MONEY: FED screws retirees

Thursday, March 29, 2012

http://finance.yahoo.com/news/how-the-fed-hurts-retirees.html

How the Fed Hurts Retirees
CNNMoney.com
By Annalyn Censky | CNNMoney.com
Fri, Mar 23, 2012 1:08 PM EDT

*** begin quote ***

The Federal Reserve has kept interest rates near zero since 2008, but the economic boost comes at the expense of these savers.

*** end quote ***

This is basically saying that the time preference for delaying consumption is ZERO!

When folks were planning their retirement decades ago, who would have guessed a zero interest rate scenario? Any financial advisor, who did, would looking for a job. There was always talk of the after tax interest rate minus the rate of inflation. That was figured at anywhere from 5 to 8%.

Yeah, right.

Now the after tax rate is ZERO and the inflation rate is guesstimate at 5%. (Pay no attention to the smoke and mirrors being blown up your <synonym for donkey> by the “news anchors”, the FED, politicians, and bureaucrats. You’ve seen the price of gas, the national debt, the amount of “dollars” being held by the various bailed out banks.)

The reason that the FED is holding the interest rate down is to allow the Gooferment to carry the national debt with ease.

The retirees are only one group that is being hurt.

There’s a long list; not the least of which is anyone considering making a capital investment. What is the true cost of capital? (I know some businesses that are making a 12% assumption. Based on historical averages in previous business plans.)

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ECONOMICS: True “National Debt” is 211+T$

Tuesday, February 14, 2012

http://www.npr.org/2011/08/06/139027615/a-national-debt-of-14-trillion-try-211-trillion

A National Debt Of $14 Trillion? Try $211 Trillion
by NPR Staff
August 6, 2011

*** begin quote ***

When Standard & Poor’s reduced the nation’s credit rating from AAA to AA-plus, the United States suffered the first downgrade to its credit rating ever. S&P took this action despite the plan Congress passed this past week to raise the debt limit.

The downgrade, S&P said, “reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”

It’s those medium- and long-term debt problems that also worry economics professor Laurence J. Kotlikoff, who served as a senior economist on President Reagan’s Council of Economic Advisers. He says the national debt, which the U.S. Treasury has accounted at about $14 trillion, is just the tip of the iceberg.

“We have all these unofficial debts that are massive compared to the official debt,” Kotlikoff tells David Greene, guest host of weekends on All Things Considered. “We’re focused just on the official debt, so we’re trying to balance the wrong books.”

Kotlikoff explains that America’s “unofficial” payment obligations — like Social Security, Medicare and Medicaid benefits — jack up the debt figure substantially. Laurence J. Kotlikoff served as a senior economist on President Ronald Reagan’s Council of Economic Advisers and is a professor of economics at Boston University.

“If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That’s the fiscal gap,” he says. “That’s our true indebtedness.”

*** end quote ***

It’s simple. The “game” is rigged against the little guy. So why do us “little guys” still allow ourselves to be fooled?

Stupidity!

It’s like the old joke about the accountant keeping two sets of books!

“Plus shipping and handling”. Like the TV offers that are bait ‘n’ switch. The politicians and bureaucrats throw around deficit, debt, and “cuts” that cut nothing.

Time is running short.

What happens when the Chinese and the rest of the world cut us off. Credit card declined!

I didn’t realize what some unknown executives at AT&T and CSFB by making the defined pension plans fully funded separate legal entities. There was no funny business. Pensions were a sacred trust. The money was taken and invested prudently so that now I’ll get my benefit for the rest of my life.

We’ve “cheated” Social Security recipients, and various Federal and State workers. They are going to get <synonym for the past tense of the procreation act> because the contributions have been stolen by past politicians and bureaucrats to buy votes.

Argh!

We need an honest accounting. Just how bad is it? I know in the Pepuls Republik of Nu Jerzee, guvs of both parties have not funded the pensions. That’s just wrong. If a private company did that, the execs would be in jail. Why are the guvs and bureaucrats exempt?

Argh!

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MONEY: How can anyone not count food and gas in the CPI?

