The US Census Department released some cold facts about life in our country. We all knew unemployment caused suffering and I stated the consequences in many past articles. Numbers can be twisted to meet any criteria and statist play games with them to hide the truth like in the CPI. These numbers cannot be massaged.
POVERTY in AMERICA
According to the report there are 46.2 million people living in poverty in America, and yet, Republicans complain about social programs for the poor as the reason for our national debt. It is not those programs to which I realize there is fraud and needs better accountability. It is the military waste that causes us severe debt, however with this knowledge in hand, I agree with those Republicans and Tea Party people that we cannot afford foreign aid any longer. We need it HERE!
PERSPECTIVE
The following list of countries come from every continent and we beat them all in NOT caring for our citizens.
A for Australia. It has 21.5 million souls and we have more in poverty than their in tire population.
How about the two wars, Iraq and Afghanistan? Iraq has 29.6 million and Afghanistan has 29.1 people and we spend more on them than on ourselves.
Greece is in the news for debt problems. Their whole country has 10.7 million and we have four times as many people with problems. One in six people go to bed hungry here and that is four times as many as the whole of Hungry with 9.8 million.
We hear there is poverty in South America. We send aid, but Brazil is rising as well as Chile with 16.7 million going to bed warm while ours can't afford heat.(22 percent of our children are in poverty levels.)
We buy a lot of junk from Asia. The lie of free trade steals all our jobs which is the root of poverty. S.Korea gets their share for there 48.6 million, but we have 49.2 million without health insurance and another 46 million on food stamps.
Libya, as well as many other Arab nations are revolting in the Arab Spring. The stock market cannot wait to get its hands on Libya's oil and I'm sure that the 6.4 million will be better off without their dictator and a new way of life. Hope you don't get the democracy that we have: run by the rich who only do things for the rich.
Finally, closer to home, after all we are their biggest trading partner. Yes, Oh Canada! There 33.7 million all have health insurance and yes, we have more in poverty than their in tire country. Those are some sobering facts and they are getting worse, The 2010 census report showed the poverty rate in America at 15.1 percent, up from 2009 at 14.3 percent. This was the third consecutive year of increases and the total of 46.2 million is the largest record since the reports were published.
LIARS and CROOKS: George Bush in 2001 in his first State of the Union address pledged that our nation would be debt free in ten years under his administration. In fact, the Congressional Budget Office(CBO)in that same year stated that we would have a surplus in relationship to the Bush leadership of $5.6 trillion at that time. So much for the nonpartisan group and the Republicans. This was a $12 trillion dollar fumble. Experts!..and I can't get my book published. Bottom line: cost our nation $6.5 trillion in the RED
That was the week that was. The stock market rallied up 700 points despite the fact that unemployment claims increased, the census report on poverty, the European crisis was front and center, a roque trader scandal, foreclosures increased in August and awful retail sales report. Shows you who butters their bread. The Fed meets next week. End the Fed! JFL.
Saturday, September 17, 2011
Monday, September 5, 2011
$5,000 GOLD!...LIARS and CROOKS
Labor Day 2011 and you can put down this prediction by Sebastian. I believe he is correct and the reason for this is all the talk about gold being in a bubble. When discussing aspects of life one must remember that everything has a range to it. If your favorite ballplayer is hitting below .250 and he is a lifetime 300 hitter, well, he is due to get hot and go from this low range to his normal level which while doing, he will perform at a even higher level. In the stock market charting affords you a quick viewing of a stocks performance and candlestick's give you a even better perception of near term expectations. Both help you decide what range a particular issue is in and moving(its trend). Personally, I like to include fundamentals to the technical to direct my investment dicisions.
Why Gold?
Now, let us talk about gold. The fundamentals should be well known by this time. It is written into our constitution as our money which is violated by the Fed who has repeatedly flooded the market with paper devalueing the purchasing power of our dollar. The other aspects of gold as an investment, jewelery and commercial are more individual choices and I do not include them in my fundamental reasoning.
40th Anniversary
The technical aspects of gold is how I reached the conclusion of $5,000 gold. It is the percentage range of this commodity. If you look at the historical range when the US was on the gold standard and you could convert your dollars for gold(this is the 40th anniversary of the Nixon Shock)in August 1971, gold was artificially fixed at $35 per ounce. When it was freed, it zoomed to over one hundred dollars and continued to rise during the 1970s, beginning a bubble stage in 1979 that saw gold reach $850 an ounce in 1980 before crashing down. Now, if you divide 850 by 35 you get 24.2 times growth exceleration.
Gold began this climb from a price point of $203 per ounce. If you multiply the above figures you reach the predicted price. It will happen.
What (k) price today
For the correct value at this time one needs to look at the most important commodity to gather a price. What, you ask? OIL!
I worked at a Hess station when the first oil embargo struck. Gas went from .31 cents-per-gallon to .61 cents overnight. Today, I'll use a figure of $3.61 per gallon. The range correllation says that the price of gold should be $2,436 per ounce. We got a long way to go before we hit the bubble stage. If you don't like Sebastian's oil model use a candy bar, up 15 times. How about the greatest car ever built for the money, the 1965 Ford Mustang. It sold for $1999 then, and now $24K give or take. How about electricity? Do anything that you are comfortable using, the results speak for themselves.
The Times, Altucker and CNBC
The New York Times missed the dot.com crash. It missed the housing bubble, but it has all its guns shooting at gold saying that it is in a bubble. Folks, gold could correct to $900 per ounce and still be in its uptrend. Do not let the media which backs the Fed rob you of the profits that gold will give you. And then there are the shills like James Altucker who stated,"gold is just another fiat currency." This ding-dong does not even know the difference between paper(fiat) and gold(commodity) which limits debt. It reminds me that Ron Paul recently asked Chairman Bernanke if gold was money? He said, "NO!" Finally, another clown on CNBC, I forgot his name and it does not deserve to be remembered, stated that gold is in a bubble. I hope that they mention this article and pick on me because I could use the publicity.
LIARS and CROOKKS: This week goes to Professor Haresh Sapea of the University of Chicago Booth School of Business. He wrote an article that stated that more transparency in accounting which means more truth is harmful to the stock market because it will distort it. Yeah, it will bring evaluations to their proper level and for that moment add volativity to the market until the correct level is attained. According to this professor a little lie won't hurt. ...and I can't get my book published. Right!
Why Gold?
Now, let us talk about gold. The fundamentals should be well known by this time. It is written into our constitution as our money which is violated by the Fed who has repeatedly flooded the market with paper devalueing the purchasing power of our dollar. The other aspects of gold as an investment, jewelery and commercial are more individual choices and I do not include them in my fundamental reasoning.
40th Anniversary
The technical aspects of gold is how I reached the conclusion of $5,000 gold. It is the percentage range of this commodity. If you look at the historical range when the US was on the gold standard and you could convert your dollars for gold(this is the 40th anniversary of the Nixon Shock)in August 1971, gold was artificially fixed at $35 per ounce. When it was freed, it zoomed to over one hundred dollars and continued to rise during the 1970s, beginning a bubble stage in 1979 that saw gold reach $850 an ounce in 1980 before crashing down. Now, if you divide 850 by 35 you get 24.2 times growth exceleration.
Gold began this climb from a price point of $203 per ounce. If you multiply the above figures you reach the predicted price. It will happen.
What (k) price today
For the correct value at this time one needs to look at the most important commodity to gather a price. What, you ask? OIL!
I worked at a Hess station when the first oil embargo struck. Gas went from .31 cents-per-gallon to .61 cents overnight. Today, I'll use a figure of $3.61 per gallon. The range correllation says that the price of gold should be $2,436 per ounce. We got a long way to go before we hit the bubble stage. If you don't like Sebastian's oil model use a candy bar, up 15 times. How about the greatest car ever built for the money, the 1965 Ford Mustang. It sold for $1999 then, and now $24K give or take. How about electricity? Do anything that you are comfortable using, the results speak for themselves.
The Times, Altucker and CNBC
The New York Times missed the dot.com crash. It missed the housing bubble, but it has all its guns shooting at gold saying that it is in a bubble. Folks, gold could correct to $900 per ounce and still be in its uptrend. Do not let the media which backs the Fed rob you of the profits that gold will give you. And then there are the shills like James Altucker who stated,"gold is just another fiat currency." This ding-dong does not even know the difference between paper(fiat) and gold(commodity) which limits debt. It reminds me that Ron Paul recently asked Chairman Bernanke if gold was money? He said, "NO!" Finally, another clown on CNBC, I forgot his name and it does not deserve to be remembered, stated that gold is in a bubble. I hope that they mention this article and pick on me because I could use the publicity.
