Debt ceiling...
Is coming back in the news. No one will point the finger at the Pentagon, but they should. They are the chief reason why we have deficits every year and they are responsible for pushing our country into bankruptcy along with the Federal Reserve. Here is a recap:
There was a period of hope just after WWII when Americans sought to get back to our roots: avoid foreign entanglements and to promote the general welfare.
The general welfare enjoyed full employment. The G. I. Bill resulted in a housing boom as pent-up demand from the war made social mobility flood into the middle-class. This masked the first hope. The Iron Curtain in Europe led to the Cold War. The US found an uneasy peace with the nuclear standoff, however the military kept its power within our government.
Another Chance
In 1991 we had a second chance as the USSR crumpled under the weight of military spending by their government. The failure of a planned economy added to the excessive debt. All we had to do was live up to promises made in meetings with Reagan and Gorbachev. We could have cut the military budget by two-thirds. We could have used that money for research, rebuild our infrastructure and repaid our national deficits. We didn't.
The problem surfaced behind the scenes. The pentagon had influence with military contracts throughout the nation. In the South it had military bases which provided those states with employment. In the West it used research facilities to buy the influence of those states. It controlled Congress. This made it even more powerful. None of our so-called leaders spoke out against this danger. Money buys influence.
In time the pentagon found new avenues of danger that they could manipulate into our national attention. Russia was reawakening in the Middle East in Afghanistan. The CIA helped the opposition and its leader, Osama Bin Laden. When that episode ended, the "Deep State" kept the Middle-East in the news. The story flipped. The so-called ally, Bin Laden was anti-West. He posed a danger. Through BS, they convinced a small minded president that terrorism would be a growing threat to the US. The tragedy of 9/11 made their case.
WMD
Remember weapons of mass destruction? The war-mongers at the pentagon threw fear into the news. A dirty bomb could be used by these terrorists.
In reality, they hi-jacked planes like Cuban sympathizers in the 1970s. As a nation, we received endless wars with excessive debt. We have a growing homeless and poverty rates as our best paying jobs are outsourced under the flag of staying competitive. This masks the lie of greed and profits before what is best for the nation. This military grab for power under our so-called "national interests" is sending us recklessly down the road to financial ruin just as the USSR suffered in 1991. We are the danger to the world as our military "empire" is in over 100 countries.
In today's news we hear of the BS of the Ukraine / Biden inquiry when the real news is we provide that nation with almost $500 million in military hardware with borrowed money. Dear Reader, this is on the Russian doorstep. No wonder they are paranoid. Look at this from a Russian perspective? Gorbachev was promised after the Berlin Wall came down that NATO would not expand. It has. The pentagon had us back Osama and then, we went after him. Recently, we were allies with the Kurds in the Middle-East. Now, we left them in the desert sun. At the same time our military budget has grown to over half of our budget at $750 billion and this is borrowed money. People, our national defense could protect us with a just $250 billion. The rest is waste spend in endless wars while generals seek a lifestyle of the rich and famous. Every year we spend money that we don't have that goes off in a blast of a poorly aimed fire power. We should be helping Americans with good paying jobs as we rebuild our bridges, roads and tunnels.
Our society has an uneasy peace. Least we forget that we are an experiment. We are not a homogeneous society like most nations. Our economy has lost almost all of our manufacturing. Our future has been mortgaged due to the pentagon's reckless adventures. Just add up their recent performance.
Our foreign intelligence is a joke - WMD?! The pentagon is a group of war mongers who sit around a table talking in a paranoid state. They see danger just looking out the window. They request things like new air craft carriers when that ship is obsolete due to smart bombs. They should be building just new age subs and cyber-security.
How about one of the many military agencies like NSA? These are the biggest idiots of all! The FBI gave them the tip of the terrorists in San Diego. They refused to share their data with the FBI on those same terrorists. In fact, the NSA people watched this same group traverse the country right up to the airline ticket counter and did NOTHING! TOLD NO ONE! They are responsible for 9/11.
How about the internet to which we invented. We get hacked everyday, including government agencies. The Deep State uses its power with the media to stop any withdrawals of troops in the Middle-East like the present moment in Syria. These people will never give peace a chance. I ask, where is the anti-war message from any candidate running for office? When will we return to our roots as President Washington advised upon leaving office, "Avoid foreign entanglements and promote the general welfare." If not now, when?
Wednesday, November 6, 2019
Wednesday, October 30, 2019
Odds and Ends: Oct. 2019
- Be on the alert then, for you do not know the day nor the hour. -
Matthew 25:13
October gets the infamous press of being the month where the stock market could correct or worse, collapse. History has not been kind to investors during this period. It appears with all the world worries like trade tensions, Brexit, Middle-East conflict, impeachment and the Fed that the market will escape unharmed. It did. A new all-time high record was recorded. Go figure?
We, at Evolution of Democracy heed the wisdom of Matthew. The present earnings season is peppered with red flags. We also do not feel that another rate cut will make any difference at all to the overall economy. The Fed is wasting all its ammo of rate cuts. We do feel that there is something happening behind the scenes. This worry finds a basis point in the recent Fed activity in the repo market. This is an overnight loan for banks and companies to make their book look like things are in balance. There has been excess borrowing in this market which could cause short term rates to rise. This is what the Fed is fighting. Day-after-day the Fed has injected billions into this segment of the market. I think that they are trying to put the lid on some problem loans by a bank. Sebastian thinks that some bank's derivative portfolio is imploding.
We also feel that the earnings books are being cooked. Price can be misleading. Consider this example from two stock exchanges: Mexico and Venezuela.
Earlier this year Venezuela was in the news for all the wrong reasons. The value of its currency was collapsing. Their stock market fell to the one thousand level (1K). At the same time the Mexican exchange was around 44,000 (44K). As of last Friday, the Venezuela exchange rose over 48K and the range bound Mexican market stood at 43K. Price can be misleading and CEOs are misleading the American public about the strength of their companies. All these adjusted incomes is nothing more than bamboozle-ling the public. You either sold product at a profit or you didn't. Keep in mind that just five stocks caused the new record high. With that said, here are some more tidbits for you to ponder.
Pluses and Minuses
Industrial powers like 3M and Caterpillar had terrible quarters with poor guidance. Hasbro is paying the price for outsourcing as the tariffs destroyed its quarter and the stock. Delivery service giants like FedEx and UPS missed and both gave weak outlook. Chip maker Texas Instruments missed, but Intel came up huge. Restaurant king, McDonald's missed as we wait to see how their competition fared. The king of e-commerce, Amazon also missed, but they still make a lot of money. Tech giant, Cisco failed for the quarter as competition for the cloud heats up with them, Amazon and Microsoft as well as a few others. Boeing is still BS-ing about the Max 737. They are suffering and in one aspect, I'm glad. How can you offer a plane for sale that costs millions and then, ask for more for things like sensors? You offer one price for one safe product. This is an example of excessive greed by corporations and the irony is, the sensors are the planes biggest problem. One railroad, Norfolk Southern posted a miss. Ford cut guidance. GM had the strike. Nokia is cutting its dividend due to outlook. No trick or treat for you! Hershey's sales fell in its biggest market, North America but somehow they made a profit.
Bottom line: oil and gas firms are not doing well. Mining is not doing well and construction is average to which makes manufacturing weak and that is never a good thing. In the auto sector 7- million consumers are 90 days late in loan payments and new cars cost 25% more than they did a decade ago. In addition, consumers are finding new ways to get into serious debt. They are taking out installment loans with high interest rates. This is a new dangerous version of a credit card. This will be big news in mid-2020 when customers will be asking for rollover loans. This action could "rollover" the consumer who is carrying this economy. These are bad ingredients for a healthy economy.
On the plus, Tesla showed a big improvement. Proctor and Gamble had a solid quarter. They said sales in China were up 13%. I think this paints a cloudy picture for the trade talks. The Chinese are stock piling US products because a ban could be placed on them by the Chinese government? The financial industry did well. As earning season is still in progress, we can only speculate. We do feel that Sebastian and Matthew's advice are worth heeding.
Nobel Prize
A trio received the award for pioneering on-the-ground experiments in tackling poverty. Good for them, but I'll stick with the CEO of Salesforce who said, "Capitalism needs a reboot." He was referring to the wealth gap in our society.
