Jon Bon’s Money

This is a chart representing the amount of debt that the Federal Government of the United States of America is responsible for. This number just under 13 Trillion dollars! To most people trillion is not a word that we say very often, it even sounds a little made up. “I am so hungry I could eat a trillion hotdogs!”  see this is funny stuff.

To break it down a little bit more this debt is held by the U.S. Government and therefore by the taxpayers of the Untied States. So if we do that math of 13 Trillion divided by 300 million or so Americans, your share comes out to be around $43,000!

What would you do with $40,000 in debt? That is a serious chunk of change. I probably would be on a diet of Ramen noodles and Water for the next 10 years or so. This enormous debt held by the federal government is starting to worry me.

Inflation

Does anyone realize what (serious) inflation can do? It can wipe out 30 years of hard earned savings in a year or less. To me it would feel like someone robbed my bank and took all my money. Say you have $40,000 in the bank but the government starts printing money to fulfill its debt obligations. All that is going to happen is cause dollars to be worth less and less. Maybe in one year your 40,000 could only buy what 20,000 could a year ago. Then the year after that 10,000, then maybe only 5,000;

So after a while all the cash you had is pretty much worthless and the government introduces a new type of dollar bill:

 (This is a real note, and the direct result of what happens when governments print money)

Inflation on this scale is a scary and very real possibility. I worry that our government (democrat and republican) is unwilling to stop its spending binge, and some painful inflation is all but inevitable. I would encourage everyone to hedge against inflation. The best way to do this is to buy “hard” assets such as gold and oil, foreign currencies like pounds, yen, or Euros even stocks and real-estate offer some protection against inflation.