LIARS and CROOKKS: This week goes to Professor Haresh Sapea of the University of Chicago Booth School of Business. He wrote an article that stated that more transparency in accounting which means more truth is harmful to the stock market because it will distort it. Yeah, it will bring evaluations to their proper level and for that moment add volativity to the market until the correct level is attained. According to this professor a little lie won't hurt. ...and I can't get my book published. Right!
Sunday, August 21, 2011
The Coming Cannibalization...and LIARS and CROOKS
Need a Haircut
It has been a long time since I was in history class in high school, but I bet they still don't say that the riots in Watts in 1965 actually began in the late 1950s when our nation received its first haircut as small industry lost-out because jobs were not protected as they went to Japan, Korea and Europe to stabilize those governments against communism. I bet they just say it was the affects of discrimination within our society. Well, folks, prepare for our next haircut. Yes, it begins with the housing crisis. You see, housing and jobs associated with it, began with the G.I. Bill. As more and more of our factories were closed and the lies of free trade flourished, the resort fullness of the American character showed itself to develop the service sector in our economy. The jobs did not pay well, but you were self-sufficient which is one of our values. This sector as politicians cite is responsible for two-thirds of our economy, but the housing crisis put the kabox on this whole sector and related businesses. Today, at this moment, we face a new danger, cannibalization. In our copy-cat world which is reflected many times by our movie industry,
CONTAGION is coming.
This new flick will be like another movie based on a true story where a plane crashes on snow covered mountain and the survivors eat the flesh of the dead passengers in order to live. When we exit the latest full lent feature, we will live a new nightmare of desperation within the culture which will result in a cannibalistic atmosphere.
There are many signs from "flash mobs" to hedge funds on Wall Street and in the actual board rooms themselves. We are seeing parts of society pick-up that first rock.
Gasoline to High
Oil speculation has caused all of us to pay more for gasoline to the tune of .40 cents-per-gallon. For instance Nymex noticed that speculators had in May of 2008, 849,472 contracts which holds 849 million barrels of oil, which is 10 times the world's daily production, and 18 times bigger than the "futures stockpile." The number of contracts held by Nymex traders rose from 850,000 in 2003 to 2,700,000 in 2008. One small hedge fund, Vitol had control over 57.7 million barrels in June 2008, three times the USA's daily needs and 11% of the futures market. They are not the only sinners, sovereign wealth funds play the same game and since oil government nations control 85 percent of the market, I believe collusion and manipulation is in play. Like I mentioned in previous articles, our oil majors actually need help and although that sounds hypocritical to say, Exxon which makes $100 million dollars every day needs help, and yet, by helping them, it helps all of us. They do keep prices stable. The oil producing nations are cannibalizing the industry and the resources for the future which will cause conflict among the oil importing nations to seek and control oil for their economies.
Revenues and Desperate Actions
In New York recent legislation has divided street walking into two lanes. One lane is for tourists and the other for native New Yorkers. Get this, if you are in a hurry and you walk fast and you weave throughout the street traffic, well, you are in violation and you will be given a ticket. The city is also considering it a fine to walk and text at the same time. Desperate for revenues, the parking meter is old news. The tolls on bridges and tunnels is BIG MONEY. Can you believe the New York Port Authority? They are raising the already over-priced fees for one-way traffic to enter the city to $17, which will cost anyone $34 to go back-and-forth to work. Oh, yeah, if you get a responder pass, it costs less - today but tomorrow much more. Big brother knows where you are, when you are there and when you move again.
Did Google purchased Motorola's Cell division in a move to dominate the market with better phones and service you ask? Yes, but the patents was the real gem and motivation. They brought protection with the founder to the industry and now, they can turn their sharks loose to litigate against the competition. People in the know say Kodak is next and yes, for the very same reason. A litigation society. We don't turn our engineers and doctors, we turn out lawyers.
Inflation
The media reports on the latest news in the "Arab Spring" almost every day, but never do they remind you that it started over food inflation and one man's self-sacrifice to illustrate the point in Tunisia. This led to protests which led to picking up that first rock to all out civil war. It is the same structural point in Greece, fighting over jobs and pay that cannot keep up with inflation. They are already past the first rock and Europe has seen riots in England, the burning of "fat cat" cars in Germany and the tragic event in Norway. When people cannot have their voice heard or acknowledge their viewpoint by the powers-to-be, then the move to protest is only the first step. Democracy is only a word and the founders feared that the wealthy would be the only class with time and money to partake in civil affairs. Today, we have a class struggle in the US, although the media which of course is controlled by this class, dismisses. Our government leaders do not come from the poor and middle class and their policies are wiping out the middle class until that line, is just one existing class, being led by the wealthy.
Anti-union, anti-worker
quo. They sponsor the lie of free trade with the alternating power grabs between the tax and spend democrats to the rip-off society no regulation republicans. Democracy is only a word and little-by-little this class is destroying the constitution. Obama care will give young people and families a criminal record for not having health insurance. Soon, they will legislate away guns and only the outlaws will have them. NSA doesn't bother to get warrants, they just listen in on everyone and do whatever they feel inclined to do. The Fed took us off the gold standard and a concept that the founders wrote into our government. Capitalism? It is B.S. The Fed is socialism for the banking industry, wait excuse me, for the big banking industry like Wall Street.
Food Stamps
One in seven Americans are on food stamps and people like Governor Scott of Florida wants you to do community service to collect your unemployment benefits. Little-by-little the wealthy only enact legislation that benefits the haves and the rest of us are have nots. Even PBS, the station of the people is dominated by guests from this class. Recently, in the NEWS HOUR SHOW, Michael Gershon who in talking about the results of the Iowa Straw Poll says, candidates like Ron Paul are radicals and he dismisses this candidate. Radical? Yes, he is against the endless, foolish wars, Yes, he is against fiat money, deficit spending and big government. Yes, he is against the Fed and the destruction of the dollar. Put me down as a radical too! (Please see Liars and Crooks as the connection is uncanny.)
Individual
The herd mentality will many times overtake the self-actualized man. The "flash mobs" of young people have surfaced robbing a 7-Eleven in Maryland. There as been various outbreaks in Las Vegas, Wisconsin, D.C. and California. Smash and grab gangs hit jewelry stores almost every day seeking gold and street thieves are snatching gold necklaces off people. In one area of Los Angeles last month there was over one hundred such instances. Our nation will have the 48th anniversary of MLK's speech next Sunday, but years of peace between the races, along with the various new immigrants to the pot could be lost when someone throws that first rock because hope and confidence is gone. I feel this every time that I get a rejection for my book, where is our social mobility? What happened to the American dream? President Obama says he has a new plan and he will reveal it after Labor Day. Yeah, show some urgency and address the jobs problem. No, wait, after I take a vacation in Martha's Vineyard.
LIARS and CROOKS: You heard that Michele Brachmann won the Iowa poll, however I bet that you didn't hear this about her less than 200 votes win ahead of Ron Paul who finished second. All the media did was talk about her win and who else is gonna join the field and who is vacating the push for the Republican nomination. Not a word on Ron Paul's showing. Bachmann put up a big tent with a country-western star to entertain, food and drinks and most importantly, gave out 16,000 tickets which cost $30 apiece, to which you had to present in order to cast your straw poll vote. She spent over one million dollars to win and she barely won. In this sad story I see hope for America. At this point, I am seriously considering casting my vote for Ron Paul. Now, you have the rest of the story...
It has been a long time since I was in history class in high school, but I bet they still don't say that the riots in Watts in 1965 actually began in the late 1950s when our nation received its first haircut as small industry lost-out because jobs were not protected as they went to Japan, Korea and Europe to stabilize those governments against communism. I bet they just say it was the affects of discrimination within our society. Well, folks, prepare for our next haircut. Yes, it begins with the housing crisis. You see, housing and jobs associated with it, began with the G.I. Bill. As more and more of our factories were closed and the lies of free trade flourished, the resort fullness of the American character showed itself to develop the service sector in our economy. The jobs did not pay well, but you were self-sufficient which is one of our values. This sector as politicians cite is responsible for two-thirds of our economy, but the housing crisis put the kabox on this whole sector and related businesses. Today, at this moment, we face a new danger, cannibalization. In our copy-cat world which is reflected many times by our movie industry,
CONTAGION is coming.
This new flick will be like another movie based on a true story where a plane crashes on snow covered mountain and the survivors eat the flesh of the dead passengers in order to live. When we exit the latest full lent feature, we will live a new nightmare of desperation within the culture which will result in a cannibalistic atmosphere.
