Reinke Faces Life

http://www.thewisdomjournal.com/Blog

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Saving ONE dollar is like earning TWO because dollars saved are “after tax” dollars.

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Profound!

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http://www.theglobeandmail.com/servlet/story/
RTGAM.20080317.rcreditbearstearns18/BNStory/
Technology/?page=rss&id=..rcreditbearstearns18

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As a result, a firm that had survived the Depression, the Second World War and numerous stock market collapses faced the humiliation of a government-assisted takeover by rival investment bank JPMorgan Chase & Co. that will likely vaporize most of the personal wealth of the firm’s executives and cost the jobs of more than half of its 14,000 employees.

***End Quote***

I’ve seen this before when employees fall in love with their employer. They drink the Kool Aid of “failing to diversify”. My Mom fell in love with her AT&T stock. And, I have in my memory bank, many other examples of this among my friends and acquaintances. Since the read this blog, I won’t call them out but you know who you are.

Suficeth to say, I “love” no stock or bond. I ruthless observe the old Wall Street canard “No more than 5% in any one thing!”. Bank, brokerage, Tbill, … … I don’t care. If there is a way to segment your portfolio, then you should know if you have more than 5% and make a conscious decision that “it’s OK”. That may be because there is no alternative. But, it should be a “conscious decision to accept a specific risk”, as opposed to “stuff just happens”.

There is one good question that I have been asked by my Turkeys and acquaintances. (My friends and relatives never ask financial advice since they will get a long wandering diatribe on the evils of fiat currency and the benefits of gold!)

How do you mitigate the risk of jobs and pensions?

Well, both a job, pension, and any income stream of regular payments can be viewed as like a funny kind of bond.

If you have a $100k/year job, that’s like having a 2M$ bearer bond that you can’t sell. There are the unusual risks associated with it (i.e., you can lose it; it might default). That’s why the folks at Bear Sterns investing more than 5% in Bear Sterns really blew it. If one had that proverbial $100k/year job (and most jobs there paid much more), then you had in effect a $2M “bond” in your net worth. To stay under the 5% rule, you’d have to have assets in excess of $40M. Then, you could start investing in the stock.

Unfortunately, houses, pensions, and jobs when measured on the equivalent asset basis tend to throw the 5% rule out of wack. Not a lot many can do to avoid it. But that’s no excuse to not recognizing the risk and seeking to mitigate it.

So buying your employer’s stock has to be made pretty attractive to rush in and grab that particular falling knife so to speak. Sometimes it works out. Sometimes, like Enron, it don’t. Can you afford the loss?

I’m always amazed that financial industry professionals — the experts — do such a lousy job of planning their own financials. Remember 90% of Cantor Fitzgerald employees, who were killed in 91101, had no life insurance.

Always watch out for “experts” and those who give advice like one. Even me! Do your own thinking.

But remember 5%!

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http://www.lewrockwell.com/orig8/whitney8.html

It’s Time to Dump the Federal Reserve
by Mike Whitney

***Begin Quote***

“Facts do not cease to exist because they are ignored.”
~ Aldous Huxley

The credit storm which began in July when two Bear Stearns hedge funds were forced to liquidate, has continued to intensify and roil the markets. Last week the noose tightened around auction-rate securities, a little-known part of the market that requires short-term funding to set rates for long-term municipal bonds. The $330 billion ARS market has dried up overnight pushing up rates as high as 20% on some bonds – a new benchmark for short-term debt. Auction-rate securities are now headed for extinction just like the other previously-vital parts of the structured finance paradigm. The $2 trillion market for collateralized debt obligations (CDOs), the multi-trillion-dollar mortgage-backed securities market (MBSs) and the $1.3 asset-backed commercial paper (ABCP) market have all shut down, draining a small ocean of capital from the financial system and pushing many of the banks and hedge funds closer to default.

***End Quote***

This is the poster child for a disastrous gooferment program. Created in secret in 1913, it’s just flat out unconstitutional. Andrew Jackson must be saying “I told you so!”.

Constitutionally, there is nothing that permits the Congress to create a banking cartel and turn over the nation’s money to it. If it ain’t gold or silver, it ain’t money. And, no amount of “legal tender” laws can make it so. See Huxley quote above. The Dead Old White Guys made a mistake. The SHOULD have not mentioned money in the Constitution and left it to the marketplace to figure it out. But then, they thought the Tenth Amendment would cover any omissions. Silly Dead Old White Guys!

Strategically, the FED is supposed to regulate the banking industry. We’ve seen how well that works. The Germans had National Socialism; The Russians has Communism; America has Corporatism. The gooferment regulators and the entities they regulate are in an incestuous corrupt relationship. We should end this by ending regulation. The invisible hand of the marketplace is a far more honest regulator than any gooferment agency.

Tactically, the Fed has mismanaged and misregulated the whole mess. If for no other reason alone, it should be terminated with extreme prejudice.

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“Inflation has now been institutionalized at a fairly constant 5% per year. This has been determined to be the optimum level for generating the most revenue without causing public alarm. A 5% devaluation applies, not only to the money earned this year, but to all that is left over from previous years. At the end of the first year, a dollar is worth 95 cents. At the end of the second year, the 95 cents is reduced again by 5%, leaving its worth at 90 cents, and so on. By the time a person has worked 20 years, the government will have confiscated 64% of every dollar he saved over those years. By the time he has worked 45 years, the hidden tax will be 90%. The government will take virtually everything a person saves over a lifetime.”

