A Reason to Recession and Inflation Proof Your Income

If you are someone who has been listening to the news about the Global Financial Crisis for
the past year or so, you are probably a little bored with some of the often repetitive
gloom.

Unless, like my friend Audie from Cinncinnati, who was laid off over a year ago, you are
listening and watching the news like a hawk, looking for the silver lining. Try to imagine
the pain, fear and frustration that he and his family feel.

But that is the good news - Audie is still positive, and his chats with me are upbeat and
full of self-deprecating humor.

I have been talking with him about the potential of on-line business, but he has an almost
uncanny belief in the power of the Chinese to bail everyone out, and is "waiting" until
things get back to "normal"

Two questions: What is normal? And Why will the Chinese help the rest of the world "get back
to normal?

Newsflash: No-one now knows what normal is; The Chinese are starting to feel the pain of
unchecked growth, with climbing inflation, that will eventually force them to act on their
currency.

Now here is the bad news: The US and the rest of the world are borrowing money from the
Chinese to stimulate their economies. They on-lend the money to banks and other
institutions, who are supposed to lend the money to people so that they can finance
businesses, service long-term liabilities, and to pay for "toys" that most are addicted to.

The banks know the real situation, and make a lot of noise about lending, but sit on the
money, because they know the reality - they are deferring losses, and they have to hoard
cash for the shake-out...

Think about it. Would you lend money out knowing that you needed it to pay for your own
inflated liabilities, sometime in the near future? If you were certain that, eventually,
cash was the only thing that would save you. Not property, falling in value, or unable to
be sold at anywhere near the Book Value. Not shares, that are so volatile that a 15% swing
in a month is not unusual anymore.

So, there is much more pain to come, unless there is a miracle, and the truly rich stop
sitting on their hands, and start lifting the awful burden that Audie and Co. carry.

I am not talking about helping those who won't help themselves, or about paying for the
toys that all walks of life seem to take for granted. I am talking about funding education
and re-training the hundreds of thousands of people who lost their jobs, for those who are
genuinely up the creek without the proverbial paddle.

Providing real jobs, even if those jobs involve public works, or perish the thought, public
housing. Real education, in fields that are future focused, rather than entertainment
support systems.

Recent comments by Alan Greenspan in the Wall Street Journal about US Federal Debt levels
are also worth considering. He repeated the truism that the US Government can produce money
at will, so there is no credit risk. But he also repeated that there is a definite
interest rate risk.

The US interest rates are still at near zero. But remember, (I can, but I am a boomer) in
1979/80 over the space of 4 months, the effective rates of interest increased by 4%. The
prime rate, that charged by the banks was 15.6%.

Debt as a percentage of the GDP rose from 38% in June 08 to 59% in June 2010. How much
more can this increase with out substantial movement in interest rates? I am not trying to
frighten anyone, but we need to look at the facts.

So, it is a no brainer. Inflation sooner or later, is going to hit. Hard. People everywhere
will need to find ways to Recession and Inflation Proof their incomes.

If you are interested in this, go to Don Paul Fuller's website,
http://www.yourworkathomebusiness.biz and learn how to start doing just that...