There are many signs from "flash mobs" to hedge funds on Wall Street and in the actual board rooms themselves. We are seeing parts of society pick-up that first rock.
Gasoline to High
Oil speculation has caused all of us to pay more for gasoline to the tune of .40 cents-per-gallon. For instance Nymex noticed that speculators had in May of 2008, 849,472 contracts which holds 849 million barrels of oil, which is 10 times the world's daily production, and 18 times bigger than the "futures stockpile." The number of contracts held by Nymex traders rose from 850,000 in 2003 to 2,700,000 in 2008. One small hedge fund, Vitol had control over 57.7 million barrels in June 2008, three times the USA's daily needs and 11% of the futures market. They are not the only sinners, sovereign wealth funds play the same game and since oil government nations control 85 percent of the market, I believe collusion and manipulation is in play. Like I mentioned in previous articles, our oil majors actually need help and although that sounds hypocritical to say, Exxon which makes $100 million dollars every day needs help, and yet, by helping them, it helps all of us. They do keep prices stable. The oil producing nations are cannibalizing the industry and the resources for the future which will cause conflict among the oil importing nations to seek and control oil for their economies.
Revenues and Desperate Actions
In New York recent legislation has divided street walking into two lanes. One lane is for tourists and the other for native New Yorkers. Get this, if you are in a hurry and you walk fast and you weave throughout the street traffic, well, you are in violation and you will be given a ticket. The city is also considering it a fine to walk and text at the same time. Desperate for revenues, the parking meter is old news. The tolls on bridges and tunnels is BIG MONEY. Can you believe the New York Port Authority? They are raising the already over-priced fees for one-way traffic to enter the city to $17, which will cost anyone $34 to go back-and-forth to work. Oh, yeah, if you get a responder pass, it costs less - today but tomorrow much more. Big brother knows where you are, when you are there and when you move again.
Did Google purchased Motorola's Cell division in a move to dominate the market with better phones and service you ask? Yes, but the patents was the real gem and motivation. They brought protection with the founder to the industry and now, they can turn their sharks loose to litigate against the competition. People in the know say Kodak is next and yes, for the very same reason. A litigation society. We don't turn our engineers and doctors, we turn out lawyers.
Inflation
The media reports on the latest news in the "Arab Spring" almost every day, but never do they remind you that it started over food inflation and one man's self-sacrifice to illustrate the point in Tunisia. This led to protests which led to picking up that first rock to all out civil war. It is the same structural point in Greece, fighting over jobs and pay that cannot keep up with inflation. They are already past the first rock and Europe has seen riots in England, the burning of "fat cat" cars in Germany and the tragic event in Norway. When people cannot have their voice heard or acknowledge their viewpoint by the powers-to-be, then the move to protest is only the first step. Democracy is only a word and the founders feared that the wealthy would be the only class with time and money to partake in civil affairs. Today, we have a class struggle in the US, although the media which of course is controlled by this class, dismisses. Our government leaders do not come from the poor and middle class and their policies are wiping out the middle class until that line, is just one existing class, being led by the wealthy.
Anti-union, anti-worker
quo. They sponsor the lie of free trade with the alternating power grabs between the tax and spend democrats to the rip-off society no regulation republicans. Democracy is only a word and little-by-little this class is destroying the constitution. Obama care will give young people and families a criminal record for not having health insurance. Soon, they will legislate away guns and only the outlaws will have them. NSA doesn't bother to get warrants, they just listen in on everyone and do whatever they feel inclined to do. The Fed took us off the gold standard and a concept that the founders wrote into our government. Capitalism? It is B.S. The Fed is socialism for the banking industry, wait excuse me, for the big banking industry like Wall Street.
Food Stamps
One in seven Americans are on food stamps and people like Governor Scott of Florida wants you to do community service to collect your unemployment benefits. Little-by-little the wealthy only enact legislation that benefits the haves and the rest of us are have nots. Even PBS, the station of the people is dominated by guests from this class. Recently, in the NEWS HOUR SHOW, Michael Gershon who in talking about the results of the Iowa Straw Poll says, candidates like Ron Paul are radicals and he dismisses this candidate. Radical? Yes, he is against the endless, foolish wars, Yes, he is against fiat money, deficit spending and big government. Yes, he is against the Fed and the destruction of the dollar. Put me down as a radical too! (Please see Liars and Crooks as the connection is uncanny.)
Individual
The herd mentality will many times overtake the self-actualized man. The "flash mobs" of young people have surfaced robbing a 7-Eleven in Maryland. There as been various outbreaks in Las Vegas, Wisconsin, D.C. and California. Smash and grab gangs hit jewelry stores almost every day seeking gold and street thieves are snatching gold necklaces off people. In one area of Los Angeles last month there was over one hundred such instances. Our nation will have the 48th anniversary of MLK's speech next Sunday, but years of peace between the races, along with the various new immigrants to the pot could be lost when someone throws that first rock because hope and confidence is gone. I feel this every time that I get a rejection for my book, where is our social mobility? What happened to the American dream? President Obama says he has a new plan and he will reveal it after Labor Day. Yeah, show some urgency and address the jobs problem. No, wait, after I take a vacation in Martha's Vineyard.
LIARS and CROOKS: You heard that Michele Brachmann won the Iowa poll, however I bet that you didn't hear this about her less than 200 votes win ahead of Ron Paul who finished second. All the media did was talk about her win and who else is gonna join the field and who is vacating the push for the Republican nomination. Not a word on Ron Paul's showing. Bachmann put up a big tent with a country-western star to entertain, food and drinks and most importantly, gave out 16,000 tickets which cost $30 apiece, to which you had to present in order to cast your straw poll vote. She spent over one million dollars to win and she barely won. In this sad story I see hope for America. At this point, I am seriously considering casting my vote for Ron Paul. Now, you have the rest of the story...
Sunday, August 14, 2011
Past"Expert"Predictions - Oil and Dollar...LIARS and CROOKS
With the S&P downgrade of the US debt rating I like to recall some past predictions by the experts in industry, government and media. No, I'm not going to talk about the actual downgrading, although Secretary of Treasury, Geithner said it would never happen, repeatedly. No, I'm going to talk about the most important product that is traded around the world - OIL.
CPI / Oil
It is ironic that this commodity is needed by everyone in every country, and it is the biggest expense by far for importing countries and it generates the most revenue by the exporting countries. With that last statement as the basis for global transactions our government releases a monthly report called the Consumer Price Index and they have the nerve not to count oil or food(second most traded commodity)as essential to inflation. They say oil does not mean anything in today's economy and they use a "core inflation" gauge to measure inflation's impact to consumers and our economy. Get real!
With that info let us recall some past predictions about oil with this most important concept, oil is traded in dollars because our dollar is the world's reserve currency. If, for any reason or event that the dollar is no longer central to oil trading, then the dollar will no longer be the world's reserve currency and because of our deficit picture, we would sink to third world status. By the way there are twenty nations in the world with a better living standards at this moment because of our military waste, the lie of free trade and excessive printing of dollars by the Fed. (Me - END THE FED!)
Paul Wolkowitz, Deputy Secretary of Defense said in 2003,"...Iraq oil revenues would pay all the costs of reconstructing the country." Larry Kudlow of CNBC said,"terrorism will be reduced and the temporary oil spike(which if you don't recall had gasoline rise to $1.72 per gallon) will be reduced." How about President Bush when questioned about the oil impact to our deficit? He said,"his tax plan will cut the deficit in half by the end of his second term and oil would be more affordable." His VP, Cheney added,"deficits don't matter!" Experts!? ...and I can't get my book published.
Speaking of oil let us go directly to its leaders.
PEAK OIL
When speaking of oil, it starts with the controversy by Hubbert with his paper way back in 1956 when he stated that the world is running out of fossil fuel. He said that the US oil production would peak in the 1970s and world production would peak around the millennium. Well, years after his prediction it was shown to be flawed as world production continues to rise, however environmentalist love to use the theory to fight for alternative energy sources which I will not tackle in this article. I will provide two points in his defense. One, technology like horizontal drilling and seabed advancements have opened new oil fields producing more oil and they were not known during his time. His second part of his theory that states that oil in surrounding areas where oil is discovered will be less than the first find has so far proven correct and this all dates to the 1950s. Wow! This guy was good.
