Day by day, more bad news about the economy has been rolling in. Many major banks have had to go hat in hand to foreign governments to get capital, the government stepped in to prevent the collapse of Bear Stearns and now it appears that Freddie Mac and Sallie Mae will collapse. Freddie Mac and Sallie Mae are by far the biggest providers of financing for mortgages in America and since the government set them up with special privileges and rules, the government is expected to step in and help them. What does this mean? The US government will take on another $5 trillion in debt. Our national debt is already staggering our country and much more is going to see Uncle Sam completely collapse under the load. The US dollar has been on a steep downward trend recently because people no longer believe that “the full faith and credit of the United States of America” is worth what it once was. Many serious issues are all coming to a head now and I expect we will see deadly serious economic damage in the coming years.
What should you do to protect yourself from the risk of American economic collapse? Unfortunately, there is not too much that you can do. I have put my investment assets into funds investing in developing countries stocks (which I think will be hit less hard than the rest of the global economy. I haven’t turned into one of those nuts stockpiling food, guns & water… yet.