More Tariffs
The US won its claim against the EU as it subsidizes Air Bus and other firms. The US can place tariffs on EU companies. However, the tariffs will be put on agriculture like cheese and specialty firms that make wine. This is not right! Place the tariffs on the guilty and not the innocent.
I'm a Capricorn not a Libra
Mark Zuckerberg appeared before Congress talking about his introducing a cryptocurrency, the Libra.
He says that it is safe and we can trust him. Let's add up the scoreboard or his record. He failed with our privacy. He failed to protect our emails. Facebook has phony accounts that seek to influence the social media. They are also guilty with political ads and possible slave trade. I say, "Hell no!"
By the way I say no to cryptocurrency too. We already have a currency that we can trust - gold. I'm with the Dutch National Bank who said, "In gold we trust."
Christmas Retail
Rod Sides of Deloitte forecasts a solid Christmas season for retail. This is what he said, "The top 20% of US consumers will spend 60% of all sales." This shows that the rest of us, 80% are hurting. He also said that these top earners buy online while it is the rest of us who actually go to stores. He also predicted that Cyber Monday will overtake Black Friday in holiday sales. He also feels that all consumers are looking for experiences this year. This translate for a good restaurant season as well as entertainment. I guess this is the thinking at Nordstrom. They spent $500 to build a flagship store in New York City. It is seven stories tall with retail. They offer an experience while shopping.
More Waste
Leave it to the government. A report shows that the government spends $2 million a year on vacant buildings to keep them from rotting. These structures are no longer needed. Here's an idea. Give them free to the states to be used a homeless sanctuary.
VLCC
If you don't know stands for oil tankers. In a little known report these specialty carriers are being forced by insurance companies to pay higher premiums due to the dangers in the gulf. Insurance rates went from $28K to over $125K per load. Dear Reader, this means gasoline prices will soon rise to reflect these higher costs. Nothing more spells recession than high oil prices even though some faithful point to the inverted yield that we saw this year. I say that they are both right.
Finally
Did I hear someone say, "Yay?" Anyway, there are more millionaires than ever. They are worth $158 trillion. They hold one-half of the world's wealth. The US has the most at 675K and China has 158K.
The "Joker" is no fool as it is the biggest Oct. box office, ever. On the other hand, the gamers are being gamed, played as some say. It appears that hackers find flaws in games. They sell them to gamers who cheat to win. They know before hand when something is going to happen in the game that they are playing. I'll stick to Monday quarterbacking.
By the way you could help Hershey's whose sales dropped in their biggest market, North America by buying some chocolate kisses and passing out some love to kids. Happy Halloween!
Matthew 25:13
October gets the infamous press of being the month where the stock market could correct or worse, collapse. History has not been kind to investors during this period. It appears with all the world worries like trade tensions, Brexit, Middle-East conflict, impeachment and the Fed that the market will escape unharmed. It did. A new all-time high record was recorded. Go figure?
We, at Evolution of Democracy heed the wisdom of Matthew. The present earnings season is peppered with red flags. We also do not feel that another rate cut will make any difference at all to the overall economy. The Fed is wasting all its ammo of rate cuts. We do feel that there is something happening behind the scenes. This worry finds a basis point in the recent Fed activity in the repo market. This is an overnight loan for banks and companies to make their book look like things are in balance. There has been excess borrowing in this market which could cause short term rates to rise. This is what the Fed is fighting. Day-after-day the Fed has injected billions into this segment of the market. I think that they are trying to put the lid on some problem loans by a bank. Sebastian thinks that some bank's derivative portfolio is imploding.
We also feel that the earnings books are being cooked. Price can be misleading. Consider this example from two stock exchanges: Mexico and Venezuela.
Earlier this year Venezuela was in the news for all the wrong reasons. The value of its currency was collapsing. Their stock market fell to the one thousand level (1K). At the same time the Mexican exchange was around 44,000 (44K). As of last Friday, the Venezuela exchange rose over 48K and the range bound Mexican market stood at 43K. Price can be misleading and CEOs are misleading the American public about the strength of their companies. All these adjusted incomes is nothing more than bamboozle-ling the public. You either sold product at a profit or you didn't. Keep in mind that just five stocks caused the new record high. With that said, here are some more tidbits for you to ponder.
Pluses and Minuses
Industrial powers like 3M and Caterpillar had terrible quarters with poor guidance. Hasbro is paying the price for outsourcing as the tariffs destroyed its quarter and the stock. Delivery service giants like FedEx and UPS missed and both gave weak outlook. Chip maker Texas Instruments missed, but Intel came up huge. Restaurant king, McDonald's missed as we wait to see how their competition fared. The king of e-commerce, Amazon also missed, but they still make a lot of money. Tech giant, Cisco failed for the quarter as competition for the cloud heats up with them, Amazon and Microsoft as well as a few others. Boeing is still BS-ing about the Max 737. They are suffering and in one aspect, I'm glad. How can you offer a plane for sale that costs millions and then, ask for more for things like sensors? You offer one price for one safe product. This is an example of excessive greed by corporations and the irony is, the sensors are the planes biggest problem. One railroad, Norfolk Southern posted a miss. Ford cut guidance. GM had the strike. Nokia is cutting its dividend due to outlook. No trick or treat for you! Hershey's sales fell in its biggest market, North America but somehow they made a profit.
Bottom line: oil and gas firms are not doing well. Mining is not doing well and construction is average to which makes manufacturing weak and that is never a good thing. In the auto sector 7- million consumers are 90 days late in loan payments and new cars cost 25% more than they did a decade ago. In addition, consumers are finding new ways to get into serious debt. They are taking out installment loans with high interest rates. This is a new dangerous version of a credit card. This will be big news in mid-2020 when customers will be asking for rollover loans. This action could "rollover" the consumer who is carrying this economy. These are bad ingredients for a healthy economy.
On the plus, Tesla showed a big improvement. Proctor and Gamble had a solid quarter. They said sales in China were up 13%. I think this paints a cloudy picture for the trade talks. The Chinese are stock piling US products because a ban could be placed on them by the Chinese government? The financial industry did well. As earning season is still in progress, we can only speculate. We do feel that Sebastian and Matthew's advice are worth heeding.
Nobel Prize
A trio received the award for pioneering on-the-ground experiments in tackling poverty. Good for them, but I'll stick with the CEO of Salesforce who said, "Capitalism needs a reboot." He was referring to the wealth gap in our society.
More Tariffs
The US won its claim against the EU as it subsidizes Air Bus and other firms. The US can place tariffs on EU companies. However, the tariffs will be put on agriculture like cheese and specialty firms that make wine. This is not right! Place the tariffs on the guilty and not the innocent.
I'm a Capricorn not a Libra
Mark Zuckerberg appeared before Congress talking about his introducing a cryptocurrency, the Libra.
He says that it is safe and we can trust him. Let's add up the scoreboard or his record. He failed with our privacy. He failed to protect our emails. Facebook has phony accounts that seek to influence the social media. They are also guilty with political ads and possible slave trade. I say, "Hell no!"
By the way I say no to cryptocurrency too. We already have a currency that we can trust - gold. I'm with the Dutch National Bank who said, "In gold we trust."
Christmas Retail
Rod Sides of Deloitte forecasts a solid Christmas season for retail. This is what he said, "The top 20% of US consumers will spend 60% of all sales." This shows that the rest of us, 80% are hurting. He also said that these top earners buy online while it is the rest of us who actually go to stores. He also predicted that Cyber Monday will overtake Black Friday in holiday sales. He also feels that all consumers are looking for experiences this year. This translate for a good restaurant season as well as entertainment. I guess this is the thinking at Nordstrom. They spent $500 to build a flagship store in New York City. It is seven stories tall with retail. They offer an experience while shopping.
More Waste
Leave it to the government. A report shows that the government spends $2 million a year on vacant buildings to keep them from rotting. These structures are no longer needed. Here's an idea. Give them free to the states to be used a homeless sanctuary.
VLCC
If you don't know stands for oil tankers. In a little known report these specialty carriers are being forced by insurance companies to pay higher premiums due to the dangers in the gulf. Insurance rates went from $28K to over $125K per load. Dear Reader, this means gasoline prices will soon rise to reflect these higher costs. Nothing more spells recession than high oil prices even though some faithful point to the inverted yield that we saw this year. I say that they are both right.
Finally
Did I hear someone say, "Yay?" Anyway, there are more millionaires than ever. They are worth $158 trillion. They hold one-half of the world's wealth. The US has the most at 675K and China has 158K.