With that background here is some facts and more predictions about the price of oil. Our military is directly responsible for using 20% of our oil imports which causes the price to rise. The Cambridge Energy Research Association(CERA)a leader in oil analyst likes the idea of peak oil except their interpretation says there is enough oil and it will be $40 a barrel in 2015. How about David Simon? Don't know him? He was a top exec with BP and he said oil would be at $20(because there is plenty)around the millennium. How about the US agency, the Energy Information Agency(EIA)? They said that the world produced more than eight million barrels of excess oil and prices would decline in 2002. Today, prices have tripled since that quote. Even the CIA does oil research and they told the president in 1977 that Russia would become an OIL IMPORTER. Can you believe these idiots. Russia may have the most oil reserves in the world!...and I can't get my book published.
Oil Prices
Oil has cycles like everything else, however contrary to the media and government the oil majors do a great job in finding oil and keeping supply and prices steady. If you look at a chart in 1986 in March the piece for a barrel of oil was $10.40 a barrel which translates to a buck a gallon. Yes, Maryann Faithful, those were the days. Continuing with this chart - oil prices remain steady to 12/10/1998 with oil at $10.73 per barrel. The only spike during the period was the Iraq War when oil spiked to $40.40 per barrel. Conclusion: No wars, no conflicts, no government interference and we will be able to fill up the car and enjoy a Sunday drive. Let me add just one other fact. Oil companies are not created equal. Exxon, Chevron and Shell put safety first with engineering while BP does not. We need to help our oil companies because in reality they know the oil business better than anyone, however the sovereign oil companies control over 85% of the world's reserves and with their governments helping them we need to level the playing field.
LIARS and CROOKS: In 1989 after the fiasco of the savings bank industry the elder George Bush created the Office of Thrift Supervision(OTS)replacing the Federal Home Loan Bank Board. Bush said."we will never have this problem again." It was reported that the workers left the building for lunch and they watched the big announcement on TV. After lunch they went back to work and they noticed a man painting the OTS sign on the door. This is the same agency that saw the failed companies: AIG, Washington Mutual and IndyMac.
The reason that I mentioned this is because the new Super Committee appointed to look into the deficits. I predict that they won't do anything and they go with the automatic $1.2 trillion in cuts. Why? Because no one has enough guts to stand for something whether I agree or not is not the point, but it is easier to say I tried but it was the other party, not me.
CPI / Oil
It is ironic that this commodity is needed by everyone in every country, and it is the biggest expense by far for importing countries and it generates the most revenue by the exporting countries. With that last statement as the basis for global transactions our government releases a monthly report called the Consumer Price Index and they have the nerve not to count oil or food(second most traded commodity)as essential to inflation. They say oil does not mean anything in today's economy and they use a "core inflation" gauge to measure inflation's impact to consumers and our economy. Get real!
With that info let us recall some past predictions about oil with this most important concept, oil is traded in dollars because our dollar is the world's reserve currency. If, for any reason or event that the dollar is no longer central to oil trading, then the dollar will no longer be the world's reserve currency and because of our deficit picture, we would sink to third world status. By the way there are twenty nations in the world with a better living standards at this moment because of our military waste, the lie of free trade and excessive printing of dollars by the Fed. (Me - END THE FED!)
Paul Wolkowitz, Deputy Secretary of Defense said in 2003,"...Iraq oil revenues would pay all the costs of reconstructing the country." Larry Kudlow of CNBC said,"terrorism will be reduced and the temporary oil spike(which if you don't recall had gasoline rise to $1.72 per gallon) will be reduced." How about President Bush when questioned about the oil impact to our deficit? He said,"his tax plan will cut the deficit in half by the end of his second term and oil would be more affordable." His VP, Cheney added,"deficits don't matter!" Experts!? ...and I can't get my book published.
Speaking of oil let us go directly to its leaders.
PEAK OIL
When speaking of oil, it starts with the controversy by Hubbert with his paper way back in 1956 when he stated that the world is running out of fossil fuel. He said that the US oil production would peak in the 1970s and world production would peak around the millennium. Well, years after his prediction it was shown to be flawed as world production continues to rise, however environmentalist love to use the theory to fight for alternative energy sources which I will not tackle in this article. I will provide two points in his defense. One, technology like horizontal drilling and seabed advancements have opened new oil fields producing more oil and they were not known during his time. His second part of his theory that states that oil in surrounding areas where oil is discovered will be less than the first find has so far proven correct and this all dates to the 1950s. Wow! This guy was good.
With that background here is some facts and more predictions about the price of oil. Our military is directly responsible for using 20% of our oil imports which causes the price to rise. The Cambridge Energy Research Association(CERA)a leader in oil analyst likes the idea of peak oil except their interpretation says there is enough oil and it will be $40 a barrel in 2015. How about David Simon? Don't know him? He was a top exec with BP and he said oil would be at $20(because there is plenty)around the millennium. How about the US agency, the Energy Information Agency(EIA)? They said that the world produced more than eight million barrels of excess oil and prices would decline in 2002. Today, prices have tripled since that quote. Even the CIA does oil research and they told the president in 1977 that Russia would become an OIL IMPORTER. Can you believe these idiots. Russia may have the most oil reserves in the world!...and I can't get my book published.
Oil Prices
Oil has cycles like everything else, however contrary to the media and government the oil majors do a great job in finding oil and keeping supply and prices steady. If you look at a chart in 1986 in March the piece for a barrel of oil was $10.40 a barrel which translates to a buck a gallon. Yes, Maryann Faithful, those were the days. Continuing with this chart - oil prices remain steady to 12/10/1998 with oil at $10.73 per barrel. The only spike during the period was the Iraq War when oil spiked to $40.40 per barrel. Conclusion: No wars, no conflicts, no government interference and we will be able to fill up the car and enjoy a Sunday drive. Let me add just one other fact. Oil companies are not created equal. Exxon, Chevron and Shell put safety first with engineering while BP does not. We need to help our oil companies because in reality they know the oil business better than anyone, however the sovereign oil companies control over 85% of the world's reserves and with their governments helping them we need to level the playing field.
LIARS and CROOKS: In 1989 after the fiasco of the savings bank industry the elder George Bush created the Office of Thrift Supervision(OTS)replacing the Federal Home Loan Bank Board. Bush said."we will never have this problem again." It was reported that the workers left the building for lunch and they watched the big announcement on TV. After lunch they went back to work and they noticed a man painting the OTS sign on the door. This is the same agency that saw the failed companies: AIG, Washington Mutual and IndyMac.
The reason that I mentioned this is because the new Super Committee appointed to look into the deficits. I predict that they won't do anything and they go with the automatic $1.2 trillion in cuts. Why? Because no one has enough guts to stand for something whether I agree or not is not the point, but it is easier to say I tried but it was the other party, not me.
Thursday, July 28, 2011
DEBT CEILING? Psuedo Political Parties...and LIARS and CROOKS
You are probably tired of hearing all the commotion with our government and its lack of ability to balance income(revenues)with spending(military and federal workers, entitlements like social security, medicare, etc.). I think one should look deeper into the psyche of this situation and put it as a reflection of priorities and purpose of these elected officials. The question is more than a battle over this issue because if our nation was to default, it not only would create doubt about our present debt( roughly $4.5 trillion)being held by foreign governments, but any investor both domestic and foreign who holds any assets like T-Bills, US Bonds, whatever the denomination or length of time. It gets worse. This doubt would give rise to the question: how could a nation which defaulted be the world's reserve currency? Folks, if we were to lose our status as the world's reserve currency, well, gasoline would double in price, food would rise another 50% and the connected aspects of these rises would be a disease that would affect every product and service. Unemployment would easily pass 20% and for the 48.2 million Americans collecting food stamps, you will starve by the middle of the next month. You see, by being able to print we are the only country who does not feel the pain for not being able to balance its checkbook. It could get even worse than the last two sentences. So, if our so-called "leaders" understand the ramifications of the debt ceiling, why can't they at least extend it without all the fighting, after all President Reagan for example, extended the debt ceiling on average, more than once every six months of his two-term administration. By the way it also shows you how little or accurate their figures are for our economy with them in control of the checkbook, however an even more sinister aspect of the debt ceiling debate is the "free time" that the president receives to go on national television and state his case without opposition. He can prepare his speech to sway public opinion whether he actually believes or will fight for the theme of his spending or cutting of programs.