Sunday, February 12, 2012

http://www.veteranstoday.com/2012/02/05/hows-that-change-working-out-for-you

How’s that “change” working out for you?
Sunday, February 5th, 2012
Posted by Ed Mattson

*** begin quote ***

These government “number slingers” are the same bunch that tells you the Consumer Price Index increased 3.0 percent before seasonal adjustment to end 2011. Let’s see… 3% inflation. Do you really believe that? Have you been shopping lately? Have you purchased gasoline or diesel for your vehicle so you could go to work (if you still have a job)? Oh, that’s right.  THEY DON’T COUNT GAS AND FOOD IN THE INFLATION RATE!  I guess we don’t need food or gasoline.

In most families the women do most of the grocery shopping right? Men usually aren’t always up to current grocery store prices. Next time anyone talks about politics and how things are going, just ask them if they have purchased ten pounds of potatoes this past year, or stopped in at a gas station.  In 2009, 10 lbs of potatoes cost about $3.50 in Western Michigan (about $3.00 at Wal-Mart). Today the cost is over $5 any place you want to shop. Gas was $1.79/gal when Obama’s entourage slithered into Washington and today, down at the local discount gas station here in North Carolina, it’s $3.59. Is it any wonder they DON’T CALCULATE FOOD AND GAS INTO THE CPI?

*** end quote ***

Excellent point. If they did then they’d have to give a COLA to all the old folks.

It’s like the scam with ZERO interest rates by the FED. That keeps Uncle Sam’s 15T$ debt as a near zero expense.

When do “We, The Sheeple” wake up?

When does the World wake up?

You’ll know the scam is over when we have to pay for oil in gold or someone else’s national currency.

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MONEY: Kill the FED; save the Republic

Wednesday, January 25, 2012

http://www.pittsburghlive.com/x/pittsburghtrib/opinion/s_777634.html

Kill the FedBy Eric Heyl, PITTSBURGH TRIBUNE-REVIEWSaturday, January 21, 2012
Read more: Kill the Fed – Pittsburgh Tribune-Review

*** begin quote ***

John Allison is the former chairman and CEO of BB&T, the nation’s 10th-largest financial holding company. He was named one of the 100 most successful CEOs by the Harvard Business Review and since 2009 has been on the Wake Forest University Schools of Business faculty as Distinguished Professor of Practice.

*** and ***

Q: In the long term, what do you think should be done with the Fed?

A: If I were in charge, I would get rid of the Fed. I believe that as long as the Fed exists, Congress can effectively print money. And it doesn’t matter whether they are Democrats or Republicans, they would rather print money than tax people. They want to spend because that effectively buys votes, and they don’t want to tax people because that loses votes.

I think the Fed provides the temptation for massive government deficits. If the federal government couldn’t print money, it would have to have better financial discipline than it has today.

*** end quote ***

Vote Ron Paul.

There’s no other candidate on the horizon that understands or articulates that the FED is the problem.

It gives the duopoly — the D’s and the R’s are two sides of the same coin intended to give “We, The Sheeple” the illusion of a choice — an unlimited checkbook to borrow and spend.

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POLITICAL: What the government is not

Thursday, January 5, 2012

http://lewrockwell.com/napolitano/napolitano34.1.html

The Case for Austerity
by Andrew P. Napolitano

*** begin quote ***

Government is not a jobs program, and government is not your caretaker. Government is an arrangement made by free individuals to protect their rights and their property.

It doesn’t take $3.6 trillion a year to do that effectively in America today. I doubt it takes a trillion. We must swallow the bitter pill of austerity now, on our own terms, while we are still the undisputed leader of the free world and while we still have a Constitution, so that we can restore our prosperity in a way consistent with personal liberty.

*** end quote ***

Certainly seems that the 15T$ national debt is OUR problem.

If we were all on the same page, then we could amortize that over generations.

Bet we could sell 50 year bonds!

But we’re not even on the same planet as some people.

The Tea Party and the Occupy folks were all screaming about the same thing. Crony Capitalism, Regulatory Capture, and Rule by the Effete Elite. (imho)

Time to cut spending. And get everyone back to work.

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FLASH: The next debt limit debate

Tuesday, December 27, 2011

http://news.yahoo.com/obama-ask-debt-limit-hike-treasury-official-152416457.html

Obama to ask for debt limit hike: Treasury officialReutersReuters – 3 mins 32 secs ago

*** begin quote ***

WASHINGTON (Reuters) – The White House plans to ask Congress by the end of the week for an increase in the government’s debt ceiling to allow the United States to pay its bills on time, according to a senior Treasury Department official on Tuesday.