The "Joker" is no fool as it is the biggest Oct. box office, ever. On the other hand, the gamers are being gamed, played as some say. It appears that hackers find flaws in games. They sell them to gamers who cheat to win. They know before hand when something is going to happen in the game that they are playing. I'll stick to Monday quarterbacking.
By the way you could help Hershey's whose sales dropped in their biggest market, North America by buying some chocolate kisses and passing out some love to kids. Happy Halloween!
Wednesday, October 23, 2019
Union is in Our DNA, Our Moniker
The word "union" has received a bad rap over the last 30 years. The media, the new influencers and the like will point out all the sins of unions: mob bosses, corruption, kick-backs, the litany goes on-and-on. What is rarely pointed out is the positives from job unions, The forty-hour work week. The concept of medical. The extra pay for an extended workday or week. These things were never given. They were made by sacrifices that today's workforce benefits, but knows nothing about. Production owners had people working from sun-up to sundown, 14-hours. A job meant that you show up for six days a week. If you missed a day, you lost your job. They never gave raises. There were no benefits. In dangerous jobs where people lost limbs, there was no restitution, insurance or anything. They just hire a new body. Dear Reader, the word body is how they treated everyone. Cattle, sheep or slave, they all were used until exhaustion and then, dumped for a new body. The media has not talked like that since Steinbeck. We need to remind everyone that producers get government influence. With the help of Congress producers even got soldiers to kill fellow Americans who went on the picket line. After years of struggle some politicians took notice. We can thank FDR for recognizing workers had a right to unionize. We talk about the American dream? Our nation never had a better living standard than we had after WWII with a strong union membership throughout our country.
Conservatives, Republicans, Whatever...
you want to call them, banded together to push legislation in Congress. They passed the Taft-Hartley bill. This act is anti-worker, anti-union and no one running for office has ever called for it to be overturned. This legislation allows owners to outsource work. When a union went on strike, the owner could now hire new workers - "Scabs." This should not be allowed. Owners lie, cheap, steal everyday. It keeps getting worse. Look at the Supreme Court and the Janus ruling?! Just look at the two recent union strikes.
Boeing: told the labor force that if they called off the strike, they would keep work in Seattle. The workers went back to the job. Immediately, Boeing shipped the work to Charlotte, in a non-union state. The labor force was cut due to the loss of work contracts. Labor loses.
Detroit: has had countless dealings with the auto unions. Management says yes to requests by unions. As soon as the strike is ended, they outsource work to Mexico, China or Canada. Union membership has declined due to less work contracts. In fact, all the so-called "trickle down effect" of one job influencing another has taken effect. Almost every auto supplier is now foreign because this work too was outsourced. Labor loses, again.
As a result, we have manufacturing which pays a living wage in decline. It has fallen to the point where it is only 7% of our economy. After WWII, manufacturing was 50% of our economy. Now, we have excess poverty where people study the poor to receive a Nobel Prize. Some workers try to enact a change. The $15 dollar meme is circulating. Producers get their cronies to argue about the effects of raising the minimum wage. I can tell you this from experience. Raising the minimum wage gets an immediate boost for a worker in this category. It does not last. Why, you ask? The Federal Reserve keeps printing money. This kills the purchasing power of the dollar. It leads to the same point as when workers first got together to seek a higher wage. It is just another reason why I say, End the Fed!
Do I have to remind you that when the minimum wage was raised from .65 cents to .95 cents per hour, workers were able to make ends meet. Deficit spending kills the value of workers wages. This too needs to be addressed. We need a balanced budget, every year! In America today, only the poor know how to maintain a budget. Again, do I have to remind you of the debt ceiling? When government workers were crying after missing one paycheck?
I'm sorry! I get off-track, however I believe that all things are connected. This connection is central to the word, union. Afterall, we are the United (union) States. Anyway, if producers and owners keep their attacks on workers and unions, it will lead me to offer an idea that I don't really want out of the bottle. More on that after this...
There are two guys sitting at a bar. They look depressed as they cry in their beer. One is older. The other is younger. Finally, the older one says, "They keep trying to take away my pension." The younger one replies, "What's a pension?"
This is true and it reflects the sad state of American workers, living conditios and future outlook. Producers have been successful in outsorcing work which has crushed unions and both their membership and effectiveness. Central to their attacks has been terminating pensions and their obligation to fund those pensions. This is so blantant that some who understand the blight of labor have enacted the Pension Guaranty (PGC). This government program seeks to provide workers who were robbed and cheated out of their pension promise by a corporation. Last year, this poorly funded program lost $35.7 billion and the future looks bleak. Workers never get close to what they earned and were promised. Workers are forced into programs and plans like IRAs and 401s. I am thankful for these programs, but allowing companies to skate by their obligations is totally unforgiven. Corporations are allowed to buyback their stock and yet, they have not contributed to a promised pension plan. This process should not be allowed. Corporations should have to meet all their obligations first for their workers, their suppliers and their debt. If they go bankrupt, those promises to their workers fall to the PGC. This is so wrong as well as the reporting of earnings by companies. It is either you made money or you didn't. Adjusted earnings reports are a lie!
There is an answer, although I hate to mention it. I will as I hope the threat will work on the conscience of owners to stop their senseless greed and share in the blessings that they were given. It won't! The only result will be by a few and it will be an answer to stop my answer. For example: In the recent strike by GM workers. Then, every worker in any union join their brothers on the picket line. Every union member in any job description from government to manufacturing to retail to grocery, everyone, they join the picker line in sympathy to their union brothers. If one is exploited. we all are exploited! This will force a quick resolution to any job action. It will show the power of workers once again in this nation. It will lead to legislation that any outsourced work to be treated as a foreign company and put tariffs on that product to help workers in this country. United we stand!
If we don't stand together now, we have some serious problems that will destroy many state governments in the near future. Consider this list of ten states and their obligations to state employees. They all are under funded pension programs. If a teacher walks out in Illinois, it only makes the evening news. If that action had everyone walking off the job throughout the nation, it will get an immediate response.
Massachusetts: 59% funded. State has a $35 billion shortfall to pension.
Pennsylvania: 55% funded. State has a $66 billion shortfall to pension.
Hawaii: 54% funded. State has a $13 billion shortfall to pension.
South Carolina: 54% funded. State has a $25 billion shortfall to pension.
Rhode Island: 53% funded. State has a $15 billion shortfall to pension.
Colorado: 47%funded. State has a $54 billion shortfall to pension.
Connecticut: 45% funded. State has a $34 billion shortfall to pension.
Illinois: 38% funded. State has a $136 billion shortfall to pension.
New Jersey: 35% funded. State has a $142 billion shortfall to pension.
Kentucky: 33% funded. State has a $42 billion shortfall to pension.
The numbers are staggering! The older states like in New England are losing population and thus, taxpayers. Unless a new economic boom settles in those states and places like Illinois, all those financial obligations will fall to the federal government. The result will be more printing of dollars and we all suffer due to the loss of purchasing power and as a result, our standard of living will fall even further. Protect all workers in America!
Conservatives, Republicans, Whatever...
you want to call them, banded together to push legislation in Congress. They passed the Taft-Hartley bill. This act is anti-worker, anti-union and no one running for office has ever called for it to be overturned. This legislation allows owners to outsource work. When a union went on strike, the owner could now hire new workers - "Scabs." This should not be allowed. Owners lie, cheap, steal everyday. It keeps getting worse. Look at the Supreme Court and the Janus ruling?! Just look at the two recent union strikes.
Boeing: told the labor force that if they called off the strike, they would keep work in Seattle. The workers went back to the job. Immediately, Boeing shipped the work to Charlotte, in a non-union state. The labor force was cut due to the loss of work contracts. Labor loses.
Detroit: has had countless dealings with the auto unions. Management says yes to requests by unions. As soon as the strike is ended, they outsource work to Mexico, China or Canada. Union membership has declined due to less work contracts. In fact, all the so-called "trickle down effect" of one job influencing another has taken effect. Almost every auto supplier is now foreign because this work too was outsourced. Labor loses, again.
