Archive for the ‘Financial News’ Category

The GDP a Myth of Biblical Proportions

Saturday, October 29th, 2011

     When the Government dilutes the money supply by printing fiat currency, the result is inflationary.

     In the case of the Federal Reserve , the printing presses are running so fast and furious, that they have already worn out 2 sets of printing presses in the 3 years of the Obama  reign.

     The inflationary pressures are a constant push on prices and a depressant on the purchase power of the American dollar. It takes more and more dollars to buy less and less items.

     Anyone who is responsible forgoing to the grocery store, realizes that the same number of shopping bags, now cost more almosrt weekly, and they also note that much of the packaging has been changed to shrink the amount in the package , while attempting to hide behind a larger box or other creative packaging.

     Yesterday, the Government announced an increase of 2.5% in Gross Domestic Production(GDP) for the 3rd quarter of 2011.

     That announcement coupled with the  European bail out of Greece (another fiasco, that will result in more and more bailouts, and  more and more unbacked paper currency in Europe..Inflation is a many splendid thing..or not!) , sent the stock market soaring.

     It always suprises me, that the so called sophisticated traders and investors can misread the news so dramatically.

     The inflation that is creeping into our economy makes everything more expensive, resulting in more spending for the same items. Hence an increase in GDP….What? We are being burried under paper, our standard of living is dying one paper bill at a time, and the world rejoices at the wonderful news.

     No double dip recession, the economy is growing!

     No default in Greece, the presses are working overtime around the world.

     The real tragedy of this fiscal disaster is that  there is abundant paper and ink. Perhaps the presses will overheat and refuse to continue printing, or perhaps society will decide that accepting printed paper in exchange for food and shelter is a bad idea,-

The Relationship of Economics to History II

Friday, September 23rd, 2011

Economics is a way of keeping score.

Economics is the way we are able to feed ourselves.

Economics is the engine that drives history.

The quest for quantitative gain, either in wealth or sustenance has been the propellant for most wars,  the march of  invading armies, and the annexation of  neighbors lands.

Economics is the fuel which drives society.

From the beginning of human history, people banded together first in clans, and ultimately in tribes and later nations, all with the original need to feed and protect.

To control the source of food and to allocate its distribution was an economic power that could decided life and death.

As society evolved, the symbiotic relationship  economics and history strengthened.

Today, the state of our economy has once again devolved to a more basic level. The days of indiscriminate spending on increasingly absurd possessions are fast disappearing.

Now we have turned into a dependent society.

We expect to be taken care of,,

Thank god for Obama and his Progressive minions.

Our needs are no longer our responsibility.

Pay my heating bills.

Buy my food.

Provide my health care.

Subsidize my rent.

Pay me not to work.

Life is good.

Life is easy

etal……

Do Not Believe the Wall Street Rally

Friday, August 12th, 2011

My dear friends,

I have told you a number of times during the past 24-36 months, ” do not believe the short term  rallies in the market.”

The economy is in bad shape, and still needs another 18 months to bottom out.

This is assuming that Obama does not get reelected.

If he wins a second term, all bets are off.

When I say bottom out, the last part of this shakeout will be the worst part. As a people we Americans are very adaptable, and have a short memory.

They have gotten us used to a lower standard of living. Gas at 3.75 a gallon is better than 4.25, but still better part of .80-.90 higher than last year.

We are told to drive less, to carpool, and to stock up on sweaters for the winter.  …And  we do it, setling into a less comfortable standard of living.

We are told the rest of the World will love us again if me freeze in the winter, sweat in the Summer,  eat less , and stock up on foods that are generic, and cheaper, meanwhile less fresh and healthy.

Well the rest of the world does not love us, and eating cheap fatty foods is well represented in the spreading rear ends of the American population.

I don’t want to be cold in the winter. I don’t like bulky sweaters. I’ve worked all my life and feel that i’ve earned the right to wear what I want, and heat and air condition my surroundings any way that I choose.

All we have to do is find or keep a job, and pray that inflation and a dropping Stock Market doesn’t wipe out what little we have leftafter loosng our homes.

Sell this bill of goods to someone else.

Beware the Market, especially if the Tax and spend party wins again and does its thing.

America we are in trouble

Perceptions of Our Future * The Good * The Bad * The Very Ugly* View #1 The Good

Monday, July 11th, 2011

                                           

                                       VIEW # 1 THE GOOD

Word leaders have an epiphany and come to the realization that keeping interest rates artifically low , is having the effect of destroying their currencies.

