This I Believe – One Young Economist’s Plea

For centuries, families have come to the United States to enjoy the freedoms and opportunities that cannot be found elsewhere in the world.  Our country’s economic, political, and educational foundations are built on the backs of immigrants seeking to improve their quality of life.

It’s time to recognize that families in the U.S. are more similar than they are different.  Muslim families as well as Christian families want to make a decent wage at a job they are appreciated for.  Democrats, Republicans, and Independents all want to be able to buy or rent a nice house in a safe neighborhood and put food on the table.  Gay and straight partners want their children to get a great education with the hopes that they will go on to get a good job, raise their own families, and live happy, healthy, and successful lives.  Men, women, and transgendered individuals are afraid of losing their jobs, losing their houses, and letting down their families.  Citizens as well as undocumented individuals are here in the U.S. because they share these hopes, dreams, and fears.

As human beings, we are all unique.  We look and act different, we have different thoughts and opinions.  But almost everyone that puts together a list of their dream place to live would write the following:

“Meaningful work, affordable housing, fulfilling education, adequate medical care, a clean environment, honest and accountable government, social and cultural renewal, or simple justice”  (Dumbing Us Down, p. 15).

I understand and recognize the importance of having a federal government.  The government is elected by the people to represent the people and to provide needs that are deemed “the public good”.  We need to continue to reduce the inefficiency and waste of the federal government.  But after reading The Price of Civilization by Jeffery Sachs, I was reminded why a strong government is necessary for a developed country.  It would be foolish to insist that we pay no taxes and allow the free market to take on the public goods.

That said, I believe strongly in the power of a free market system.  Capitalism is the single most efficient method to price goods as they are needed, pay individuals that are hard working or creative, and transfer those goods to the place of their greatest need – anywhere in the world.  But the free market system must be balanced with some regulation by the federal government. Without a mixed economy, the world would be filled with Enron’s and BP oil spills.  Capitalism is great at efficiency and providing short term profits, whereas the government helps to keep the free markets from damaging the resources we need to survive and that we will pass on to future generations.

I believe in sound money and taking the country from a fiat currency back to a currency that is more stable and more difficult to reproduce.  I believe that the time has come to take control back from the federal reserve and to end the abuse of the fractional reserve banking system.  An effort should be made to allow for people to use sound banking facilities where they are guaranteed to be able to withdraw their money at any time.  These banks should protect the hard-earned assets of the average citizen.  As a result, U.S. citizens would be encouraged to save for their future and future generations.

I believe that corporations are corporations.  They are not people, and they are a foundational part to what has made the U.S. a great nation.  In order for the free market system to function, corporations must be allowed to fail.  Our country becomes stronger because businesses and individuals can take risk and go bankrupt.  No company should ever be declared “too big to fail”.  Any company that does this imposes a risk to the entire system and should be immediately divided and sold off as smaller companies.

Just because the wealthy may create jobs doesn’t mean they shouldn’t pay their fair share of taxes. I believe that everyone in this country should be thankful for the opportunities that exist here.  The Bill Gates and Warren Buffets of the world should recognize that their money comes from the pockets of working Americans.  Being wealthy is okay and should be encouraged.  Hoarding money and finding loopholes to prevent paying taxes hurts everyone – both the rich and the poor.

In a country as powerful and full of opportunity as the U.S., healthcare should be a basic human right and not a privilege.  A universal healthcare system should be developed that would:

  • Provide basic healthcare insurance for everyone that includes access to a primary care physician, access to preventive care, and basic coverage for most major diseases.
  • Make healthcare costs more clear to the consumer and allow a combination of public and private services to provide these options.
  • Make it cheaper for qualified doctors, nurses, and healthcare professionals to access training.
  • Move to an electronic records system similar to other developed countries
  • Limit litigation and damages that healthcare workers face to keep costs down.

The U.S. has over 3 million people incarcerated.  This is a tremendous burden on the taxpayer.  Anyone that is incarcerated for using or selling marijuana should be released.  Alcohol is a much more dangerous, addictive, and debilitating drug than marijuana.  Prisoners that desperately need psychological help should be provided the treatment they need, as well as the prisoners addicted to drugs, or victims of violence.