– G. Edward Griffin

***End Quote***

And, we’re lucky if it’s ONLY 5%!

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http://www.townhall.com/columnists/WalterEWilliams/2008/01/30/stimulus_package_nonsense

Stimulus Package Nonsense
By Walter E. Williams
Wednesday, January 30, 2008

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There are three ways government can get the money for a stimulus package. It can tax, borrow or inflate the currency by printing money. If government taxes to hand out money, one person is stimulated at the expense of another who pays the tax, who is unstimulated and has less money to spend. If government borrows the money, it’s the same story. This time the unstimulated person is the lender who has less money to spend. If government prints money, creditors, and then everyone else, are unstimulated. As my colleague Russell Roberts said in a NPR broadcast, “It’s like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing — the water in the shallow end doesn’t get any deeper.”

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Good point!

And, we, of course, know who’s going to pay for it! “The Rich!”

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http://tinyurl.com/3c2bup

MONEY: Creating a ladder

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You walk in on January 2nd with your 16k$ and buy A one year, two year, three year, and a four year cd for 1k$ each. You also buy a Ninety day, One Hundred Eighty day, and a Two Hundred Seventy day cd for 4k$ each.

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http://tinyurl.com/34fycg

MONEY: Deploying a CD ladder isn’t easy

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And, if your account goes over the FDIC insurance cap, I’ll set up the overflow with my competitor down the street.

*** end quote ***

Well, picking up from where I left off, it’s very easy to flow over the FDIC 100k limit. So one has to plan ahead to avoid this problem. For example, in the example of a five year quarterly cd ladder, one has 20 slots to fill. Assuming the 100k limit, then one is limited to 100,000/20 or 5k$. If you do a five year twelve month cd ladder, then the limit is $1,666.66. So, you’ll be using different banks to avoid that.

Now if one wants to have say 100k in retirement income, that’s 5% of 2M$.

(Before you do a Redd Fox — clutching your heart and exclaiming this is the big one — recognize that this is not much in terms of inflation and costs in retirement. Not when a ride on the NJ Turnpike is going to cost 50$! Argh!)

So, how does one develop a 2M$ ladder? And, how do you grow into your own “annuity”?

2M$ across a 20 rung (4 Quarter by 5 years) comes out very neatly to 100k$.

So you need 20 DIFFERENT FDIC banks for your CDs at full capacity. You are always taking the interest, so you never rollover the entire cd.

Since most folks I know don’t start with 2M$, how do you do this organically?

I suggest that you start with one bank and target your deposits with an eye to the magic 100k five year cd. So assume that you can “save” 5k/year, then it’ll take you 20 years to get to that 100k target. (Don’t be discouraged! Make a game of it.) Each year you buy a five year cd for your 5k, rollover interest, and as you “range in” on your goal tune your maturity to have it all come due at the same time.

Do it in your IRA and it’s tax deferred.

The more you save the faster you get there.

Seem “easy” in terms of the financial injineering!

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http://www.ronpaul2008.com/issues/inflation-tax

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Today, the federal government burdens us with one of the most dangerous taxes it can impose — the inflation tax. When the federal government finds that it cannot afford its out-of-control spending, and is unwilling to directly tax the public, it resorts simply to creating the money out of thin air.

***End Quote***

Here we have the ultimate tax.

A tax on money. A tax on savings. A tax on the poor. A tax on those on fixed income. An escalator that drives all costs up.

And, it creates a positive feedback loop for the cost of gooferment. The Fed inflates so the cost of what the gooferment pays goes up. The gooferment needs more money. The Fed inflates more. A positive feedback loop that any injineer will tell you will ultimately and rather quickly destroy itself. And, in the process, politicians, bureaucrats, and unions get ever increasing pay raises.

A tax on anything dollar denominated.

How silently insidious?

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http://www.csmonitor.com/2007/1231/p14s01-wmgn.html?page=3

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Bengen, author of the book, “Conserving Client Portfolios During Retirement,” published last year by the Financial Planning Association Press, has studied this issue since 1993. And based on his calculations, he believes 4.5 percent of total tax-deferred assets – stocks, bonds, and the like – is the correct payout amount in the first year of payouts. In following years, that payout rate would rise in line with inflation.

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Folks coming to the “withdrawing” phase of retirement savings have always been advised to take 4%. So a million dollar IRA can throw off 40k per year. So, you need lots stuffed away to be comfortable.

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http://www.nydailynews.com/money/2008/01/03/2008-01-03_citibank_limits_atm_cash_in_city-2.html

Citibank limits ATM cash in city
BY KERRY BURKE and LARRY McSHANE
DAILY NEWS STAFF WRITERS
Thursday, January 3rd 2008, 4:00 AM

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A jump in ATM fraud led Citibank to slash the maximum amount of cash available to customers from their accounts - a security move greeted warily Wednesday by its patrons.

The new cap on cash kicked out by the company’s ATMs began in mid-December after what Citibank called “isolated fraudulent activity” around the city.

*** end quote ***

Hmm, interesting. With the subprime mortgage mess on everyone’s mind, might an ATM be a new way that there’s a “run on the bank”?