Dueling Debt Bills
The first to appear in the news was the Simpson/Bowles Bipartisan Commission in December. It got attacked by both political parties. Funny, President Obama submitted his budget only two months previous to the findings and he displayed so little with their work. This is what directed me to look at the issue differently. The president, now gets free TV time to basically build up his presidency without spending a nickle. Just like his campaign back in 2008, he says all the right things, but history proves actions speak louder than words. Let's review - he did not end the wars, in fact extended them when you consider Libya. In addition, in his campaign he railed against Bush deficit spending, I guess he beat Bush in that category. He said he was for First Payer in the health program and he passes a law nothing like it. His law will make all young people criminals because they must have health insurance after they turn eighteen. Yeah, what kid looks forward with his first job to buy health insurance. Who wants a car anyway? Like I stated, President Obama broke the record with his deficit budget and his stimulus program gets zero results. His leadership ability is minus as he does not even stand up for traditional democratic ideals. He betrayed everyone when behind closed doors he agrees with the Republicans to extend the Bush Tax plan. By the way this tax "break" is really for the rich. People, you do not understand what it means and I'm going to set an example to give you a better picture. There are 145 million workers in the US. If, say I were to give everyone of them a refund check for $1000 dollars, and keep in mind that I know there are over 14 million unemployed and another 17 million underemployed, because I'm trying to make a point how terrible this tax break is for America. The total is $145 billion, but the tax break cost America and it is all in the deficit column, $845 billion. Can you now understand where the other $700 billion went? To the RICH! In just five minutes Obama added almost one trillion dollars to our debt. Of course, the Republicans say this will create jobs. Yeah, can I cut your grass, Master? ...Now, back to free TV time. The "gang of six" have a debt plan as does the House Speaker Boehner as well as the House itself. Senator Reid has a plan, as well as Senator McConnell and just about every member because they can have their free TV time to say, "see I tried, it's the other party." The President says he is willing to compromise. Funny, the House plan was passed last week, but Obama wants the senate to kill it. Why? It puts forth an amendment that says every budget must be balanced. Talk about hypocrisy!
NEW AMERICAN OLIGARCHY
Wall Street banks are the new American oligarchy - a group that gains political power because of its economic power, and then uses that political power for its own benefit. You doubt? By 2007 the debt held by the financial sector grew over $36 trillion, or 259 percent of our GDP. Both political parties enlist Wall Street executives for key positions of power, especially from Goldman Sachs. In the last election Obama's top donators with access included Goldman Sachs, Citigroup, JP Morgan Chase, UBS and Morgan Stanley. A top individual donator: George Soros.
Now, the Republican side. John McCain's list has, Goldman Sachs, JP Morgan Chase, Merrill Lynch, Credit Suisse Group(foreign), Bank of America and yes, George Soros. Funny, it looks the same and that's where our tax break money goes - it goes to maintain the status quo. We have no accessinternet is our only communication to let each other know that we are out there. It shows our ears are listening. By the way if my book ever gets published, I do have a plan that will save Social Security and it won't cost the taxpayer one cent. I say that because even though Medicare needs retooling, I am for social security.
LIARS and CROOKS: This one is beyond believe. It's worse than a liar and crook. It is TREASON!
This is the story. An illegal in Texas, Jose Medellin along with eight other illegals kidnapped two young American girls off the street while they were walking home. They were sodomized and raped and left dead. He was caught and he confessed. Guess what? Since he was an illegal, he was told that he had a right to speak to the Mexican council which at the time, he did not know or do. His lawyer appealed. The Supreme Court upheld the conviction, but President Bush comes to his rescue. Bush has his attorney general fight and receive another Supreme Court case. Why? Bush wanted the court to free the man because Bush wanted international law to supersede our law. Bush did not care that the man was guilty; he wanted to set a precedent for his economic globalization plan which makes North America an economic zone with a new currency, the "amero." This has been second by the ex-Mexican President, Vicente Fox on the LARRY KING LIVE Show. Bushs' plan would lose our sovereignty along with all our jobs. Praise God! Bush lost the case and the court upheld the conviction for a second time, however this story demonstrates that our leaders are determined to run globalization down our throats until we are all depended upon the government for everything except FREEDOM!
"One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors." - Plato.
"When, in the course of human events, it becomes necessary for one people to DISSOLVE the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the laws of nature and of nature's God entitle them, a decent respect to opinions of mankind requires that they should declare the causes which impel them to the separation. - Declaration of Independence. JFL.
Dueling Debt Bills
The first to appear in the news was the Simpson/Bowles Bipartisan Commission in December. It got attacked by both political parties. Funny, President Obama submitted his budget only two months previous to the findings and he displayed so little with their work. This is what directed me to look at the issue differently. The president, now gets free TV time to basically build up his presidency without spending a nickle. Just like his campaign back in 2008, he says all the right things, but history proves actions speak louder than words. Let's review - he did not end the wars, in fact extended them when you consider Libya. In addition, in his campaign he railed against Bush deficit spending, I guess he beat Bush in that category. He said he was for First Payer in the health program and he passes a law nothing like it. His law will make all young people criminals because they must have health insurance after they turn eighteen. Yeah, what kid looks forward with his first job to buy health insurance. Who wants a car anyway? Like I stated, President Obama broke the record with his deficit budget and his stimulus program gets zero results. His leadership ability is minus as he does not even stand up for traditional democratic ideals. He betrayed everyone when behind closed doors he agrees with the Republicans to extend the Bush Tax plan. By the way this tax "break" is really for the rich. People, you do not understand what it means and I'm going to set an example to give you a better picture. There are 145 million workers in the US. If, say I were to give everyone of them a refund check for $1000 dollars, and keep in mind that I know there are over 14 million unemployed and another 17 million underemployed, because I'm trying to make a point how terrible this tax break is for America. The total is $145 billion, but the tax break cost America and it is all in the deficit column, $845 billion. Can you now understand where the other $700 billion went? To the RICH! In just five minutes Obama added almost one trillion dollars to our debt. Of course, the Republicans say this will create jobs. Yeah, can I cut your grass, Master? ...Now, back to free TV time. The "gang of six" have a debt plan as does the House Speaker Boehner as well as the House itself. Senator Reid has a plan, as well as Senator McConnell and just about every member because they can have their free TV time to say, "see I tried, it's the other party." The President says he is willing to compromise. Funny, the House plan was passed last week, but Obama wants the senate to kill it. Why? It puts forth an amendment that says every budget must be balanced. Talk about hypocrisy!
NEW AMERICAN OLIGARCHY
Wall Street banks are the new American oligarchy - a group that gains political power because of its economic power, and then uses that political power for its own benefit. You doubt? By 2007 the debt held by the financial sector grew over $36 trillion, or 259 percent of our GDP. Both political parties enlist Wall Street executives for key positions of power, especially from Goldman Sachs. In the last election Obama's top donators with access included Goldman Sachs, Citigroup, JP Morgan Chase, UBS and Morgan Stanley. A top individual donator: George Soros.
Now, the Republican side. John McCain's list has, Goldman Sachs, JP Morgan Chase, Merrill Lynch, Credit Suisse Group(foreign), Bank of America and yes, George Soros. Funny, it looks the same and that's where our tax break money goes - it goes to maintain the status quo. We have no accessinternet is our only communication to let each other know that we are out there. It shows our ears are listening. By the way if my book ever gets published, I do have a plan that will save Social Security and it won't cost the taxpayer one cent. I say that because even though Medicare needs retooling, I am for social security.
LIARS and CROOKS: This one is beyond believe. It's worse than a liar and crook. It is TREASON!
This is the story. An illegal in Texas, Jose Medellin along with eight other illegals kidnapped two young American girls off the street while they were walking home. They were sodomized and raped and left dead. He was caught and he confessed. Guess what? Since he was an illegal, he was told that he had a right to speak to the Mexican council which at the time, he did not know or do. His lawyer appealed. The Supreme Court upheld the conviction, but President Bush comes to his rescue. Bush has his attorney general fight and receive another Supreme Court case. Why? Bush wanted the court to free the man because Bush wanted international law to supersede our law. Bush did not care that the man was guilty; he wanted to set a precedent for his economic globalization plan which makes North America an economic zone with a new currency, the "amero." This has been second by the ex-Mexican President, Vicente Fox on the LARRY KING LIVE Show. Bushs' plan would lose our sovereignty along with all our jobs. Praise God! Bush lost the case and the court upheld the conviction for a second time, however this story demonstrates that our leaders are determined to run globalization down our throats until we are all depended upon the government for everything except FREEDOM!
"One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors." - Plato.
"When, in the course of human events, it becomes necessary for one people to DISSOLVE the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the laws of nature and of nature's God entitle them, a decent respect to opinions of mankind requires that they should declare the causes which impel them to the separation. - Declaration of Independence. JFL.
