what’s an ark? (part 1)

Year’s ago, I won’t mention how many, I remember listening to Bill Cosby’s bit on Noah’s conversation with God. Noah’s hilarious and doubtful protests were summed up in one word, “…Right.”

That was, until it started raining.

Everyone knows it’s been raining, financially speaking, for a while now. So what kind of shape is your ark in? This metaphor is not an idea unique to me; Robert Kiyosaki wrote a whole book on the subject back in 2003 called “Rich Dad’s Prophecy”.

Kiyosaki spoke mostly in his book about the Stock Market crash he expected to start somewhere around, well… now. Economist Peter Schiff predicted with eerie accuracy pretty much everything we’ve watched happen from 2008 through today in his book “Crashproof” written in late 2006.

They watched the signs, and saw what was coming.

So, are we through the worst part? It’s my opinion that we’re not. I think what we’ve seen over the last year has simply been the earthquake under the ocean floor. And I believe we saw yesterday, with the talk of a global currency, the first signs of the water receding before the tsunami. What will the major flood be? I believe it’s massive devaluation of the U.S. Dollar. But more on that in the next post …

For now, let’s go back to the start. Where did all of this mess begin?

I was thrilled to finally hear someone with clout recently validate what I’ve been saying all along (listen to the audio clip of Fred Smith–CEO of FedEx). Using another analogy, he illustrates that the exploding powder keg was the massive debt we all were taking on, visually in the housing arena, but really in all consumer markets.

The match that lit the powder keg was the sharp spike in gas prices. These initial flames quickly licked up all of the discretionary spending dollars of the average American and then some. People started defaulting on their mortgages and other payments, and like a forest full of dried underbrush, the wildfire took off.

But matches aren’t dangerous unless there’s something flammable nearby. Ah… the powder keg. America, we have this terrible problem with spending more than we make, and saving nothing.

More to come in the next post …

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