Sunday, February 24, 2013

2013: Year of Economic STORMS...L&C

CCR sang about a bad moon rising and if you were in Florida as I was back in the summer of 2004 when Hurricane Charley hit, you lived it. In fact there were three hurricanes to hit Florida that year and two, Charley and Bonnie within 24 hours. Those storms caused severe financial damage and loss of life. This year we are entering a period from January 2013 to January 2014 of economic storms that will make nature disasters appear like Sunday's leftovers. For those of you that are still suffering from Hurricane Sandy, please forgive me. I'm using the summer of 2004 because there were three terrible storms and now, I see three terrible economic storms.
Payroll Tax
was scaled back 2% beginning in January. This is only a squall compared to what is coming. Next week the sequester will hit with its $85billion in spending cuts to the budget. There are many avenues to approach this reduction in government spending. The military will feel most of it. Praise the Lord! Not only am I against the military because they breathed destruction and waste, but they have been destroying our economy since Vietnam. Defense spending results in 40% of our manufacturing and if we cut that spending, that is how much our manufacturing will decline. Like I've stated many times, there is no such thing as free trade and if we protected our workers, there would be no fear of loss in manufacturing. This is the first storm and like Hurricane Bonnie, the weakest
May 6
storm number two will hit. On that day mortgage loans with less than 20% down will face demandatory PMI(private mortgage insurance). Before the recession all home purchases had to have PMI, however ninja and liar loans did away with PMI. In the "old" days PMI would end after a homeoner reached a 20% threshold in equity. Now, if you have 10% or less, PMI will be added to your mortgage payment for the LIFE of the loan, This is like your loan interest rate rising 1%. Not only that, if you had less than 20% down, then expect to pay this increase for ten years. It gets worse because this will effect all loans that have already closed. It will hit everyone!
under the Affordable Care Act will kick in next January.This so-called Medicare fix will cause a tidal wave of debt for the taxpayer and our country. You see every state government has not put away funding for their municipal workers. Now, they can place their workers under Obamacare and the health cost will shift to the federal government. This will cause the deficit to add another $trillion in debt.
Liars and Crooks:goes to the Federal Reserve again! You see, most folks don't understand the bond market and how important it is to credit and finance. For example, our nation had $10trillion in debt before president Obama took office and now, we have $16t with him. However, we pay 20% less to finance our debt with $16t than we did with $10t. How can that be? The Fed! You see, they buy over 60% of our bonds because no one else would with these low rates. In fact, if rates return to their normal level, our nation would have to pay $500billion just to pay the interest on our national debt. It is that bad!End the Fed!

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