Reinke Faces Life

http://www.vanguard.com/VGApp/hnw/VanguardViewsArticle?
ArticleJSP=/freshness/News_and_Views/
news_ALL_socialsecurity_07232007_ALL.jsp&
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Social Security: Does it pay to delay?
July 23, 2007

I thought you might be interested in this information I found on Vanguard.com®.

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The first members of the baby boom generation are about to reach another milestone. People born in 1946—the beginning of the boom—will turn 62 next year, making them eligible for early retirement benefits from Social Security.
For more information

Having paid into the federal program for decades, many baby boomers will find the prospect of tapping their benefits appealing. But this may be a situation that calls for delayed gratification.

Taking Social Security at age 62 involves a significant trade-off: In exchange for getting your payments before “full retirement age,” you’ll see your benefits permanently reduced.

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Social Security Insurance — it’s none of those things — is such a scam.

The article correctly cites to delay if you can and your guesstimate of your life expectancy.

The article ignores that: the congresscritters can change the game at any time (like the did when they made it taxable); the dollar is not a store of value (hence the number that they cite are devalued by inflation); and the catastrophic effect of your death on your wealth (guessing wrong about you life expectancy deprives your heirs for the fruit of your labor).

The article begs the question of why anyone would be in a scam that provides such a significant negative return. It’s estimated to be a negative 2% per year.

It also fails to factor the TEOTWAWKI arguments that might end the scam. Social Security Insurance is a Ponzi scam that is racist, intergenerational war, unconstitutional, and unsustainable. It transfers money from poor minority men to rich white women. It pits the old against the young by saddling them with the bills later. No where in the Constitution is the gooferement empowered to do all these things. And, like most Ponzi schemes, it collapses when it runs out of suckers.

So, my take is that you should cash out as soon as you can. Too many unavoidable risks. A dollar now invested in gold might be worth far more than an empty promise later.

imho

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update: There’s a Part 2 here: http://tinyurl.com/ypamjp- that’s where the surprise is.

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http://www.economist.com/business/displaystory.cfm?story_id=9587542

The credit squeeze
Abandon ship
Aug 2nd 2007
From The Economist print edition
Investors sail into a credit storm amid worries about the debt markets

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Bank executives will be haunted by memories of Ninja loans (to people with No Income, No Job or Assets) and Pik toggles (agreements that gave firms the right to pay interest in the form of further IOUs rather than cold, hard cash).

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Now there’s a term I never heard before — ninja loans!

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http://www.lewrockwell.com/orig3/guillory10.htm

Thrift and Liberty
by Gil Guillory

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Taxes. Not only is taxation perhaps the most evil institution left on earth, now that chattel slavery is virtually extinct, taxation distorts the individual’s finances. We are all familiar with the social engineering in the US Federal Income Tax, with credits and deductions for all manner of activities the state officially encourages or discourages. But much worse is the attack on capital which the tax system represents. Consider: your wages are taxed, with what’s left, you invest in stocks of companies, the profits on the companies you invest in are taxed, with what’s left of that, the company pays you dividends or increases retained earnings, and then those dividends or capital gains are then taxed.

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We can’t even calculate the ax load we carrying. Taxes are buried inside everything.

Argh!

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OK, it’s Frau’s subscription, but it was a “honey do”! It was interesting that there was a 28% discount for a multi year subscription. There were no human beings handling the call. (Activating Frau’s replacement credit card was an automated experience as well. Another honey do! She lose her card and I get work to do. Sigh!) Of interest in this exchange was that there was no confirmation number. And, a lot of dumb repetition. Sigh. SO, if the transaction gets “lost”, how do I prove I did it. Better yet, how do I get credit for completing a honey do?

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OK, it’s Frau’s subscription, but it was a “honey do”! It was interesting that there was a 28% discount for a multi year subscription. There were no human beings handling the call. (Activating Frau’s replacement credit card was an automated experience as well. Another honey do! She lose her card and I get work to do. Sigh!) Of interest in this exchange was that there was no confirmation number. And, a lot of dumb repetition. Sigh. SO, if the transaction gets “lost”, how do I prove I did it. Better yet, how do I get credit for completing a honey do?

