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Date: June 25, 2010
Subject: “A Lost Decade for U.S. States”

This is
G&G Associates Tax & Financial Consulting

“A Lost Decade for U.S. States”
By Patrick Bove

Imhotep (Wisdom To You) G&G Readers,

Folks…here is an article saying the same thing I’ve been warning you about for years. The writing is on the wall…BUTTTTTT…are you reading it? Better yet do you know how?
A “lost decade”…what does that mean exactly?

Some folks apply it to Japan – whose Nikkei Index has collapsed and drifted sideways for 20 years.

Others apply it to the Dow Jones Index, which has gone nowhere since 2000.

1978-1988 was my own personal lost decade. (I have nothing to show for it except a few lousy baseball trophies.)

But few people have ever heard of a “Lost Decade for States.” And that’s because it hasn’t happened since the 1930s.

Let me explain…

And You Thought Greece Was Bad…
According to a recent report from the National Governors Association…

“The states are facing a protracted budget crisis, like none seen in the last 30 years and perhaps not seen since the Great Depression… This raises the specter of a ‘lost decade’ for states.”

The numbers are simply astounding…

“From 1979 through 2007, state tax revenues grew at an average rate of 6.5% each quarter from the year before, with only a single quarter of negative growth. But recently, this trend has reversed. Starting in the fourth quarter of 2008 through 2009, state tax revenues declined an average of 10.7% each quarter, with no indication…that the bottom has been reached.”

The average American has no clue this is going on.

For years, voters have gone to the ballot box and checked “yes, yes, yes” next to every bond measure that could possibly “help” their hometown.

Rising property and income taxes made it all possible.

But nothing goes up forever, does it?

Property tax receipts have plummeted. So have income tax revenues – you can’t tax someone who’s out of a job. And according to ShadowStats, 22% of adult Americans are out of work.
Now the bill is coming due and those same voters are about to say, “No, no, no… what have we done?”

Soon they’ll see the exactly what will come of all these cut corners.

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So-Called “Solutions” To Fix this Debt Crisis

Here are a few solutions put forward by the National Governors Association:
• Selling off state assets (surplus equipment and state office buildings).
• Eliminate or permanently alter Medicaid and retiree benefits.
• Increase the number of people who leave prison and lower the number who re-offend and return.
• Replacing school teachers with “online courses” for middle and high school students.
And that’s just for starters…

Scary? Yes…

End of the world? No!

Every lost decade has an upside. In the coming years there are a handful of investments that will continue to soar as the worst of this debt crisis unravels before our eyes.
As a currency investor, there are a couple strategies you can use to batten down the hatches right now as states go bankrupt.

Here’s just a glimpse…

• Make sure that at least 20-30% of your investment assets are sitting in the world’s oldest “crisis currency,” gold and silver. An easy way to buy is with either a pooled gold account or even gold and silver coins.
• Buy the three currencies that tend to rise as crisis grips the world markets (and even the U.S. markets)…the Japanese yen, Swiss franc and now the Canadian dollar.

Bottom line: This lost decade does NOT have to translate into a loss for your investment portfolio! Make sure you’re prepared.

Also, if you need a personal one-on-one consultation, please feel free to contact us to setup an appointment.

If you missed a past G&G article, click on the link below to visit G&G Associates archive:

Until the next time!
Asante Sana (Thanks)
Gary Gray
Tax & Financial Consultant, RFC
G&G Associates
757-251-0174 office
866-361-3872 toll free fax

“Words cannot give wisdom if they stray from the truth."
Ancient Kemetic Proverb

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