The U.S. education system is broken.  But it’s not because there aren’t great teachers.  Teachers need fewer standardized tests and more freedom to use their passion to teach.  Technology will provide the data and allow teachers to identify and reach out to students that are struggling.  Schools should be re-engineered as learning centers for the community, and parents and professionals should all play a role in helping young minds explore the wonders of the world we live in.

If I was president, I would encourage every young person that graduates high school to commit to 2 years of service to the country:  armed forces, Peace Corps or AmeriCorps volunteer work, Teach for America, or other volunteer work.  Our citizens should be happy to “pay it back” and help other Americans live better lives.

I would also reign in the military spending and close many of the military bases that exist around the world.  Limits to Medicare and medicaid would have to be made in order to provide this service to our children and our grandchildren.  We don’t need to pay back the 15 trillion dollars we owe, we just need to pay some of it back so our economy can be strong again and the world can trust that we are fiscally responsible.

I believe that I can be proud of the United States of America again.  I believe that my future children will have clean water to drink, national parks to visit, and a great education provided to them.  I believe that my shaken faith in the United States is only temporary.  I believe that I am a change agent and that I can help this country remain great for future generations.

~Nick, January 28, 2012

$6 Million Bucks of Nothing

Photo courtesy of

I wish I raked in a $6 million annual salary.  (That’s almost $3,000 an hour if you work 40 hour work weeks!)

The only people that make that kind of dough are successful inventors, high level execs at prestigious firms, or… college football coaches.

You read that correctly.  College coaching is paying more than ever before, and I’ve got a problem with it.   In a previous blog post, I wrote that the costs of higher education are unsustainable, and this article is a follow-up piece.


I took over 200 credits during my undergraduate years (and still managed to graduate without student debt), and almost 30 credits for my master’s program (still no debt!).  I attended, at most, maybe ten football games and a handful of other athletic events.

Funny, because I paid around $80 per semester in student fees, which adds to over $1,100.  With a little digging, I found that the actual definition for this athletic category reads as follows: “The revenue from this fee enables free access to sporting events by all students at the U. Money also supports non-revenue sports and marching band.”

You see why I’m mad?  Even my on-campus gym and intramural sports weren’t covered in this fee (those fees are filed in the ‘recreation’ student fee).

If you’ve read my previous article, you’re probably wondering why I’m continuing to beat this dead horse.  It’s because I just finished watching a video that got me all riled up again!

The National Inflation Association produced a documentary called College Conspiracy, and it’s actually quite good.

One fact that I never realized in this education bubble is that when it pops, the market will contract.  The NIA predicts that 30% of colleges and universities will close as the population recognizes that a college degree does not equate to a high-paying job.  College prices will come down and brick-and-mortar schools are going to be stuck with their crazy glass buildings (here, here, and here) they seem to enjoy.

I encourage you to watch the video for yourself and leave your comments.  Here’s mine: I want my $1,100 bucks back.

~Nick, the Self-Taught Economist


PS:  For those of you following my journey away from W-2 salary into self-employment, I may have news for you soon.  I can’t really discuss at this point, but I’m hoping I can announce in a week or two!


An Offer to Anyone That Reads This

(left to right like a book)

1.)  It’s been my dream to go heli-skiing in Alaska almost my whole life.  I finally feel like I’m a good enough skier.   My goal is to go the winter after I turn 30.

2.)  Lab puppies.  They can’t get any cuter, and I fell in love with all my friends’ labs.  They make great companions.

3.)  Taking 2-3 weeks and rafting the Grand Canyon.  Probably the most famous canyon in the world, with so much great history within.

4.)  I want to own a Bed and Breakfast somewhere great like Salt Lake and offer guide services to go along with it: biking, skiing, rafting, and hiking.

5.)  Instead of retiring to a big house, I’d rather sell everything and buy a sailboat with my wife and the dogs and sail around the world.  We’d eat delicious food, make great friends, and explore new things.

6.)  I would love to have a healthy, happy little girl someday.  Just a little bit jealous that my best friends have just been graced with one. J

7.)  A beautiful, intelligent and athletic wife.  I already have this one, but I have to put her on here because she means the world to me.

8.)  No, I don’t have a man-crush on Ryan Reynolds.  This picture represents success at my career and I want to be able to dress this nicely once in awhile.

9.)  I want to backpack Patagonia and see the World Cup in Brazil with my wife when she’s done with her graduate program.