As a result, we have manufacturing which pays a living wage in decline. It has fallen to the point where it is only 7% of our economy. After WWII, manufacturing was 50% of our economy. Now, we have excess poverty where people study the poor to receive a Nobel Prize. Some workers try to enact a change. The $15 dollar meme is circulating. Producers get their cronies to argue about the effects of raising the minimum wage. I can tell you this from experience. Raising the minimum wage gets an immediate boost for a worker in this category. It does not last. Why, you ask? The Federal Reserve keeps printing money. This kills the purchasing power of the dollar. It leads to the same point as when workers first got together to seek a higher wage. It is just another reason why I say, End the Fed!
Do I have to remind you that when the minimum wage was raised from .65 cents to .95 cents per hour, workers were able to make ends meet. Deficit spending kills the value of workers wages. This too needs to be addressed. We need a balanced budget, every year! In America today, only the poor know how to maintain a budget. Again, do I have to remind you of the debt ceiling? When government workers were crying after missing one paycheck?
I'm sorry! I get off-track, however I believe that all things are connected. This connection is central to the word, union. Afterall, we are the United (union) States. Anyway, if producers and owners keep their attacks on workers and unions, it will lead me to offer an idea that I don't really want out of the bottle. More on that after this...
There are two guys sitting at a bar. They look depressed as they cry in their beer. One is older. The other is younger. Finally, the older one says, "They keep trying to take away my pension." The younger one replies, "What's a pension?"
This is true and it reflects the sad state of American workers, living conditios and future outlook. Producers have been successful in outsorcing work which has crushed unions and both their membership and effectiveness. Central to their attacks has been terminating pensions and their obligation to fund those pensions. This is so blantant that some who understand the blight of labor have enacted the Pension Guaranty (PGC). This government program seeks to provide workers who were robbed and cheated out of their pension promise by a corporation. Last year, this poorly funded program lost $35.7 billion and the future looks bleak. Workers never get close to what they earned and were promised. Workers are forced into programs and plans like IRAs and 401s. I am thankful for these programs, but allowing companies to skate by their obligations is totally unforgiven. Corporations are allowed to buyback their stock and yet, they have not contributed to a promised pension plan. This process should not be allowed. Corporations should have to meet all their obligations first for their workers, their suppliers and their debt. If they go bankrupt, those promises to their workers fall to the PGC. This is so wrong as well as the reporting of earnings by companies. It is either you made money or you didn't. Adjusted earnings reports are a lie!
There is an answer, although I hate to mention it. I will as I hope the threat will work on the conscience of owners to stop their senseless greed and share in the blessings that they were given. It won't! The only result will be by a few and it will be an answer to stop my answer. For example: In the recent strike by GM workers. Then, every worker in any union join their brothers on the picket line. Every union member in any job description from government to manufacturing to retail to grocery, everyone, they join the picker line in sympathy to their union brothers. If one is exploited. we all are exploited! This will force a quick resolution to any job action. It will show the power of workers once again in this nation. It will lead to legislation that any outsourced work to be treated as a foreign company and put tariffs on that product to help workers in this country. United we stand!
If we don't stand together now, we have some serious problems that will destroy many state governments in the near future. Consider this list of ten states and their obligations to state employees. They all are under funded pension programs. If a teacher walks out in Illinois, it only makes the evening news. If that action had everyone walking off the job throughout the nation, it will get an immediate response.
Massachusetts: 59% funded. State has a $35 billion shortfall to pension.
Pennsylvania: 55% funded. State has a $66 billion shortfall to pension.
Hawaii: 54% funded. State has a $13 billion shortfall to pension.
South Carolina: 54% funded. State has a $25 billion shortfall to pension.
Rhode Island: 53% funded. State has a $15 billion shortfall to pension.
Colorado: 47%funded. State has a $54 billion shortfall to pension.
Connecticut: 45% funded. State has a $34 billion shortfall to pension.
Illinois: 38% funded. State has a $136 billion shortfall to pension.
New Jersey: 35% funded. State has a $142 billion shortfall to pension.
Kentucky: 33% funded. State has a $42 billion shortfall to pension.
The numbers are staggering! The older states like in New England are losing population and thus, taxpayers. Unless a new economic boom settles in those states and places like Illinois, all those financial obligations will fall to the federal government. The result will be more printing of dollars and we all suffer due to the loss of purchasing power and as a result, our standard of living will fall even further. Protect all workers in America!
Wednesday, October 16, 2019
Currencies Are Talking
There are many indicators out there to help you navigate the stock market and inform you of the strength of your economy. These oscillators however do not behave the same way under market conditions. In a bull market whenever an overbought or oversold oscillator is indicated, the stock immediately bounces in the other direction. In a bear market, there is no effect. There are however, other more reliable indicators. Currencies is right at the top. Some people look to interest rates, but whatever the rate, there will be a ratio exchange value with the currency involved.
Top Currencies
The US leads since America is not only the largest economy, but also many commodities are only exchanged in dollars like oil not to remind you that it still is the world's reserve currency. Recently, some nations like China and Russia will transact an exchange through euros or gold. This is a small change, but other reasons for circumventing the dollar are out there. One central to emerging markets is financing. They would like another source like a shopper seeking a lower price on a product. There is nothing wrong with that approach except looking beyond the purchase. By complaining about the dollar, a consuming nation for financing forgets that if the dollar was replaced, the alternative could and most probably, be worse. The IMF wants that role. Nothing like bureaucrats running the show and allowing you a say. Not going to happen! You will have no say. Then, there is the ego of the Chinese. Nothing like a corrupt, totalitarian state dictating money policy. You want to try the euro? All you have to do to understand another bureaucratic concern is look at Brexit. The dollar is freedom's best choice. Dear Reader, the role of the dollar in the global community places many hardships on individual Americans. Global nations don't understand this aspect. They only see the for me point of view. At one time when the dollar was good as gold, the poor in America had it great. Not so much anymore. The dollar last Friday was valued at 98.31-cents in relationship to world exchanges.
The next important currency is the euro. Its value on Friday was 110.42-cents in exchanges. The euro has many pluses and minuses for its members. It allows cross border exchanges with equal value, however it helps older, stronger currencies to lower their exporting value at the expense of older, previously cheaper dollars like in Italy or Greece. Keep in mind, this is an experiment in financing. I have put forth my beliefs on the subject. I believe it would be best for Europe to have two currencies. One for the Northern manufacturing economies and one for the warmer, specialty climates.
Central to Europe and the world is the pound. The geopolitical tensions have wiped it up and down. I will digress more on that in a moment. Last Friday the pound rose to 1.26-cents in world trading.
The yen of Japan is also an important exchange since Japan is a leader in exporting. Lately, it has been weakening. It fell to 108.29 last Friday.
The Chinese yuan settled at 7.09-cents on Friday while the Hong Kong fell to 7.84-cents. Generally, they are similar, but tensions on the city effects many things. The trend is cheaper which is par for the course in Asian policy. Government has more control in this region and they manipulate to keep the value cheaper. More exports will be the result.
Last line...
is the most important aspect in currency exchange - the price value. Cheap currency makes your exports cheaper. The price mechanism is suppose to adjust after a period of time. Government manipulation trumps this market mechanism. The price mechanism says that if you are exporting so much and your economy is growing so much, therefore the value of your currency should rise. Then, your competition will have a more equal playing field. Not so! All one has to do is look at Japan in the late 70s and 80s. No real change in value. Look at China today. They are the king of exports, but they manipulate their currency to maintain market share. Theory is not reality which is another reason to End the Fed! Since the Fed began, the US dollar has lost 95% of its value to which is why the poor in America are suffering. Sorry, I got off on a tangent.
Deal or No Deal!
That is the question. People, do not be fooled by politics. The currencies are trending in a direction that smart money sees as the outcome. The Brexit / EU trade deal says that Europe will punish the UK. The pound looks like it is heading back to 131. Is this manipulation? Not sure, but rice is the reality. This will be good for the British citizens in the short term as imports will be cheaper with their stronger currency. However, this means the UK economy will be limited. It will eventually fail as the nation will lose export share. The EU hopes to change the thinking of Brexit back to the EU. This is so typical of European agreements. You settle one deal which is preparation for the next one.
The China / US trade talks are basically doing the same poor agreement as is being done in Europe. By holding off tariffs, both nations buy time for their economy. This helps Trump more than China. All Donald has to do is get past next November. Then, he can bring up intellectual theft by China as an important aspect to a longer term agreement. This issue will be put aside as China helps US big farmers with a purchase. They will act like they always act: they lie, cheat and steal. We never should have done business with them. If corporations want a big market, go to India!
