tag:blogger.com,1999:blog-44010727338260188862024-03-12T21:24:53.313-07:00A Shaped RecoveryOne mans opinion about Finance and Journalism in the modern era.A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-4401072733826018886.post-75348922107086897092013-06-26T17:33:00.002-07:002013-06-26T17:33:30.354-07:00Policy Of Energy<div class="separator" style="clear: both; text-align: center;">
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<span style="color: blue; font-family: Times, Times New Roman, serif; font-size: large;"><b>Policy of Energy </b></span></div>
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<span class="A14"><span style="font-size: 13.0pt;"><i><u><span style="color: blue;"><b>Energy Scale</b></span></u></i><o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11pt;">Even though much of the world is still suffering from economic
stagnation, most of us would agree that we still have a very high standard of
living in the United States. Compared to previous generations, we are
wealthier, healthier, have better </span><span style="font-size: 15px;">technology</span><span style="font-size: 11pt;"> more mobility and many more
opportunities for a better life.</span></span><span style="font-size: 11pt;"> <span class="A1">Several factors contribute to a higher standard of
living, but one of the most important (and most often overlooked) is access to
reliable and inexpensive energy. </span></span><span style="font-size: 11pt;">Affordable energy is essential for </span><span style="font-size: 15px;">almost</span><span style="font-size: 11pt;"> every aspect of our modern
lives. Without it, we </span><span style="font-size: 15px;">wouldn't</span><span style="font-size: 11pt;"> have many of the things we often take for
granted. Affordable energy is needed to run the hospitals and laboratories that
improve our health. It’s required to deliver </span><span style="font-size: 15px;">electricity</span><span style="font-size: 11pt;"> to our homes and put
fuel in our vehicles. It also supports the millions of jobs associated with all
of these things.</span></div>
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<span class="A14"><span style="font-size: 13.0pt;"><i><u><b><span style="color: blue;">Carbon
concerns</span></b></u></i><o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11pt;">In general, the most affordable forms of energy come from fossil fuels,
such as coal, oil and natural gas. Compared to these energy sources,
alternative fuels such as solar and wind power are </span><span style="font-size: 15px;">considerably</span><span style="font-size: 11pt;"> more expensive
(and less reliable).</span></span> <span class="A1"><span style="font-size: 11pt;">Burning fossil fuels to generate electricity or provide power
necessarily releases </span><span style="font-size: 15px;">carbon</span><span style="font-size: 11pt;"> dioxide, or CO</span></span><span class="A15"><span style="font-size: 6.0pt;">2</span></span><span class="A1"><span style="font-size: 11.0pt;">, into the atmosphere. </span></span><span class="A1"><span style="font-size: 11pt;">Carbon dioxide, a gas, is what we exhale </span><span style="font-size: 15px;">every</span><span style="font-size: 11pt;"> time we breathe.
Erupting volcanoes, decaying trees, wildfires and the animals on which we rely
for food all emit CO</span></span><span class="A15"><span style="font-size: 6.0pt;">2</span></span><span class="A1"><span style="font-size: 11.0pt;">. This by-product, which is essential
for plant life and an unavoidable aspect of human life, is at the center of
today’s climate change controversies.</span></span></div>
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<span class="A14"><span style="font-size: 13.0pt;"><b><i><u><span style="color: blue;">Degree of
change</span></u></i></b><o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11.0pt;">There is a vigorous debate about what effects carbon emissions may or
may not have on our future climate.</span></span> <span class="A1"><span style="font-size: 11.0pt;">Many scientists
have estimated that the earth’s atmosphere has warmed by about 1.3 degrees
Fahrenheit since 1880.</span></span> <span class="A1"><span style="font-size: 11.0pt;">Those who believe that increased CO</span></span><span class="A15"><span style="font-size: 6.0pt;">2 </span></span><span class="A1"><span style="font-size: 11pt;">emissions inevitably lead to global warming believe
this change is directly </span><span style="font-size: 15px;">attributable</span><span style="font-size: 11pt;"> to the widespread use of fossil fuels.
Because they believe further warming will have catastrophic effects, they have
waged a war on carbon for many years. They have persuaded regulators to
restrict carbon-based fuels in favor of subsidized alternative energy and
encouraged </span><span style="font-size: 15px;">policymakers</span><span style="font-size: 11pt;"> to make fossil fuels more expensive in hopes of
discouraging their use.<o:p></o:p></span></span></div>
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<span class="A14"><span style="font-size: 13.0pt;"><b><i><u><span style="color: blue;">A matter of
policy</span></u></i></b><o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11.0pt;">In 2009, some policymakers proposed new legislation called
“cap-and-trade,” which would set a cap on carbon emissions and allow businesses
to buy, sell or trade permits for emitting carbon.</span></span><span style="font-size: 11pt;"><o:p></o:p></span></div>
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<span class="A1"><span style="font-size: 11pt;">Due to its
severe economic effects and the lack of proven benefits for the </span><span style="font-size: 15px;">environment</span><span style="font-size: 11pt;">,
the legislation was widely </span><span style="font-size: 15px;">unpopular</span><span style="font-size: 11pt;"> and failed to become law. Instead of
accepting this reality, the </span><span style="font-size: 15px;">Administration</span><span style="font-size: 11pt;"> decided to bypass Congress entirely
and restrict emissions through regulations, which are rules that don’t require
the approval of elected officials. The U.S. Environmental Protection Agency
began restricting emissions from mobile sources such as cars, working with
other agencies to require manufacturers to make more fuel-efficient autos.</span></span></div>
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<span class="A1"><span style="font-size: 11pt;">Although this
might sound like a good idea, such a policy is loaded with </span><span style="font-size: 15px;">unintended</span><span style="font-size: 11pt;"> consequences. Vehicles with higher fuel efficiency are typically more
expensive. They also tend to be smaller. For cash-strapped families with
several children, this is a serious problem. </span></span><span style="font-size: 11pt;">Manufacturers
have also tended to make cars lighter as a way of improving fuel </span><span style="font-size: 15px;">efficiency</span><span style="font-size: 11pt;">
which can reduce a car’s safety in the event of an accident.</span></div>
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<span class="A14"><span style="font-size: 13.0pt;"><b><i><u><span style="color: blue;">Truth and
consequences</span></u></i></b><o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11pt;">Regulators have also changed the rules for stationary sources of
emissions, including mills, manufacturing plants and refineries. The EPA now
requires new and modified carbon-emitting sources to have permits from various
agencies in addition to </span><span style="font-size: 15px;">separate</span><span style="font-size: 11pt;"> greenhouse gas requirements. These new
requirements, coupled with lawsuits from non-governmental </span><span style="font-size: 15px;">organizations</span><span style="font-size: 11pt;">, stop
expansions that would </span><span style="font-size: 15px;">create</span><span style="font-size: 11pt;"> value for society and more good jobs. The new
rules also force manufacturers to use the most advanced (which usually means
the most expensive) technologies.<o:p></o:p></span></span></div>
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<span class="A14"><span style="font-size: 13.0pt;"><b><i><u><span style="color: blue;">Tale of two
climates</span></u></i></b><o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11.0pt;">If the goal is really to reduce carbon emissions, it’s worth noting
that the U.S. is doing a good job of achieving that goal without cap-and-trade
programs. In Europe, where carbon cap-and-trade was imposed years ago, carbon
emissions are actually up, not down. The same is true for European energy
prices, which have become more expensive.<o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11.0pt;">In April, the EU’s CO</span></span><span class="A15"><span style="font-size: 6.0pt;">2 </span></span><span class="A1"><span style="font-size: 11pt;">emissions-trading program was described as “on the brink of collapse,”
as prices crashed by as much as 45 percent, dropping to record lows. In the
U.S., which has no national cap-and-trade program, carbon emissions and </span><span style="font-size: 15px;">energy</span><span style="font-size: 11pt;"> prices are both down in recent years. </span></span><span style="font-size: 11pt;"> </span><span class="A1"><span style="font-size: 11pt;">Thanks
to increased U.S. production, </span><span style="font-size: 15px;">natural</span><span style="font-size: 11pt;"> gas, which cost about $12 per million
BTUs two years ago, now costs less than $4. U.S. crude oil prices are also down
by more than $20 per barrel since 2011. Meanwhile, the U.S. economy is less </span><span style="font-size: 15px;">sluggish</span><span style="font-size: 11pt;"> than the recessionary economies of much of Europe. An article in the
U.K. acknowledged how the recent boom in U.S. shale oil and natural gas
production has already had “profound” effects.<o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11pt;">London’s </span><i style="font-size: 11pt;">Daily Telegraph </i><span style="font-size: 11pt;">noted that increased production of
these fossil fuels in the U.S. is “creating hundreds of thousands of jobs,
significantly adding to GDP and contributing tens of billions of dollars in
federal, state and local taxes.” Instead of celebrating these </span><span style="font-size: 15px;">developments</span><span style="font-size: 11pt;"> state and federal regulators in the U.S. keep trying to impose new and more
restrictive carbon regulations. Considering the numerous and extensive
environmental laws already in place, it’s easy to wonder why any additional
carbon legislation – such as cap-and-trade – would be necessary.<o:p></o:p></span></span></div>
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<span class="A14"><span style="font-size: 13.0pt;"><b><i><u><span style="color: blue;">Inside your
numbers</span></u></i></b><o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11.0pt;">All too often state and federal proposals to tax carbon directly or
launch new carbon cap-and-trade schemes have much more to do with raising
revenue than helping our environment. </span></span><span style="font-size: 11pt;">Even with the so-called </span><span style="font-size: 15px;">sequestration</span><span style="font-size: 11pt;">, total U.S. </span><span style="font-size: 15px;">spending</span><span style="font-size: 11pt;"> has not
gone down, but taxes have certainly gone up. As of Jan. 1, a U.S. household
making $50,000 a year pays about $1,000 more in taxes. That </span><span style="font-size: 15px;">isn't</span><span style="font-size: 11pt;"> nearly enough
to erase the $1.3 trillion U.S. budget deficit, let alone the $16 trillion
national debt. For those who prefer higher taxation to spending cuts, having an
entirely new source of revenue is an appealing way to reduce the deficit.