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http://www.lewrockwell.com/north/north550.html

The Five Stages of Counterfeiting
by Gary North

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The FED does whatever it can to figure out what the public will expect next. Most important, it keeps its activities and plans secret. But, step by step, word is getting out. The dollar is falling. The government’s debt is rising.

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While North is focusing on how the fiat currency “burrows” into the civilization’s thinking (i.e.paradigm shift), I was focusing on the meme of money. There’s no doubt that the debasement of the currency has caused the downfall of several empires, civilizations, and nations. The French Kings, the Byzantine, and Zimbabwe to cite just three quick examples.

The 64k$ question is “when?“.

When does the SHTF?

When is the Gadswell “tipping point”?

When does the money fail to support the division of labor?

I’m an ingineer, not an ekkynonymist. I’m not even sure that those three whens are in the correct order. In the history of the USA, and before that in the United States of America, we have never seen such an event. There have been several close calls. The Carter 21% inflation, the Nixon Wage Price Controls, and the Long Term Capital Finance derivative mess.

The tipping point on when the American dollar can no longer be inflated imho is when the Chinese accept something else as a reserve currency. The recent “news” that they were diversifying out of dollars was telling. It’s a toe in the water. When OPEC wants payment in other than dollars, when the Chinese make WalMArt pay in other than dollars, when the Mexican “illegals” start sending home something other than dollars, htt will be the tipping point. Look out below.

The SHTF when the legal marketplace begins to fail and the black market begins to boom in other than drugs. Ebay starts auctioning food. Amazon sells move books on Victory Gardens. And, the politicians start “jawboning”.

Money is a unique meme. The store of value function is what is being messed with by gooferment. Money allows capitalism and the division of labor. On Crusoe’s island, Robinson has to save five days of fish to make a the fishing net to allow him to catch twice as much. Tool building is the hostage of savings. If there were ten castaways on the island, they could each “invest” a ½ fish in making a net. (Dumb analogy. But you get the idea.) So to substitute money in for those saved fish, money saved allows small sacrifices to be “collected” more easily into one big “investment”. Note that money isn’t the saved fish. But printing more money doesn’t make more fish. When money devalues so quickly that there is a paradigm shift by the population, that’s when the division of labor breaks down. When people are growing “victory gardens” instead of working for money, the division of labor is a “toasty critter”. Stick a fork in it we are done. We only support the number of living souls based on the division of labor. If we begin to regress to subsistence farming, then there will be a lot of dead people around.

When the big question is not if, but when?

So what does one do?

* Become Amish? Or a Mormon. No debt, frugal life style, seek valuable skills.

* Orient savings and investments away from fiat currencies. Stick to defensive investing regardless of what your politicians and bureaucrats tell you.

* Minimize your exposure to taxes. Call the shots as you see them. Save and plan for what does one do when the transition occurs.

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http://www.homelandstupidity.us/2007/07/04/independence-day-3/

From a discussion with a befuddled fool who’s had the wool pulled over his eyes.title

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Author: Ace Duggery
Comment:
You’re a moron. First of all, I had to debate whether or not to even respond to a posting with dozens of grammatical errors. Obviously you’re a very smart person, your command of the written English language shows that. NO matter what you use as a currency, whether it’s a commodity or a piece of paper, somebody will have to control the issuance of such currency. Unless you want a barter economy, do you know what that is reinkefj?, you will never get true value from an exchange and there will constantly be a change in value of whatever you use for currency. If we used gold or silver, or even a note that is backed by such commodities, like the United States used to do, we would have to constantly revalue how much our currency is worth per oz. of these commodities. Do your research, this has happened several times over the course of history. And the reason we stopped using volatile commodities as a peg for our currency is that the prices of gold and silver fluctuated so much that we had to frequently change

Oh…and the dollar has not depreciated 95% since 1970. That is a blatant lie, did you make that number up?

I understand your points, and I even agree with you to the effect that the government, “gooferment”, whatever you want to call it, is, at times, corrupt. This is no perfect society, get over it. No such place exists, has ever existed, or will ever exist. There will always be shortcomings. I am not advocating that we completely ignore these problems, but let’s at least come up with a better idea than commodity backed currency. And seriously what the hell was Ron Paul talking about in the last debate? 9/11 happened because we were bombing Iraq and the middle east? Are you trying to say we “deserved” 9/11 because we were over there fighting against countries in the Middle East?