Now we know that the Federal Reserve Bank (which is neither “federal”, a “bank”, or a “reserve” of anything but assurances) can supply all the little green pieces of paper one could ever want. (Remember I think it was Mises who said “only a government can take something valuable like paper and make it worthless by printing on it”.) That guarantee didn’t stop half of NYC’s Chinatown from lining up outside one their banks recently when a bank officer took off with some dough. After all those were just illiterate (in English?) Chinese (illegal?) immigrants who didn’t understand that things are different in the “Pepuls Paradise of the USA”. (Are they really?)

Seriously, while it may be fraud prevention, it certainly doesn’t inspire confidence when this is how you find out about it. What did they lose? How did they lose it? (Personally, some IT guy mailing a file of name, rank, serial number, ssn, card number, mothersmaidenname, and pin to a backup location is not outside the realm of possibility. Like the bloke in England did.)

>change password

So why is the cited depositor being told to change their password?

Sigh, so many question. So few answers.

Let me google my pin, and see if it’s up for sale on a pirate board somewhere!

fjohn

p.s., Luckily I have no accounts with Citibank. Unless you count that one that the nice Nigerian fellow was telling me all about.

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FROM AN EMAIL EXCHANGE ABOUT A NEARBY HOUSE BEING SOLD

284k?

Always thought the way to wealth was to have 12 single family rental homes.

At 300, the opportunity cost is about 15k. If you financed 300k for 30 years at 5%, the PI is 1610. If you could rent it at say 2k, then at the end of 30 years, you have an asset that throws off 24k per year. Twelve of them is 240+48=288/year. An excellent retirement.

I first saw this proposed in the 70s by a discredited hustler named Sonny Bloch. (Later convicted on something unrelated to real estate.)

Shoulda, coulda, and woulda if I was smart.

You have to be meticulous with money. Diversify your risks. But, I can see how it is a guaranteed winner. Like when we rented the shore house. Rents edge up over time. You sign one year leases with your tenants. Hefty security deposits. A lot of headaches, but after 30 years, or 40 years, you have the equivalent of the family farm. Incorporated it as a family business to minimize tax and legal risks.

Sigh.

Too late, I get smart.

# - # - #

Note: You have to bootstrap into 12. Optimistically, you get into one per year. Or per two year. You have to ruthlessly buy cheap quality houses. Modest improvements; diligent maintenance. Track the cash flow. Eventually the equity builds up. I think you title each one in its own corporate entity. Superior performing ones could be sold off at a premium. Hard work, but the road to riches imho.

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http://www.smartmoney.com/consumer/index.cfm?story=20071227

Consumer Action
New Year, New Consumer Scams
By Aleksandra Todorova |Aleksandra Todorova Archive |Published: December 27, 2007

*** begin quote ***

IT’S BEEN A tough year for consumers. With housing prices falling and the subprime-mortgage mess raging on, we won’t blame you if you’re looking forward to a fresh start in 2008.

Better watch out: The financial woes and natural disasters of 2007 have armed scammers with plenty of new tricks — or resourceful spins on old ones — aimed at separating you from your cash. Here the five most treacherous scams to watch out for in 2008.

*** end quote ***

As a notary, I “hear” a lot of scams going on. It seems that they all boil down to the elemental “something4nothing”. You’ll magically get, for example, a grazillion bucks from your long lost aunt tillie, if you’ll just send a “shipping & handling” fee.

Right?

Last time I looked, the tooth fairy made house calls. No “s&h”.

Fore warned is fore armed!

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http://www.survivalblog.com/2007/12/odds_n_sods_635.html

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SurvivalBlog reader Mary R. forwarded us this odd notice from the US Treasury: Annual Purchase Limit For Savings Bonds Set at $5,000. Could the Treasury have been warned that the Fed plans to further lower interest rates, potentially making even low-yield savings bonds more attractive? We live in strange times, dear readers.

***End Quote***

http://www.treasurydirect.gov/news/pressroom/pressroom_reducedpurchaselimit.htm

Very very strange!

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http://www.masternewmedia.org/news/2007/12/15/economic_recession_2008_scobles_advice.htm

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Economic Recession 2008: Scoble’s Advice The Only Way To Go?
By Robin Good on Independent Publishing
I loveRobert Scoble mostly because he is a very positive, optimistic and friendly person
CounterPoint to: Surviving the 2008 Recession
by Robert Scoble and Robin Good
1. Get some income from overseas.
2. Cut expenses.
3. Lock down clients into longer-term contracts.
4. Ensure you’re seen as valuable at work. Do an honest assessment.
5. Network more than usual. You might get laid off
6. Watch the job listings.
7. Dust off your blog.
8. Start a company.
9. Move to a bigger company
10. If you are in a big company, join a group that isn’t going to get cut.
11. If you’re in a small company, get real friendly with two groups
12. Look at your stock portfolio and make smart moves.
13. Try to get into hot new markets. Russia, for instance
14. ComputerWeekly is recommending CIOs get two budgets together
15. Work the basics: build a cash reserve; manage inventory; renegotiate your lease; reward loyal customers;
16. See where you stand in the story line.
17. Write a blog about how to brilliantly sail through a recession.
18. Clean up your balance sheet.
19. Keep your ear to the ground,

***End Quote***

Batten down the hatches!