Unfortunately, </span><span style="font-size: 15px;">taxing</span><span style="font-size: 11pt;"> carbon, as with all taxes, only takes more resources
from the private sector to support a swelling federal government.</span></div>
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<span class="A14"><span style="font-size: 13.0pt;"><b><i><u><span style="color: blue;">Does this
feel fair?</span></u></i></b><o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11pt;">A recent study by NERA Economic </span><span style="font-size: 15px;">Consulting</span><span style="font-size: 11pt;"> analyzed the probable
effects of a U.S. carbon tax that starts at $20 per ton and then rises 4
percent per year (which is in line with recent proposals). If such a tax were
imposed, the study estimated that more than 1.3 million U.S. jobs would be lost
this year alone and that workers’ incomes would eventually drop as much as 8.5
percent. Such a tax would also decrease </span><span style="font-size: 15px;">household</span><span style="font-size: 11pt;"> consumption, due to the
increased cost of goods. </span></span><span style="font-size: 11pt;"><o:p></o:p></span></div>
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<span class="A1"><span style="font-size: 11pt;">In Arkansas, for example, the average household would have to pay 40
percent more for natural gas, 13 percent more for electricity and more than 20
cents per gallon extra for gasoline. And that’s just in 2013. Costs would rise
even more in subsequent years. For those living paycheck-to-paycheck, price
hikes like these (coupled with </span><span style="font-size: 15px;">higher</span><span style="font-size: 11pt;"> payroll taxes) can only mean lower
standards of living and less opportunity. Families that spend a bigger portion
of their household income on </span><span style="font-size: 15px;">transportation</span><span style="font-size: 11pt;"> utilities and household goods are
hurt, not helped, by carbon taxes and cap-and-trade rules that make traditional
forms of energy more expensive.<o:p></o:p></span></span></div>
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<span class="A1"><span style="font-size: 11.0pt;">Almost
everyone is hurt by these higher costs – the exception being those few who
benefit from <u>subsidies</u>. <o:p></o:p></span></span></div>
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A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com1tag:blogger.com,1999:blog-4401072733826018886.post-54072461607553364902012-02-24T20:54:00.001-08:002012-02-25T23:00:40.709-08:00A World Of Credit <br />
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://conservativebyte.com/wp-content/uploads/2011/07/Full-of-Debt.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="260" src="http://conservativebyte.com/wp-content/uploads/2011/07/Full-of-Debt.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="color: blue; font-size: small;"><i><b>Slim-Fast doesn't work anymore!</b></i></span></td></tr>
</tbody></table><div style="text-align: center;"><br />
</div><div style="text-align: left;"><b><i><span style="color: blue;">The Burden of Debt!</span></i></b></div><br />
The credit rating of the United States was recently downgraded by Standard and Poor's from AAA to AA+, moving from the best possible rating to the second highest out of 19 possible ratings. The creditworthiness of a government borrower is measured by it's likelihood of default (the inability or unwillingness to repay debts).<br />
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For sovereign nations that issue debt in their own currency, the risk of default is less about the inability to repay as it is whether that currency will be worth the same in the future as it is today. Governments that do not take steps to preserve the value of their currency are - by definition - unwilling to preserve the value of national debt held by investors.<br />
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<span style="color: blue;"><b><i>Credit Counts!</i></b></span><br />
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A government can choose to repay its debts by simply turning on the printing press. Today, that can happy electronically in a matter of seconds. But when a government prints more money, that money will soon be worth less. After all, money is a commodity.<br />
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If the supply of a commodity goes up and demand remains constant, the price (value) of the commodity will decline. If supply goes down, the price goes up. It really is just that simple. Unfortunately, the U.S. has been printing a lot of money lately. That devalues our currency, which leads to inflation, less prosperity and less purchasing power.<br />
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To understand why, let's look at what might happen if we allow the U.S. dollar to devalue as a result of government policy. At an exchange rate of 80 yen to the dollar, buying a Toyota Camry for $25,000 gives Toyota the equivalent of 2 million yen. But what if future dollars are worth less and will purchase only 40 yen? At that exchange rate, Toyota would have to double the dollar price of the car just to maintain the same price in yen. This is why when currency devalues, the prices for goods and services eventually increase.<br />
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<span style="color: blue;"><b><i>Why Does It Matter?</i></b></span><br />
<span style="color: blue;"><b><i><br />
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<i style="color: blue; font-weight: bold;"> </i>Today nearly 30% of all trade is between nations. This trade has not only led to greater global prosperity, but more and better goods, and higher standards of living for billions of people. As a part of this process, capital is exchanged between countries in form of borrowing and direct investing. But when the borrowing goes too far, trouble arises.<br />
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About $4.5 trillion of the $15 trillion in federal debt is held by foreign investors such as China and Japan. If the U.S. dollar is worth less in the future, the willingness of those investors to continue lending will decline. The same will be true for anyone - including employees and retirees -who are paid in U.S. dollars.<br />
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As debt increases, interest rates (the cost of time and creditworthiness) will go up and overall standard of living will decline. After all, the amount of wealth in the U.S is finite. If we must pay more to service our debts, there will be less left over for anything else.<br />
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S&P downgraded the U.S. for one primary reason: the potential inability of the U.S. to repay it's debts with dollars that will be worth the same in the future as they are today. If S&P is right (which I believe they are) and the U.S. government does not start living withing its means, our standard of living will most certainly decline.<br />
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<span style="color: blue;"><b><i>Can This Problem Be Fixed?</i></b></span><br />
<span style="color: blue;"><b><i><br />
</i></b></span><br />
Canada lost it's AAA rating from S&P in 1992. At that time, Canada's national debt (measured as a percentage of GDP) exceeded 60%. It took a decade, but the Canadian government was successful in reducing its dependency on debt. Canada's external federal debt-to-GDP ratio fell to 29% in 2002, the year its AAA rating was restored. Canada improved its creditworthiness the old fashion way; by cutting government spending and balancing the budget. When government spending was cut, the economy then grew as amounts previously spent by the government, including interest expenses on debt, were instead invested to improve the capacity and productivity of the nation.<br />
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<span style="color: blue;"><b><i>Time To Act!</i></b></span><br />
<span style="color: blue;"><b><i><br />
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Today, the amount U.S. debt owned by third parties is estimated at 73% of GDP. If you include the $5 trillion Social Security trust fund surplus that has also been borrowed by the federal government, the current debt exceeds 100% of GDP. Of course, these calculations don't even begin to include the trillions of dollars in government promises for increased entitlement spending down the road.<br />
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This is why our elected officials and policymakers must act quickly, before our debt grows even more out of control and we see further reductions in our standard of living. The best first step is to reduce borrowing by cutting actual spending - not just the rate of spending increases. All of us need to understand that our fiscal sovereignty is being compromised and that tough choices are required to reverse this trend.<br />
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There are currently 17 nations and three territories (Hong Kong, Guernsey and Isle of Man) with a AAA debt rating from S&P. When the United States of America isn't on that list, it's time for change!A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-37031088466566113662011-05-07T20:48:00.000-07:002011-05-07T20:48:59.669-07:00Learn Why QE will Fail!<div class="separator" style="clear: both; text-align: center;"><iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/wPnvZ8tKA74?feature=player_embedded' frameborder='0'></iframe></div>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-85395024243859326532011-03-07T19:22:00.000-08:002011-04-02T03:49:03.775-07:00It's called Inflation!<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://lh5.googleusercontent.com/-swrISoY7Q08/TXWeg9jAM7I/AAAAAAAAABg/O8gESndkG7E/s1600/inflationpic.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="302" src="https://lh5.googleusercontent.com/-swrISoY7Q08/TXWeg9jAM7I/AAAAAAAAABg/O8gESndkG7E/s400/inflationpic.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><b><u><i><span class="Apple-style-span" style="color: #6aa84f; font-size: small;">We have a bull market alright!</span></i></u></b></td></tr>
</tbody></table><span class="Apple-style-span" style="color: blue;"><b><i>The Weed Keeps Growing</i></b></span><br />
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In October of 2009 cotton was 0.80 cents/pound; on March 4th 2011 cotton was at $2.20/pound. That is a tripling in the price of cotton; and obviously this doesn't happen without a lot of money creation from the central banks. Cotton is up 190% since last fall; does anybody not think that's cause of inflation and thats going to feed through to the price of clothing? Everything uses cotton; socks, t-shirts, underwear, blue jeans. Of course it's not just cotton, it's all fabrics that are getting expensive; so you can't substitute some other material for it. This is just one example of the true cost of increase money supply.<br />
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Rising food prices is not the story, it's rising money supply that's the story; which is the reason food prices are rising. It isn't a coincidence, that prices of food is surging to record highs at the same time as money supply's are expanding to record highs. There is a cause in relationship between QE1 and QE2 and whats happening with prices. It's not like all these high prices are a surprise; it's exactly what you would expect based on the monetary policy of the United States. The reason why inflation is global is because the United States has the world reserve currency. What the U.S monetary policy direction is, affects the monetary policies of every other currency so long as the dollar remains the world reserve currency.<br />
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<span class="Apple-style-span" style="color: blue;"><i><b>3 scapegoats</b></i></span><br />
