Signs

Every now and then I pick up on a sign that there is a problem in our economy. A few years ago when the new bankruptcy laws were passed I could see a near future in which these laws would become more important. After all I predicted a down turn to the housing markets years before it actually happened.

Today was one of those sign post days. The FDIC wants to up the limit for personal protection to $250,000 for a savings account. This might seem like a good thing overall for the average citizen. After all if a bank collapses today and you have more than $100,000 in it then you are pretty much hosed.

To me this new (yet to be) law is a serious red flag. The president is not there to warrant bailing out people for more than $100,000. If you have more than that in any one bank account you are not managing your money properly. The same goes if you have more than $250,000.

The proposal is a sign post that there is inflation on the way. I would add Gold as a short term investment against inflation. Do not even think about this paper gold nonsense. Gold is only worth something if it is in your hands.