I need a dollar

Why worry about Aloe Blacc when you can be rubbed all over with Aloe Vera? Getting soothed is usually more appealing than reality checks but then sometimes ignorance isn't always bliss.

Meredith Whitney predicted in Dec 2010 that 50 to 100 Municipalities in the USA would become insolvent, saying "there is not a doubt in my mind you will see a spate of municipal bond defaults". So what? Well two points, firstly Judgment Day seems to have arrived, see here, here and here. Secondly that they are a microcosm of our whole financial system. So while you can sit back and think who cares, the fallout may be coming to a town near you sooner than you think.

The real reality check is that most Western countries are broke. This may not seem like an insurmountable problem when you can print your own currency but as you might of guessed that path is never without consequence. Zimbabwe being the most recent example of what can go wrong. As I say in OUCH! money printing isn't a cure, its another disease. 'Sore throat madam? Try two teaspoons of botulism and let me know how you get on'.

The other slight problem is that the official debt is massively understated. When you throw in all the unfunded liabilities its about 5 times the size. A recent claim for the USA was that its real debt stood at $75 Trillion. So what you have seen in some USA municipalities is replicated all the way up the chain. What stops everyone panicking about this? One word, belief. Belief because so far everything has worked out OK. Well all you need under these circumstances is a change in perception and then as Emperor Kenny might say "suddenly all my new clothes fell off". Welcome to planet Ponzi playmates.

You might therefore want to heed the following statement, In a depression 'the winner is the person who loses the least money' . How much are you personally going to lose. Well, you are about to find out. Of course you could just recognise the urgency and choose to do something about it. And that way you won't have to repeat the hookline on a street corner.