<span class="Apple-style-span" style="color: blue;"><i><b><br />
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Scapegoat number one : the weather. The weather has nothing to do with it, there's weather every year. There's always problems in the weather; someones got a flood, drought, freeze.... It happens every year. In the old Soviet Union (Russia) was the bread basket of Europe. When the communist system came in, every year produced a bad harvest and every year they blamed the poor harvest on the weather. It wasn't the weather, it was the communist system that destroyed the incentive of farmers to farm. It is not weather related these surging prices across the board. It's not just this commodity (Wheat) that's rising, it's all commodities that are rising. So the weather is affecting every crop on the planet? Come on. <br />
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Scapegoat number two : demand in emerging markets: well we have had demand in emerging markets for centuries; they've been eating for centuries, they didn't just show up. What's changed? Answer : whats changed is all the money they have to spend on food because all the money that central banks are printing.<br />
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Scapegoat number three : Speculators. Where are the speculators getting all the money to speculate? Answer : from the FED; the critics are not pointing the finger at the real problem and the root cause of global inflation. It's Ben Bernanke, the money he's printing, it's President Obama and Congress that are spending money; the debt that they are issuing that Ben Bernanke is buying. This is a direct consequence of economic stimulus; that's why the world is suffering and that's why Americans are going to suffer in the future!<br />
<br />
If we don't make the connection of printing money and rising prices; then it's never going to stop. It seems like it's so obvious, that it's such a obvious connection. If we have more money, then money is less valuable; so prices have to rise. If we keep blaming the inflation problems on the weather, speculators, emerging markets; we are going to keep blaming it on everything but the actual cause which is the Federal Reserve and the deficits that are being created by congress that forces the FED to monetize. They're not required to monetize but we have a FED chairman with no guts!<br />
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<b><i><span class="Apple-style-span" style="color: blue;">Global Economy / Global Problems / Naughty FED!</span></i></b><br />
<b><i><span class="Apple-style-span" style="color: blue;"><br />
</span></i></b><br />
First off, the global economy has been growing; theres currently 5 billion people on the planet. More people are alive today than in the past but this growing trend has been in place for centuries; yet we've never had this "problem" with food. The thing is with more people on the planet means not only more people eating but also more people farming. Also, with advances in science and technology their are more advanced means in growing food with less input. It's not like you've had this huge explosion in people in the last 2 years, no; whats changed is this huge explosion in money supply. Whats changed is the FED's balance sheet being blown out of proportion. What's changed is all these foreign reserves of all these emerging markets central banks printing money to buy up all these FED printed dollars like it's going out of style. That's what's different from now and a couple of years ago; that's why prices are shooting through the roof.<br />
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Why doesn't the FED see this you ask? Answer : the FED is not missing it, the FED is just closing it's eyes. The FED doesn't want to acknowledge what they see, because they don't like the picture that's being painted. If the FED admitted it sees inflation, the reaction to that is having to raise interest rates. The minute the FED has to raise interest rates the economy tanks. The only reason why the economy is not tanking already is because it's on artificial life support already by the FED. The trade off consequence of that is to keep this phony economy going, to keep these banks afloat, to keep the real estate prices high we have to create inflation, we have to make prices go up. The FED doesn't want to say that's the trade off; the FED doesn't want to admit they've made a deal with the devil and these are the consequences. So they ignore inflation, they lie; but the problem is they loose all credibility when they look at all this inflation and say it doesn't exist. Of course it exist, but they don't want to deal with it. They don't want to have raise rates, they don't want to force politicians to make real cuts. The problem is we need to get this recession out of the way; the recession is part of the cure. In less we allow the economy to restructure in a way that will create a solid foundation, we will never build a lasting economic recovery; that is the point!<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://lh4.googleusercontent.com/-K-ZxEmMzCpA/TXWfihl42EI/AAAAAAAAABk/BTWN0DZVpcw/s1600/africa+inflation.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://lh4.googleusercontent.com/-K-ZxEmMzCpA/TXWfihl42EI/AAAAAAAAABk/BTWN0DZVpcw/s320/africa+inflation.jpg" width="294" /></a></div><b><i><span class="Apple-style-span" style="color: blue;">QE2 Failure!</span></i></b><br />
<b><i><span class="Apple-style-span" style="color: blue;"><br />
</span></i></b><br />
<span class="Apple-style-span">The main goal of QE2 was to bring long term treasury rates down and instead they went up! So, the FED has already lost control of long term rates; noticed in the rising rate. At some point the long end yield curves will get out of control. When the FED loses control of short term rates; is when it will be forced to monetize not only treasuries but other short term commercial paper. Because at some point when inflation gets so high, nobody will want to buy any short term paper and then what is the FED going to do? If the FED doesn't raise rates then nobody will be able to borrow cause the current rate for borrowing is 0%; unless the FED lends to everybody and then of course the FED becomes the buyer of only resort and not the buyer of last resort and that's it for the dollar index! If the FED raised rates right now then the recession will start right now and that would be bad for any political representative trying to get re-elected like the President. Because when it comes to politics it's all about postponing, delaying, even if the delay exacerbates the problem; that doesn't bother a politician. A politicians biggest problem is getting through the next election. He doesn't care how much long term damage he does to the economy in reaching his own goals. Unfortunately the central bankers are working in partnership with the politicians, they're buddy buddy; they're helping them get re-elected instead of being the independent central bankers they were appointed to be. The central bankers are not playing the role of the adult in the room. Instead the bankers are the life of the party, they've got the lamp shade on their head and they're spiking the punch bowl! There is a party in DC and I haven't got a invite.... </span><br />
<span class="Apple-style-span"><br />
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<div class="separator" style="clear: both; text-align: center;"><b><u><i><span class="Apple-style-span" style="color: #6aa84f;">Uncle Ben is Numb to Global Inflation</span></i></u></b></div><div style="text-align: center;"><iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/A2BTzFDJAJQ?feature=player_embedded' frameborder='0'></iframe></div>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-61072679130411573302011-01-06T15:12:00.000-08:002011-04-02T03:41:19.189-07:00The Loss of Prosperity!<div class="separator" style="clear: both; text-align: center;"><a href="http://www.russellbateman.com/images/obama-and-fdr.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="277" n4="true" src="http://www.russellbateman.com/images/obama-and-fdr.jpg" width="320" /></a></div><div style="text-align: center;"><span style="color: blue;"><em><strong><u>Taking Notes!</u></strong></em></span> </div><br />
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“We could be facing the greatest loss of liberty and prosperity since the 1930s." – Some Degenerate. Sad to say, that prediction is coming true. We now know the U.S. economy has been in recession for more than 3 years. Most of the world's economies are still suffering from the effects of that crisis, with no end in sight of the spread of this govt. induced disease. When trying to overcome such dire economic circumstances, it is essential to learn from what has and has not worked in similar circumstances in the past. And we need to not only remember, but to understand the past.<br />
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<span style="color: blue;"><strong><em>History lesson </em></strong></span><br />
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The closest parallel to our situation today, both economically and politically, is the early 1930s. Although there are differences, there are striking similarities. In both instances, free markets were blamed for problems caused by misguided government policies, which led to additional interventions. This ratcheting up of interventions led to long-term economic decline. For example, the U.S. Federal Reserve began a “monetary expansion” in 1927. This led to a stock market bubble, which the Fed, in 1928, felt it needed to pop. The resulting deflation, combined with the anticipation of other interventions, caused the stock market to drop nearly 50 percent in just two months.<br />
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If these interventions had been avoided, there is no reason to believe we wouldn't have escaped with a short-term, if severe, market adjustment rather than an historic depression. Instead, having caused a crash, the government quickly began looking for others to blame - especially bankers, brokers and businessmen. Sound familiar? Getting it wrong! <br />
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Far from being a champion of minimal government intervention in markets, as is commonly believed, President Herbert Hoover launched the most interventionist economic program in U.S. history. Hoover supported record income tax hikes and devastating import tariffs. He also initiated an explosion in government power by creating massive new programs. Far from helping, these programs created a destructive “uncertainty” that discouraged investment and entrepreneurship and contributed to the decline.<br />
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Unfortunately, most of us (and our children) have been told or taught just the opposite that Hoover was a laissez faire President who let unregulated markets get out of control. Nothing could be farther from the truth. Making matters worse, when Franklin D. Roosevelt came to power after Hoover, he compounded the uncertainty by pursuing a change policy of "bold, persistent experimentation" to end the Depression. This approach, instead, extended and amplified Hoover's mistakes. FDR's actions fundamentally changed the government's role in the economy, and prolonged and deepened the decline. <br />
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Rather than following the philosophy that government "can only exercise the powers granted to it" by the U.S. Constitution (as expressed by Chief Justice John Marshall in 1819), Roosevelt changed it to one in which the government has all powers not expressly forbidden by the Constitution. Prior to 1936, U.S. federal regulations covered 2,600 pages. By adopting Roosevelt's philosophy, they have since mushroomed to 72,000 pages. Non-defense spending skyrocketed as dozens of new government agencies (many of them still with us today) were created and most of them are un-necessary wastes of tax payer funds.<br />