The approval is expected to go through without a challenge, given that Congress is in recess until later in January and the request is in line with an agreement to keep the U.S. government funded into 2013.

The debt is projected to fall within $100 billion of the current cap by December 30, when the United States has $82 billion in interest on its debt and payments such as Social Security coming due. President Barack Obama is expected to ask for authority to increase the borrowing limit by $1.2 trillion, part of the spending authority that was negotiated between Congress and the White House this summer.

*** end quote ***

OK, let’s start another “debt deal”. No!

No more debt!

Ever.

In fact, it’s sticking it to the posterity. Stop spending.

End the FED.

# – # – # – # – #  2011-Dec-27 @ 11:39


RANT: Menedez response is unbelievable. Argh!

Monday, March 1, 2010

I GRIPED ABOUT RAISING THE DEBT.

*** begin quote ***

Dear Mr. Reinke:

Thank you for contacting me to express your concern for raising the debt limit of the federal government. Your opinion is very important to me, and I welcome the opportunity to respond to you on this issue.

As a member of the Senate Budget Committee, as well as the Senate Finance Committee, I share your concern about the long-term financial health and viability of our nation. The Office of Management and Budget (OMB), the Congressional Budget Office (CBO), and the Government Accountability Office (GAO) have all agreed that over the long-term, the federal budget will continue down an unsustainable path if there are no changes to address current federal fiscal policies. It is critical, then, that our short and long-term fiscal policies address the large increase in our national deficit.

I understand your anger, anxiety and frustration as the economy continues to recover. We have emerged from a year in which the threat of a second Depression forced the need for recovery programs, which both conservative and liberal economists have credited with helping to keep our economy afloat. It is important to note how detrimental it would be if the United States defaulted on its debt- it would undermine our nation’s credit worthiness, badly weaken our economy and put Social Security and veteran’s benefits at risk. It is also important to note that increasing the debt limit does not authorize a single penny of new spending- it only allows the government to pay bills already incurred.

Throughout my tenure in Congress I have supported provisions that would bring down our deficit. You will be pleased to know that I voted in favor of Senate Amendment #3305 to House Joint Resolution 45, increasing the statutory limit on the public debt. The amendment will re-impose the statutory pay-as-you-go (PAYGO) budget rules. Under PAYGO, legislation that increases direct spending or reduces revenues must be fully offset, to avoid increasing the deficit. Additionally, I voted for Senate Amendment #3302 – which did not pass- would have created a Bipartisan Task Force for Responsible Action. I am encouraged that the President has signed an executive order creating the National Commission on Fiscal Responsibility and Reform. This is an important step in finding solutions to combat the national deficit.

During such difficult economic times it is vital that we make sound and solid investments that will stimulate the economy. Please be assured that I stand committed to working with my colleagues in the Senate to ensure that we make sound fiscal policy that invests in our future and gets our economy moving again so that we can establish a financially secure future for our nation’s children.

Again, thank you for sharing your thoughts with me. Please do not hesitate to contact me if I may be of more assistance. I invite you to visit my website (http://menendez.senate.gov) to learn of other important issues to New Jersey.

*** end quote ***

AND, the bozo says I’ll be pleased cause when he voted to approve it, he put some “lipstick” on!

Argh!

