The federal national debt is over 8 trillion dollars. That equates to more than $29,000 for every man woman and child in the United States. As you can see the federal government is not in any position to finance any additional debt especially with the falling dollar.

So what do you need to do to survive and profit in this environment?

Well first off you should not expect mass layoffs or huge salary reductions. Expect that government and businesses alike will slow capital spending, freeze hiring and salaries, and reduce internal costs to become more efficient at the same time watch real asset values fall substantially due to global deflation.

Secondly you should review your asset allocation and investment portfolio. Forget about any new appreciation in your real estate holdings and be prepared to see substantial decreases in value. You want to review your investment portfolio and remove companies with slow moving inventory or those that are heavily asset based. Look for high inventory turns as this allows the company to clear out older high priced goods with lower cost items quickly. Recurring revenue business models are a prime targets to look for.

Thirdly contact your local elected officials and tell them that they need to reduce spending now in order to prepare for the ramifications of global deflation. Both republicans and Democrats need to get together and solve the national debt problem as this will take 20 or more years at its current level.

BH