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Personal income tax rates increased and new taxes, including corporate "excess profits" taxes as high as 90 percent, were imposed. The Great Depression saw the most far-reaching and abusive use of executive privilege in U.S. history. FDR issued 3,466 executive orders, nearly as many as the combined total for all his successors. Our current President, Barrack Obama is almost a reincarnation of FDR and his policies.<br />
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<strong><em><span style="color: blue;">What did all that spending, regulation and intervention accomplish?</span></em></strong><br />
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None of it, including Roosevelt's massive public works programs - solved the problem. In fact, under FDR, unemployment was still more than 23 percent at the end of 1934, and remained at double digit levels until World War II. Businesses, faced with the uncertainty created by invasive and ever-changing government policies, curtailed investment. Thus, share prices remained low. (The stock market did not recover to pre-crash levels until 1954.) The only reason the U.S markets are performing strongly is due to the FED’s position of pumping liquidity into the system, which is artificially creating a Bull Market and false optimisms among the masses. <br />
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<span style="color: blue;"><strong><em>Tough lessons </em></strong></span><br />
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The responses we've seen to today's economic crisis make me wonder if we have learned anything at all from the sobering lessons of the past. Once again, our government has allowed a “yo-yo” monetary policy to distort economic reality and wreak havoc on the stock market. Once again, massive government interventions - including bailouts, takeovers and make-work programs - are being offered as the "solution" to our economic problems. Once again, leaders are suggesting we can solve the problem by creating even more government agencies while piling on even more regulations. Once again, the government - rather than the market - is picking who wins or loses. <br />
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It is markets, not government, which can provide the strongest engine for growth, lifting us out of these troubling times. If we are foolish enough to ignore some of the most painful lessons of history, then we will almost certainly make the same mistakes on a devastating scale. In the new year of 2011 we have a crack in the door that if taken advantage of can open our country up to the realities of the past 4 years and allow the U.S.A express to get back on the tracks! With new leaders in office this could be the last opportunity we have to get the country back to its original promise to the American people, Freedom!A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-13965579517048166872011-01-03T16:23:00.000-08:002011-04-02T03:38:51.441-07:00Bond Market Implosion!<div class="separator" style="clear: both; text-align: center;"><iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/PRS48C55pjs?feature=player_embedded' frameborder='0'></iframe></div><div style="text-align: center;"><span style="color: blue;"><strong><em><u>We will have those Inflation Blues again!</u></em></strong></span></div><br />
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<span style="color: blue;"><strong><em>Inside the Fortune Cookie</em></strong></span><br />
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Consumer Prices in China have risen to 5.1% annual rate. The Producer Prices are rising better than 6% per year and beneath the surface if you look at food prices, food prices are up almost 12% in a year in China. That is a huge rise in cost of the most basic of all commodities food, and obviously the Chinese government has it’s hands full dealing with all the inflation which is largely a consequence of it’s own foolish policies on pegging it’s currency to the dollar. Because by doing that, China gets our (United States) inflation. The United States biggest export to China is inflation; they send us products and we send them paper. So we get more stuff, that’s what keeps prices low for the U.S. and China gets more paper, that’s what makes prices rise (inflation). Why you ask? Answer: because China is sending their stuff away and paper is coming in; and the way it all works is the U.S. sends those dollars and then the Chinese Banks buy up those dollars and in turn prints RMB. The Chinese Money Supply then rises, that new money goes through the economy biding up prices, meanwhile the dollars that the Chinese buy get loan back to Americans because they buy our Treasury Bonds and our Mortgage Back Securities which keeps this whole phony economy here in the United States moving!<br />
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The consequences for China are rising prices which result in a higher inflation which is at 5% currently in China. To counter this China thought that raising interest rates would curb inflation by encouraging people to put money away in savings at the bank. The only money China is attracting with the raise hike is speculative money; because by raising rates they attract a lot of hot money into RMB’s and people will do a carry trade, in which they short U.S. dollars and buy RMB because they know that the RMB is not going to go down against the dollar; it’s only going to go up and if they can borrow in dollars and buy RMB’s then it becomes a risk less trade from the perspective of a lot of people. So this rate hike may actually backfire on the Chinese because of a lot of the hot money coming into China, results in them having to print more RMB to keep their currency from rising. Normally when you raise interest rates your currency rises but China doesn’t want it’s currency to rise. It’s raising rates because it doesn’t want to let it’s currency to rise, but if it does keep on raising rates then it makes its own currency more attractive. So then to prevent the currency from rising what do they (China) have to do? Answer: they have to buy more dollars; they’ve got to grow their money supply faster. What does that mean? Answer: that means more inflation; but why do we care in America that inflation in China is a big deal? Because this is the key to all of the coming problems we will face in 2011. <br />
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There are two options China really has in this situation. <strong>1.)</strong> They can allow inflation to get worse and run out of control and if that happens you’re talking about a billion people, you’re talking about a lot of money that’s going to be chasing commodities and gold and everything if they realize there is massive inflation in their country. <strong>2.)</strong> Or the Chinese can get serious about attacking inflation, not just speak about it but actually attack it. <br />
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There’s only one way to do it and it’s not price controls, it’s not through higher rates, it’s through a stronger RMB. They’re not going to stop inflation until they stop inflating and inflating means growing their money supply and they are growing their money supply because they don’t want their currency to go up. Well If you let your currency go up then prices will come down and that will stop the Chinese Inflation but when they stop the Chinese Inflation they ignite the American Inflation. Instead of exporting our (U.S.) inflation to China, our inflation will stay right here in America. We will have our (U.S.) paper money, we won’t have the Chinese products or other products and so we will be biding up prices. Prices will then be going up and Bonds will be falling, interest rates will be rising!<br />
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<span style="color: blue;"><strong><em>Uncle Bens Animal Farm</em></strong></span><br />
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In 2011 the United States will see the 30 Year Bond yield be above 5% in Q1 and by Q2 and Q3 the yield will be above 6% and we will have interest rates at a 10 year high. Now what is that going to do to the economy; what’s it going to do to the Mortgage Market? Remember why this will happen, Ben Bernake “Quantitative Easing” was all about bringing rates down. Instead of rates going down they are doing the opposite; they are going up. They are even going up despite the fact that the FED is buying Bonds in a effort to artificially push them down. <br />
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Look at the charts of some of these commodities; look at the chart of the CRB, extremely bullish! There is no resistance in the CRB, maybe we might get some at the 365 level. That spike in the CRB will happen. We had a similar move in the CRB in 2008 before the collapse in the markets was up at 473 levels. We will be there again in 2011 and may even eclipse the 473 number. This means the FED will be forced to make the decision it has tried to avoid. <br />
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Uncle Ben said on “60 minutes” that “the FED could raise interest rates in 15 minutes if it had to.” well we will see if Ben meant it cause he will have to raise interest rates. That will be the most difficult 15 minutes of his life when he has to raise them, which will end his world and ends his fantasy where we will have a collision course with reality. Because remember the way the government was able too delay the crisis in 2008 which was “print money” expand, stimulate; the FED was able to buy up debt, buy up Mortgages, buy up treasuries. That’s what has kept this whole phony economy going, is the FED’s ability to constantly inject money; to keep buying Bonds and to keep bailing everybody out. When the FED has to deal with Inflation as a problem, when the FED sees prices rising, long term interest rates rising and now is force to raise rates. The FED can’t bail out anybody because it would be adding to the problem; the FED can’t buy Bonds when it’s the one selling Bonds, it can’t buy Mortgages when it’s one of the sellers of Mortgages. So it’s not going to be just the private sector trying to unload and the govt. coming to the rescue. It’s going to be the private sector and the govt. through the FED trying to unload and nobody coming to the rescue. So this is the decision the FED chairman doesn’t want to have to face; raise interest rates or just keep inflating and say “I lied” inflation is here to stay. I think the latter will happen but the FED will try to spin it in some double speak. It will probably go something like this “The increase is welcomed, it shows we have a victory over deflation, a little inflation is good for us.” They will try hard to rationalize why it’s okay so that they don’t have to put on the breaks; “Don’t worry inflation isn’t going to get too bad.” It will not work and it will rage out of control very… very… quickly.<br />
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All of this is going to happen and we will hear it from the puppet master himself on Friday the 7th of January when Uncle Ben gives his speech before the budget committee. This disaster will occur in 2011 and will probably happen in the next couple of months. <br />
