Marshall McLuhan once commented that if you asked a fish to describe its environment the last thing it would mention is the water.

Yes, I went on a little bit of a rant Saturday, but it seems to me that most people. like McLuhan's fish, do not see the water. There is a general unease about the situation, but no real concern to make changes.

One symptom is the crazy interest rates.

The interest rates in Spain and Italy are crazy, they are too "high." Paying around 7% with the high debt load is cutting into the budgets of these countries. This leads to more budget cuts. This leads to more economic troubles. This leads to less revenue. This leads to more budget cuts. I am not sure how these countries can get out of this cascade of negative feedback.

However, the reason for these high rates is the justified perception that these governments will default. Because of the risks, the "high" rates may in fact be too low.

Some countries have crazy low rates. Germany, Canada, and the United States actually have negative interest rates on very short term debt.

Since we are swimming in the low interest rate water, we do not think about what it means.

On a recent trip to Branson I was at the bank. An older man was there complaining. "Over one hundred thousand in the bank but the interest I get is less than one thousand." He is being stolen from by the Federal Reserve's low interest rate policy. Savers are penalized and borrowers benefited.

If we assume that the inflation rate reported by the government is correct, interest rates are very negative. The inflation rate is actually much higher than what is reported. If this is correct, then interest rates are very, very negative once taxes and loss of purchasing power is factored in.

Once you have a reserve for an emergency, pay down debt—savings in the financial market is making little sense right now.

Do it now. Pre-buy consumer goods. “Forever” first class stamps are an example of what I am talking about. It is not that I expect empty shelves. I don't. But the current financial markets are so fragile that one of the best investments you can make is consumer goods. If you have junk and clutter you aren’t using, have a yard sale or garage sale (if you have a garage) and sell that stuff. Then pre-buy food and consumer products with the money from the sale. Be sure to only buy stuff that you actually eat or will use. I have blogged about this before. You can't go wrong, as you can use or eat your investment.