Cheap money and flooding the markets with unbacked paper currency is having the effect to diluting the wealth of their citizenry.

The resulting creeping inflation is lowering the living standards worldwide.

This is  creating scarcity as more paper chases a finite amount of consumables, including food, fuel, and clean water.

The realization that we are creating a scenario where bailouts will continue to grow, leads out wise leaders worldwide, to make a series of dramatic fiscal decisions, beginning with a return to a gold backed currency.

Interest rates are allowed to rise, and ” Too Big ti Fail” becomes ” Too Big and Expensive to Save.”

The Federal Reserve is closed and a return to Fiscal Responsibility is reluctantly agreed to by the President and Congress.

There are massive protests, and disruptions in the economy resulting in the Government downsizing for the first time in 100 years.

Useless and duplicate departments are closed.

Many taxes are lowered or eliminated.

40% of Federal employees are let go.

The Military closes 90 % of foreign bases, and brings the troops home.

The war on drugs is ended, and crime rates in Mexico, and the United States drops radically.

Controlled devaluation of the dollar  is instituted, and much of out national debt is brought into line by the painful readjustment of our economy to a sustainable level of work and direct reward.

When our entreprenurial spirit is allowed to grow without heavy regulations, our economy begins to respond.

Our GDP embarks upon a decade of unprecedented growth, reaching 6-7% a year, and ushering the new Golden Age of Civilization.

Is This 1937 or 2011 Deja Vu Part II

Thursday, June 9th, 2011

With QE2 ending at the end of June, the Treasury Department will be forced to go back to global markets in order to sell Treasury Bonds.

Interest rates are sure to rise, dealing a severe blow to the already fragile recovery.

Federal Reserve Chairman, Ben Bernanke’s Qualitative Easing plan has failed to stimulate economic growth, but has done a masterful job of encouraging inflation and a weakening dollar.

Armed with a printing press, and some  obsolete economic theories, he  is fated to  become a Quixotic figure  in World history.

A printing press should be used for printing books, instruction manuals and even Bibles, but not to stimulate free enterprise economic growth and investments.

The insidious  inflation is having the result of disrupting economic growth, rather than encouraging it.

How can an entreprenure invest in a new enterprise when inflation makes price stability questionable.

This coupled with increasingly stringent government regulations and the onset of Obamacare have done a masterful job of strangling the economy.

According to a recently released report, the combined public and private sectors of our economy spend upwards of a $2 billion just on interest on all our debt.

The borrowed money which this interest services, has been spent on consumption rather than capital investment.

This is leaving nothing available for real growth or new creations.

QE2 has done nothing but service our debt and given a momentary artifical bounce in an otherwise floundering economy.

The current and proposed future taxes which are being piled upon the “wealthy” (ie the entreprenure) is making the  economic recovery  increasingly reminiscent of a black hole.

More Later

Is This 1937 or 2011 Deja Vu all over Again

Thursday, June 9th, 2011

Well dear friends, QE2 is comming to an end,

What does that really mean, and what has all the fuss been about?

We put cute names and labels of earth shaking actions to make them pallatable to the average person, but the real intention is to hide the reality of what is happening.

QE2 or Quantitative Easing is another way of saying that the United States Federal Reserve has printed $ 600 Billion out of thin air and used this freshly inked paper to purchase 85 % of the Treasury Securities issued in the past 6 + months.

This giant Ponzi scheme has allowed the Fed to keep interest rates artifically low while flooding the market with inflationary paper, which has been used to pay the interest on our national DEBT.

What? We are printing money out of thin air, and using this to buy our own bonds?!!

As of June 30th, this program will end.

Now what!

How will we be able to continue selling $Trillions of new Treasury securities and record low rates of interest?

The answer is we won’t.

After this program ends, we will have to look to foreign buyers.

China, Saudi Arabis, possibly France and other Euro nations, as well as some hostile people with huge petro dollars such as Iran, Venezuela, et al.

Will these foreign nations be willing to lend us money at depressed interest rates.

HELL NO!!!

The days of cheap money are destined to come to a swift end.

5%, 6%,and higher are in our immediate future, and the drag on a very fragile economy will drag us to the precpice of a precipitous drop.

More later,

Counting the Budget Deficit in Real Numbers!

Saturday, April 16th, 2011

The fiscal disaster which is the U S Federal budget, and the tidal wave of debt( Tsunami,sorry I have dated myself) which is threatening our Nation, is a well documented reality.