The US dollar will be directly effected by whatever happens with the trade talks. If there is no deal, the Fed will continue to cut. If there is a deal, even temporary, the Fed will pause. This action or inaction could cause all other currencies to devalue their denominations to maintain market share. At the moment the dollar is near its high. This will be good for Christmas shoppers, but like the UK, the trend of our economy will continue to decline. At one time the pound was worth $5- US dollars. See what I mean?
Top Currencies
The US leads since America is not only the largest economy, but also many commodities are only exchanged in dollars like oil not to remind you that it still is the world's reserve currency. Recently, some nations like China and Russia will transact an exchange through euros or gold. This is a small change, but other reasons for circumventing the dollar are out there. One central to emerging markets is financing. They would like another source like a shopper seeking a lower price on a product. There is nothing wrong with that approach except looking beyond the purchase. By complaining about the dollar, a consuming nation for financing forgets that if the dollar was replaced, the alternative could and most probably, be worse. The IMF wants that role. Nothing like bureaucrats running the show and allowing you a say. Not going to happen! You will have no say. Then, there is the ego of the Chinese. Nothing like a corrupt, totalitarian state dictating money policy. You want to try the euro? All you have to do to understand another bureaucratic concern is look at Brexit. The dollar is freedom's best choice. Dear Reader, the role of the dollar in the global community places many hardships on individual Americans. Global nations don't understand this aspect. They only see the for me point of view. At one time when the dollar was good as gold, the poor in America had it great. Not so much anymore. The dollar last Friday was valued at 98.31-cents in relationship to world exchanges.
The next important currency is the euro. Its value on Friday was 110.42-cents in exchanges. The euro has many pluses and minuses for its members. It allows cross border exchanges with equal value, however it helps older, stronger currencies to lower their exporting value at the expense of older, previously cheaper dollars like in Italy or Greece. Keep in mind, this is an experiment in financing. I have put forth my beliefs on the subject. I believe it would be best for Europe to have two currencies. One for the Northern manufacturing economies and one for the warmer, specialty climates.
Central to Europe and the world is the pound. The geopolitical tensions have wiped it up and down. I will digress more on that in a moment. Last Friday the pound rose to 1.26-cents in world trading.
The yen of Japan is also an important exchange since Japan is a leader in exporting. Lately, it has been weakening. It fell to 108.29 last Friday.
The Chinese yuan settled at 7.09-cents on Friday while the Hong Kong fell to 7.84-cents. Generally, they are similar, but tensions on the city effects many things. The trend is cheaper which is par for the course in Asian policy. Government has more control in this region and they manipulate to keep the value cheaper. More exports will be the result.
Last line...
is the most important aspect in currency exchange - the price value. Cheap currency makes your exports cheaper. The price mechanism is suppose to adjust after a period of time. Government manipulation trumps this market mechanism. The price mechanism says that if you are exporting so much and your economy is growing so much, therefore the value of your currency should rise. Then, your competition will have a more equal playing field. Not so! All one has to do is look at Japan in the late 70s and 80s. No real change in value. Look at China today. They are the king of exports, but they manipulate their currency to maintain market share. Theory is not reality which is another reason to End the Fed! Since the Fed began, the US dollar has lost 95% of its value to which is why the poor in America are suffering. Sorry, I got off on a tangent.
Deal or No Deal!
That is the question. People, do not be fooled by politics. The currencies are trending in a direction that smart money sees as the outcome. The Brexit / EU trade deal says that Europe will punish the UK. The pound looks like it is heading back to 131. Is this manipulation? Not sure, but rice is the reality. This will be good for the British citizens in the short term as imports will be cheaper with their stronger currency. However, this means the UK economy will be limited. It will eventually fail as the nation will lose export share. The EU hopes to change the thinking of Brexit back to the EU. This is so typical of European agreements. You settle one deal which is preparation for the next one.
The China / US trade talks are basically doing the same poor agreement as is being done in Europe. By holding off tariffs, both nations buy time for their economy. This helps Trump more than China. All Donald has to do is get past next November. Then, he can bring up intellectual theft by China as an important aspect to a longer term agreement. This issue will be put aside as China helps US big farmers with a purchase. They will act like they always act: they lie, cheat and steal. We never should have done business with them. If corporations want a big market, go to India!
The US dollar will be directly effected by whatever happens with the trade talks. If there is no deal, the Fed will continue to cut. If there is a deal, even temporary, the Fed will pause. This action or inaction could cause all other currencies to devalue their denominations to maintain market share. At the moment the dollar is near its high. This will be good for Christmas shoppers, but like the UK, the trend of our economy will continue to decline. At one time the pound was worth $5- US dollars. See what I mean?
Wednesday, October 9, 2019
Future Shock
If the American people ever allow private banks (read Federal Reserve) to control the issue of their currency, first by inflation (1970s), then by deflation (present), the banks and corporations that will grow up around (central bank) will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks (central bank / Fed) and returned to the people, whom it properly belongs.
- Thomas Jefferson
In past articles I have reported the dangerous demise of not only our retail sector, but the restaurant industry. The dangers that republicans love to blame is unions. However, they cannot use that lie in these cases, because those industries have little or no union influence. The guilt lies elsewhere. One central cause is the loss of our purchasing power caused by the combined spending of government and the massive dollar printing by the Federal Reserve.
There is no need to reprint the litany of causalities that is a result of dollar printing and deficit spending. You can see the effects while driving in your auto. There are many malls that sit vacant like ghost towns of the Old West. There are many more malls and shopping centers where the anchor vacated and resourceful owners turned that retail space into a skating ring or another space eater.
Little tots today will never have heard of Sears, J.C. Penny, Radio Shack or K-Mart. With that said, they will age into a world with less opportunity because Congress refused to make a level playing field between brick and mortar and the internet. It is understandable that the government gave advantages to online shopping in its nascent stages. They wanted the new technology to succeed. Today, we see the effects of this put-off decision. Forever 21 is the latest retail entity to file for bankruptcy. Why would any consumer buy a product at a store if that same person knew that one could get the same product for 6% less? We are talking about the sales tax.
State Sales Tax
on a national average is about 6%. If you buy on the internet, the seller offers as an incentive, free shipping. A consumer gets the same product from TVs to diapers without paying a sales tax. Every day e-commerce is bustling with shoppers as a lone clerk walks around an empty shop, waiting and hoping for a customer. This is why there are fewer and fewer book stores, clothing stores, department stores and now, supermarkets are also under duress. All these wage opportunities for kids and upward to earn are fading. All those warehouses, stocking jobs and similar for Christmas money are ending. This may be the time for the Fall Classic, but no one can afford to go to a game. The scoreboard in the industry is like the results of the N. Y. Mets in their early years. The only record that the team recorded was the most losses by a team, ever!
8,200 Stores
will close between now and next year. Simple math translates into tens of thousands lost jobs. Since 2007 that number exceeds 200,000 people. The only bright light in our economy as unemployment hit a 50-year low of 3.5% last week was whenever a business ended, another sought help. This one man's ceiling for another man's floor will not continue. The news will awaken one day to the tsunami of lost jobs in a slowing economy and unemployment will explode overnight.
It Gets Worse
The announcement of store closings could balloon past 8K to 12,000. This is according to Coresight Research. In another survey by Duke University, the CFOs of two-thirds of the companies responded that they expect a recession in 2020. The overall condition is not helped by cheap money. The reason is like an addiction by an addict. CEOs take the debt in hope of turning around the enterprise, but later and sadly, realize that they are over-leveraged. They cannot make revenue meet expenses. They close their doors.
New Hurdle
Politics will enter the equation. I have already pointed out how Congress which is basically Democrats and Republicans have failed to act responsibly. Some states have realized taxing e-commerce is an easy tax to pass. The revenue helps to balance their budgets. The problem is candidates seeking to make debt and the national deficit an issue will look to the same target. This Monday morning quarterbacking will result in dual taxation like we already pay with gasoline purchases. When you buy gas, you pay both a state and federal tax. So, we will get taxation on the internet and although the playing field in retail will be level, it may be too late. Sadly, I foresee another threat to the industry. Foreign retail will fill the void. This will only worsen our national deficits. Our government will be bought as they do little for our citizens. There are many examples of this process in the making. States have allowed foreign companies to build roads and then, put up excessive tolls to pay for the expense. Candidates like Bernie Sanders offer ideas to tax companies that don't pay employees fairly. His idea is to put a wealth tax on companies over $100 million in revenue that have an excess pay gap between the CEO and the lowest paid employee. To put this in clear language: Walmart would pay $800 million, J. P. Morgan would pay $1 billion and even McDonald's would cough up $100 million. Together, all these actions and ideas will not paint a pretty picture for retail in the future.