10.)  I want to finish my P90X program.  I’ll always be scrawny, but P90 is a beast that I have yet to conquer!  Anyone that’s tried it will understand….

11.)  This one is to remind me to do things that bring me peace: to read, practice my yoga for strength and flexibility, and to inspire me to learn a martial art.

12.)  I want to teach myself to play guitar.  Well enough that I can play in bars and coffee shops when I’m older.

13.)  The VW is to represent constant adventure and trip-taking, with or without kids in our life.  I love the open road and I always get excited for a new adventure.


I set goals so that I can be better. I am an idealist, and I’m always striving to eat healthier, watch less television, learn something new, etc.  For those of you that are at peace with who you are, I totally get that.  It just isn’t me.

I remember my first experience with a vision board was when my old sales company showed “The Secret”.  The movie rings truer to some than others, but I’ve always been a goal-setter, and I like the idea of being able to visualize my goals in order to make them happen.

I made a digital vision board a few years ago and when I found it on an old flash drive, I was surprised to see some of my goals have come true.   Here’s just one example:

I wanted to go rafting and have adventures……

…and this is an actual picture taken on my honeymoon.  We are all celebrating because we didn’t flip over in a spot where other boats had done so. (My wife and I are in the front!)

Here’s my offer: I’m willing to make a few (3? 4? I don’t know…) FREE vision boards a day (they don’t take that long, and you are welcome to do one yourself).

Just send me 10-15 quality pictures from Pinterest, photos you’ve found online, or photos you’ve taken.

If pics are smaller than 300×300 they won’t look good.  My rafting picture directly above is a good example, it’s 300 pixels wide by 200 tall.

Drop them all into a Word document with any special instructions and attach it to an email directed to

When I send it back, you can make a fancy little list like mine and share it with your friends on Facebook, your blog, or just save it to your desktop like me:

Cheers everyone!  Have a great Thursday!

~Nick, the Self-Taught Economist

PS:  I’m interested to see what people want to do/be/have, so start sending them over!


Epic. Fail.

I remember the first day of my master’s program (with an emphasis on higher education) quite well.

The professor passed around a big bag of colorful candies and told everyone to take a handful.  After the bag had been passed around, she instructed us that for every red candy we took we had to tell the class one of our favorite books, for every blue candy we had to say a place we had visited, and so on and so forth.

Note:  While this activity was probably designed for 4th graders, it seemed to work well for graduate students, too.

I was shocked to hear more than one student profess to not reading books!  After a laugh from the class (Personally, I was laughing out of shock, but maybe others were laughing out of relief), these students discussed magazines or video games they enjoyed.   Don’t get me wrong, I’m not anti-periodical nor am I anti-technology.  It’s just…this is an education program.  In order to serve your students well (let alone do well in the graduate program), you absolutely have to read!

I guess my point is that everyone knows the U.S. education system is failing. Now, that may sound like a hypocritical statement coming from a person with two bachelor’s degrees and a master’s degree (at least I didn’t take on debt to pay for these, but there was an opportunity cost…sigh).  But hear me out:

  • There are huge inequalities and achievement gaps within the educational pipeline.  If you aren’t white and well-behaved, the odds are your teacher is going to “track” you into easier classes.[1]
  • High school students are dropping out at unprecedented levels.  Some states are only graduating 47% of students.[2]
  • The students that are graduating aren’t prepared for college.  If they do decide to apply, often picking up $15-25k a year in student debt in the process, they have to take remedial courses to catch them up and get them ready for the rigors of college.
  • Even if you make it through college with a degree or two, you’re not likely to find a job.  Thanks to the timing of the market, most of the students in the millennial generation are facing unemployment levels worse than the great depression.

Okay, it’s pretty bad.  What can we do to improve the situation and help the U.S. get back on top?  Here are my recommendations (and add your own if you’ve got ‘em):

1.  Raise the salaries of teachers and make the school year a full calendar year, with a full 9-4:30 day, which includes sports or physical education.  It’s too hard on students to remember concepts after three months off, and too hard on parents to cover the cost of childcare.

2.  Pay teachers based on their improvement of their students.  With better technology and evaluation procedures, it should be easier to see improvement from year to year.  Standardized testing in its current state is a failure, so this would rely on something better.  More effective teachers deserve better pay.