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It’s a fact of life that the “old folks” who go into nursing homes run out of money and become wards of the state. It happened to a wealthy aunt decades ago, who took a “fortune” and wound up on the dole. (I was young and not privy to the exact numbers.) And, it’s happening to another aunt and I am privy to the numbers.

She worked her whole life at menial jobs. Saved her pennies and accumulated a nice nest egg. (Probably 5 times her annual salary!) Had social security and a tiny pension. And she’ll die on the dole. (I’m not planning on telling her because she just get upset.)

It’s NOT her fault.

That “social security insurance” theft didn’t provide her with “social insurance”. Proper insurance with MetLife, Prudential, or Allstate over fifty years would have given her a substantial annuity.

Argh!

Now I read about folks going into assisted living. I read about old folks living on cruise ships. I read about people going overseas for expensive medical procedures.I read about old folks in Japan needing robots.

Will old people become America’s new export? Will the American equivalent of the Eskimos putting old folks on ice flows going out to sea be sending our old folks to old age homes in Third World countries where they can get taken care of “humanely”?

Warped thought, but who is going to take care of an “old” America?

Is that a consequence of our love of abortion and our failure to cherish life?

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http://www.getrichslowly.org/blog/2007/10/24/understanding-the-seven-habits-of-wealth

Understanding the Seven Habits of Wealth
Wednesday, 24th October 2007 (by J.D.)

This is a guest post from Dough Roller, a Washington D.C. blogger who writes about building wealth, one dollar at a time.

***Begin Quote***

We are what we repeatedly do. Excellence then, is not an act, but a habit. — Aristotle

We tend to define our lives by the big events: graduation, marriage, children, a big promotion, retirement. What often gets neglected are the little things we do every day, the little things that make the big events possible. As Aristotle said, it’s what we “repeatedly do” that produces excellence. When it comes to money and wealth, what do you repeatedly do?

***and***

Hard Work
Modest Living
Patience
Perseverance
Balance
Self-Awareness
Learning

***End Quote***

I remember, but didn’t “learn” until much later, that “small leaks sink big ships”.

Singularly, I have demonstrated “big leaks sing ships quickly”. It’s my personal objective to plug all my “big leaks” before I “sop earning and start burning”.

I have to get organized!

Maybe that’s the “eighth” idea. Organization. You have to be organized to succeed?

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http://blogs.marketwatch.com/greenberg/2007/12/straight-talk-on-the-mortgage-mess-from-an-insider

Straight Talk on the Mortgage Mess from an Insider
12:11:23 PM December 6th, 2007
Herb Greenberg is senior columnist for MarketWatch. His column also appears in the weekend edition of the Wall Street Journal.

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Values are down and these are interest only loans, therefore, many are severely underwater even without negative-amortization on this loan type. They were qualified at a 50% debt-to-income ratio, leaving only 50% of a borrower’s income to pay taxes, all other bills and live their lives. These loans put the borrower in the grave the day they signed their loan docs especially without major appreciation. These loans will not perform as poorly overall as sub-prime, seconds or Option ARMs but they are a perfect example of what is still considered ‘prime’ that is at risk. Eighty-eight percent of Thornburg’s portfolio is this very loan type for example.

***End Quote***

It appears that this mess is not even begun to be cleaned up. Remember the post 9-11 FED with its multi-year near zero interest rate? That’s the cause. Now the PREZ is going to “save us all” with some type of sub-prime bail out.

Fools! The sheep are fools. Just Fools!

It’s immoral for politicians to steal money from the productive class to bail out the unproductive class.

It’s just makes people make even worse decisions.

Hopefully, you’ve been putting away your gold coins. Perhaps, this is truly the end of the Republic.

Messing with the money is always a sure sign of the end.

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http://video.google.com/videoplay?docid=-466210540567002553&pr=goog-sl

Money, Banking and the Federal Reserve
41 min 25 sec - Jun 1, 1996
Average rating: (868 ratings)

***Begin Quote***

Description: Thomas Jefferson and Andrew Jackson understood “The Monster”. But to most Americans today, Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed generates. Dedicated to Murray N. Rothbard, steeped in American history and Austrian economics, and featuring Ron Paul, Joseph Salerno, Hans Hoppe, and Lew Rockwell, this extraordinary new film is the clearest, most compelling explanation ever offered of the Fed, and why curbing it must be our first priority. Alan Greenspan is not, we’re told, happy about this 42-minute blockbuster. Watch it, and you’ll understand why. This is economics and history as they are meant to be: fascinating, informative, and motivating. This movie could change America.

***End Quote***

Never?

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http://www.getrichslowly.org/blog

***Begin Quote***

What Is Insurance and How Does It Fit Into My Plan?

Insurance is the cheapest and most immediate way for a person to displace risks that are too great to assume individually. I can afford the doctor for an annual check-up, but what if I need an MRI and surgery? By paying a smaller amount up front, I am moving the responsibility from my shoulders to a large organization.

***End Quote***

This drives me wild. It is so basic, yet we seem to have zero understanding.

(1) Ever watch the TV commercials made famous by Ed McM. Insure your baby. Insure your funeral expenses. Insure what? What in the Intelligent Designer’s name are you protecting against?

(2) Social Security Insurance? That Ponzi scheme should have never been allowed to assume the word “insurance”.

