Read the Constitution (maybe for the first time) and find out what little the government is authorized to do and you will know why we are on the wrong track.

This is precisely the sort of thing I had no intention of responding to and I thought I tried very hard to explain why. Except I also knew that my explanations probably wouldn’t go over very well since anyone who was already convinced that you could extrapolate from a household budget to the US economy or the economy of Botswana for that matter, was probably lost to me anyway.

I know that sounded snarky and I guess it was, but you have to understand that we come from very different backgrounds in this regard. When you’ve worked in the financial industry, studied it, studied the economy – you have a completely different perspective. I don’t know what branch of the service you’re in, but my dad was career Army; fought under Patton in WWII in Italy, did his time in SK and before he retired learned to be a helicopter mechanic. So I understand a little about the military life. Can you really expect somebody who is non-military to understand that sort of command structure and the absolute discipline that’s required in order to make it work? Do you think any non-military family is ever REALLY going to understand what a deployment feels like?

And honestly those aren’t even very good examples since on some level they all involve common human experiences. But the things I’m talking about are totally alien. They don’t exist in your household budget and I guarantee that you will think I’m stoned with the very first one.

The first problem is that for a household, money is a finite, immutable quantity. If you want more, you have to earn it or steal it. In the economy, money is almost completely fungible. The federal reserve can create and destroy hundreds of billions with a few computer key strokes. And it’s not just the fed.

We have what’s called a fractional reserve banking system which means that banks only have to keep a fraction of deposits in reserve. Whatever the laws says doesn’t have to be kept in reserve can be used to make loans. As a result, you get something called the money multiplier. It’s called that because what happens is that if the fed creates $100 and puts it directly into the economy today (which they can’t, but let’s assume that for simplicity), after a couple of years, that $100 will have generated an additional say $200 for a total of $300. IOW, you got that addition $200 virtually by magic – the magic of fractional reserve lending.

That doesn’t happen in the context of a household budget and that is only one of a thousand other reasons that to even consider making the comparison is a complete fallacy.

But the reason I responded to your post wasn’t to tell you all of that. I still don’t expect you to believe me. The reason is your statement about buying silver. There’s nothing wrong with buying some precious metals. I’ve still got gold and platinum coins I’m thinking about selling after having sold the bulk last year. But metals are far too risky for small investors like us to put a significant chunk of our investment into them. Silver can be especially volatile since it is cheaper.

If you absolutely are convinced that we are going down the toilet and want hard assets, consider some compromises. There are foreign companies that have stock that trades here as ADR’s (American Depository Receipts). It’s virtually the same thing as owning say Nestle or Daimler. Another thing you might like are MLP’s (master limited partnerships). These are generally how oil and gas pipelines are owned, just make sure to ask up front about the tax treatment since some are a little tricky. Generally it’s not a problem, but check.

That’s all I’ve got off the top of my head, but PLEASE, try to consider doing something with your money besides buying silver. Keep buying enough that you’ll feel comfortable, but if it starts getting up into 10-15% of your assets, that’s something you should think about and maybe consider talking to a licensed adviser (which I am NOT by the way – but I AM sincerely concerned).