Believe It or Not
Even after all that I pointed out, the retail association foresees a robust Christmas shopping season. They forecast a 4.2% sales increase in 2019 as compared to 2018. They base their prediction on the good economic standing of the consumer. Dear Reader, this is like a meal in a restaurant. While you are eating, no one worries about the bill. After your hunger is vanquished and you receive the bill, ii is then when you question your thinking. I hope the retail group is correct and homes are warmed by new purchases, because in January comes the bill.
Banks are more dangerous than standing armies. The idea of spending (deficits) that may be paid by posterity under the scope of funding is but swindling futurity on a large scale.
- Thomas Jefferson
- Thomas Jefferson
In past articles I have reported the dangerous demise of not only our retail sector, but the restaurant industry. The dangers that republicans love to blame is unions. However, they cannot use that lie in these cases, because those industries have little or no union influence. The guilt lies elsewhere. One central cause is the loss of our purchasing power caused by the combined spending of government and the massive dollar printing by the Federal Reserve.
There is no need to reprint the litany of causalities that is a result of dollar printing and deficit spending. You can see the effects while driving in your auto. There are many malls that sit vacant like ghost towns of the Old West. There are many more malls and shopping centers where the anchor vacated and resourceful owners turned that retail space into a skating ring or another space eater.
Little tots today will never have heard of Sears, J.C. Penny, Radio Shack or K-Mart. With that said, they will age into a world with less opportunity because Congress refused to make a level playing field between brick and mortar and the internet. It is understandable that the government gave advantages to online shopping in its nascent stages. They wanted the new technology to succeed. Today, we see the effects of this put-off decision. Forever 21 is the latest retail entity to file for bankruptcy. Why would any consumer buy a product at a store if that same person knew that one could get the same product for 6% less? We are talking about the sales tax.
State Sales Tax
on a national average is about 6%. If you buy on the internet, the seller offers as an incentive, free shipping. A consumer gets the same product from TVs to diapers without paying a sales tax. Every day e-commerce is bustling with shoppers as a lone clerk walks around an empty shop, waiting and hoping for a customer. This is why there are fewer and fewer book stores, clothing stores, department stores and now, supermarkets are also under duress. All these wage opportunities for kids and upward to earn are fading. All those warehouses, stocking jobs and similar for Christmas money are ending. This may be the time for the Fall Classic, but no one can afford to go to a game. The scoreboard in the industry is like the results of the N. Y. Mets in their early years. The only record that the team recorded was the most losses by a team, ever!
8,200 Stores
will close between now and next year. Simple math translates into tens of thousands lost jobs. Since 2007 that number exceeds 200,000 people. The only bright light in our economy as unemployment hit a 50-year low of 3.5% last week was whenever a business ended, another sought help. This one man's ceiling for another man's floor will not continue. The news will awaken one day to the tsunami of lost jobs in a slowing economy and unemployment will explode overnight.
It Gets Worse
The announcement of store closings could balloon past 8K to 12,000. This is according to Coresight Research. In another survey by Duke University, the CFOs of two-thirds of the companies responded that they expect a recession in 2020. The overall condition is not helped by cheap money. The reason is like an addiction by an addict. CEOs take the debt in hope of turning around the enterprise, but later and sadly, realize that they are over-leveraged. They cannot make revenue meet expenses. They close their doors.
New Hurdle
Politics will enter the equation. I have already pointed out how Congress which is basically Democrats and Republicans have failed to act responsibly. Some states have realized taxing e-commerce is an easy tax to pass. The revenue helps to balance their budgets. The problem is candidates seeking to make debt and the national deficit an issue will look to the same target. This Monday morning quarterbacking will result in dual taxation like we already pay with gasoline purchases. When you buy gas, you pay both a state and federal tax. So, we will get taxation on the internet and although the playing field in retail will be level, it may be too late. Sadly, I foresee another threat to the industry. Foreign retail will fill the void. This will only worsen our national deficits. Our government will be bought as they do little for our citizens. There are many examples of this process in the making. States have allowed foreign companies to build roads and then, put up excessive tolls to pay for the expense. Candidates like Bernie Sanders offer ideas to tax companies that don't pay employees fairly. His idea is to put a wealth tax on companies over $100 million in revenue that have an excess pay gap between the CEO and the lowest paid employee. To put this in clear language: Walmart would pay $800 million, J. P. Morgan would pay $1 billion and even McDonald's would cough up $100 million. Together, all these actions and ideas will not paint a pretty picture for retail in the future.
Believe It or Not
Even after all that I pointed out, the retail association foresees a robust Christmas shopping season. They forecast a 4.2% sales increase in 2019 as compared to 2018. They base their prediction on the good economic standing of the consumer. Dear Reader, this is like a meal in a restaurant. While you are eating, no one worries about the bill. After your hunger is vanquished and you receive the bill, ii is then when you question your thinking. I hope the retail group is correct and homes are warmed by new purchases, because in January comes the bill.
Banks are more dangerous than standing armies. The idea of spending (deficits) that may be paid by posterity under the scope of funding is but swindling futurity on a large scale.
- Thomas Jefferson
Wednesday, October 2, 2019
Leave Engineers for Bridge Work
Lately, everyone is adding their two cents on how to help the economy. Central to the ails of our economy and the EU is deflation. To us here at Evolution, this is only partly true. When every aspect in legislation, when every employer and every economic thinker centers their resolutions toward the wealthy and offer nothing for the laborer, you will get stagnation. The only aspect that has helped to keep the economy rolling is the aspect that the consumer does not utilize deflation more with its purchases. If the consumer waited for lower prices, then economies will have the worst economic outlook: stagflation - it could be on the horizon, especially if oil prices spike.
Fortunately, the consumer only utilizes the power of deflation with Christmas shopping. Nevertheless, we have global summits of G-7s, G-8s and G-20s. We have a World Bank along with the IMF. These are the same idiots whose programs got us to this point. We have destroyed currencies by seeking manipulating advantages and over-spending to the point where money loses value everyday with negative bonds. We hear the constant message that central banks have the answers in their tool box. If that is so, how come our nation has over $20T in debt and the world has over $130T? How come the Fed places a 2% inflation rate and never reaches that goal? I'll tell you why: they don't count, food, energy and shelter. They talk in riddles how a computer is cheaper today because it offers more for the price than previously on the market. They rarely challenge government spending to push for a balanced budget.
Independent Fed = BS!
They never admit that they are wrong! The Fed declares that it is independent, but the position is appointed. The government makes known its borrowing needs before the Fed policy meeting. Then, the Fed lowers rates to make the debt borrowing less costly. The stock market and the bond market also communicate with the Fed through the media and its price action. If a policy is ill received by the market, it tanks until the policy is changed to the thinking of both the stock market and bond market. This is indirect pressure and now, we have a president who regularly uses the media to excerpt even more pressure. Independence? BS!
Central Problem
They believe that they can engineer an economy. Engineers build bridges not economies. When central banks try something new like Keynesian economics after WWII, and they have some success, they take bows. However, when the added government debt becomes a factor, they try fiscal policy. They try rate policy. Now, they are advocating Modern Monetary Theory. They never consider the poor citizen and how their policies effect the everyday life.
If you take a quick historical view, society progressed when craftsmen took power from the nobility. When America gave the world, "All men are created equal." When unions were finally accepted, the quality of life exploded. But, the butt people can buy votes. They countered unions with Taft-Hartley. They got legislation to outsource labor and factories and yet, they were not taxed as a foreign concern. This is the heart of the problem. Dear Reader, the outlook is dismal.
Central Banks Work With Government
This the current meme floating around the world. The so-called independence of a central bank is being blurred so the central bank can work with governmental policies to aid the economy. This is the old Russian Five Year Plan or the present programs of the Communist Party in China. It also appears within the work of BOJ (Bank of Japan), the US, Fed and the EU, ECB. So much for the independence of the Fed, but here at Evolution, we never viewed the Fed as a separate entity (see above). Nothing spells kill the American dream, the positive aspects of capitalism and social mobility like a planned economy. The problem began when we allowed the creation of the Fed and their motive to replace gold backed economy with a fiat trust economy. This is why I say, End the Fed!
