The Dangers of Holding Fixed Income Financial Assets in the U.S. Today

We live in troubling times. The U.S. economy is in the ditch and the government is spending money to try and stimulate it like there will be no tomorrow. And with their reckless abandon of spending, there just may be no tomorrow or at least no tomorrow that any of us would recognize.



Meanwhile, the Fed is printing money at a rate never seen before in our history. Unfortunately, that’s what you risk when you have a Fiat money system. Wikipedia defines fiat money as "Fiat money is money declared by a government to be legal tender." According to an excellent article by Mike Moffitt on about.com, Fiat money, "money that is intrinsically useless; is used only as a medium of exchange". I don’t know about you but I would like to go out into my garage and print up some money every time things got tough.



Many experts even think such a Fiat money system encourages people to spend, spend, spend, just like the government. And while hucksters like Bernie Madoff go to jail for their ponzi scheme, many believe our government is operating the biggest Ponzi scheme in the history of the world. They call it Social Security. Just think about it. Also according to Wikipedia.org, A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. Isn’t that what our Social Security system is doing? They are paying current recipients with the new social security payments we are putting in.



So what does all this spending have to do with fixed income payments? Unfortunately, it has everything to do with them as actions by the government and the Fed today can have a major effect on the future value of the dollar and inflation. So if as many experts predict, this reckless spending and money printing results in a much lower dollar and stagflation, then the real value of those future fixed income dollars could be considerably less. Imagine if your annuity, social security or structured settlement payments were $1,000 a month. Now transport yourself to the year 2015 where the dollar is worth half its current value and inflation is at 15% (some say it will be worse than that, more like a third world country where it takes millions of each unit to buy a loaf of bread.)



So what can you do about this? There are a number of tactics that you can take to protect yourself and you should consult a good financial adviser before making any moves. For things like Social Security, unfortunately there is nothing you can do except to do everything you can so as not to depend on it. For many structured settlements, annuities and other structured monthly payments, you can get cash for payments by selling a structured settlement or selling an annuity. That allows you to put the cash into investments that are secure or even prosper in an environment of inflation. If you believe the many gurus, it just might make sense for you and your families financial future.





Ron Stone has a mortgage note and structured settlement buying business. His company buys private mortgage notes and structured settlements. Learn more at his websites, Sell Structured Insurance Settlement and Cash For Structured Settlement Payments