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Bob Brinker ponders Financial Armageddon
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On my way to the airport Sunday evening, I caught a piece of "Bob Brinker's Money Talk" on WLS-AM. When I can, I like listening to his financial advice about particular stocks or the behavior of the markets in general. However, listening to all this great advice didn't stop me from losing over 30% of my retirement in the last 10 months, along with everybody else (actual amount too painful to admit).
That night he had a couple guests who seemed to pick up on populist fears related to the government's expansion of the money supply.
The first guest had several questions regarding the Federal Reserve.
Caller: "I heard the Federal Reserve was a private bank."
Brinker: "No. It gets it's authority to operate from Congress."
I was impressed he had so much patience with the caller.
Then the questions went from conspiracy theories to the actual mechanics of the Federal Reserve. Brinker remarked that in the 1970s, then-President Nixon took the dollar off the gold standard because the President recognized that government wanted to keep spending far more dollars than there was gold in reserve to back the "green backs."
The next caller wondered if the Amero or some other currency could replace the dollar due to inflation. He was concerned about hyperinflation. This caller said he was invested into CDs (certificates of deposit), EE bonds, and I-TIPS (Individual- Treasury Inflation-Protected Securities). Brinker commented that the Chinese were probably justified in wondering if their investments would lose value, which prompted them to recently push for some world currency.
Then the caller asked what would happen if the Treasury defaulted on its debt payments. Brinker just said that that would be financial Armageddon. He didn't say the caller was crazy. He just mentioned "financial Armageddon" a couple more times before the commercial break, just as I was shutting off the engine in the airport parking lot.
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