3.  Do away with tenure and with teacher’s unions.  Bad teachers should be fired.  Period.

4.  Raise the expectation of parents.  Provide classes to educate parents on how much they should read with their students, how to ask students about their day, etc.  Parents should be involved throughout their kid’s education.

5.  Raise the expectation of students.  Get rid of No Child Left Behind.  Abolish the idea that students should always be segregated by their age level.  Work to improve a model where students mentor other students and get mentored themselves.

6.  Improve the physical education programs in schools, and provide healthy, fresh, breakfast and lunch to every student.  You can’t learn if you’re hungry or sick.

7.  Cut class sizes down to 15-20 tops.  Teachers should get an extra $2,000 for any additional students beyond the cap of 20.

8.  Change the tax code of the United States so that the more children you have, the more you pay, not the opposite (current) structure.

9.  Allow teachers to invite guest lecturers to teach about important topics like personal finance, specialized science projects, music, foreign language, and the arts.  Teachers should be allowed to focus on being excellent at teaching the core concepts in exciting, unique ways.

10.  Encourage young entrepreneurs to find new ways to teach from outside the classroom.  Examples include the Khan Academy that wants to flip education upside down:  The students watch the lectures (on YouTube) at home, and then they come to school to do their homework with individualized attention from the teacher and working collaboratively with their fellow students.

11.  Make education a process of “lifelong learning”.  Your education shouldn’t stop at the end of the school year, the end of high school, the end of college, or…ever.  Folks in their forties, fifties, and eighties should be able to teach and learn.  If you feel like you still have a little bit more to learn, check out these 12 dozen online education sites:


Ultimately, just like my friend Tyson pointed out, our education system will determine whether or not the U.S. retains a middle class.  I personally think that the U.S. would not be half the nation it is today if we didn’t offer a free, top-notch education to all students.  If we lose this, our whole country loses.

What would YOU change about our current education system?

~Nick, the Self-Taught Economist


Could the U.S. Be Held Hostage By China?

I decided to have an educational movie night and rented checked out I.O.U.S.A from my local library.

While things (mostly economic things) have deteriorated terribly since the film was produced in 2008, one short segment of the film stuck in my mind:

If we journey way back in time to 1956 (I wasn’t even born, and I definitely didn’t learn about this in history class), there was a hostile little scuffle called the Suez Crisis.  Here are my shorter-than-CliffsNotes. (If you like the full thing, read a book.  Or search it on Wikipedia.)

Location:  The Suez Canal is a waterway (mostly manmade) from the Mediterranean to the Red Sea through Egypt.

Aggressors:  France, the U.K., and Israel

Defender:  Egypt

Spectators (the angry, belligerent kind):  Soviet Union and the United States

Context:  The aggressors weren’t stoked that the leader of Egypt (Nasser) nationalized the canal at a time when Britain was trying to maintain strategic control of this valuable shipping way for oil and goods.

Why I’m telling this story:  The U.S. didn’t really want to get involved, but finally Eisenhower threatened to cut off financial support to Israel and also threatened to sell of the U.S. Government’s Sterling Bond holdings.  This would have caused Britain’s currency to fall, sending them into Depressionville.  Basically, financial pressure from the U.S. caused three powerful countries to back away from a highly valued prize.


Flash forward to present day.  The U.S. is in a tremendous amount of debt (duh).  For the first time EVER, 32% (4.45T) of the total debt ($14.1T) is owned by foreign countries.  Everyone knows who owns the majority.  Of course that would be China with 36% of that $4.45 trillion.

Dear reader: You should be reading between the lines and already cursing under your breath at the ridiculousness that the tables of turned.

Pretend for a minute that the Chinese (for any reason) don’t play nice with the U.S.  Let’s say, for example, that they’ve been growing their naval fleet (true!) and decide to take control of the Suez Canal tomorrow.

The U.S. immediately reacts and pulls out our fighter planes, nukes, drones, invisibility cloaks, and whatever else we’ve been buying with all of our military spending. But China isn’t concerned because they’re one step ahead of our awesomely expensive attack methods.  They threaten to sell off the $4.45 T worth of U.S. bonds they own, effectively collapsing the dollar.

Uh oh.  Goodbye U.S. dollar.  Think of the currency crash we would experience.  Think of the global repercussions, since the U.S. dollar is the reserve currency of the world.

