What Is Going On?

I knew this would be an interesting month, but this is epic.What is happening here is similar to the Cuban missile crisis, in that we don't know how close we are to financial Armageddon. And we won't know, at least until history tells the whole tale.
Fannie, Freddie, Lehman, AIG Wow!
I am not a doomsday kind of guy, however, this is serious. The amount of money involved in this meltdown is so large, that nobody can comprehend it. If you win a million in the lottery, well, that's a number we can grasp.
What about a thousand million? That's a billion. Now that is an interesting number. At 5% interest, that's what? 50 million a year in interest payments. What about a trillion? you guessed it 50 billion! This banking crisis will be counted in the trillions before all is said and done.
They (the Government) are already throwing around numbers like 200 billion, 85 billion, even a trillion. Now this would be fine if we were running surpluses in the Federal budget, but, , , we have a massive deficit and massive debt. In other words, the money just doesn't exist.
So what is the Government handing out in all these bailouts?
Freshly printed checks. Checks written on an account that has a massive negative balance.
Now all of this will probably work out just fine. This is still the greatest country in the world and offers the best environment for capitalism and opportunity. Is it perfect? Of course not. Can it collapse financially? Who knows. History tells us that no currency in 4000 years of monetary history has ever survived after it has been debased. We've been slowly doing that for a long time now.
So what does all this mean to me?
I'm going to apply straight common sense.
No body knows where the banking and financial markets are going, but it doesn't look good.
Commodities have been hammered recently in the markets. And are now, in my opinion, on sale.
I'm exchanging those Government checks for something solid.
Gold and Silver are solid and they are on sale!
But not for long.


JT

Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.