(3) “Health” Insurance that pays for routine maintenance stuff.

Insurance on the open market for true catastrophes, like death, are cheap and easy to buy. Life Insurance was pioneered by the fraternal organizations to mitigate the death of a wage earner.

So what are you calling “insurance” that isn’t? And, what are you paying for that you shouldn’t even be “insuring”? And, what are your biggest risks? Are they “insurable”? And which ones should you be mitigating and which should you properly be “insuring” (i.e., the big hairy ones)?

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http://www.dolans.com/video/DOEL_avoid_these_401k_mistakes_091207.html?sid=9AG316&cp=IPIE&ct=20071204&cc=eletter&en=3452901

***Begin Quote***

Avoid These 401(k) Mistakes!

We’ll be straight with you: In our many years of talking to people about their money concerns, we’ve heard from far too many folks who are making serious mistakes with their 401(k) plans. It breaks our hearts to think about how often we come across these mistakes — and how costly they are as well.

***End Quote***

Good folks with good advice!

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http://www.lewrockwell.com/katz-j/katz-j26.html

Knowledge Through Ignorance
by Joshua Katz

***Begin Quote***

Now, the state of Pennsylvania has outlawed the labels. This is quite harmful to producers who built organic farms, which are much harder to build and maintain, on the expectation of being able to obtain a higher milk price. Now that the milk is not labeled, there will be no price differential, and soon enough there will be no untreated milk available for sale in the state, I’d wager.

***End Quote***

Milk is an excellent example of the fascism that pervades this country. Milk is highly regulated and highly taxed.

(Regulated for your “protection”. Like you couldn’t tell that the milk you were buying wasn’t pastuerized or homogenized. You used to be able to buy a BRAND of milk for it’s assurances. Now milk is a commodity!)

(Taxed because … well they can. When you see a gallon of milk, think of a gallon of gasoline. And, all the taxes on the gasoline that went to produce and deliver it to you are all hidden in the price of the milk that you buy!)

And, to ensure that the gooferment properly protects the fascist milk producers, there are milk price support laws! So you can pay more. And, that makes work for the lobbyists employed by milk fascist.

So where are your lobbyists?

How does this relate to money recognize that you are paying more? And, ask you congress critter why!

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How doe

http://video.google.com/videoplay?docid=-466210540567002553

Money, Banking and the Federal Reserve

*** Begin Quote ***

Thomas Jefferson and Andrew Jackson understood …. But to most Americans today, Federal Reserve is just a …

*** End Quote ***

But when they do it, it’s “inflation”, “expanding the money supply”, or some other drivel.

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http://www.gold-eagle.com/editorials_05/schiff113007.html

The End Of Consumer Credit As We Know It
Peter Schiff

***Begin Quote***

In an article this week that examined the troubles brewing in Citigroup’s mortgage business, the Wall Street Journal focused on Natalie Brandon, a 51 year old married woman from Granada Hills, CA, who is currently unable to make the payments on her $625,000 adjustable rate home loan from Citigroup, despite the fact that the rate will not even reset higher until June of next year. Amazingly, the Journal reported that Mrs. Brandon bought the house in 1985 for just $105,000, but had chosen to refinance five times over the past seven years, borrowing more than $500,000 and spending every single penny. While this may be an extreme example of American profligacy, it is by no means unique. Unfortunately this type of behavior typifies everything that is wrong with the modern American economy.

Had this homeowner behaved responsibly, as was typical for Americans of prior generations, her current monthly mortgage payments would likely be less than $600 and the remaining balance on her loan would be about $40,000. In eight more years she would have owned her home free and clear, and would likely be on track for early retirement. Instead, after 22 years of making mortgage payments, she is now $625,000 in debt. The article stated that she had recently tried to refinance into a 6%, forty year, fixed-rate mortgage, but it fell through. Even if she had qualified, she would have been obligated to make monthly mortgage payments of close to $4,000 until she was in her nineties.

***End Quote***

Well, they say something like experience is an expensive schoolteacher, but fools will learn from no other.

About the only think that can happen is the foreclosures and subsequent bankruptcies allow folks to start over.

What does one have to show for a life’s work … “experience”.

Seems like there will be a lot of competition for my planned “final job” as the WalMart Greeter?

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http://www.lewrockwell.com/rockwell/money-mania.html

***Begin Quote***

Let’s ask ourselves: why would this make anyone optimistic? Let’s say that you are playing the game Monopoly and one player proposes to double the money stock for everyone. The problem would be obvious to everyone. If the prices on the board could change, they would double. Since they can’t, the game will only last twice as long as before. Meanwhile, players would become more reckless with their investments in houses and hotels. It wouldn’t really make the players more wealthy; it would only create an illusion that would be temporary.

The analogy isn’t exact, but the point should be clear. Paper money is not the same thing as wealth. Wealth comes from trade, investment, and capital accumulation. Money is merely a tool that facilitates the creation of wealth; it is not identical to it.

***End Quote***

The essence of an advanced course in Economics. If Americans ever re learned that one fact, then the pundits, politicians, komisars, and bureaucrats would be all “out of business”. They couldn’t scam us any more.