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MONEY: When the shoe drops

Tuesday, September 29, 2009

http://www.lewrockwell.com/rozeff/rozeff313.html
*** begin quote *** My bet is this. One fine day the bottom is going to drop out of the dollar. There will be a swift and sharp order of magnitude change. The recognition of the problems will reach a point at which it starts to go exponential, not just in terms of people being vaguely conscious that things are not right, but in terms of actually taking action to protect themselves. Foreign central banks may be reluctant to dump their dollar securities and think it better to liquidate them slowly so as not to drive prices down and break the market, but when they observe that others are running for the exits, they will run too.*** end quote ***
I agree that there will be a “run”. But it will look differently.
The Chinese are leading it NOW. The recent swap of Chinese held dollars for IMF gold, their “strategic reserve” acquisition program, and their stated “strategic rebalancing of their portfolio” is happening now.
Since there is nothing backing the US dollar, there is no “bank” to “run” on. So by definition, it will look differently than the Great Depression.
IMHO, (and I’m an injineer by education and know it all blogger by avocation), the “run” is happening now.
US borrowing is in trouble. I think we are seeing the FED quietly, carefully, and with malice aforethought manipulating with the assistance of the bailed out Wall Street firms manipulating the Treasury bond sales. They are selling debt at what appears to be record low levels. But by using shills, they are quietly buying it back from their accomplices on the street after the auction.
That’s why the FED coudn’t stand an audit as Ron Paul and others have asked for. It’s a Ponzi scheme.
So, what will the run look like?
Foreigners will exit the Treasury market. (Didn’t the Chinese students laugh at Geithner?) The dollar will tank against foreign currencies. Commodities rise in dollar terms, but not as much in other currencies. The world “readjusts” to a trading pattern that excludes or minimizes the US since everything will be much more expensive in dollars that no one wants.
Here at home, the fixed income people are screwed — the old, the retired, the elderly, the “savers”. The elite political class continues to spend other people’s money which is fast drying up. (Without access to foreign credit, all they can do is run the printing press.) Hyperinflation will destroy the dollar. As the welfare spending drops, there has to be riots in the inner cities. As the crisis expands, warfare spending has to drop. Eventually the government has to default on its debt. Unfunded liabilities like social security are defaulted on as well.
I hope that commodity money reemerges from the “return to barter” and the chaos of the “American default” like Zimbabwe. And, we can begin the long climb back up.
It’s going to be messy.fjohn


POLITICAL: You WILL have health insurance, even if you don’t want to pay for it!

Sunday, June 7, 2009

http://www.bloomberg.com/apps/news?pid=20601087&sid=aj5HHIKfogR8&refer=worldwide#

Democrats Weigh Health Mandate as Obama Urges Taxing Wealthy
By Laura Litvan and Ryan Donmoyer

*** begin quote ***

June 7 (Bloomberg) — President Barack Obama wants Congress to consider taxing the wealthy instead of workers to pay for a health-care overhaul, as House Democrats discuss a plan to require health insurance for most Americans.

*** and ***

The effort to overhaul health-care would affect a sector that makes up 17 percent of the U.S. economy. The goal of Democratic supporters is to provide insurance to most of the nation’s 46 million uninsured, and lower the soaring cost of care. A key challenge is the potential impact of legislation on an already rising U.S. budget deficit that may reach $1.8 trillion this year.

*** end quote ***

Stupidity!

We have Medicare for the old; Medicaid for the poor.

We have young people who don’t want insurance.

We have congresscritters who know what’s good for us.

But, we can’t afford them any more!

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MONEY: Shills hide that some government debt is unsellable

Sunday, April 26, 2009

http://www.telegraph.co.uk/finance/comment/
ambroseevans_pritchard/5220118/
The-capital-well-is-running-dry-and-some-economies-will-wither.html

The capital well is running dry and some economies will wither

The world is running out of capital. We cannot take it for granted that the global bond markets will prove deep enough to fund the $6 trillion or so needed for the Obama fiscal package, US-European bank bail-outs, and ballooning deficits almost everywhere.
By Ambrose Evans-Pritchard
Last Updated: 8:49AM BST 26 Apr 2009

*** begin quote ***

Unless this capital is forthcoming, a clutch of countries will prove unable to roll over their debts at a bearable cost. Those that cannot print money to tide them through, either because they no longer have a national currency (Ireland, Club Med), or because they borrowed abroad (East Europe), run the biggest risk of default.

Traders already whisper that some governments are buying their own debt through proxies at bond auctions to keep up illusions – not to be confused with transparent buying by central banks under quantitative easing. This cannot continue for long.

Commerzbank said every European bond auction is turning into an “event risk”. Britain too finds itself some way down the AAA pecking order as it tries to sell £220bn of Gilts this year to irascible investors, astonished by 5pc deficits into the middle of the next decade.

{Extraneous Deleted}

*** end quote ***

In this long article, the author asserts that not all is good in the “Emerald City”. No need to look behind the curtain.

The FED is buying Treasury debt.

Who is going to finance the American deficits?

And, at what interest rate?

How can shills buying the unsellable help the gangs finance their wasteful ways?

When does this one very big and ugly chicken come home to roost?

Argh!

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