How to Feed a Chihuahua

How to Feed a Chihuahua

Editor Sara Nunnally

Many of you know that I've got dogs. Most dogs aren't picky eaters, and some will eat anything. But we've got two Chihuahuas that are quite the opposite... for different reasons.

One has had some stomach issues, possibly related to a food allergy. We've spent a lot of time trying to find a food that didn't make his stomach upset, and that gave him all the nutrients he needs. The other Chihuahua likes to be fed by hand.

(Don't blame me -- she was here before I was.)

Now, we can feed our other dogs, and our horses, and barn cats in well under an hour if we're efficient.

Feeding these two Chihuahuas could take a half hour on their own, with coaxing and bribing. And we couldn't wait them out for long... They are about four pounds each, and don't have a lot of fat reserve to call on. If they missed more than one meal, they would get sick.

I'm sure you can see the analogy I'm getting at.

These Chihuahuas are the Democrats and Republicans we've elected to run our government.

Things need to be "just right" if we are going to get anything done. And things are far from "just right." One difference between my house and Congress? Our other dogs didn't have their kibble cut just because these two Chihuahuas couldn't come to an understanding.

From CNBC:

Anxiety over the fiscal cliff isn't just affecting Wall Street. Many entrepreneurs report slower activity as uncertainty swirls about how tax hikes and government spending cuts will affect them. Faced with unanswered questions, entrepreneurs are stuck contemplating trimming costs and laying off workers-not creating Main Street jobs, which has traditionally fueled economic recoveries.

[Charlie] Arnold [owner of Arnold Powerwash] said there's a "huge gap" between entrepreneurs' economic reality and the stalemate between Congress and President Barack Obama. "The longer they bicker, the worse my business is," he said.

Of course, the economy doesn't work the same way as a bag of dog food. In the real world, average folks making between $60,000 and $88,000 could get hit with tax hikes between $2,700 and $3,700 a year!

That's not chump change to the tens of millions of people who fall into this tax category.

That's more like a month's mortgage, or your teenager's first car.

(Mine was a Pontiac Sunbird I got for about $3,500... Turned out to be a bad deal with a cracked head gasket and shoddy spark plugs, but it got me around for a few months.)

But the fact is, though the fiscal cliff is going to be painful and scary, so is the solution.

From the Maestro, Alan Greenspan:

The presumption that we're going to have a painless solution to this, I think, is fantasy. There are a lot of risks out there but the one thing I can be reasonably certain of is we won't get through this whole issue without some pain.

Greenspan blames both the Democrats and Republicans for the huge spending boom that has brought us to the cliff. We can also blame both sides for not addressing these issues a decade ago... And perhaps we can include

Greenspan's "easy money" solutions back during the dot-com bubble and the housing bubble that slashed interest rates and bumped up cheap credit consumption.

But blaming sides is not as productive as blaming policies, and until we get down to the honest nitty-gritty about how policies actually affect the economy, we're just going to have obstinate Chihuahuas turning their noses up at their food.

This could take a while...

In the meantime, our personal wealth is in jeopardy. And we've got precious little time to protect it. The good thing is that the markets have pushed gold and precious metals prices sideways instead of to the moon.

Why? There are several theories, but none of them matter at the moment. Look at this chart, from the U.S. Mint:

I grabbed it from Peter Schiff's recent article, "Ditching before the Fiscal Cliff."

He says that the most secure way to try to avoid the cliff is to get into precious metals, and even though prices aren't moving much, physical bullion sales are booming. He's calling this an under-the-radar rally.

"The figures are astounding," he writes. "For US Gold Eagle coins, mint sales are up some 150% from the QE3 announcement on September 13th. Despite what the spot prices show, there has been a tremendous surge in people buying physical gold."

But it's not just people. Governments are, too. Check out this chart from the World Gold Council.

Gold Chart
View larger chart

From July 2012 through October, countries have purchased 139.85 metric tons of gold. That's on top of the 168.3 metric tons purchased in the first half of the year, and 384.2 metric tons purchased in 2011.

Peter says, "Looking back to the debt ceiling debate of August 2011, we saw big movements into physical gold there as well. What investors are concluding as they hear these grand debates is that whatever the result, the budget, the dollar, and the taxpayer will lose."

In his opinion, the only way to win is not to play. But if you can't ditch your portfolio entirely, the next best thing is to move heavily into gold, and hold on for dear life.

Happy Investing,

Sara

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