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http://www.resourceshelf.com/2007/11/26/resource-of-the-week-consumer-guides-for-getting-and-keeping-health-insurance

Resource of the Week: Consumer Guides for Getting and Keeping Health Insurance
By Shirl Kennedy, Senior Editor

***Begin Quote***

Here is an issue that, in the United States, needs no elaboration. Even if you, yourself, do not have a health insurance horror story, most assuredly you have a friend, relative or colleague who does. We’re all familiar with these tales by now:

* People who lose their health insurance when their employer kicks them to the curb.
* Small businesses no longer able to offer coverage to employees because premiums have become unaffordable — if they can find a company willing to insure them to begin with.
* Large businesses unable to complete on a level playing field in the increasingly globalized economy, due to the built-in overhead cost of providing health insurance for employees and, sometimes, retirees.
* People without insurance who put off going to the doctor until a health situation reaches the crisis stage, at which point they show up in the emergency room, where they are treated at taxpayers’ expense for something that might have been prevented — or relatively simply and inexpensive to take care of in its early stages.
* People who are tethered to unrewarding/unsuitable jobs — who would maybe like to work part-time and/or start a small business — because of the need for health insurance.

***End Quote***

Note the fine hand of the gooferment in this problem at many places.

* Employer connected benefit plans are a direct result of the WW2 wage and price controls.

* Health Insurance is tax deductible to an employer but not to Joe SixPack (and I’m not referring to abs). Consultants and contractors can deducted by the pretense that they are their own employers. Argh!

* The supply of “doctors”, “nurses”, and “hospitals” are all restricted by gooferment licensing laws. (Like people prior to the AMA were too stupid to figure out what docs were good and what were bad. Docs that screwed up my get shot. Made for motivated health professionals.) Any restriction in supply increases cost. Demand is relatively constant.

* Drugs are restricted by the FDA (whose horror stories are legendary) and, even when “approved”, are further restricted by FDA diktats which ensure the creation of BigPharma (where “regulators” come from and go to retire in an incestuous relationship). Further restricting supply when you can get it. And, too bad, if you happen to die while “your” drug awaits approval. Even if you wave all the claims and accept the risk, you still can’t have it, you peon you. (Unless you’re rich enough and healthy enough to fly to a Third World country where you can have whatever you need. If it’s made at all.

* Drugs, that are evil things that can jump up and put themselves in you, can only be sold in gooferment approved stores. And, then only by prescriptions from gooferment approved “doctors” (qwak qwak) which have to come on gooferment approved forms. These prescriptions can be paid for by gooferment approved insurance companies if they are listed in their gooferment approved “formularies”. Argh!

* Things that BigPharma can not make a profit on — vitamins, minerals, dirt, mold, weeds, bark of tropical trees — can not be advertised to you by anyone — regardless if the have a gooferment license or not — as “curing anything” unless the FDA agrees to the proof. Since, for example, the British Navy discovered that Vitamin C cures scurvy, but you can advertise that claim citizen because the FDA hasn’t been paid so you can do a double blind test — at your expense of course. So no vitamins or minerals for you Citizen regardless of what they cure, prevent, or help. (I know one fellow, gets something for his horse, and takes it himself. For arthritis pain. Horse and owner are doing just fine thanks. Not so, the rest of the non-horse owning population.)

* Now my favorite topic, weed. MJ. Did you see that they think that smoking it prevents breast and brain cancer from spreading? Yup, no joke. And, ignore the fact that some sick people can tolerate it better than the fancy and expensive BigPharma drugs. And, further ignore, that in California, the federal thugs are robbing medical marijuana dispensaries. (Well, what do you call a federal raid where pot and cash are taken, but no one is arrested or charges. OJ does it in LV and he’s an armed robber. The feddies do it in CA and they are heros of the empire. We stopped being a republic a long time ago. Guess they haven’t read the Fourth, Fifth, and Tenth Amendment.)

AND ONE LAST POINT

* The gooferment assuming the medical insurance of all old folks over age 65 under the Social Security / Medicare program is imho the single biggest factor in why we are broke and medical care stinks here. Go to a hospital er and go to one of those “you pay” urgent care places. Guess where you’ll be home from first.

Argh!!!

BTW, the guide is excellent and this is a great find.

# # # # #

http://www.moolanomy.com/74/7-mistakes-i-made-when-i-went-to-college

***Begin Quote***

1. Not considering the return on investment

Education is like any other investment — i.e., there are good ones and bad ones. Aside from your house, this is probably the second biggest investment you will be making. The problem was that my heart was set on going to an Ivy League school, and I stupidly turned down full scholarship to the University of Michigan at Ann Arbor (a top notch school). In short, I was young and irresponsible with money (my parents’ money). If I went to Ann Arbor instead I would have saved them about $20,000 a year (after scholarship and financial aids), and that was in 1991. If I had instead saved and invested that money, it would be worth about $265,000 today (at modest 8% annualized gain).

Was my Ivy League education worth $265,000? Definitely not! I do not think I would make any less money today, if I had gone to Ann Arbor.

***End Quote***

Is it really?

I agree that on one level (i.e., I spend X; I then earn Y; if Y GT X, happy, else unhappy) one might think of it as an “investment”. Comparing the IVY to a STATE is more difficult than it seems.

