Another thought provoking article by Ernie McDaniel
Don't be afraid for America. She will survive, just as she survived the Depression and many recessions. But average Joes and Janes may suffer a good deal in the future if things don't work out as well as we all hope. That's why you may want to be especially cautious with your personal retirement nest-egg.
Economics is a difficult science…if it's a science at all. There are as many different opinions about the future of the economy as there are economists to offer them. George Bernard Shaw once commented that if all economists were laid end to end, they still wouldn't come to a conclusion. To the best of my knowledge, he didn't recommend shooting them first but he might have preferred that.
I am not an economist! Nevertheless, I have about five hundred families who expect me to keep up with what respected economic experts are saying and to try to boil all that often conflicting information down to something useful. I take that responsibility very, very seriously, so this matter is close to my heart.
Ann Landers once commented that democracy was more like a raft than a boat. A boat is generally better at keeping one high and dry but it can sink; on the other hand, a raft won't sink but the passengers may often get wet. I believe that analogy would apply to our American economic system as well. For most of the past two centuries, we have been a raft, not a boat, and we have stayed afloat even if the ride was at times stormy. Some experts believe, however, too much has been done in recent years to make the American economy more like a boat in an effort to keep everybody comfortably dry. The end result, they say, is an insecure craft with a hurricane brewing ahead.
Other experts compare the present American economy to an overloaded dam from which no relieving trickle has been allowed. They say economic gimmicks (for example, abnormally low short-term interest rates for too long time) have been used to prevent the dam from breaking but that these have only been stopgaps. When she does finally break, they warn, look out.
Not all experts are doomsayers, of course, but too many are for peace of mind, and clearly, as we look around, we see situations in the world that worry if not downright threaten.
The good news is that steps can be taken in an effort to avoid your personal participation in nationwide, even international, economic difficulties. There are even steps you may take to profit from them potentially. In order to accomplish your financial goals, your best bet may be to seek out a professional who shares concern about dangers you believe exist and isn't the too typical Pollyanna, market cheerleader type. You do have choices.
Ernie McDaniel is a Chartered Financial Consultant and President of McDaniel Financial.