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Is it possible that this move up in Bond yields is all a façade? Then the scenario is going to be pushed back and we will get some longer rope to hang ourselves later on. But their may be some real money and real power behind these recent moves in the Bond Market. It’s not just Bonds; look at some of the charts in commodities, Silver, Gold, Crude Oil, Soy Beans, these markets look like they are going a lot higher. I think it’s more than just a coincidence this is all happening and happening at a time when the Chinese are finally having to face the music when it comes to the inflation that resulted from their foolish currency peg.<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="http://www.tribbleagency.com/wp-content/uploads/2010/12/bernankebills.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" n4="true" src="http://www.tribbleagency.com/wp-content/uploads/2010/12/bernankebills.jpg" width="320" /></a></div><div align="center"></div>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com1tag:blogger.com,1999:blog-4401072733826018886.post-17472959784132718752010-11-04T19:12:00.000-07:002011-04-02T03:42:22.841-07:00We Won't Get Fooled Again!<div style="text-align: center;"><object height="344" width="425"><param name="movie" value="http://www.youtube.com/v/Rp6-wG5LLqE?fs=1&hl=en_US&color1=0x5d1719&color2=0xcd311b"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/Rp6-wG5LLqE?fs=1&hl=en_US&color1=0x5d1719&color2=0xcd311b" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object></div><br />
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<span style="color: blue;"> <strong><em><u>Consider the Following:</u></em></strong></span><br />
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<ul><li> The FED reduced the interest rate charged to the banks to near 0%. The push was on to improve their (Banks) performance in hopes they could overcome the large losses from the default mortgages that they hold.</li>
</ul><br />
<ul><li> Problem is few businesses an individuals wanted to borrow the money from banks due to the political an economic conditions that they face daily in the market place. Banks could not loan out the <strong><u>cheap</u></strong> money and make profits on the spread!</li>
</ul><br />
<ul><li> Now the FED will buy U.S. Bonds held primarily by the same banks to again infuse money into them and take the risky debt of their books. The hope is the banks will lend out this money to small business and consumers to spur growth in the economy. </li>
</ul><br />
<ul><li> <strong>Not So Fast</strong> - Banks will take the new cash and put it to work in foreign currency's, and stocks plus Gold. They will make money and our economy will not grow. It's another bailout for banks holding ever decreasing mortgage's. We get fooled again!</li>
</ul><br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://www.themanwhofellasleep.com/celeb_ben_bernanke.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" px="true" src="http://www.themanwhofellasleep.com/celeb_ben_bernanke.jpg" width="320" /></a></div>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-54429618349816286682010-10-30T22:24:00.000-07:002011-04-02T03:43:30.374-07:00Last Lifeline for Future Economic Freedom!<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://www.renaflacaria.com/Presidents/Thomas%20Jefferson.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="320" nx="true" src="http://www.renaflacaria.com/Presidents/Thomas%20Jefferson.jpg" width="240" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="color: blue;"><em><strong>Jefferson Was Right</strong></em></span></td></tr>
</tbody></table> <br />
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On Nov. 2, the United States will hold an important mid-term election. At stake will be control of the U.S. Congress, 39 state governorships and thousands of other state and local offices. High unemployment, record deficits, a sluggish economy and a swelling federal government have become flash point issues for millions of concerned Americans of every political persuasion. This upcoming election is an opportunity to help decide the future of economic freedom.<br />
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<strong><em><span style="color: blue;">Batter Up!</span></em></strong><br />
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According to the International Monetary Fund, the United States accounts for about one-fourth of the world's total output of goods and services, and one fifth of the world's purchasing power. Like it or not, what's bad for the United States - including misguided federal policies that undermine economic freedom - is usually bad for the rest of the world. What has proven to be best for all societies is economic freedom. Citizens on every continent enjoy more prosperity, cleaner environments, longer lives and higher literacy rates in economically free societies.<br />
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<strong><em><span style="color: blue;">The Challenge</span></em></strong><br />
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<span style="color: black;"> Unfortunately, these values and principled point of views are now being strongly opposed by many politicians (and their media allies) who favor ever-increasing government. Government - like fire, water, chemicals and most everything - is productive at some level and destructive at others. In the United States, government has now grown to such a level that it is choking American entrepreneurship and hurting the nation's international competitiveness. Even worse, recent government actions are threatening to bankrupt the country. This can only stifle economic growth and job creation, which in turn will significantly reduce the standard of living of American families.</span><br />
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To preserve the nation's economic viability and individual freedoms, this explosive growth must be reversed. There are, of course, plenty of politicians and critics who feel otherwise. Many of them have been quite vocal in their attacks on opposition uprisings; such as the tea party. However, as New York Senator Daniel Patrick Moyniham famously said, "one is entitled to one's own opinions, but not to one's own facts." And the facts are that the overwhelming majority of the American people will be much worse off if government overspending is allowed to bankrupt the country.<br />
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<strong><em><span style="color: blue;"> Fateful Warning!</span></em></strong><br />
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<span style="color: black;"> When Thomas Jefferson was inaugurated in 1801, he warned about a particularly destructive way of thinking. It is wrong, he said, to punish someone for working harder or being more successful than someone else. He warned against "wasting the labors of the people under the pretense of taking care of them" and taking from some to give to others "who have not exercised equal industry and skill." </span><br />
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More than 200 years later, the destruction of economic freedom that Jefferson warned against is being vigorously promoted by this administration and many elected officials. In the United States, the best antidote to this kind of over-reaching government is the power of the ballot box. That was true in 1801, and is just as true in 2010.A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-37686536637901111172010-10-24T00:29:00.000-07:002011-04-02T03:44:34.507-07:00The Business of Being in Business!<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://www.cosmoloan.com/wp-content/uploads/2008/05/burning-money.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="282" nx="true" src="http://www.cosmoloan.com/wp-content/uploads/2008/05/burning-money.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="color: blue;"><strong><em><u>Business is Burning Around You!</u></em></strong></span></td></tr>
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</div><div align="center"><strong><span style="font-size: large;"><u><em>Value Creation -</em></u></span><span style="font-size: small;"><u><em> Create real, long-term value by the economic means. Eliminate Waste</em></u>.</span></strong></div><div align="center"><br />
</div><div align="center"><br />
</div><div style="text-align: left;"> We live in an era when many people - including policymakers and media celebrities - view businesses and corporations with disdain or intense suspicion. Their way of thinking begs a simple question: What is the primary role of business? Is it to create jobs and provide benefits? Help advance a social agenda? Or just to make as much money as possible, by exploiting customers and employees? As a matter of principle, there is only one reason for any business to exist: creating value. We all tend to pursue our own interests, but in a true market economy we can only prosper long-term by providing others with what they value!</div><div align="left"><br />
</div><div align="left"> <span style="color: orange;"> </span><span style="color: blue;"><strong><em>Biting the Hand</em></strong></span></div><div align="left"><br />
</div><div align="left"><span style="color: blue;"><strong><em> </em></strong></span><span style="color: black;">In a system of economic freedom, a company will generate long-term profits only if it uses resources in a way that consumers value more than alternative uses. Large or small, a company will not stay in business for long if it is not truly creating value. Unfortunately, the same cannot be said for governments. Most governments consume massive amounts of resources - primarily labor and capital - much of which doesn't create value.</span></div><div align="left"><br />
</div><div align="left"> Was it worth more than $200 million of U.S. taxpayers' money to build an airport in Johnstown, Pa., that services just three commercial flights per day? Although it was never built, would the federal government have created real, long-term value by spending nearly twice that much for the infamous "bridge to nowhere" in Alaska? It is essential that use of resources is directed by consumers, rather than politically. When resources are directed for political ends, the result is misallocation.</div><div align="left"><br />
</div><div align="left"> <strong><em><span style="color: blue;">What About Jobs?</span></em></strong></div><div align="left"><br />
</div><div align="left"><span style="color: black;"> Job creation is one of today's hottest topics. Governments of many nations - liberal, conservative and even Communist - are under enormous pressure to "do something" about high unemployment and lagging job growth. In reality, it is business of all sizes in the private sector, not the government, that tend to produce the sorts of jobs that create real, long-term value.</span></div><div align="left"><br />
</div><div align="left"> Government interventions - particularly controls, subsidies, barriers to entry, tariffs and bailouts - misapply resources, thwarting the efficient production of what people value. An economist would say such actions replace activities that convert resources to higher-value products with activities that convert them to lower-value products. Think about that for a moment.</div><div align="left"><br />
</div><div align="left"> If a business activity is really creating value, should it need to be subsidized? Similarly, if a business is destroying rather than creating value, shouldn't it be allowed to go out of business, rather than be subsidized or protected; i.e. Citi.</div><div align="left"><br />
</div><div align="left"> <strong><em><span style="color: blue;">Productivity</span></em></strong></div><div align="left"><br />
</div><div align="left"><span style="color: blue;"><strong><em> </em></strong></span><span style="color: black;">Productivity is more than a business buzzword. It is a key driver of success for all of society. The more productive we are in enhancing the value of resources, the better off virtually everyone is going to be. By contrast, anything that interferes with productivity is going to make people less well off, especially the poor, who are least capable of weathering economic shocks. </span></div><div align="left"><br />