Monday, July 11, 2011
In Defense of Protectionism...Liars and Crooks
At present there are a two hated words in our economic culture. One, is to be called a "liberal" and not relevant here. The other is to call for protectionism and I speak in its defense.
The economic history of the US begins with our constitution and the overall thinking behind it. Since it was mainly drafted along the lines of the Virginia Commonwealth by its leading thinkers, Jefferson and Madison. They envisioned a society whereby the people were self-sufficient, mainly small farmers. With their new found freedom, they would have the right to choose their individual direction for life, liberty and the pursuit of happiness. The nation was to promote their general welfare.
This is not to say that the nation would be all farmers. The industrial revolution had already started in England and the other nations of Europe were catching up. The founders who did not share the agricultural direction of the nation sought to establish the first national bank for the country. They wanted cheap credit to expand the nascent industry, mainly in the north. They were opposed by the agricultural block who wanted a strong currency to defend the price for their commodities. They compromised with gold and silver being directly included into the constitution, however, the first Secretary of the Treasury, Hamilton was allowed to construct the First National Bank with strong protections for the currency which would be backed by gold and silver. We could not print unless it had the backing of gold or silver. Although young and poor, we had a strong currency.
The Northern industries grew rapidly as many things came together. The DuPont Corporation started in 1802. Its chief product was gunpowder. The power loom was invented in England, but the natural resources along with cheap, immigrant labor forged its success in New England.
ELI'S COMING
Whitney introduced the concept of interchangeability with his rifle and the government made the first big purchases of his rifles and DuPont's gunpowder, nevertheless agriculture was the nations largest employer until the 1870s. Our society grew economically through individual achievement as it spurred all areas and regions.
However, as the nation expanded on railroad lines, industry grew more as agriculture shrank. The industrial age had come of age in America along with the many negatives in its caboose.
WORKERS RESPOND
In Europe the writings of Dickens highlighted the exploitation of the rich over the poor through factory labor of the industrial revolution. In the US the first protest by workers was met with severe reprisals by management. Black listing and the hiring of guards who shot many strikers in situation-after-situation finally found a voice in Congress, although unions were not recognized until well after WW1. To remind the youth of today this is what a factory worker could expect. You would work six days from sunrise to sunset(14 hours)with no benefits. If you got hurt on the job, tough. Laid off? No unemployment. No representation. No voice and no unions allowed. If you lost a limb like many railroad workers due to excessive demands by management, sell pencils like the deformed veterans of the Civil War. The government would not assist you in any way. Ever hear of the TRIANGLE FIRE? Over 100 hundred women lost their lives due to excessive abuse and conditions on the job which paid .10 cents an hour with a 60 hour workweek. Welcome to the world that Republicans want: no unemployment benefits, no social security and no regulations. The party of Lincoln has been taken over by the rich and powerful and they are hypocrites as I will demonstrate.
Change of Heart
In the US the industrial revolution got bad press and an anti-trust candidate was elected president. The rich and powerful in this nation took note and used their connections to develop a new approach. We are no longer robber barons and monopolist; we are capitalist. Yes, we made mistakes, but our free enterprise system works and anyone can make it or become president.
It sounds good and for many years it had a lot of truth except the loopholes are being closed due to many factors. Globalization is the number one reason why it is failing and our nation is sinking rapidly. The lie of free trade by both political parties is the biggest sin.
TRADE SOCIETY
The English aristocrats came up with the idea to combat the guild system in Europe. The guild system had worked for over 100 years, but due to limited growth was stagnating. Its one big strength, the use of monopoly by the master was now under attack. An individual could make a better product, but he could not compete with mass production. The writing was on the wall to end the guild system.
NEW THINKING: Social Democracy
The rest of the world developed differently. Socialist and communist had an listening audience for the abuses of the industrial revolution. In fact, their concepts are still in vogue today. The idea of government planning is one of their mainstays along with the concept of the welfare state. As unification spread throughout Europe many emerging nations took to the ideas of the socialist. Germany, the biggest economic power, lives by socialist thinking, especially today. Chancellor Bismarck introduced the first pension(social security) and what we call the welfare state with government assistance. He also spoke out against the idea of free trade(new name for trade society) because it was basically a self-interest concept formulated by the British. He put in place tariffs to protect German industries and utilized government assistance to develop large corporations. This is how Siemens, Mercedes, SAP and all the others grew. Socialist corporatism(SC). It is the same everywhere. Even though Germany was late to the Industrial Revolution, they became the leading economic power that has been copied by every nation except the US.
GLOBAL SYSTEM
Japan made use of its favorite son using another favorite son, the keiretsu bank. The government would use long-term planning through its Ministry of International Trade and Industry(MITI)and the Ministry of Finance to direct their economy. They channeled bank loans, import licenses and legislation to favorite firms like Toyota, Sony, etc. Socialist corporatism.
In Korea, the government developed their industry with creating Chaebols. They used planning which included loans, legislation whatever it took to take market share. S.C. again! In Indonesia it was cronyism. Same technique as the others. In China the communist party utilizes the same formula. These nations are causing the world two problems. They cause over capacity which results in recessions and because of their favoritism which is really picking winners and losers, they will create conflict for resources. The end result of these socialist economies with monopoly companies is totalitarianism. Totalitarianism will lead to conflict and then, wars. Want a second opinion? Alexis de Tocqueville grew up in France. He knows Europe. He stayed in the US and he noted the difference in democratic thinking and personality or temperament between the two. Democracy(US)extends the sphere of individual freedom, socialism restricts it. Democracy attaches all possible value to each man;socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference, while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude. These are invisible signs of their economies. The visible signs are tariffs, road blocks like licenses, product safety, things that protect the domestic economy. The average tariff in China on American products is 25%. A Florida pink grapefruit cost $8. in Tokyo. A K-car cost over $35k in the early 1980s in Korea. How many did they sell? Forget that for a moment. How many of the greatest car ever built for the money, the 289 Ford Mustang ever sold in foreign countries? What nobody ever admits is that foreign nations have an unwritten rule that to buy American is to buy luxury and at the same time you could be causing a neighbor to lose their job. The only thing that our press would cover is to mention someone damaged some one's Toyota in a union parking lot back in the 1970s.
FIAT v. PRIVATE
This is the real reason why we are losing jobs, industries and our way of life. Our free enterprise is competing against government sponsored entities. Socialist versus private. Fiat versus gold. Gresham's Law states that bad money will drive out good money. Ever see a silver quarter? Forget that, you'll be lucky to find a copper penny. This is what I add: Fiat, socialist systems will drive our free, capitalist systems and it does not matter whether it is set by law or market evaluations. If we don't start protecting what is left, we will surely die. The reason Republicans are hypocrites(Democrats just have their hand-out)is the fact that producers owe their initial success to the town and region where they started. The local workers put in an extra effort for the success of the company and the local citizens supported the company product. Now, the plant is out-sourced for cheaper labor and bigger profits. Nike could not make their sneakers here with the price that they charge? Of course, some producers had to out-source just to survive. However, if we do provide protections, this is what we can expect.
Pro-Protectionism
Immediately, the world will first complain and then, retaliate. So, what! We will begin to collect tariff's that will reduce our deficit. When manufactures see that they can trust these protections, they will re-open old plants, build new ones and our unemployment will fall to less than 4%, which will be a new record. Our exports will fall too. Who cares. They only account for 14% at best and if we keep doing what we were doing with the lie of free trade, those same companies will be under attack and eventually go out of business. This will help them in the long run. In addition, our local and state governments will be able to balance their budgets with higher revenues, not to mention the federal government. By the way we will need to end ALL TRADE AGREEMENTS. NAFTA, CAFTA, all of them 'cause it should read SHAFTA!(which is what they were doing all along) Eventually, the global world will stabilize and at that point, if we don't make the best products, at the best price, well then, we are gonna lose. Remember this, we are the country of self-reliance, creativity and freedom of thought. If our government returns to the thinking of the Founding Fathers, we will finally be doing what they placed into our constitution - promoting the general welfare. God Bless America!...and we gonna need it after you read the next piece.
LIARS and CROOKS: the whole Atlanta education system. It seems that the school teachers needed to raise the standards in the classroom. After extensive meetings and overtime, they found a solution. The teachers and principals would gather after tests were given to "go over" the results. They would change all the wrong answers to the correct answers and "lo and behold" the Atlanta school system achieved remarkable standards, not to mention the hugh turn-around in results. Supervisers stated this was "only" in elementary and middle levels. Yeah, right! Did Michelle Bachman go to school there? Why? In New Hampshire for the first time, she shouted out for joy that it was so great to be in the state that fired the shot heard around the world(Lexington and Concord).
