The End of the World? Probably not.....

This country has gone through fifteen or so recessions since its formation. During every single one, pundits have presented "hard evidence" that the system we are built on is destined for collapse. It's very easy to get sucked in to doomsday theories and end up in your basement with bottled water and a shotgun waiting for the inevitable collapse of civilized society. Why? It's our nature. When prehistoric man heard the grass ruffle he was immediately alarmed and on guard. Most times it's probably the wind, but if you're wrong even once and it's a lion, your lunch. It's costs you nothing to be alarmed but your life if your eaten, hence, we are defensive by nature. But in today's day and age, panic can cost you a lot more than it did your prehistoric ancestor. Recently, even I have been drinking the Armageddon flavored Kool-Aid whipping myself into a panic over the nature of FIAT currencies and how we're on the verge of a complete global economic breakdown. The evidence is there. We have hyper-inflation caused by central banks all over the world manically printing paper for the past 40 years (check out this video from August 15, 1971 of Nixon announcing the new FIAT monetary system and ending the dollars linkage to gold. Happy Anniversary!)



coupled with mortgage (U.S) and sovereign (EU) debt crises. Add to that the worldwide civil unrest from the Middle East, China, London, and Greece which is expected to soon spill over in to the streets of Italy and Spain, and it looks pretty dire. The best evidence of this is the recent price of gold. It as an illusion the "value" of gold is rising. While the price of gold is rising, the value is virtually the same. What increases value is Supply and Demand. We don't have less gold, in fact we pull more out of the ground all the time. The only increase in demand is from the investment class either hedging against the depreciation of currency, or as speculation. There's only nominal increases in industrial/cosmetic demand. The value of gold isn't increasing, the value of FIAT currency is decreasing! Did I blow your mind? Anyway, while I believe everyone should have 10%-20% of their portfolio in gold as both an investment and a hedge, anymore than that is too much. If you don't have a lot of money, buy the gold ETF (GLD). If you're caked, buy "Swiss 20 franc gold pieces" and keep them half  in an offshore safety deposit box in a non-U.S. affiliated bank, and the other half at a local bank. Not to hide wealth from the tax man but just for security in case the "revolution" comes. Also, always keep 10%-20% of your portfolio in cash, both your home currency and that of your offshore bank's, and split it between the two safety deposit boxes. But I digress. I've almost forgotten this post is about how it's probably NOT the end of the world.

After working myself into a frothy lather the past couple weeks over hyper-inflated FIAT currencies, debt crises and the rising cost gold, it took none other than the "Oracle of Omaha", Warren Buffett, to place my feet firmly back on the ground. I strongly encourage you to watch the whole 53 minutes. He's a little too optimistic, but his underlying themes are dead on.

Ladies and Gentlemen, the Oracle of Omaha:



Europe will calm down when the Europeans get back from vacation. The Fed will inject QE3 if necessary. Corporations have been going strong until last month and there's no reason that should change after this "uncomfortable" period ends. Stay positive. Peace :)