I have been listening to the arguments between Liberal and Conservative pundits, and there is one serious problem with both sides of this debate.

Both sides acknowledge that the  budget deficit is approx $1.7 trillion this yeat, and a $ 13-14  trillion unfunded debt also exists.

O K , I acknowledge the reality of our fiscal horror show.

BUT, what is 1.7 trillion? How about letting the public know the real number. Try $ 1700 billion. Yes thats right, the glib $ 1.7 trillion deficit in real dollars is 1700 BILLION,  of 1,700,000 MILLION.

Those numbers are all the same,but the spelled out number is truly staggering. 1.7 trillion is 1700 Billion .

How about our acknowledged debt of $ 14trillion. This is where our debt ceiling is right now. 14 trillion is 140,000 Billion dollars. A number which gives me a headache to comprehend.

Yet Obama and the Democrats are treating it as monopoly money and throwing around 1.6 or 14 trillion  without really telling you the desperation of the numbers.

Take a minute or possibly a hour and try to actually write out the number longhand.

Blows your mind doesn’t it

Cooking the Books to Manipulate our Perception

Friday, March 4th, 2011

Much of the statistics which the Main Stream Media presents to us as “gospel” , is actually “good” news based upon group - think.

 Highly misleading statistics based upon  political expediency.

This morning , the unemployment statistics reflected 180,000 + new private sector jobs created and an unemployment rate that fell to 8.9 %.

This is great news and heralds  a further steps towards economic recoveryand a renewal of the American dream!!! 

Yay!!!

Let the good times roll !!!

WRONG !!

The reduced 8.9 % unemploment represents only the number of people actually drawing unemployment cheks.

How about those who’s unemployment insurance has expired.

How about those unemployed who have given up on looking for work.

How about people who have been forced totake part time jobs , or “1099″ off the books low wage employment.

The shameless agenda , constantly fostered upon an unsophisticated public, is irresponsible  and down right unethical  if not criminally misleag.

Wall Street embraces the Government statistics, while Main Street continues to plod along, bewildered by the facts and the continuing lack of jobs, and the insidious encroachment of real inflation( including food and transportation costs).

“Never the Twain Shall Meet”

Wally Woodchuck Gets Stimulated by an “Economic Stimulus Package” a parable about Fiscal Irresponsibility

Thursday, October 14th, 2010
 

by

Charlie Champion

 

Wally Woodchuck was full of himself. He was cool, he knew it, and anyone who didn’t recognize his coolness was very uncool.

If you had any doubts about Wally’s specialness, just ask him..” I’m hip, I’m Cool. Lay it on me , baby” He would reply, looking down his nose at such a plebeian question.

Several months ago, while surfing the City garbage dump, Wally had found a pair of discarded, Barbie doll , sun glasses. They were oversized by woodchuck standards, but with the help of a length of salvaged wire, they were able to perch precipitously on the bridge of his nose.

Wally looked at his reflection in a pool of water, ” These glasses are the final touch.” He thought. ” I’m much too fine to do any woodchucking. That type of work is only for suckers and regular Woodchucks.. The other Woodchucks should feed me and take care of all my health and wealth needs.

After all” He continued,” I’ ve worked very hard at being too cool to work. It’s much more fun to drink with my friends, chase after females in heat, and get free food from public storage during the Winter.”

He ambled over to the local wood pile, and leaned against a stump.

There was a group of 10 or 12 woodchucks busy at work, chucking the wood into ragged piles.

His noticed three of his buddies working as part of the group.

He snickered as Warren Woodchuck picked up a length of tree limb.” Hey Willie , look at sexy Wanda Woodchuck.” He pointed off to his right.

When Willie Woodchuck looked away, searching for Wanda, Warren chucked the branch he was holding, landing a glancing blow at the back of Willies head.

” Hey who did that?” Growled Willie, in mock anger. ” Who hit me in the head?” He looked around the work group, while reaching down to pick up a clod of mud.

As Willie straightened up, he threw the muddy clump aiming at Warren’s head.

Seeing the approaching mud ball, Warren ducked. The mud ball sailed over his head and hit group leader Winston, smack in the snout.

The ensuing melee lasted far too long, and left several members of the group nurseing injuries, effectively ending any any additional work getting done.

Still chuckling, Wally went over to his friends.” Look at you guys! What a sight.” He shook his head,.” You all certainly made a mess. All the wood that you chucked is gone, mashed in with the mud.”

