Living in the Worried Middle

Rodney Johnson | Thursday, October 24, 2013 >>

I recently gave a presentation at The Sovereign Society’s Total Wealth Symposium in Las Vegas. The nights were cool, the days warm.

While the environment was enjoyable and the presentations were great, you could tell there was a growing sense of concern in the room. The audience was friendly, attentive, and good-natured, but also worried.

They weren’t concerned about slots or roulette. They were (are) concerned about the future.

That’s why we were there. To discuss our views of what might lie ahead. And frankly much of what was said from stage was about the challenges we’ll face.

Default.

Devaluation.

Loss of reserve currency status.

Favoritism to those in power.

The end of American hegemony.

We discussed all of these possibilities and more. Conversations with attendees were focused on the economic problems of our nation and the world.

Mind you, these aren’t timid people…

Among the conference-goers I met were business owners, retired politicians, and wealthy investors. They didn’t get to where they are today by shying away from hard decisions or hard work. They’re intelligent, thoughtful, and very interested in pursuing knowledge.

Their current state of worry doesn’t come from a lack of confidence in their own abilities. Instead, they’re very concerned and frustrated about what their own government is doing to them financially, while they see millions of their countrymen sitting idly by, not seeming to care.

Unfortunately, this frustrated group is also small… they exist between those who don’t care and those who profit from it.

Over the last 40 years, many Americans have grown their wealth and income only to see inflation eat away part of it. Clearly the Federal Reserve, the organization that’s supposed to be the keeper of our currency, caused some of the inflation.

Instead of safeguarding the U.S. dollar and thereby protecting the assets savers have accumulated, the Fed has taken on the role of economic manipulator, doing whatever the unelected group of twelve think is best for economic growth.

Its path has included negative interest rates (wherein interest rates are held below the rate of inflation) and an unprecedented level of money printing. This has caused an incredible shift of wealth to those who already had assets.

At the same time the government – under both parties – has continued to rack up monumental debts while making absurd promises about the level of benefits they’ll pay in the future. This has gotten to such a level as to be laughable.

The people I met at the Total Wealth Symposium are angry about these trends of monetary and fiscal foolishness.

They’re deeply patriotic and want the best for the nation. They refer to the U.S. Constitution as a guiding document instead of an historical one. They wonder where our current leaders got the notion that they could simply wipe away the product of years of work with the stroke of a pen or the push of a button and invite no consequence either for the nation or personally.

When these people note that CEOs of failed banks are still running free, if not still running their companies, they wonder how this can be. But they already know the answer: The money and power exchange from Washington to Wall Street, from Congressional meeting rooms to board rooms, flows in both directions. Current leaders of industry and politics stay in power together, supporting each other.

Those currently in power have no apparent reason to address what ails the country because no profit – or vote – is to be had from making hard choices.

At the same time millions of Americans are at the other end of the spectrum. They haven’t accumulated wealth. They’re simply trying to get through the pay period before their last dollar runs out.

They don’t have energy to worry about banks going bust or the Fed printing money. Those things haven’t materially affected their lives, at least as far as they can tell.

Sure, people in Washington seem only to be interested in the next election, and of course people on Wall Street should be held accountable for at least some of what they caused…but what can you do? There are bills to pay, kids to take to sports practice, and cars that need gas.

So the people I met remain worried – they don’t see a good ending here – while millions of Americans can’t even articulate how money is created… nor do they seem to care. But that doesn’t mean that the Fed’s actions aren’t important.

Just because our current crop of politicians can’t agree on what time it is, much less a budget for the coming twelve months, that doesn’t mean their actions – or inactions – won’t cause serious harm to the financial well-being of the nation.

The people I met recognize both of these things, and are frustrated that leaders don’t seem to care, while much of the nation doesn’t seem to be paying attention.

They live in the worried middle, between those who profit from our ills and those who ignore them.

The question is: What do you do about it?

Well, I write letters to Congressmen… and I get back the form letters.

I vote.

I support candidates that reflect my values… when I can find ones running for office that fit the bill.

I try to educate people about the nature of finance and money so they can question the wisdom of what government entities like the Fed are doing on their behalf.

I also work to position my finances so that I can benefit as much as possible from current trends, even though I don’t agree with them.

I think this is the path for all of us.

We need to be proactive, not resigned. We need to make sure we’re heard politically while also taking steps to protect ourselves financially. This doesn’t mean that we all have the same view, or that we’ll all take the same steps. It simply means that inaction doesn’t solve our issues.

Does your Congressman represent your views? Is he putting forth a plan for how to move the country forward?

Let him know what you think.

And don’t stop there. Make a point of contacting your U.S. Senator as well, and also your state representatives. They work for us, after all.

At the same time, consider whether or not your finances are aligned with what you see ahead. Many of the people I spoke to at the conference are taking steps to prepare for what they think will happen.

We should all be so proactive… and concerned.

Rodney

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Categories: Life Cycle

About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.