</div><div align="left"> It is important to realize what makes us better off. It's not just how much money we have, but the availability of the goods and services we value. In the old Soviet Union, lots of people had rubles to spend, but there was very little of value to buy. Government policies resulted in chronic shortages of food, clothing and shelter. Similarly, in any nation where government policies systematically destroy value, shortages of valued goods and services should be expected.</div><div align="left"><br />
</div><div align="left"> <strong><em><span style="color: blue;">Good Idea?</span></em></strong></div><div align="left"><br />
</div><div align="left"><span style="color: blue;"><strong><em> </em></strong></span><span style="color: black;">Government-mandated transfers from one group to another don't solve the problems of lower productivity and higher unemployment. In fact, they make those problems worse. If the government insists that someone should be paid $50 per hour in wages and benefits, but that person only creates $30 worth of value, no one will prosper for long. </span></div><div align="left"><br />
</div><div align="left"> In a scenario such as this, as businesses lose money because of the government's policy, employees will end up losing their jobs and fewer (if any) new employees will be hired. Consequently, the result of what sounded good - making a guaranteed $50 per hour-will not be prosperity, it will be higher unemployment. Anything that undermines the mobility of labor, such as policies that make it more expensive and difficult to change where people are employed, also increases unemployment.</div><div align="left"><br />
</div><div align="left"> In Europe, where stringent labor laws make it difficult and expensive to terminate someone - even for cancer - this has become especially troublesome. Similar policies that distort the labor market - such as minimum wage laws and mandated benefits - contribute to unemployment. Policies that make it difficult to get permits to build plants and equipment that are more efficient lower productivity and reduce wages. All these obstacles interfere with the ability to create valued products and services, adversely affecting consumers, employees and employers.</div><div align="left"><br />
</div><div align="left"> <strong><em><span style="color: blue;">Alternatives</span></em></strong></div><div align="left"><br />
</div><div align="left"><span style="color: black;"> Societies that value freedom and prosperity protect their citizens' rights to free speech, which greatly facilitates the discovery and the dissemination of knowledge. What we see is many nations today is just the opposite. Citizens who are openly critical of the European Union bureaucracy in Brussels or the out-of-control government of the United States are being shouted down by politicians, government officials and their media and other allies. Too many government elites think they know what's best for citizens and ignore the wishes of the citizens themselves.</span></div><div align="left"><br />
</div><div align="left"> Those in power tend to want to control more and more, all in the name of making things "fair." To do so, they pile on more rules, more regulations, more restrictions, more programs and more costs. This kind of thinking is a recipe for disaster - both for a company and for a government. Over-specifying and enforcing particulars undermines prosperity, it also facilitates corruption and abuse of power, subservience and stagnation.</div><div align="left"><br />
</div><div align="left"> After many years of disastrous policy decisions in the United States, it will be interesting to see who voters support at the ballot box this November.Will it be those candidates who believe that more government is the answer, and that government - rather than consumers - should decide which businesses succeed or fail? Or will it be those candidates who believe the true role of business is to create value for society by serving customers, not politicians?</div><div align="left"><br />
</div><div style="text-align: left;"> </div>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-58605973519330522412010-10-21T18:55:00.000-07:002011-04-02T03:46:42.506-07:00All the President's Men!<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://www.renaflacaria.com/Presidents/Calvin%20Coolidge.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="320" nx="true" src="http://www.renaflacaria.com/Presidents/Calvin%20Coolidge.jpg" width="276" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><strong><u><em><span style="color: blue;">Economic Freedom is a mind-set!</span></em></u></strong></td></tr>
</tbody></table> <br />
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I am often asked which U.S. presidents pursued the best and worst economic policies. My answers may surprise you. In evaluating a President, I believe it is essential to look past his popularity, party affiliation and family background. During the twentieth century, there were several presidential standouts - both good and bad. I want to discuss one of each. In both cases, their policies changed the direction of the entire nation, affecting the lives of millions of Americans.<br />
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<strong><span style="color: blue;"><em>Silent Cal</em></span></strong><br />
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Calvin Coolidge was Vice President under Warren G. Harding, who became President in 1921. At the time, the United States was in a deep depression. Unemployment was at 20 percent, taxes were high and federal debt was ballooning. Harding insisted on cutting taxes, reducing the national debt and cutting the federal budget (the opposite of what his predecessor, Woodrow Wilson, had done). Following Harding's sudden death in 1923, Coolidge wisely chose not only to maintain many of those policies, but to extend them.<br />
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In his first address to Congress, Coolidge called for further tax cuts, fewer subsidies and avoidance of foreign entanglements. "Perhaps the most important work that this session of the Congress can do," Coolidge said, "is to continue a policy of economy and further reduce the cost of government." Coolidge had a deep understanding of the need to limit government growth. His belief in property rights was reflected in his commitment to cutting taxes. "I want taxes to be less," said Coolidge, "so that the people may have more." Coolidge signed into law Revenue Acts that lowered income tax rates from 73 percent to 24 percent. He, together with Harding, also cut federal expenditures in half. "Anybody can reduce taxes," Coolidge said, "but it is not so easy to stand in the gap and resist the passage of increasing appropriation bills which would make tax reduction impossible." Where were the results of these policies?<br />
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It is no coincidence that the Harding/Coolidge era was one of the most prosperous in U.S. history. Gross National Product, wages, profits, productivity and the overall standard of living rose substantially. Although he was quite popular and faced no term limits, Coolidge refused to run for re-election in 1928. Today, it is rare to find any politician who wishes to self-limit his time in office<span style="color: blue;"><strong>. </strong></span><br />
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<span style="color: blue;"><strong> <em>Cal's Successor</em> </strong></span><br />
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<span style="color: blue;"><strong> </strong></span><span style="color: black;">When Coolidge decided to step down, Herbert Hoover - who was Secretary of Commerce for both Harding and Coolidge - secured their party's nomination and went on to win the presidency. Hoover served just one term in office. During those four years he essentially reversed the course of federal policy. Hoover pushed for higher taxes and farm subsidies, and proposed costly pension entitlements. He also signed the infamous Smoot-Hawley tariff bill, a protectionist policy that helped cause global economic depression. </span><br />
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Under Hoover, federal spending roughly doubled and personal income tax rates jumped from 25 percent to 63 percent. He raised corporate taxes, too, and doubled the estate tax. Hoover also pressured business leaders to keep wages artificially high, contributing to massive unemployment. By the time he left office, the U.S. economy was in shambles and the <u><strong>Great Depression</strong></u> had arrived. <br />
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Hoover is rightfully blamed for much of the economic calamity that left millions of Americans unemployed and penniless. But it is wrong to say he caused the Great Depression by following free-market principles. Hoover did just the opposite. He undermined economic freedom. Those mistakes were then compounded by Franklin Delano Roosevelt's "New Deal," which prolonged the Great Depression. Rex Tugwell, an architect of FDR's policies, wrote: "we didn't admit it at the time, but practically the whole New Deal was extrapolated from programs Hoover started."<br />
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<strong><em><span style="color: blue;">Election Time!</span></em></strong><br />
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<strong><em> </em></strong>The United States is not electing a president this year, but hundreds of other important offices will be on the ballot Nov.2. When evaluating a candidate for public office, I ask a simple question: <strong>Does the candidate support economic freedom?</strong> Economic freedom does not "belong" to any political party. After all, both Coolidge and Hoover were Republican. Candidates of any party who believe we need bigger government, more regulation, higher taxes, increased spending and borrowing, and more centralized decision making are threats to economic freedom. Like Hoover, their policies leave all of us - especially the poor - much worse off.<br />
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Candidates who support economic freedom realize our government is already too big and intrusive, and is spending, borrowing, taxing and controlling too much. They support a strong and efficient government, but one that operates within strict Constitutional limits and in the best long-term interests of society. If you are concerned about creating jobs, growing our economy and enhancing our quality of life, then you need to be concerned about electing candidates that support freedom. This is true everywhere and at all times, not just in the United States this November.<br />
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<span style="color: blue;"><strong> </strong></span>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com1tag:blogger.com,1999:blog-4401072733826018886.post-61780605347295241682010-09-23T16:44:00.000-07:002011-04-02T03:47:50.049-07:00Decision Time!<div></div><br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://4.bp.blogspot.com/_OPwCsv-gbXQ/TJvkih_goOI/AAAAAAAAABQ/S3EoQqiwPS0/s1600/theForceisstrongwiththisone.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="400" px="true" src="http://4.bp.blogspot.com/_OPwCsv-gbXQ/TJvkih_goOI/AAAAAAAAABQ/S3EoQqiwPS0/s400/theForceisstrongwiththisone.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="color: blue;"><strong><em><u>We need another "New Hope"</u></em></strong></span></td></tr>
</tbody></table><br />
<div></div> After wrestling with the worst recession in a lifetime, many governments are now facing an even bigger economic challenge : what to do next. While the issues are complex, the debate over next steps essentially boils down to two schools of thought: First, there are those who urgently insist we need to spend more - even if it requires borrowing money - in hopes of stimulating something better. Second, are those who insist we must get in the habit of spending less and paying down debts to avoid making things worse. Everyone agrees that the consequences of a wrong decision could be enormous.<br />