The economic history of the US begins with our constitution and the overall thinking behind it. Since it was mainly drafted along the lines of the Virginia Commonwealth by its leading thinkers, Jefferson and Madison. They envisioned a society whereby the people were self-sufficient, mainly small farmers. With their new found freedom, they would have the right to choose their individual direction for life, liberty and the pursuit of happiness. The nation was to promote their general welfare.
This is not to say that the nation would be all farmers. The industrial revolution had already started in England and the other nations of Europe were catching up. The founders who did not share the agricultural direction of the nation sought to establish the first national bank for the country. They wanted cheap credit to expand the nascent industry, mainly in the north. They were opposed by the agricultural block who wanted a strong currency to defend the price for their commodities. They compromised with gold and silver being directly included into the constitution, however, the first Secretary of the Treasury, Hamilton was allowed to construct the First National Bank with strong protections for the currency which would be backed by gold and silver. We could not print unless it had the backing of gold or silver. Although young and poor, we had a strong currency.
The Northern industries grew rapidly as many things came together. The DuPont Corporation started in 1802. Its chief product was gunpowder. The power loom was invented in England, but the natural resources along with cheap, immigrant labor forged its success in New England.
ELI'S COMING
Whitney introduced the concept of interchangeability with his rifle and the government made the first big purchases of his rifles and DuPont's gunpowder, nevertheless agriculture was the nations largest employer until the 1870s. Our society grew economically through individual achievement as it spurred all areas and regions.
However, as the nation expanded on railroad lines, industry grew more as agriculture shrank. The industrial age had come of age in America along with the many negatives in its caboose.
WORKERS RESPOND
In Europe the writings of Dickens highlighted the exploitation of the rich over the poor through factory labor of the industrial revolution. In the US the first protest by workers was met with severe reprisals by management. Black listing and the hiring of guards who shot many strikers in situation-after-situation finally found a voice in Congress, although unions were not recognized until well after WW1. To remind the youth of today this is what a factory worker could expect. You would work six days from sunrise to sunset(14 hours)with no benefits. If you got hurt on the job, tough. Laid off? No unemployment. No representation. No voice and no unions allowed. If you lost a limb like many railroad workers due to excessive demands by management, sell pencils like the deformed veterans of the Civil War. The government would not assist you in any way. Ever hear of the TRIANGLE FIRE? Over 100 hundred women lost their lives due to excessive abuse and conditions on the job which paid .10 cents an hour with a 60 hour workweek. Welcome to the world that Republicans want: no unemployment benefits, no social security and no regulations. The party of Lincoln has been taken over by the rich and powerful and they are hypocrites as I will demonstrate.
Change of Heart
In the US the industrial revolution got bad press and an anti-trust candidate was elected president. The rich and powerful in this nation took note and used their connections to develop a new approach. We are no longer robber barons and monopolist; we are capitalist. Yes, we made mistakes, but our free enterprise system works and anyone can make it or become president.
It sounds good and for many years it had a lot of truth except the loopholes are being closed due to many factors. Globalization is the number one reason why it is failing and our nation is sinking rapidly. The lie of free trade by both political parties is the biggest sin.
TRADE SOCIETY
The English aristocrats came up with the idea to combat the guild system in Europe. The guild system had worked for over 100 years, but due to limited growth was stagnating. Its one big strength, the use of monopoly by the master was now under attack. An individual could make a better product, but he could not compete with mass production. The writing was on the wall to end the guild system.
NEW THINKING: Social Democracy
The rest of the world developed differently. Socialist and communist had an listening audience for the abuses of the industrial revolution. In fact, their concepts are still in vogue today. The idea of government planning is one of their mainstays along with the concept of the welfare state. As unification spread throughout Europe many emerging nations took to the ideas of the socialist. Germany, the biggest economic power, lives by socialist thinking, especially today. Chancellor Bismarck introduced the first pension(social security) and what we call the welfare state with government assistance. He also spoke out against the idea of free trade(new name for trade society) because it was basically a self-interest concept formulated by the British. He put in place tariffs to protect German industries and utilized government assistance to develop large corporations. This is how Siemens, Mercedes, SAP and all the others grew. Socialist corporatism(SC). It is the same everywhere. Even though Germany was late to the Industrial Revolution, they became the leading economic power that has been copied by every nation except the US.
GLOBAL SYSTEM
Japan made use of its favorite son using another favorite son, the keiretsu bank. The government would use long-term planning through its Ministry of International Trade and Industry(MITI)and the Ministry of Finance to direct their economy. They channeled bank loans, import licenses and legislation to favorite firms like Toyota, Sony, etc. Socialist corporatism.
In Korea, the government developed their industry with creating Chaebols. They used planning which included loans, legislation whatever it took to take market share. S.C. again! In Indonesia it was cronyism. Same technique as the others. In China the communist party utilizes the same formula. These nations are causing the world two problems. They cause over capacity which results in recessions and because of their favoritism which is really picking winners and losers, they will create conflict for resources. The end result of these socialist economies with monopoly companies is totalitarianism. Totalitarianism will lead to conflict and then, wars. Want a second opinion? Alexis de Tocqueville grew up in France. He knows Europe. He stayed in the US and he noted the difference in democratic thinking and personality or temperament between the two. Democracy(US)extends the sphere of individual freedom, socialism restricts it. Democracy attaches all possible value to each man;socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference, while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude. These are invisible signs of their economies. The visible signs are tariffs, road blocks like licenses, product safety, things that protect the domestic economy. The average tariff in China on American products is 25%. A Florida pink grapefruit cost $8. in Tokyo. A K-car cost over $35k in the early 1980s in Korea. How many did they sell? Forget that for a moment. How many of the greatest car ever built for the money, the 289 Ford Mustang ever sold in foreign countries? What nobody ever admits is that foreign nations have an unwritten rule that to buy American is to buy luxury and at the same time you could be causing a neighbor to lose their job. The only thing that our press would cover is to mention someone damaged some one's Toyota in a union parking lot back in the 1970s.
FIAT v. PRIVATE
This is the real reason why we are losing jobs, industries and our way of life. Our free enterprise is competing against government sponsored entities. Socialist versus private. Fiat versus gold. Gresham's Law states that bad money will drive out good money. Ever see a silver quarter? Forget that, you'll be lucky to find a copper penny. This is what I add: Fiat, socialist systems will drive our free, capitalist systems and it does not matter whether it is set by law or market evaluations. If we don't start protecting what is left, we will surely die. The reason Republicans are hypocrites(Democrats just have their hand-out)is the fact that producers owe their initial success to the town and region where they started. The local workers put in an extra effort for the success of the company and the local citizens supported the company product. Now, the plant is out-sourced for cheaper labor and bigger profits. Nike could not make their sneakers here with the price that they charge? Of course, some producers had to out-source just to survive. However, if we do provide protections, this is what we can expect.
Pro-Protectionism
Immediately, the world will first complain and then, retaliate. So, what! We will begin to collect tariff's that will reduce our deficit. When manufactures see that they can trust these protections, they will re-open old plants, build new ones and our unemployment will fall to less than 4%, which will be a new record. Our exports will fall too. Who cares. They only account for 14% at best and if we keep doing what we were doing with the lie of free trade, those same companies will be under attack and eventually go out of business. This will help them in the long run. In addition, our local and state governments will be able to balance their budgets with higher revenues, not to mention the federal government. By the way we will need to end ALL TRADE AGREEMENTS. NAFTA, CAFTA, all of them 'cause it should read SHAFTA!(which is what they were doing all along) Eventually, the global world will stabilize and at that point, if we don't make the best products, at the best price, well then, we are gonna lose. Remember this, we are the country of self-reliance, creativity and freedom of thought. If our government returns to the thinking of the Founding Fathers, we will finally be doing what they placed into our constitution - promoting the general welfare. God Bless America!...and we gonna need it after you read the next piece.
LIARS and CROOKS: the whole Atlanta education system. It seems that the school teachers needed to raise the standards in the classroom. After extensive meetings and overtime, they found a solution. The teachers and principals would gather after tests were given to "go over" the results. They would change all the wrong answers to the correct answers and "lo and behold" the Atlanta school system achieved remarkable standards, not to mention the hugh turn-around in results. Supervisers stated this was "only" in elementary and middle levels. Yeah, right! Did Michelle Bachman go to school there? Why? In New Hampshire for the first time, she shouted out for joy that it was so great to be in the state that fired the shot heard around the world(Lexington and Concord).
