My Thoughts

Have been reading a few interesting things in the last few days and wonder what implications it will have over the long term.

Reserve Currency and Russian Army Modernization
Russia said it in Davos and now China too feels that the world should have an acceptable global currency as reserve currency than having the dollar standard. Both countries feel that the reserve currency cannot be from an economy which is going down. China has already started to reduce its dollar dependence by buying a lot of Asian currencies.

I recently read that Russia is beefing up its Armed Forces, by calling it modernization of the army. It has already hoarded all sources of natural resources under the government control.

Russia and China are allies, Europe is dependent on Russia for its Natural Gas needs. America needs China. So when the shit hits the ceiling, you know where this is headed......an out and out , once in a lifetime, geopolitical event. If you survive this one, maybe you would have enough left to pick up the pieces again and re-build your life. Definitely worth giving a thought.

On US consumer spending
The Obama government is ensuring that they leave no stone unturned to ensure the loosening of the credit system and consumer spending. I guess its a good plan for short term to get the economic engine revving again, but wait, what when this engine picks up speed? The mass of the US consumer spending will ensure there is enough acceleration for this vehicle to catch speeds beyond control again, and when that happens, the US govt. will be bankrupt by then and so will be the US consumer for sure (one due to debt and also due to taxes to fund the current bailouts).

So when the government is bankrupt where will it fund its security forces from? So with Russia and China beginning to drop hints on where we are headed in the future....i think its best you take a good look at your current cash and cash equivalents, and stay away from risky investments for sometime.