Open for Localism

Why is our ability to economically coexist together so dam complicated? If we are so smart, why is our economy so stupid? Future contracts, derivatives, insurance. Did we build this global economy house of cards, or did we inherit it? Either way, can we please take it down before it crumbles?

With China raising interest rates twice in the past month; and oil, electricity and gold perpetually rising in US Dollar terms, the purchasing power of the US Dollar is nearing panic mode. A frenzy-like rise, if you will. Gold is trending like it may even be the next Google, or will it be oil? The continued rise in oil specifically, will have dramatic effects across the U.S. and Europe’s economy that will be felt for years to come. It is no help that our seemingly long time best bud, China, is now in control of world interest rate levels, and on their way to world economic dominance. In my opinion, such a rising interest rate environment will instantaneously crater what’s left of the fragile US housing market, bankrupt Wall Street (again), and take down our interest-tied, debt-ridden municipalities with it.

Personally, I find myself at odds with the whole thing. Please let me explain. I saw and bought Gold at $400 per ounce in 2004 and hung tight with it as it tripled in price, right up until this moment. And in my opinion, as the U.S. and Europe are forced to borrow more and more to pay for increased borrowing costs (higher interest rates), and caught in a perpetual cycle; Gold is ripe to double or triple in price again from this point forward. However, I am at the point where I am fearful to root for Gold’s rise any longer. You see, I am betting my personal investment savings on Gold, and as Gold rises in price, the dollar is plummeting in relative terms; and although it seems like I am “winning” the financial poker game, I view myself truthfully shortsighted in my financial glory. I am very concerned that if Gold continues to rise further and further, the economic riches that find their way into the American economy will be gone for a long, long time; and potentially chaos may even pursue.

I am fearful of such an outcome; the unknown of it all. But inside, I hope things will turn out different. I hope we won’t depend on bailout funds this time around, because the tens of trillions of dollars required won’t be there. I hope we consciously shift our intentions now, so there will be a new outcome, while the U.S. Dollar’s purchasing power is still trusted. I hope we become  aware of our economic reality, embrace a different financial strategy, and start saving some usable acorns like renewable energy just in case its a long, long winter.

In my opinion, we have two choices: 1.) we can freeze-up and hoard our tremendous personal and institutional savings, which will only create more panic, more empty houses, more unused cars and higher unemployment, or  2.) we can invest it calmly and intelligently to our own benefit. You see, our weakness is also our strength. As I described above, the economic system is currently very weak, so a strategic attack or aggressive investment now would be both economically and financially advantageous. Makes sense, right?

Attached is an outline of such a strategic attack called a Local Investment Fund, with a focus on renewable energy and real estate. As investors, our timing to acquire local assets at rock bottom prices, as well as create energy competition in the local markets, is impeccable. Remember, only a 5-10% allocation of our savings towards such a fund would dramatically shift the economic energy to the local economy. The local economy will soon prove to be the best place to protect our savings while improving our lifestyle and happiness. The Local Investment Fund will be invested locally, in front of our own eyes. Such a local investment strategy allows us to physically touch and feel the assets that comprise our savings, actually explain how our financial return is generated, and personally meet the team that is responsible to protect and grow our savings; all the while igniting local job growth and lowering cost of living.

Happy New Year!

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