Politicians soon correlated debt with winning an election. Don't get me wrong, new ideas sometimes cost the investment of debt, but the projection is the problem. We are seeing it today with the democratic debates. Every candidate has an idea and the only thing that they have in common is debt.
Free tuition! What good is a college degree if it is watered down like a high school diploma? There has to be a job at the end of schooling. Obamacare? I'm against it. If there is free medical plan for all and a way to pay for it, I'm all in. The key to any debt investment is the detail in how to pay for it. The Keynesians never understand that important aspect. I could rant on-and-on, but I think that you get the point.
Fiscal - Monetary
cooperation only adds to debt. The projection of fiat interest rates to negative only proves that it is a failure and weakens government to make good decisions. If government or a politician offered a real solution, it would appear unpopular and easily attacked by the media or an opponent. This is why the outlook is bleak. Great ideas will be wisps into the air as people look up for "helicopter money." It is so much easier to sit on the couch, turn on the TV than to go into the garage and try to make something that will give meaning to your life. (Ask not what your country can do for you, but what you can do for your country.)
I see the rich staying rich and the poor growing in numbers. We are already experiencing a decay in morals and it will only get worse. This is not a Brave New World, but a loss of individualism. This leads to the loss of creativity and the loss of will power. Give some credit to the Viet Cong for surviving in tunnels as an example of will power. The only fear that they had was our "Tunnel Rats." God bless those brave souls. Anyway, we are becoming lazy and obese. If this continues, we will be slaughtered like a pig.
Fortunately, the consumer only utilizes the power of deflation with Christmas shopping. Nevertheless, we have global summits of G-7s, G-8s and G-20s. We have a World Bank along with the IMF. These are the same idiots whose programs got us to this point. We have destroyed currencies by seeking manipulating advantages and over-spending to the point where money loses value everyday with negative bonds. We hear the constant message that central banks have the answers in their tool box. If that is so, how come our nation has over $20T in debt and the world has over $130T? How come the Fed places a 2% inflation rate and never reaches that goal? I'll tell you why: they don't count, food, energy and shelter. They talk in riddles how a computer is cheaper today because it offers more for the price than previously on the market. They rarely challenge government spending to push for a balanced budget.
Independent Fed = BS!
They never admit that they are wrong! The Fed declares that it is independent, but the position is appointed. The government makes known its borrowing needs before the Fed policy meeting. Then, the Fed lowers rates to make the debt borrowing less costly. The stock market and the bond market also communicate with the Fed through the media and its price action. If a policy is ill received by the market, it tanks until the policy is changed to the thinking of both the stock market and bond market. This is indirect pressure and now, we have a president who regularly uses the media to excerpt even more pressure. Independence? BS!
Central Problem
They believe that they can engineer an economy. Engineers build bridges not economies. When central banks try something new like Keynesian economics after WWII, and they have some success, they take bows. However, when the added government debt becomes a factor, they try fiscal policy. They try rate policy. Now, they are advocating Modern Monetary Theory. They never consider the poor citizen and how their policies effect the everyday life.
If you take a quick historical view, society progressed when craftsmen took power from the nobility. When America gave the world, "All men are created equal." When unions were finally accepted, the quality of life exploded. But, the butt people can buy votes. They countered unions with Taft-Hartley. They got legislation to outsource labor and factories and yet, they were not taxed as a foreign concern. This is the heart of the problem. Dear Reader, the outlook is dismal.
Central Banks Work With Government
This the current meme floating around the world. The so-called independence of a central bank is being blurred so the central bank can work with governmental policies to aid the economy. This is the old Russian Five Year Plan or the present programs of the Communist Party in China. It also appears within the work of BOJ (Bank of Japan), the US, Fed and the EU, ECB. So much for the independence of the Fed, but here at Evolution, we never viewed the Fed as a separate entity (see above). Nothing spells kill the American dream, the positive aspects of capitalism and social mobility like a planned economy. The problem began when we allowed the creation of the Fed and their motive to replace gold backed economy with a fiat trust economy. This is why I say, End the Fed!
Politicians soon correlated debt with winning an election. Don't get me wrong, new ideas sometimes cost the investment of debt, but the projection is the problem. We are seeing it today with the democratic debates. Every candidate has an idea and the only thing that they have in common is debt.
Free tuition! What good is a college degree if it is watered down like a high school diploma? There has to be a job at the end of schooling. Obamacare? I'm against it. If there is free medical plan for all and a way to pay for it, I'm all in. The key to any debt investment is the detail in how to pay for it. The Keynesians never understand that important aspect. I could rant on-and-on, but I think that you get the point.
Fiscal - Monetary
cooperation only adds to debt. The projection of fiat interest rates to negative only proves that it is a failure and weakens government to make good decisions. If government or a politician offered a real solution, it would appear unpopular and easily attacked by the media or an opponent. This is why the outlook is bleak. Great ideas will be wisps into the air as people look up for "helicopter money." It is so much easier to sit on the couch, turn on the TV than to go into the garage and try to make something that will give meaning to your life. (Ask not what your country can do for you, but what you can do for your country.)
I see the rich staying rich and the poor growing in numbers. We are already experiencing a decay in morals and it will only get worse. This is not a Brave New World, but a loss of individualism. This leads to the loss of creativity and the loss of will power. Give some credit to the Viet Cong for surviving in tunnels as an example of will power. The only fear that they had was our "Tunnel Rats." God bless those brave souls. Anyway, we are becoming lazy and obese. If this continues, we will be slaughtered like a pig.
Wednesday, September 25, 2019
Odds and Ends: September 2019
One of the scariest months for the stock market and it is touching all-time highs. Go figure? By now you know the suspects for a correction. No need to repeat the obvious. However, a sliding view of the sectors along with tidbits will allow you to see some direction. One point to consider: If President Trump has true conviction, there will be no trade deal with China because China will continue to steal, cheat or do whatever they feel necessary to be number one. Too much ego is a bad thing. Maybe somebody should remind Antonio Brown of that point? Anyway, we begin with housing...
New Home Sales
They rose for a second straight month to a yearly estimate of 1.36M. This gives hope, especially when added to existing home sales. They also rose to a yearly estimate of 5.49M. Since housing effects so many aspects to an economy, these are very important indicators. Robert Shiller told Bloomberg last week that he sees another crash coming. I agree up to a point. There are serious problems with affordability, rising state taxes and insurance. Those factors will offset any Fed rate cut. Housing prices will stagnate for a period of time. The upper end will feel the most damage. Another reason for pessimism is population growth. Our large population grows at 150,000 per month. This equates to 1.8M a year. New home sales fall short of this figure. This means housing will be needed, but it will be multi-family as opposed to a single residence. This is not good for society and an economy.
By the way a better view of upscale housing is displayed by the new condo in New York. The view from the 131st floor is exceptional like the price, $63M. No offers for it and the city has a glut of expensive units for sale with 25% still available. This unit offers a special elevator that speeds upward at 2,000 feet per minute. Of course, I see future problems as the elevator stops at the 120th floor, then the 125th floor, then 126th floor as the impatient owner of the 131st floor stammers at his fellow neighbors in the cabin to the sky.
ECB
They cut negative rates to even deeper into red territory. Mario, in his last act as chairperson says this will help along with QE buying of bonds. Nothing says future growth like guaranteeing that one will lose money by purchasing a bond to stimulate an economy. In a related game of fools, the Brexit merry-go-round has been extended until 31st. of October. Does anyone play Led Zeppelin anymore? Remember these lines, How many more times will you treat me the way you do? As I stated before the democratic vote went against the aristocratic vote which is why nothing gets done.
The Fed cut rates as we all know and Greenspan said, "Negative rates will come to the US." However, watch the King Dollar as it approaches expiration date of existing contract in correlation to Brexit.
In a related aspect, watch corporate debt as firms seek to refinance loans with cheap money. Rate cuts allow poor companies to operate. They would be out of business in normal times. China suffers from this same zombie effect. Recently, big business took $72B with another $50B planned. Many of these loans will be with negative bonds. This will force the rating agencies to downgrade the firm. This begins a bad cycle which will force companies to cut costs which begins with jobs.