Tuesday, June 28, 2011
Fiat Fractions and the Economy...Liars and Crooks
If you have been reading my blog, I think by now, you know it reflects my disposition. I am very pragmatic. I would not classify my thinking as overly interlectual. In fact, if I ever get invited to an economic conference, I would have doubts. Did these guys receive their doctorates from the internet? Nevertheless, I do have a natural gift in being able to understand the Ivy Tower and put their thinking into everyday examples.
This intro serves as the background to a report that I just recently read. Ever hear of Marginal Productivity of Debt(MPD)? This is an economic term used to describe the effects of debt that can influence economic growth by government, whether federal, state or local. It shows the amount of money that is spent to produce one dollar of growth.
My first reaction to this report was tell me something that I don't know, but upon further reflection, I saw many other aspects to it.
The article pointed out that nearly 20% of every dollar of disposable income comes from the government in March. This money has many names from Social Security to unemployment checks. These government benefits are also called "transfer payment."
To understand the impact of the report one must have more info on the trend. I borrow the concept from technical analysis. If a stock is rising, the trend is up. It won't change until something affects the basics of the stock like its sales, margins, labor and supply, product saturation, things fundamental to it. You can use science too. A body in motion trends to stay in motion until friction, gravity or similar overcomes the momentum.
Now, back to MPD. In 2006 it took $6.31 for a dollars worth of growth. Going back to the 1980s, the cost of MPD was about 12% according to the US Bureau of Economic Analysis. Back in 1959 when the bureau began covering this aspect, it cost only 6% of debt for a dollars worth of growth. This translates to $1.86 for one dollar. Can you see the trend? And it is definitely negative. Why?
The report stated no particular reason. It did however cite many future concerns because benefits are under scrutiny and on top of that pressures are building with the ever increasing size of the federal government, declining revenues along with the fact that transfer payments will gobble an increasing share when you factor into the equation the baby boomers and Medicare which will compound the deficit which in turn could cause interest rates to rise, resulting in a vicious circle of decreasing returns. These fractions are in negative territory and only getting worse with time.
I cannot argue with the above, however I do think the reason for the increasing cost are related to the other aspects of which mostly are caused by our federal government and the decisions that they have made or not made.
The one chief reason that is outside of the government direction, but still responsible for it, is the exponential growth of the shadow banking industry. Its affects were evident in the financial crisis of 2008. The investment houses, hedge funds and finance companies were as big, if not bigger than the banks within our nation. These unregulated groups along with their unregulated actions like the spreading of CDS(derivatives)which by the way are surpassing $500 trillion dollars and the whole value of the world GDP is only $65 trillion. These idiots are allowed to function when one slip could crush the whole economy of the planet. No one could cover the bill even with centuries to pay it. Keep that in mind when the Republicans say we have too much regulation or think Bernie Madoff. An investment adviser must be registered when you have over 15 clients. Madoff had over 3,000. And then, there is the flip-side to this. We regulate an industry, but with the next election, the new party in power waters down their ability or better yet, put a yes man like we usually have in the SEC and elsewhere. Lehman was declared solid four days before bankruptcy.
Next, the military complex. Since 9/11, we have spent over one trillion dollars in the two wars and all of it will cost more because it all got added to the deficit. Yeah, Cheney, "deficits don't matter!" (past winner of my Ding-Dong Award). No one can put a figure which needs to be added to this: the loss of life and resources which could have served all of us with a better purpose.
Finally, the declining value of the dollar and with Bernanke printing overtime, its value will continue to shrink. This is why MPD is continually costing more to produce one dollar of growth. Not to mention the Obama stimulus package will only put the cost off the charts in the near future. Translation? Yogi said it best," a nickel, ain't worth a dime anymore." Better have some gold, you're gonna need it.
LIARS and CROOKS: Gotta go with Secretary of Defense, Robert Baker. He does not want to be associated with a country that won't run a $trillion dollar modern military. He's taking his ball and going home because "they" won't play by his rules. Yeah, his rules said never negotiate with terrorist, but in his last interview with 60 MINUTES, he said it is possible to end the conflict in Afghanistan if we settle with the Taliban. It shows the military complex is ALL B.S. They have been wrong in everything that they do. Terrorist is fear and FDR sated it best,"the only thing that we have to fear is fear itself." If we only protected our borders 9/11 would never have happened, but one agency after another would not act on the tip that these first terrorist were overheard on a Sat/phone in Yemen and they were followed to San Diego and the whole thing could have ended right there, but NO! These idiots are responsible for the tragedy and the subsequent ten years of pain and loss.
This intro serves as the background to a report that I just recently read. Ever hear of Marginal Productivity of Debt(MPD)? This is an economic term used to describe the effects of debt that can influence economic growth by government, whether federal, state or local. It shows the amount of money that is spent to produce one dollar of growth.
My first reaction to this report was tell me something that I don't know, but upon further reflection, I saw many other aspects to it.
The article pointed out that nearly 20% of every dollar of disposable income comes from the government in March. This money has many names from Social Security to unemployment checks. These government benefits are also called "transfer payment."
To understand the impact of the report one must have more info on the trend. I borrow the concept from technical analysis. If a stock is rising, the trend is up. It won't change until something affects the basics of the stock like its sales, margins, labor and supply, product saturation, things fundamental to it. You can use science too. A body in motion trends to stay in motion until friction, gravity or similar overcomes the momentum.
Now, back to MPD. In 2006 it took $6.31 for a dollars worth of growth. Going back to the 1980s, the cost of MPD was about 12% according to the US Bureau of Economic Analysis. Back in 1959 when the bureau began covering this aspect, it cost only 6% of debt for a dollars worth of growth. This translates to $1.86 for one dollar. Can you see the trend? And it is definitely negative. Why?
The report stated no particular reason. It did however cite many future concerns because benefits are under scrutiny and on top of that pressures are building with the ever increasing size of the federal government, declining revenues along with the fact that transfer payments will gobble an increasing share when you factor into the equation the baby boomers and Medicare which will compound the deficit which in turn could cause interest rates to rise, resulting in a vicious circle of decreasing returns. These fractions are in negative territory and only getting worse with time.
I cannot argue with the above, however I do think the reason for the increasing cost are related to the other aspects of which mostly are caused by our federal government and the decisions that they have made or not made.
The one chief reason that is outside of the government direction, but still responsible for it, is the exponential growth of the shadow banking industry. Its affects were evident in the financial crisis of 2008. The investment houses, hedge funds and finance companies were as big, if not bigger than the banks within our nation. These unregulated groups along with their unregulated actions like the spreading of CDS(derivatives)which by the way are surpassing $500 trillion dollars and the whole value of the world GDP is only $65 trillion. These idiots are allowed to function when one slip could crush the whole economy of the planet. No one could cover the bill even with centuries to pay it. Keep that in mind when the Republicans say we have too much regulation or think Bernie Madoff. An investment adviser must be registered when you have over 15 clients. Madoff had over 3,000. And then, there is the flip-side to this. We regulate an industry, but with the next election, the new party in power waters down their ability or better yet, put a yes man like we usually have in the SEC and elsewhere. Lehman was declared solid four days before bankruptcy.
Next, the military complex. Since 9/11, we have spent over one trillion dollars in the two wars and all of it will cost more because it all got added to the deficit. Yeah, Cheney, "deficits don't matter!" (past winner of my Ding-Dong Award). No one can put a figure which needs to be added to this: the loss of life and resources which could have served all of us with a better purpose.
Finally, the declining value of the dollar and with Bernanke printing overtime, its value will continue to shrink. This is why MPD is continually costing more to produce one dollar of growth. Not to mention the Obama stimulus package will only put the cost off the charts in the near future. Translation? Yogi said it best," a nickel, ain't worth a dime anymore." Better have some gold, you're gonna need it.
LIARS and CROOKS: Gotta go with Secretary of Defense, Robert Baker. He does not want to be associated with a country that won't run a $trillion dollar modern military. He's taking his ball and going home because "they" won't play by his rules. Yeah, his rules said never negotiate with terrorist, but in his last interview with 60 MINUTES, he said it is possible to end the conflict in Afghanistan if we settle with the Taliban. It shows the military complex is ALL B.S. They have been wrong in everything that they do. Terrorist is fear and FDR sated it best,"the only thing that we have to fear is fear itself." If we only protected our borders 9/11 would never have happened, but one agency after another would not act on the tip that these first terrorist were overheard on a Sat/phone in Yemen and they were followed to San Diego and the whole thing could have ended right there, but NO! These idiots are responsible for the tragedy and the subsequent ten years of pain and loss.
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