The euro’s not doing so hot right now. We can use Swiss francs or Chinese yuan.  Hate to say it, but the world’s probably gonna look at the currency that can actually support global trade.


Anyway, I don’t really know the full repercussions, but I just wanted to touch on the point that the U.S. in a very dangerous position.  Let’s show some fiscal responsibility and put joint bills together.

Insert Personal Bias Here: There are two ways to balance a budget: spend less or make more.  Anyone that takes one of those options off the table (I’m talking to you Tea Party) without negotiating shouldn’t be in Congress.

I’m just sayin’.

This has been another fear-instilling (thought-provoking?) article from

~Nick, the Self-Taught Economist


Another Sign We’re in Crazy Town Looking Over the Ridge into Depressionville

The markets are shifting back and forth so fast that day traders are foaming at the mouth, and the average person is getting whipsawed like a kid’s head on one of those old, rickety wooden roller coasters.  But if you step back and look at the big picture, it’s a scary sight – especially for Europe.


What am I talking about?  Anyone that follows the news has heard of the countries on the euro that haven’t been playing nice.  Here’s a list of the 23 countries that use the euro as currency, and the ones on the verge of default are designated in red.

1) Andorra
2) Austria
3) Belgium
4) Cyprus
5) Estonia
6) Finland
7) France
8 ) Germany
9) Greece
10) Ireland
11) Italy
12) Kosovo
13) Luxembourg
14) Malta
15) Monaco
16) Montenegro
17) Netherlands
18) Portugal
19) San Marino
20) Slovakia
21) Slovenia
22) Spain
23) Vatican City

Interestingly, when the euro was introduced in 1999, the economists that put this idea into action had the sense to require a few stipulations for the countries that wanted to join:

  • A budget deficit of less than three per cent of their GDP
  • A debt ratio of less than sixty per cent of GDP
  • Low inflation
  • Interest rates close to the EU average.

But (not-so-wisely), the economists never wrote into the agreement what would happen if countries moved away from the euro.  Now, with countries as big as Spain and Italy having trouble staying solvent, it’s not unlikely that countries with strong economies (i.e., Germany and France) would have voters that want to avoid getting dragged down with the whole ship.  To read more about the sovereign debt crisis, click here.

The other whacky thing that’s happening in Europe is little Switzerland.  The little Swiss franc has become the strongest currency in the world because investors are scrambling to find a safe place for their money.  Besides gold, the Swiss franc is one of the best options.

Normally, a strong currency is good.  But Switzerland is too small a country to have the world’s investment dollars poured in.  As the value of the franc goes up (because increased demand = increased price), it is impossible to export anything out of the country.  Here’s the 18-minute radio story if you want to hear more about this.

So the funny thing is, the Swiss government is considering tying the Swiss franc to the euro to bring it’s value back into check.  What a huge friggidy-freakin’ mess!

So what does this all mean for the U.S.?  It means that the road to recovery is not likely coming in the next five years.  I can’t wait to listen to the President’s speech tonight to see what he has to say about the forecast.  Watch it tonight, Sept. 8, 2011 at 7pm Eastern.

Okay wise reader, how do you think the Eurozone crisis will affect the U.S.?


~Nick, the Self-Taught Economist


Think My Predictions Are Crazy? Listen to This…

Think my predictions the other day about an economic calamity are facetious?

Listen to this podcast developed by Planet Money of NPR and hear the similarities (except they’re talking EU and I’m talking US).

It frightens me to think about how likely much more likely the situation seems to me.  Everyday it seems to becoming more and more real…..


<<< click here to link to the podcast >>>

~Nick, the Self-Taught Economist

How to Make Money Investing in Real Estate

The best feedback I’ve received thus far on Self-Taught Economist is from my article about real estate investing.  Well if that’s what you want, then that’s what you shall have!  This article will continue the conversation and discuss some of the choices investors make when they purchase a property.

Successful investors possess the business acumen to determine if a property will be profitable or not.  To break it down into the very simplest terms, there are two ways to make money from a rental property:

1.)  You receive rent in exchange for someone living in your rental unit.  If you bring in more rent than it costs to pay the mortgage, repairs, utilities, and everything else, you have “positive cashflow”.