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Here’s my response:

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>somebody will have to control the issuance of such currency.

No, why can’t we have a free market in currencies as we did before the legal tender laws were passed mandating that everyone had to accept these phony unconstitutional federal reserve notes.

>And the reason we stopped using volatile commodities as a peg for our currency is that the prices of gold and >silver fluctuated so much that we had to frequently change how much the paper backing was worth to the metals.

No, the reason FDR took us off the gold standard was so that he could spend as much as he wanted on welfare and warfare. And the people were to dumb to see the con.

>The dollar has not depreciated 95% since 1970. That is a blatant lie, did you make that number up?

No even the Federal Reserve will admit that the dollar has depreciated.

http://www.frbsf.org/econrsrch/econrev/98-3/3-16.pdf
between 61 & 97 2.39% per year average by the Fed’s own numbers. The math is a little tortured to minimize the impact.

However, other credible sources

http://research.stlouisfed.org/fred2/data/CPIAUCSL.txt
1970-01-01 37.900
2001-01-01 175.600
CPI 175 from 37 looks a lot more than 95%

http://inflationdata.com/inflation/Inflation_Rate/Inflation_Rate_Calculator.asp#results
435.49%

And no one seems to dispute the impact.

http://www.econedlink.org/lessons/index.cfm?lesson=EM168
Costs of Inflation
4. Inflation does reduce the purchasing power of money.
5. Inflation does redistribute income. On average, individuals’ incomes do increase as inflation increases. However, some peoples’ wages go up faster than inflation. Other wages are slower to adjust. People on fixed incomes such as pensions or whose salaries are slow to adjust are negatively affected by unexpected inflation.

>You’re a moron.

You’re right “Putting lipstick on a pig doesn’t make it beautiful and annoys the pig.”

One can’t reason with a “true believer”. If you wish to believe that everything in money is just peach keen, then do so in peace. But, let’s not kid around with the what is the single biggest crime of the gooferment messing with the money. It’s what brings down civilizations (i.e., Romans; Germans; English) and our turn is coming. Quickly.

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Which made me think of an interesting comparison.

If the CPI was 38 in 1970 and 176 in 2001, that’s a 463% increase.

If the S&P500 was 85 and 1394, that’s 1643% increase.

If the DJ was 619 and 11501, that’s 1857%.

So the markets have out performed inflation.

Using my real estate as a proxy, 55 to 350 47 to 335 40 to 350. That’s about 142 to 1035. Or, 728%.

Those are the good things.

Purchasing power has declined. SO a “depreciation factor” would make all these “paper gains” what?

$4559.73 in the year 2001 has the same “purchase power” as $1000 in the year 1970. www.measuringworth.com/ppowerus/result.php

So that’s about 79%!

But, it I think it understates it. For example, I’m paying property taxes on an inflated value. I’m paying capital gains taxes on an inflated value. And, the various taxes are all based on a percentage of inflated value.

Exponential Arghs!

One thing is for sure. You don’t want to be holding cash. Ever!

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http://www.thefirstpost.co.uk/?storyID=7501

A non-currency country
Zimbabwe Today
It’s a daily struggle trying to survive in
a society where money is worthless

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I popped out for a Z$25,000 loaf of bread last Friday. It had gone up to Z$30,000 dollars. I ran home for the extra, ran back to the shop – and the price of my loaf had risen to Z$44,000.

That’s life in Zimbabwe today – or at least it was, until this week when our government took bold and decisive action to reduce the inflatory spiral, and predictably everything got even worse straight away.

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I love when the Universe provides us a “labratory demonstration” when the meme we call gooferment falls afoul of economic law. Not content with shaving a few coins, the gooferment in Zimbabwe can’t print paper money fast enough. (Sounds a little like “helicopter ben” at his Senate confirmation hearings!)

When humans are infected with a mental virus, or meme, we can become irrational. Look at the “pet rock” which was pretty harmless. Look at the tulip craze in Holland’s history, the German hyper-inflation, our Great Depression, or any of the “monetary disasters” of the last century. They are all characterized by a failure in our own thinking.