One reason that immediately leaps to my mind is that this is not a “repeatable event”. Probability theory is built up around roulette wheels, dice, and cards. The student is a UNIQUE (i.e., a unique individual with free will). Selection of a college isn’t a repeatable event. As a high school senior in the US you only get one choice. And, it’s destructive. You don’t get to rewind the VCR as in the movie “groundhog day” and get to run repeated trials.

Another reason is that your experience colors everything — every single blessed thing — you do after that point. Your perceptions, your thinking, heck even your speech and the words you use are different. And, it “labels” you to other people. You’ll always be the “Ivy League” guy.

So static analysis is pointless.

In the cited case, you can’t even assume that the mythical 265k — and it is mythical because it exists no where in your own mind — no where — would have been “saved and invested”.

You can’t even be sure that where you have to chosen STATE over IVY, that on the first day of school, as you were crossing from the bus stop to the campus — cause in your mythical dream you’d have saved money on a car and taken the bus — that crossing the street you were hit by the big dump truck. (Hey if you can imagine a “college student saving money” then I can make “runaway dump trucks” materialize as well!)

Nope, that is why they are called “decisions”. One choice precludes (”cide” means to cut) all the others. You come to that proverbial fork in the road and you do a Yogi Berra taking one. Peck advices taking “the one less traveled”. You will never know in this lifetime what would have been if you’d gone down the other one. It’s all guesswork and speculation.

It’s a question philosophers have struggled with like forever. Duh! It’s really easy. The one you took was by definition the “best” one. Unless your were deluded, high, or defrauded, then you chose the one that your perceived “best” at the time. “Right” is left to the Intelligent Designer to decide.

imho.

So, I’d that the premise is flawed. Education is different and unlike other investments.

Interesting exercise though.

I don’t know if my Mom’s money and my time was well-spent by my education? Hope so. But, I don’t “know”!

# # # # #

Proud to say, I chipped in a couple of bucks for this effort! If they can do it Taxachusetts, then it can be done anywhere!

*** begin quote ***

From: Small Government News [www.SmallGovernmentNews.com]
Sent: Tuesday, November 27, 2007 1:25 AM
Subject: END the Income Tax Initiative Headed For Ballot

Small Government News*
Tuesday, November 27, 2007

Publisher: Carla Howell
Editor: Michael Cloud

===========================================================
IN THIS ISSUE
===========================================================

– END the Income Tax Initiative Headed For Ballot
– Boston Globe Article
– “Congratulations,” Writes Citizens for Limited Taxation

===========================================================
END THE INCOME TAX BALLOT INITIATIVE HEADED FOR BALLOT
===========================================================

Dear Friend,

We’re frazzled, fried, and fatigued.

Last week, we delivered 100,000 petition signatures for our END the Income Tax Ballot Initiative to 351 town clerks for validation and certification.

This week, we have to arrange pickups and shipping of these legally validated signatures to us.

Next week - by Wednesday, December 5th - we must file our validated petition signatures with the Massachusetts Secretary of State.

Then the fun begins. We get to show Massachusetts taxpayers and voters the huge, immediate, direct benefits of ENDing the Income Tax in Massachusetts.

We get to tell them why they can make themselves dramatically better off by ENDing the state income tax - and giving 3,000,000 Massachusetts workers and taxpayers $3,600 each, every year.

{Extraneous Deleted}

*** end quote ***

If they can start the ball rolling repealing the income tax around the country, we’ll have a booming economy and I can afford to quit blogging for fame and fortune. (Huh?)

# # # # #

http://www.backwoodshome.com/blogs/JackieClay/2007/11/26/we-made-another-giant-step-yesterday

***Begin Quote***

We’re still kind of working the bugs out of the system; we’d gotten lazy about things like turning off the lights (with the generator on, what the heck?), phantom loads (unpluging the TV when you’re finished, not just pushing the off button, cause it’s still ON!), etc.

***End Quote***

Maybe I’m anal, but I hate to pay for nothing. And, that’s what “instant on” translates to.

Also, don’t forget those “warts”, you know the various and sundry “wall warts”, power “adapters”, the things that convert AC to DC. Running all the time.

I put them on a power strip with a switch and click off the entire strip when I’m not charging something.

A penny here and a penny there, and before you know it you have two whole cents.

# # # # #

http://www.breitbart.com/article.php?id=2007-11-25_D8T4MV7G1&show_article=1&cat=breaking

Court to Consider Investor’s 401(k) Suit
Nov 25 08:48 AM US/Eastern
By PETE YOST
Associated Press Writer

***Begin Quote***

WASHINGTON (AP) - James LaRue says he lost $150,000 when his instructions to his employer on where to invest money in his retirement plan were ignored. Now the Supreme Court will decide whether a federal pension-protection law gives LaRue the right to sue to recover his losses. Arguments in the case were scheduled for Monday.

***End Quote***

This is a interesting development.

Ignoring for the moment that the gooferment court will decide just how much trouble a corporation, another gooferment created entity, can get into. Of course, there are lawyers abundant as far as the eye can see.

More to the point:

(1) Why are there such things as 401ks?

(2) Why would you expect a business to be involved in YOUR retirement?

(3) Why is the gooferment “protecting” both sides? (Allowing the corporation off the hook if it’s not “criminal” while pretending to regulate the “industry”.)

Now clearly, the roles and motivations of the individual, the employer, a slew of other corporations, the gooferment, and bunch of lawyers are all muddled together. Time to cut the Gordian Know and simplify!