2.)  Your property appreciates in value.  This means that you buy your property at a certain price and the market value (what someone else is willing to pay) goes up.  It doesn’t really matter what the market is doing until you decide to sell your property.  If the market value has appreciated (including the cost of selling the property), you might make a profit.

I can hear you thinking, “Easy enough.  Tell me more about how to choose a property based on these two methods to generate income.”

Rent.  I recommend you choose a property that is most likely to bring you consistent (and high!) rental income.  All of the following will bring higher rent:

  • The nicer the neighborhood, the more rent you can charge.  Location is the number one factor when you set the rent.  Basically, you compete with units in your immediate vicinity.
    • If you’re near a college/university, hospital, big company, shopping, you get even more!
    • It’s an uber-bonus (and really unlikely) that you have little or no rental competition. For example, if you are the only apartment building out in the tiny little town builds rocket motors, you get to raise your rents.  This is rare.
  • The nicer the condition (inside and out), the more rent you can charge.  Keep your place shined up!
  • The bigger the unit, the more rent you can charge.  Think of different size families when you buy.  Could a family of four and a dog comfortably fit in a 2 bed, 2 bath condo/apartment?  Not unless they have to…
  • If laundry is available on-site, you can charge higher rent.
  • If utilities are included, you can charge higher rent.
  • If off-street parking is available (even better if it’s covered), you can charge higher rent.
  • Are your lease terms flexible?  You can usually charge higher rent if someone wants  a 6 month lease, and even more if they just want a month-to-month.

Appreciation.  This one’s much more difficult to work with and I would never recommend buying a property solely for the appreciation.  If you are buying a property that has a negative cashflow (which means you’re actually losing money each month), in the hopes that it will appreciate, you are walking a thin line with no safety net below you, my friend.

Now that I’m done with my warning, I do take appreciation into account with regards to two factors:

1.)  I always think about what the market is likely to do over the next ten years.  Currently, I think the market is still going to decline (more foreclosures, more economic issues, watch the sweet video blog I put together), so it’s something to keep in mind when buying a property.  But it doesn’t really effect me until I need to sell.

2.)  I definitely think about where the neighborhood is going to be in ten years.  Is the neighborhood getting better?  Are new shops opening nearby?  Are nicer areas “taking over” and helping reduce crime, clean up trash, and improving the situation?  These are the neighborhoods that I want to invest in – not the declining neighborhoods.

I’m definitely going to explore the idea of property management and investing while I’m in New York.  The CAP rates are good, the depreciated market is encouraging for investors, and there are plenty of tenants eager to move in!

I’ll continue to post as I move through the stages of searching, making offers, closing, and managing a new investment property!

As always, I’d love to see more reader questions and comments!

~Nick, the Self-Taught Economist




Economic Calamity

If the economy was a female, she's probably do something like this...

This article will either scare you stiff or make you laugh because you’ll think I’ve lost my marbles. But either way, hopefully you will think about the “what ifs” associated with some kind of economic calamity.

To give you some context, it’s not like I’m any sort of conspiracy-theorist, whacko, or maniac. I’m a level-headed guy. I studied biology and Spanish in college and I had to learn to question everything.  I read the newspaper.  I don’t live under a rock nor do I take any medication for any tendencies.

Even before I started studying economics seriously, I wondered how everyone could trust that a one dollar bill (U.S. dollar) was worth one dollar if the government could just print as many as they wanted. The more I learn about the current U.S. economic situation, the more fearful I’ve become. The following is my best prediction for a worst-case scenario in 2012 or 2013:

1.) The stock market crashes, losing 95% or more of it’s value. This would be exactly as some experts (most of which are smarter than me) predicted, known as the “dead cat bounce” after the last crash in 2007-2008. Precious metals and treasuries rally during the crash, but eventually top out and crash as well.

2.) Banks fail. First the investment banks beg the U.S. government for additional funding, but there will be no money to give (was there ever?). The elected officials want to do another bailout, but the American people erupt in chaos and demand that the companies fail.  No matter how many banks fail, credit seizes and any size loan is virtually impossible to obtain.

3.) The ripple effect of the banks hits Europe, China, and other creditor countries especially hard. This starts the erosion of the major currencies. The dollar and the euro inflate rapidly and investors jump to safer currencies.