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<span style="color: #000099;"><strong><em>WHAT HAPPENED?</em></strong></span><br />
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<span style="color: black;"> For years, individuals, businesses and governments lived far beyond their means. They borrowed excessively at government-induced, artificially low <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">interest</span> rates and then went on spending sprees. All that spending appeared to be great for the economy, which grew at a rapid rate because of artificial stimulation. But what was growing even faster was a mountain of debt and bad investments. Consequently, when the economic meltdown began in 2008, its effects were fierce.</span><br />
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As the recession spread from the United States to Europe and beyond, credit downgrades and defaults reached record levels. The global financial <span class="blsp-spelling-corrected" id="SPELLING_ERROR_1">system appeared</span> to be near collapse. Home values , commodity prices, stock values, currency rates, interest rates and fixed income <span class="blsp-spelling-corrected" id="SPELLING_ERROR_2">assets</span> collapsed. Unemployment rates began to soar, <span class="blsp-spelling-corrected" id="SPELLING_ERROR_3">aggravated</span> by government barriers to the mobility of employment. <br />
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Governments in the European Union and the United States reacted by pouring trillions of euros and dollars into "relief" and "stimulus" programs intended to restart the economy. But these actions undermined true prosperity. With the government directing the economy, resources went to satisfying political desires rather than the desires and values of individual consumers. Of course, since there was no cash on hand for those programs, governments borrowed and central banks created even more money to fund these efforts.<br />
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<span style="color: #000099;"><strong><em>WHAT THEN?</em></strong></span><br />
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<span style="color: black;"> Many families and businesses are now slowly paying down their debts and spending less, especially for things that aren't essential. That's why sales of new homes and automobiles (overbuilt due to easy money and government subsidies) have slumped. </span><br />
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When the U.S. government tried to stimulate sales of those products (through the "cash for clunkers" program and first-time home buyers tax credits), sales briefly rose, but then dropped after the programs expired. The drop in demand for goods and services created a decline in industrial production that was seen around the world. In Japan, industrial production dropped 40 percent from it's early 2008 peak. Even China suffered.<br />
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Since so much of the world's economy depends on consumer spending, this newly frugal behavior has meant a slow-growth economic environment. The U.S. economy grew at an annual rate of just 2.4 percent in the second quarter of this year, following a revised 3.7 percent rate in the first quarter. That compares with growth rates of 5.1, 9.3, 8.1 and 8.5 percent in the first four quarters following the next worst recession since World War II.<br />
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<strong><em><span style="color: #000099;">ON THE OTHER HAND!</span></em></strong><br />
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<span style="color: black;"> So, if individuals and businesses have decided it's wise to trim their spending and pay down debt, what are governments doing? Just the opposite. In fact, additional deficit spending by the U.S. government has more than offset any private sector improvements. Keep in mind, this additional government spending is financed with borrowed money. Most governments were already running serious deficits before they tried stimulate any recovery.</span><br />
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According to the International Monetary Fund, advanced economies - like those of the United States, Japan and Europe - now have public debts that are averaging more than 110 percent of gross domestic product. (Emerging economies, such as India and China, are below 40 percent.) At some point, a nation will have no reasonable hope of repaying its debts. The inevitable result is some sort of default, whether through outright bankruptcy, a restructuring of payments or devaluation of the currency.<br />
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<strong><em><span style="color: #000099;">WHAT NOW?</span></em></strong><br />
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The good news is that the global <span class="blsp-spelling-corrected" id="SPELLING_ERROR_4">recession</span> appears to be over....for now. In general, the Asia-Pacific region fared better than the rest of the world. By comparison, Europe is in much worse shape and the United States is somewhere in between. I believe near term expectations are sobering and not likely to excite peoples belief in a real recovery. The economies of Europe and the U.S. are likely to be in a relatively weak, slow-growth mode for several years. <br />
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Recoveries following serious housing busts and credit crunches typically take four or five years as banks and households focus on the hard work of rebuilding their finances. The process for a government to get out of debt is even harder, especially in a slow-growth environment.<br />
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<strong><em><span style="color: #000099;">DEBT BINGE!</span></em></strong><br />
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In Europe, assistance to Greece and other nations has already cost European taxpayers far more than expected, causing some to balk at any notion of taking on further debt to bail out over-extended economies. The Government of France disagrees with taking a conservative approach, and suggests that even more must be done - if necessary - to <span class="blsp-spelling-corrected" id="SPELLING_ERROR_5">preserve</span> the European Monetary Union. In the midst of all this disagreement, there are some encouraging signs.<br />
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Ireland's government, for example, has already settled down to the painful task of cutting spending and repaying debt. In the United Kingdom, Prime Minister David Cameron and his coalition government are doing the same. Britons have been told that a difficult period of "new austerity" is unavoidable if there is to be any hope of cleaning up their dire fiscal mess. (Government spending in the United Kingdom - as a percentage of GDP - is even higher than that of hapless Greece.)<br />
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<strong><em><span style="color: #000099;">FUNDAMENTAL DIFFERENCES!</span></em></strong><br />
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<span style="color: #000099;"><span style="color: black;"> Europe's experience is another reminder, if one were needed, that every country with sustained budget deficits and rising debt ... needs to act in a timely manner to put in place a credible program for sustainable fiscal policies. This sort of thought process does not sit well with those urging the government to spend even more borrowed money on further "stimulus" for the shaky economy. Obama says we haven't spent enough!</span> </span>Many who might have agreed with that policy a few years ago now disagree with his policy ideas.<br />
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There is nothing progressive about a government who consistently spend more than they can raise; there is certainly nothing progressive that endows future generations with the liabilities incurred by the current generation. While painful and slow in the short term, it is essential that we allow our economy to adjust. If politicians try to intervene and prevent or postpone this necessary adjustment, we run the serious risk of not just a double - dip recession, but a true depression. But, if we prevent further damage and begin to reverse the harm already done; we should be able to achieve positive long term growth rates. It's important to realize that prosperity is dependent on <span class="blsp-spelling-corrected" id="SPELLING_ERROR_6">economic</span> freedom. As citizens, are we going to advocate for economic freedom, or bigger government and lower well - being?<br />
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<strong><em><span style="color: #000099;">HISTORY LESSON!</span></em></strong><br />
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<span style="color: black;"> Back when I was at the University of Florida I did a report on two Countries Argentina and Venezuela that undermined their own prosperity by instituting policies that undid what originally made them prosperous. </span><span style="color: black;">They transformed themselves from free and prosperous societies into nations burdened by unemployment, escalating taxes and runaway inflation. Despite clear lessons from the past, many of the same misguided policies that have devastated those nations are now finding a home right here in the United States.</span><br />
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After decades of growth and spending in the United States, we now see many disturbing parallels with South America's failures. If you look at the past 10 years of expanding government bureaucracy, spending and debt, it's clear the U.S. is losing ground. As a nation, we are no longer generating prosperity for society as a whole. We will continue to lose ground until government policymakers understand that more spending, more debt, more regulation and more centralized controls of every aspect of life <span class="blsp-spelling-error" id="SPELLING_ERROR_0">can not</span> make us better off. The simple truth is that many of the "new" or "progressive" policies being promoted in the U.S. are old ideas that have failed throughout history. Why in the world would we want to repeat such serious mistakes?<br />
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<strong><em><span style="color: #000099;">THE STAKES</span></em></strong><br />
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<span style="color: black;"> What's at stake in this struggle is the future of the United States. Americans who are concerned about our future must speak out if this course toward economic ruin is to be reversed. Tea parties, for example, reflect a spontaneous recognition by thousands of Americans that if they do not act, the government will bankrupt their families and the country. Although our efforts to draw attention to government overspending <span class="blsp-spelling-error" id="SPELLING_ERROR_1">pre</span>-date recent tea parties by many years, I certainly applaud those citizens that are becoming more engaged in key policy issues.</span><br />
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<span style="color: black;"> Citizens must hold lawmakers accountable for upholding the Constitutional principles of liberty and personal responsibility that helped the U.S. become productive and prosperous. There is too much to lose if we do not speak up - both to our elected officials and at the ballot box.</span><br />
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<span style="color: black;"><strong><em><span style="color: #000099;">MY STANCE!</span></em></strong></span><br />
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<span style="color: black;"><span style="color: black;"></span></span><br />
