Robinson Cano is the New York Yankees second-baseman and his contract is up. Cano has decided to become a free agent which means that he can sign with any team that is willing to meet what he feels is fair pay for his services. Fair pay for professional athlete's is partly what I'm upset about as well as CEO compensation and of course, the Federal Reserve which is destroying our standard of living which is in itself the root cause in the debasement of the purchasing power of the dollar.
This story demonstrates many things, but three come to mind as I'm sure that you, dear reader can think of many, many more.
Why is it that CEOs in the US average more than 300x the wages of their employees, and fail to increase products, jobs or value to the company that hired them?
Why is it that for the average working citizen working full time and their yearly wages cannot meet the cost of a new car? Now, that may sound off the mark when there are vehicles for less than $20K, but I'm talking about disposable income after the necessary expenses like food, shelter and medical.
When you look at it in that light, it is a wonder that anyone can afford a car period. Ah, the miracle of financing which means more debt and less disposable income after all obligations have been met. Of course, new behavior of non-responsibility means that you don't make house payments and blame the problem of your money mismanagement on to someone else, but I will not entertain that problem which there are books dedicated.
Why is it that government conspires to find new ways to show that the Consumer Price Index(CPI) reveals no inflation? Maybe because this reduces the government's COLAs(cost-of-living) for social security and lowers interest rates for bonds like TIPS. While at the same time government leaders decry all social benefits as the cause of all our debt, past, present and future?
The Answer? Because the government uses the Federal Reserve as a rubber stamp to continue spending more than revenues. The wealth of the nation allowed the banking industry to evolve, but the nation no longer creates wealth but masks itself under pretend by we are rising with borrowed spending, while at the same time, lowering the value of the dollar which is stealing from its citizens who cannot increase their wages at the same rate as the devaluing in purchasing power of the dollar.
M3
is no longer published by the Fed. It stopped in 2006 and prior to that, this volatility of money was growing in double digits which means a lower dollar down the road and inflation. The inflation has been held in check due to the fact that the Fed pays the banks to hold money in reserve and the same banks can borrow at zero interest which is easy money as long as it is held in its vaults which is a risk in itself.
The rest of the "printed" money which is not printed at all, but all electronic is used by the Fed to purchase bonds and securities under its QE program. The real question is this, now that the Fed balance sheet is over $3T, what security do we have that there is real value in this balance sheet and is it worth the estimated value? Who backs the Fed?
At the moment the Fed purchases 61% of all Treasuries, because no one else would with their low interest and high risk. If rates rise, then the value of the Fed's purchases decline which begets the question, who backs the Fed?
Where does this all lead and how does it relate to Mr. Cano?
The Yankees offered him $14m per year which he laughed at. Can you believe that? How much does a ticket to the game cost, if the stars are making money out of this universe? He wants $30m per year for ten years.
When I was a kid, I collected soda bottles. When I had .50cents, I could sit in the bleacher section at the old stadium. My dream was to make enough to get into the actual ballpark with a grandstand seat, but things change as well as laws.
Long Story Short:
Bottles were out along with thrift and debt was in along with waste. As a teenager, I was no longer interested in going to the ballpark. The Yankees should become aware of demographics which are working against them. Now, when I hear about these crazy contracts, I'm turned off on sports. In the same way I'm angry about CEO pay and most of all, I realize this is all because of the Federal Reserve which has debased the value of the dollar 95% since it took power in 1913. 100 years of poor results! End the Fed!
Special
This past Saturday there was a rival college football game played between number one Alabama and number four, Auburn. It was a good game with lead changes and ties that extended to the last second when Alabama would attempt a 57 yard field goal to win. This was a long shot, but if the kicker missed, the team would still have the overtime period to win and 'Bama had the better team. Well, the Auburn coach made a great precocious move by placing his kick return player, Davis in the end zone in case of a miss to which his team could return as the play would not end until his player was tackled. Surprise! The kicker misses as expected, but Davis returns the kick 108 yards to win the game for Auburn in one of the great moments that sports gives us. This is the beauty of sport and it is a shame that money is sullying everything, including the Olympics. I see that someone is offering $100K for the ball. Please, Auburn keep it in your trophy case and priceless like the TD pass that Flutie threw against Miami against the wind for 60 yards in the last second to knock the Canes out of the national championship and to win the game for Boston College. Go Irish!
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