4.) Meanwhile, U.S. companies contract along with the credit and are forced to lay off hundreds of thousands and then millions of workers.  Companies that rely on sales of middle class luxuries (lattes, massages, fancy clothes) shutter their doors.  Companies that sell to the upper classes will be affected, but not as dramatically.  A massive lower class is created, and without federal aid, is unable to survive.

5.) The housing market continues to fall into a giant sinkhole. Recent college graduates are burdened with student loan debt and families are unable to afford assisted living centers for older family members. Families move in together, with multiple generations living under the same roof. Many homes are boarded up or burned for insurance money.  The value of real estate dwindles.

6.) Americans continue to be scared of the U.S. government and corporations.  When individuals try to withdraw cash reserves at their local banks, they are told to come back later. This quickly hits the news and mass panic ensues.

7.) Rioting occurs throughout the country, mostly in large cities.  The national guard is called to maintain control of the bigger cities.  The presidential administration is forced to withdraw troops overseas to serve as peacekeepers within U.S. borders.

8.) The U.S. continues to operate, but at a different capacity than the one we’ve all been accustomed to since World War II. The U.S. will no longer be able to “police” other countries. Military spending is cut drastically and America is unable to provide significant protection to ally countries.  By now, most of the wealthy class has moved their money to international opportunities like Japan, Brazil, and other developing nations.

9.) The U.S. people will go through years of electing political candidates that promise “better business sense for the government” and “fewer taxes”.

10.) The U.S. president who finally starts to turn things around will be the president (hopefully a woman) that instills pride in the American people and does what’s best for the people, not what’s best to be re-elected.

11.) The U.S. will go through a long (decades) period of growth and development, but not as the world’s superpower.  Families will reflect on the breakdown of the U.S. government and Wall Street stealing money from the American Dream.


Scared?  Laughing this off as irrational? That’s okay.  Even if I’m way off-base, it’s nice to think about this ahead of time, right?  Use your own brain to think about what will happen and how your family will react and adapt to the changes.  If you’d like to learn more about this topic, I suggest The Great Depression Ahead by Harry Dent.

What do YOU think the future has in store?  What did my scenario get wrong/right?  I’d love to hear your comments.

~Nick, the Self-Taught Economist



The Self-Taught Economist Coming to You From a New Locale!

Greetings to the one or two diehard folks that continue to check up on me here at!  I had an epic adventure driving across the U.S. to my new home here in Rochester, New York.  After 4,000 miles and 14 states, I promise not to neglect STE for two weeks ever again!  (Well, at least not until we drive back to Utah in three years.)

A lot has happened since my last post.  While daily news isn’t really all that important in the grand scheme of things, the cumulative effect provides significant information about the trend of the economy.  Here’s a brief review and my take on things:

    1. On Friday, August 5th, the U.S. credit rating was downgraded by Standard and Poor’s from AAA to AA+ and with a negative outlook for the future.  This is the first time in history that the U.S. has been considered anything but a bulletproof investment.

Frankly, the downgrade surprised me because I thought the rating agencies were far too corrupt to actually go through with a downgrade.  If the rating agencies were truly unbiased and objective, they would have downgraded the U.S. a long time ago.  But, low and behold…they come up with a downgrade despite a 2 trillion dollar mathematical error on their part.

2.  As a result of the downgrade, the stock market has become incredibly volatile.  In the past two weeks, there have been wild swings both ways (insert joke here), but the Dow has lost nearly 5.5% since August 8th.  Personally, I feel I made the right decision in April when I decided to sell the majority of my portfolio except for a small index fund.

3.  Gold continues to break records and everyone acts surprised, which amuses me.  Silver has superseded where it was when “the bubble popped” and lost a good 30% of its value this summer.

I have significant investment in these precious metals and I will continue to invest in these areas until I trust the U.S. government will stop printing currency and start getting its act together OR I feel that the real estate market or stock market are a better place for my money.

I just watched a scary video today.  Scary because it was honest and scary because it foretold of dark days ahead.  I happened across this video at one of my favorite blogs about money and the economy,  It’s long (1.5 hours), but I promise it’s worth your time.

Mark Mahoney clearly knows his stuff and this video is only one part sales video for every ten million parts truth about how the economy is headed for major change in the upcoming years.

I would love to have more of you quiet readers leave feedback and comments on this site about what you see!  And as always, thanks for reading today.


~Nick, the Self Taught Economist