# # # # #

http://www.ncc-1776.org/tle2007/tle445-20071125-01.html

***Begin Quote***

Question: So, what can the regular guy do to help create a more stable financial economy?

Answer: First, “sauf qui peut.” Save yourselves. If you have a savings account, and no other wealth, then take that savings account and buy some gold and some silver, and do it right now. Second, diversify. Again, for the sake of your own financial survival. Put some of your money into … …

{Extraneous Deleted}

***End Quote***

Never hurts to “bury” a few coins in your yard!

And, where is your “victory garden”?

# # # # #

FROM AN EMAIL WITH LUDDITE

What you don’t the think that the youth of American understand that they are getting screwed royally by you old folks? Why would you think old folk wouldn’t want more of the same? It’s not like they are going to be around when “Rome” falls!

I’m firmly convinced the only way we avoid a lot of pain and misery is for Ron Paul to guide the country back to the Founder’s original intent.
Otherwise, I think the kids will see the TEOTWAWKI (The End Of The World As We Know It) scenarios (i.e., high inflation caused by the world rejecting the American Dollar as it’s reserve currency; Social Security - Medicare - Medicaid - Drug “benefit” breaks the bank in social spending; the graying of America takes a lot of productive people out of the labor force; Oil becomes even more expensive when it’s priced in something other than dollars; the 5T$ in China come home to roost; and don’t forget about the National Debt.

# # # # #

http://www.gambling911.com/Ron-Paul-111807.html

***Begin Quote***

This “inflation tax” is what is causing most of us to feel the economic pinch right now. Right now one main reason things are so tough on you financially is because the government is spending up to one trillion dollars a year on the military. Guess who is paying for that? Us. Guess when? Now and in the future when we will have to pay interest on even more loans the government took out. The government has no money of its own, it only gets what it takes from you and me. And they have been taking a lot of it. We just haven’t seen it directly coming out of our pockets in the form of taxes in our paycheck, but we sure feel it when it costs over fifty bucks to fill the tank, or milk is five bucks a gallon, or your cat food goes from 7.99 to 12.99 in three months. Right now the prices are rising because the value of the dollar is dropping.

***End Quote***

I’d say a lot of people are finally waking up to the fact that the “inflation tax” might be a bigger bite than any other single tax.

Bout time! It is.

# # # # #

Friday, November 16, 2007
Early To Rise
The Internet’s Most Popular Wealth,
Health and Success E-Zine
Issue #2201

“It’s Just So Much Tougher for Kids These Days.”
By Michael Masterson

***Begin Quote***

That’s the view of Tamara Draut, who works for an agency that promotes government action and whose book, Strapped is subtitled “Why America’s 20- and 30- Somethings Can’t Get Ahead.”

I read the book because I was curious. Her assertion didn’t seem true.

Draut argues that escalating college costs, high rents, and a tough job environment have forced our young people into an endless cycle of borrowing. The result? A generation that simply can’t make it in today’s economy. She supports her argument with anecdotes. And she concludes her book with a short chapter urging governmental reforms and running credit card companies off campuses.

***and***

I tried to put everything I know about starting out and becoming successful - as an entrepreneur and as an employee - in Automatic Wealth for Grads… and Anyone Else Just Starting Out. If you get the book (and I hope you will), you’ll see that I put a heavy emphasis on what has worked for me:

Don’t fret about your problems. And don’t wait for the government to solve them. Create a personal plan for success and follow it.

***and***

This is probably not the kind of advice that Tamara Draut would like to hear, because it doesn’t do much to solve the “starting-out problem” on a global level. But I’d like to think it can help individual people - college grads and young people - become wealthy despite the challenges posed by our shaky economy.

***End Quote***

I think anyone, who looks to the gooferment for “helping” getting on track, is going to be sadly disappointed.

In my warped world view, when we help our fellow man, we are awarded certificates of appreciation (i.e., money). Help lot’s of people and get lots of certificates. These are really IOUs that promise to be redeemable at a future date for a like contribution.

[They should be aware of "inflation" aka gooferment counterfeiting. Running the printing press causes inflation and it is an unavoidable tax on money. At least, the old kings had to physically clip coins to steal from the people. Today, it's a silent hidden tax.]

I see “children” of many chronological ages wasting their attention, time, money, and energy on frivolous things. Probably the biggest waste is attention. When I watch a college football game and they intro the players and identify their major, I’m stunned. Majors like “Sports management”, “Government Studies”, and “Peace” give me the greatest shock. At least if they say “undecided”, I have some hope.

No, as I have said before, I think the model for success in the future generation starts with: (1) ruthless financial discipline. And, maybe it should be shortened to just “ruthless self-discipline”.

In the days of an agricultural America, children grew up quickly. Chores and the harsh realities of life taught discipline. That has been lost. Today, children are allowed to be dilettantes. Unfortunately, there’s no national trust fund to keep them in the style they’ve been accustomed to.

So, I hope that all the young people can see their way clear of the “smoke” that people are blowing up their a…… in their collective eyes making them “blind” to the realities and possibilities of life. They have a lot less room for error than I did when I was a kind.

It’s a global world and their are a lot of hungry people who will eat their lunch unappologetically.

Sigh!

# # # # #