The consumer will be effected then as now. Consider the following:
You can see this at ground level as auto loans for car loans are now 6-years in length. The average monthly payment is $550. Now, the consumer must also pay his rent/mortgage along with food, energy and utilities. This leaves little or no room for anything else like entertainment, medical or emergency expenses. If corporations begin to cut, the outlook is not good!
California versus Trump, EPA, Lyft, all comers...
The state recently said that drivers for car services like Lyft are employees. As such, they must be treated under laws regulating employees. They can no longer be paid as contractors. This will raise expenses for those type of companies. Then, President Trump said California can no longer determine auto mileage and exhaust requirements. Trump got the EPA to fight the state. This is how our nation began heading towards the Civil War with state rights versus federal government. California has 22 states in its confederacy. This will be a topic in 2020.
"All We are saying is, 'Give Peace a Chance..."
is another oldie that needs playing time again and now, more than ever. The freaking military is pushing the same BS it used when that liar, Bush used the media to start the war against Iraq and later, Afghanistan. Remember Weapons of Mass Destruction? Now, we the military says with 100% accuracy that Iran attacked the oil fields in Saudi Arabia. One thing I can say, our military can't say 100% about anything. The Who were right, "Meet the new boss. Same as the old boss."
By the way President Trump has given the military more than 50% of our budget. The military will use some of that dough in a new program to prevent cyber attacks. The "JEDI" is coming. It stands for Joint Enterprise Defense Infrastructure.
Don't blame the driver...
UPS just received permission to use drones in package delivery. Amazon had already got the green light. I can see it now, your new electronic gismo falls 50 feet from the sky into thousands of pieces. You are mad as hell, but the drone has long left your residential air space and you gave them permission to use a drone. Good luck on your replacement fight.
Medical help?
President Trump says he will favor using Canadian prescription companies to lower medical costs. This will be a hot topic in 2020.
New Idiot Economic Theory
ever hear of Tupy-Pooley effect? They say money is time. If you don't have enough money, it is because you don't have enough time (working). You need to work more (think slave) and then, you can make your purchase. They also overlook the wages for labor. This is related to the GM strike. I always feel for workers, but anyone working in autos receives a quality pay scale. I do sympathize with their future outlook. Electric cars need less workers and the auto firms need to see the horizon. This is a tough confliction point and it will have many ramifications.
Lousy Bankruptcy Court
I said this before: the bankruptcy court process needs to be overhauled. The problem is lawyers set the process and lawyers are corrupt. Case in point: Purdue Pharma. They filed for bankruptcy. All the lawsuits against the firm will be thrown out. These crooks walk free with a trail of dead in the thousands behind them. This is so wrong!
More smallness...
The Democrats are seeking to punish the reelection of Trump in 2020 by pushing impeachment investigations. This shows the smallness in our political leaders. The democrats remember when jealous Republicans sought the same actions on Bill Clinton. The odds for success are tiny like their motives. They saw Gore lose in the resulting election. They hope the bad press will sway votes. The irony is they say Trump tried to gain election scandal info on Biden to sway the next election. Where are ideas to help make America better? I said it before and I'll say it again, "We need a new political party that represents the people and their interests."
New Home Sales
They rose for a second straight month to a yearly estimate of 1.36M. This gives hope, especially when added to existing home sales. They also rose to a yearly estimate of 5.49M. Since housing effects so many aspects to an economy, these are very important indicators. Robert Shiller told Bloomberg last week that he sees another crash coming. I agree up to a point. There are serious problems with affordability, rising state taxes and insurance. Those factors will offset any Fed rate cut. Housing prices will stagnate for a period of time. The upper end will feel the most damage. Another reason for pessimism is population growth. Our large population grows at 150,000 per month. This equates to 1.8M a year. New home sales fall short of this figure. This means housing will be needed, but it will be multi-family as opposed to a single residence. This is not good for society and an economy.
By the way a better view of upscale housing is displayed by the new condo in New York. The view from the 131st floor is exceptional like the price, $63M. No offers for it and the city has a glut of expensive units for sale with 25% still available. This unit offers a special elevator that speeds upward at 2,000 feet per minute. Of course, I see future problems as the elevator stops at the 120th floor, then the 125th floor, then 126th floor as the impatient owner of the 131st floor stammers at his fellow neighbors in the cabin to the sky.
ECB
They cut negative rates to even deeper into red territory. Mario, in his last act as chairperson says this will help along with QE buying of bonds. Nothing says future growth like guaranteeing that one will lose money by purchasing a bond to stimulate an economy. In a related game of fools, the Brexit merry-go-round has been extended until 31st. of October. Does anyone play Led Zeppelin anymore? Remember these lines, How many more times will you treat me the way you do? As I stated before the democratic vote went against the aristocratic vote which is why nothing gets done.
The Fed cut rates as we all know and Greenspan said, "Negative rates will come to the US." However, watch the King Dollar as it approaches expiration date of existing contract in correlation to Brexit.
In a related aspect, watch corporate debt as firms seek to refinance loans with cheap money. Rate cuts allow poor companies to operate. They would be out of business in normal times. China suffers from this same zombie effect. Recently, big business took $72B with another $50B planned. Many of these loans will be with negative bonds. This will force the rating agencies to downgrade the firm. This begins a bad cycle which will force companies to cut costs which begins with jobs.
The consumer will be effected then as now. Consider the following:
You can see this at ground level as auto loans for car loans are now 6-years in length. The average monthly payment is $550. Now, the consumer must also pay his rent/mortgage along with food, energy and utilities. This leaves little or no room for anything else like entertainment, medical or emergency expenses. If corporations begin to cut, the outlook is not good!
California versus Trump, EPA, Lyft, all comers...
The state recently said that drivers for car services like Lyft are employees. As such, they must be treated under laws regulating employees. They can no longer be paid as contractors. This will raise expenses for those type of companies. Then, President Trump said California can no longer determine auto mileage and exhaust requirements. Trump got the EPA to fight the state. This is how our nation began heading towards the Civil War with state rights versus federal government. California has 22 states in its confederacy. This will be a topic in 2020.
"All We are saying is, 'Give Peace a Chance..."
is another oldie that needs playing time again and now, more than ever. The freaking military is pushing the same BS it used when that liar, Bush used the media to start the war against Iraq and later, Afghanistan. Remember Weapons of Mass Destruction? Now, we the military says with 100% accuracy that Iran attacked the oil fields in Saudi Arabia. One thing I can say, our military can't say 100% about anything. The Who were right, "Meet the new boss. Same as the old boss."
By the way President Trump has given the military more than 50% of our budget. The military will use some of that dough in a new program to prevent cyber attacks. The "JEDI" is coming. It stands for Joint Enterprise Defense Infrastructure.
Don't blame the driver...
UPS just received permission to use drones in package delivery. Amazon had already got the green light. I can see it now, your new electronic gismo falls 50 feet from the sky into thousands of pieces. You are mad as hell, but the drone has long left your residential air space and you gave them permission to use a drone. Good luck on your replacement fight.
Medical help?
President Trump says he will favor using Canadian prescription companies to lower medical costs. This will be a hot topic in 2020.
New Idiot Economic Theory
ever hear of Tupy-Pooley effect? They say money is time. If you don't have enough money, it is because you don't have enough time (working). You need to work more (think slave) and then, you can make your purchase. They also overlook the wages for labor. This is related to the GM strike. I always feel for workers, but anyone working in autos receives a quality pay scale. I do sympathize with their future outlook. Electric cars need less workers and the auto firms need to see the horizon. This is a tough confliction point and it will have many ramifications.
Lousy Bankruptcy Court
I said this before: the bankruptcy court process needs to be overhauled. The problem is lawyers set the process and lawyers are corrupt. Case in point: Purdue Pharma. They filed for bankruptcy. All the lawsuits against the firm will be thrown out. These crooks walk free with a trail of dead in the thousands behind them. This is so wrong!
More smallness...
The Democrats are seeking to punish the reelection of Trump in 2020 by pushing impeachment investigations. This shows the smallness in our political leaders. The democrats remember when jealous Republicans sought the same actions on Bill Clinton. The odds for success are tiny like their motives. They saw Gore lose in the resulting election. They hope the bad press will sway votes. The irony is they say Trump tried to gain election scandal info on Biden to sway the next election. Where are ideas to help make America better? I said it before and I'll say it again, "We need a new political party that represents the people and their interests."
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