worth less. And with this record rate of dollar printing, it will be soon worth nothing.
- The Gold price is currently exploding. Every day, we currently see record highs, and gold is soon hitting the 1500 value. Gold is basically the clinical thermometer of the economy. And today, it says something is really out of control.
- Greek government bonds now have a new record interest rate: 18,3 percent. It's clear that no one ever will pay this back again.
- Oil price: No comment :)
What will happen now?
IMO, there it's not possible to prevent the collapse anymore. The politicians have shown that they are incapable of even thinking about counter measures, and the bankers now switched to the squeeze-every-money-out-of-the-system-as-long-as-it's-still-possible mode. They know: If they succeed, they get the money, if they fail, the governments will print more money to save them. Nice setup, right? Also: Take a look at history. Every FIAT money system
has broken down. It usually leads to hyperinflation. The only thing nobody knows today for sure when the time will be.
What can you do about it?
If you have some money lying around, it will soon be worth nothing. Buy something of value with it. Like silver, gold or if you have a lot of money: real estate. Some piece of land, a house, or whatever. And then wait for the collapse and smile. And even if it doesn't happen: You've lost nothing then.