Willie’s black nose glistened with moisture, and a splatter of brown mud. ” What do you think we should do, Wally? The Union leaders, and their supervisors will be angry that we ruined all this work.” He rubbed his mouth. ” I chucked so much wood that my teeth hurt.”.

” Who are you kidding?” Sneered Wally. “Your teeth hurt because Winston Woodchuck smacked you in the mouth for hitting him with that mud.”

Willie looked sheepish. ” Perhaps you are right. So what do we do to fix this mess?”

” We go to the Union Hall and talk to Wingo. He’s our representative to the Bosses. They can’t do anything without Wingo’s O K .You know that.”

Willie sighed . ” I forgot. Things have changed so much since the World economy crashed two years ago.Everything is so different.So easy. They tell us what to do. When and how to do it, I get tax rebate checks even if I don’t work.”

Wally Woodchuck nodded in agreement. “As long as the Red Woodchuck’s United party remains in power, we can’t get fired.Our share of the Annual Spending Stimulus (A . S . S . ) Pays for our food. Takes care of our landlord. Pays for our health care. We get a monthly stimulus payment. ” He looked at his friend.” And if we mess up at work, our union covers our ASS.”

Warren walked over and joined his friends. Reaching out he patted Willie on the back.” Wally’s right” He said.” Let someone else clean up the mess. There are plenty of woodchuck’s wanting to work.Let them do it if they are so industrious.. Hard work and responsibility are such old fashioned concepts. .”

” Right on baby,” Said cool Wally. The sunlight bounced off his shades, rendering his eyes invisible.” Pre bailout is pase. Give me my stimulus, and let me go play.Working is for squares.Let someone else do it”

He thought about it for a moment, then smiled.” Yes thats it, Let someone else do it. Our New motto. Let someone elase do it.”

Warren and Willie picked up the chant. “Let someone else do it!” They shouted in unison.”Let someone else do it.”

The Economic Rescue and Stimulus Package.(E.R.S.P.) had accomplished its goal.

Woodchuck ambition and innovation had been replaced by government employment. Everyone got a job. Working was optional.

Healthcare was available to every person in the Country, and the quality was equally low and slow for all.

The standard of living was permanentally lowered, but no citizen was forced to work for their lowered standard.

And of course, most important of all,THE RED WOODCHUCKS UNITED party( TRWU) was the benevolent orchestrator of out welfare, safety, and what we can think from now on.

A very comforting thought.

 

 

 

Why the World is Going Broke. Does Anyone Care ?

Friday, May 21st, 2010

Why is the world going broke, and how did we get into this mess.

Start with a homeowner who was granted a mortgage even though he did not deserve one, and couldn’t afford one.

During a dip in the economic cycle, he looses his job, and can’t keep up with his mortgage payments.

He falls behind and ultimately defaults on his loan.

The mortgage company that brokered his loan  to the lending institution , takes a loss on the bad debt and goes broke.

The lending bank has a growing number of  defaulting  mortgages, and fails.

The failed bank had previously packaged and sold its mortgage loans as “derivatives”, to another bank.

The larger bank which bought the first bank’s derivative debt “bomb”, now goes broke.

The government springs into action, bailing out the failied bank, and assumes their bad debt.

As the derivative bombs continue to explode, they turn into a “blitzkreig” which threatens our entire financial system.

The government steps up and spends trillions of dollars to bail out and prop up the “entire world” .

While spending all of this bail out and now stimulus money which it does not have, the government continues to :

Provide Social Security, money , which it does not have.

Provide unemployemnt insurance  for upwards of 20 % of the population for almost 2 years, money , which it does not have.

Provide Medicare and Medicaid and other free health care services, with  money that it does not have.

Provide another trillion dollar health care reform coverage, with money, that it does not have.

Bail out the Bankers with TARP funds, which it does not have.

Bail out the auto industry with money it does not have.

Bail out and protect labor unions, with money that it does not have

When smaller countries, governments, states, counties, and municipalities can no longer afford the growing tide of the social welfare state, they turn to larger governments and countries to bail them out.

Investors seeing the dangerous rising tide of debt and insolvency in the world, buy big government bonds because they are “safer”.

When big governments run out of printers ink, the Ship of State finds inself sailing in rivers of red ink.

Red ink is not as buoyant as clean clear water, and the Ship of State is in danger of sinking.

Disaster lurks !