PART II
COPING WITH THE DECLINE OF THE U.S. ECONOMY
Part II makes several economic predictions that strongly indicate that the U.S. will eventually suffer an economic collapse, most probably in the next 5 - 15 years. This is because we cannot continue indefinitely to drain our wealth by importing more than we export. Neither can we indefinitely compete in the global marketplace when our labor costs are several times that of countries like China and India. They take our money and modernize their manufacturing plants and become even more competitive. There is a limit to the number of jobs we can outsource to other countries and be able to provide employment to our workforce. Reality is that in the face of this decline Corporate America is becoming a less stable, less safe place to be.
This problem is further exacerbated by the demands of an aging population. As our population turns retirement age it will strain the social security system, and as the elderly withdraw money from their retirement programs, to pay tax obligations and to live on, further downward pressure will be placed on the stock market.
There will come a point where this downward spiral will reach critical proportions and the only way to restore economic balance will be for the U.S. to devalue its currency enabling its labor force to compete in the global marketplace.
The good news is that with the right investment strategy you can bridge such an economic crisis and substantially protect your assets. The investment recommendations that are made in this book are specifically designed to do well in both a good economy and a down turn economy. They are specifically intended to provide broad based diversification so that investor’s exposure is minimized. This section sets the stage for specific investment strategies by providing a long term view of the effects of Globalization on the U.S. job market and the U.S. economy.
As the U.S. economy destabilizes it will be imperative that we, individually and as a society, cease defining our worth based on our material possessions. Faced with financial decline, we need to learn to live within our means, spend less than we make and save the difference. If we put too much emphasis on materialism we become nothing more than indentured servants. We lose control of our lives and reach a point where the pursuit of money brings us unhappiness.
These global changes are creating a new reality where each and every one of us needs to learn to be responsible for his every action. We can no longer afford to depend on the Government or the Corporations to take care of us. We must assume responsibility for our actions and choose carefully what we want because our choices have consequences. Lastly, we need to reflect on the true cost of material consumption and accept the fact that we individually and collectively are the cause of the problem so we are individually and collectively the solution as well!