Gold coins anyone?

If you were traveling to Zimbabwe, then I bet they’d hold their value!

The question is how does the human population of Zimbabwe throw off their “mental virus”? If you are in that society, how do you survive? How does it unwind?

Sadly, I think it involves a lot of pain and suffering and even deaths.

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FROM AN EMAIL TO ECONOMIST WRITER

Dear X:

As an injineer, I’m not a social scientist. Some say I am not even social. As a “gold bug”, I am adding to supply of that relic. My question is one of philosophy, history, and practicality.

I first became aware of inflation (i.e., monetary fiat inflation as opposed to all the other distractions that are called inflation) when in Manhattan College in some course or another, vonMises was an assigned collateral reading. I had a prof, who I can’t remember, was always on Crusoe’s Island. I got a D, so I didn’t take much away from the course. My next brush with education about it was a visit to the Smithsonian where I saw the incredible shrinking French franc. The original French Franc of Louis I was a gold coin that looked more like a small hockey puck than a coin. The last French Franc of the monarchy Louis XVI was a tissue paper thin button. That is what governments do. They debase the currency. They redefine money to give themselves more and the people less. Paper money is even easier to inflate. No coins to shave! I then experienced the Carter inflation of the 70’s with 18% interest rates. And the WIN (Whip Inflation Now) absurd buttons. Lately I’ve read about the Liberty Dollar, silverization of the Mexican peso, and the golden dinar. I’m also remotely aware of Say’s Law which I will paraphrase as “if you had some gold and some paper, which would you spend first?”. I think is a fair translation.

So with that context, how do the people of say New Hampshire, with all those willing Free State Project members, transition from Federal Reserve Banknotes (that I sarcastically called FRBies) to a metal backed currency (i.e., the Liberty Dollar, gold or silver bullion coins, something else)?

I’ve posed this question to Walter Williams, Lew Rockwell, and anyone else who I thought might have an answer. Never had a good answer. Care to take a stab at it?

Does it take a TEOTWAWKI (The End Of The World As We Know It) scenario to get rid of the Federal Reserve? With all the fighting and bloodshed to get to peace and economic honesty? Or is there a peaceful path to end “counterfeiting”? With all the “stuff” that the Federal Gooferment could sell off, it would seem possible to make good on all the promises. Sell off land in Nevada and Alaska to pay for Social Security? I can’t see how anything good will come out of our current direction. Nothing likely except more inflation.

Care to share your thoughts about this topic?

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http://www.escapefromcubiclenation.com/
get_a_life_blog/2007/06/what-to-do-when.html

http://tinyurl.com/2wqhys

Tuesday, 26 June 2007
What to do when your work dries up, key client disappears or industry grinds to a halt
Pamela Stewart Slim
Escape From Cubicle Nation
How to go from corporate prisoner to thriving entrepreneur

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Save for a rainy day. Your financial adviser and grandpa were right … you should have a healthy cushion of savings set aside in case of emergencies. This is the hardest advice for me to follow, but it is very, very wise. Set up an automatic monthly deposit to an account that is NOT tied to your regular personal or business checking account. I heard someone suggest that it be a bank or financial institution that is inconvenient to get to and has few ATMs.

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I learned this lesson sort of by chance.

In my first transition from AT&T to Wall Street, I got a golden handshake to leave. Thru dumb luck, the protection that the Universe extend to the totally clueless sometimes, I was able to get back “in” in eleven days. Mostly that was waiting for the gooferment SEC and the blood test about drugs. In my new job, I had access to a salary deferral plan that allowed my to defer paying taxes on the handshake. Since I hate taxes, the money was “saved”. Fast forward to my transition out of Merrill Lynch, where I decided to become a consultant. I was seeing big gobs of money being paid to consultants in those go go days. Frau’s fears were minimal, and so were mine, beneath the bravado, since I still had that year’s pay with interest “salted away”. Always nice to fall flat on one’s face when you have a nice cash cushion to “fall into”. My consulting was a wild success. But it could have just as easily been a dismal flop. When I consult with My Turkeys (i.e., the FOWGs who are out of work) who “land”, I always try to drive home the need for building up a “rainy day fund”.

Sigh. Some even listen.

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