We like to believe that everything is going to be OK, that we'll get through our little setbacks and problems just fine, like we always have. To the extent that the sun will keep rising, yes, that's true. But it may keep rising even though all the assets you thought you owned in the bank are now part of someone else's account. When government itself permits or causes theft, real chaos and economic ruin can follow. You might have missed some of the alarming details about the failure of MF Global recently, but you should dig into this story. Regulators appear to have allowed a crooked CEO to steal the cash that people had deposited to pay for his horrific losses in highly leveraged futures trading. Something that is not supposed to happen, that should never happen, simply happened, with tacit government approval. Mysteriously, $630 million has just disappeared right under regulator's noses. For some, like Ann Barnhardt of Barnhardt Capital Management, the theft is a signal that the rule of law has ended in the United States and that we have become a kleptocracy (warning: she makes an nasty statement toward one party when the problem has become much more bipartisan). Feeling that her clients can no longer be secure in such a system, she's pulling the plug on her business. Worry about the implications of the MF Global crime? Yawn--I know, it wasn't your money. This time.

What happened may be a rare exception, limited to the commodities area and not necessarily applicable to whatever investments you may have. But that it could happen at all is quite unsettling.

Even if the electronic digits that represent your economic assets are secure, even if your cash balances remain untouched and not locked up by regulators or simply swiped, we also face the burden of devastating national debt, now $15 trillion worth plus obligations far beyond that. We'll be footing some of the bill for Europe and facing unpredictable consequences of their horrific debt. The US and Euro governments are stuck in a paradigm of printing money to solve our problems (and subsidizing big banks with artificially low interest rates that further transfers wealth away from citizens who pay them interest on the treasuries they buy with the money they borrow from us for almost free). This cannot go on without consequences, including the ongoing erosion of the dollar. It has lost over 95% of its value since the Federal Reserve began taking charge of our money supply to "protect" us. Adding trillions more to the effective money supply will inevitably erode the value of the dollar in the future--a form of theft, of redistributing your wealth into the hands of the Government, Inc. and their pals.

So is this a time to panic and fall into boundless despair? No, not at all. That doesn't come for a few weeks yet. But this is a time to avoid unnecessary debt, to become more frugal, to build up your food storage, to diversify, to maintain some cash reserves (some precious metals might help one day--a few handfuls of silver coins, for example), to have some fuel, water, and clothing on hand, and to make sure you have 72-hour kits in case of emergency. Be prepared--that's all I'm saying, really. Recognize that we live in perilous times where what we take for granted, like the rule of law and property rights, might not apply when you need it. I hope everything will be OK and that we'll get our debt under control without serious trouble, just like Greece has--wait, I mean Italy, no, Spain, uh, Zambia? Help me out, it's on the tip of my tongue--what was the name of that country that had been cranking out new money like we are and then managed to reduce their debt and fix everything smoothly without serious social and economic trouble? Utopia? Atlantis? Disneyland? Mental block, sorry.
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