<span style="color: black;"><span style="color: black;"> When it </span><span style="color: black;">comes to public policy, I believe the U.S. - not to mention much of Europe - has been headed in the wrong direction for quite some time. Republicans and Democrats alike have been fiscally irresponsible, spending more than they should be borrowing like there's no tomorrow. As a nation, we are, quite literally, going bankrupt. </span></span><br />
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<span style="color: black;"> The upcoming elections in November will provide a prime opportunity to help steer things in a different direction. By educating ourselves on the issues and voting for those candidates that support economic freedom and prosperity, we have a chance to make a difference. To solve our nation's problems for the long term, we must remain principled and pursue practical, thoughtful solutions - solutions that can actually be implemented.</span><br />
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We need all citizens to speak out about wasteful government spending. That is the best way to get policy makers focused on the serious problems that spending and unbridled debt are creating. I will continue to advocate for economic freedom and market-based policy solutions because they are proven pathways to prosperity for all. <span style="color: black;">To paraphrase Winston Churchill, a market-based approach to public policy may not be perfect, but it beats all the other alternatives that have been tried.</span><br />
<div></div>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com1tag:blogger.com,1999:blog-4401072733826018886.post-81492173169153743062010-06-10T18:08:00.001-07:002010-06-10T18:42:32.644-07:00Where to go from here?<a href="http://3.bp.blogspot.com/_OPwCsv-gbXQ/TBGNiR4mczI/AAAAAAAAAA4/k_PluL9HAEQ/s1600/DSC01931.JPG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 320px; DISPLAY: block; HEIGHT: 240px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5481317841542476594" border="0" alt="" src="http://3.bp.blogspot.com/_OPwCsv-gbXQ/TBGNiR4mczI/AAAAAAAAAA4/k_PluL9HAEQ/s320/DSC01931.JPG" /></a> To correct these problems and prevent further deterioration, a wise path forward would have to include important changes. To start, our governments need satutory budget controls that eliminate deficit spending. We simply must spend less. Second, all spending iteams need to be part of the fiscal budget process.<br /><br />This is an especially painful problem in the United States, where costly war efforts don't even show up on a federal budget that is already more than $1 trillion overspent. Perhaps the most difficult solution involves reforming existing entitlement programs or considering new ones.<br /><br />Aging populations and declining birth-rates make real reform in this area necessary and inevitable. Complicating the challenge is not just agreeing on such difficult decisions, but implementing them within a reasonable period of time.<br /><br />We can help make that happen by supporting leaders and policymakers who focus on fiscal discipline, smaller government and economic freedom!A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com1tag:blogger.com,1999:blog-4401072733826018886.post-67709975949354218322010-06-08T13:13:00.000-07:002010-10-22T20:07:15.725-07:00#3 Tipping Point!<a href="http://3.bp.blogspot.com/_OPwCsv-gbXQ/TGGxyaDuXHI/AAAAAAAAABA/LfcmZP-AJ3c/s1600/untitled.bmp"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5503875699169975410" src="http://3.bp.blogspot.com/_OPwCsv-gbXQ/TGGxyaDuXHI/AAAAAAAAABA/LfcmZP-AJ3c/s320/untitled.bmp" style="cursor: hand; display: block; height: 250px; margin: 0px auto 10px; text-align: center; width: 233px;" /></a><br />
<div><a href="http://www.acus.org/files/u3/china-flag-wave.jpg"></a><br />
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<div> The third factor that should concern us all involves intrest expenses. Many of the world's leading economies are approaching a tipping point where there is little or no reasonable hope of ever being able to repay all their debts. In Britian, the national debt per child born this year is estimated at 20k euros . In Japan, it takes almost 60 percent of all tax reciepts just to service the national debt. Japan's situation would be even worse if the government could no longer sell most of it's bonds at below-market intrest rates to its citizens.</div><br />
During the five years ending in 2008, the "intrest" , just the intrest on U.S. debt went from $322 billion per year to $454 billion. That's a 41 percent increase by my calculations, and I'm just a english major, lol. Keep in mind those figures were before the government borrowed even more so it could spend trillions in "stimulus" dollars.<br />
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Although the United States still has the largest and most diverse economy in the world, it is slowly becoming more and more vulnerable to its creditors, especially CHINA, which recently eclipsed Germany as the worlds largest exporter.<br />
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Americans need to better prepare themselves for a new world in which the global economy is less and less dependent on the United States. Meanwhile, the debt clock keeps ticking, tick tock, tick tock....<br />
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<div></div></div>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-38083629335641378742010-06-08T00:52:00.000-07:002010-10-22T20:26:17.514-07:00#2 The Pain of Growing<span style="font-family: georgia;"> One of the most optimistic ways to deal with a debt trap is to assume your income is going to go up, despite lower investment in new opprotunities. This may not be realistic, but it sure sounds good, lol. </span><span style="font-family: georgia;">Not surprisingly, many of the most optimistic governments budget proposals assume our economies will soon be growing at remarkable rates. It's true that robust growth can mean more jobs, more economic activity and most importantly for the government more tax reciepts. </span><span style="font-family: georgia;">However, this growth is "inevitable" approach to budgeting is a lot like spending the winnings from your lottery ticket before you even know it's a winner; and the odds are that it's not, lol. </span><br />
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<span style="font-family: georgia;"> To-date growth in the U.S economy has been nowhere near recent projections; and to make matters worse , an aging U.S. population will soon be paying less in taxes just when the government needs to payout more in retirement benefits. Japan is already feeling this demographic squeeze, as is much of the EU. </span>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-36011388544275076092010-05-25T08:22:00.000-07:002010-06-10T18:35:21.909-07:00#1 Debt--->GDPWhen you want to borrow money these days most lenders will look at your income and expenses before making a decision. The higher your precentage of debt to income, the risker you are as a borrower. Similary, the ratio of a nation's debt to its gross domestic product is a very strong financial indicator.<br /><br />The European Union set its debt limit at 60 percent of GDP, but Greece has already hit 125 percent and economists are predicting an EU average of around 80 percent by 2012. The European Central Bank's chief economist predicts U.K. debt will hit 88 percent of GDP next year, with the U.S rising to 100 percent and Japan at 200 percent.<br /><br />Some U.S. poloticians have tried to calm our fears by saying the debt-to-GDP ratio was much higher at the end of WWII. They fail to mention that 90 percent of that debt was earmarked for military spending, which dropped dramatically after the war. Back then, federal entitlement programs, interest expenses and discretionary spending amounted to just 10 percent of GDP.<br /><br />Today, more than half of U.S. debt is tied to a rising tide of entitlements such as Social Security and Medicare. Cutting all the federal government's discretionary spending would save only 15 percent.<br /><br />To solve this problem, most governments prefer to raise taxes, not spend less. But if more money is siphoned off in taxes and government borrowing less, less is left to invest in opprotunities such as job creation in America.A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-72491054359598188062010-05-13T09:32:00.000-07:002010-06-10T18:39:07.700-07:00Euro to a Zero.<a href="http://www.enjoy-europe.com/euro-dollar.jpg"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 369px; DISPLAY: block; HEIGHT: 279px; CURSOR: hand" border="0" alt="" src="http://www.enjoy-europe.com/euro-dollar.jpg" /></a><br /><div></div><br /><div></div><br /><div>All of the recent Stock Market chaos is very easy to explain. It all has to do with the de-value of the "Euro". For instance, most companies do a lot of global business and have delt with the euro as the base currency in those dealings. For the longest time the euro was worth more than the U.S dollar; which meant that when companies made profits over seas; the transfer from euro's to American dollars was almost 2 to 1. the profits were recieved here in the U.S as blow out earnings just on the fact that the conversion of the Euro to the U.S dollar. </div><br /><div></div><br /><div>Now the Euro is declining in value which hurts global businesses that have relied on the strength of the euro to further their businesses. It's very hard in the U.S to make a huge profit as a corporation because of all the taxes and what not. Thats why companies rely so heavaly on the Euro as a way to pair there U.S losses. </div><br /><div></div><br /><div>All the talk about Greece is not the issue, the issue is the Euro being down graded and thus hurting everybody in sight. The next real shoe to drop will be Ireland and their Huge banking sector. When that shoe drops so does the Euro, an thus causing businesses all over the world to fail; Get Ready!!!</div>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0tag:blogger.com,1999:blog-4401072733826018886.post-33342661230158408432010-05-11T14:43:00.000-07:002010-06-10T18:41:42.750-07:00The Apple was Green<a href="http://faizanbaloch.files.wordpress.com/2009/08/apple-inc11.jpg"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 161px; DISPLAY: block; HEIGHT: 200px; CURSOR: hand" border="0" alt="" src="http://faizanbaloch.files.wordpress.com/2009/08/apple-inc11.jpg" /></a><br /><div></div><br /><div></div><br /><div>Apple has one group of people to thank for there current success in the world of tech. That single group would be the liberal green party. When you look around at any University these days you will see smart cars and prius's parked in the student lot. Getting out of those eco-friendly cars are people who live in a reality of instant gradification. They will have the iphone strapped to there pants a ipod on there arm, a Ipad in there left hand & starbucks coffee in there right. </div><br /><div></div><br /><div>To any onlooker they may look as if they are going to a Yoga confrence somewhere. Apple has really put all there eggs in one basket but the underlying question is will they continue to have there blow-out success? Hardware can only take you so far, just ask Dell or HP. </div><br /><div></div><br /><div>Apple has a problem coming down the road and that is the software problem that is linux and the ability for that program to compete with windows 7 in the future of computing world wide. Linux was just meant as a quick means to and end for the fantastic hardware that Apple created. What will be the driving software of the future for Apple? </div><br /><div></div><br /><div>How will they further their hardware with no gas? These are just many questions facing Apple in the future.</div>A Wise Degeneratehttp://www.blogger.com/profile/15170748105000376743noreply@blogger.com0