Reinke Faces Life

http://www.catholicculture.org/news/headlines/index.cfm?storyid=11854

Nigerian bishops lament refusal to implement minimum wage
September 26, 2011

*** begin quote ***

The bishops of Nigeria are lamenting the refusal of state governments to implement a new national minimum wage.

*** end quote ***

Argh!

Economics is not faith and morals so the bishops are NOT infallible.

Maybe next the good bishops will opine on how to set broken bones?

Economics is called the dismal science because wishing doesn’t make it so. You can’t change reality by Gooferment diktat!

Implementing, or in the case of the USA raising, a minimum wage will ensure that folks will be unemployed.

So what’s worse, reality with people working or unemployment?

FYI, one should always stick to their area of expertise.

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http://dumpdc.wordpress.com/2011/09/17/flash-editorials-september-17-2011

Flash Editorials September 17, 2011
By Russell D. Longcore

*** begin quote ***

The Nation: At Monday night’s “Tea Party Debates,” EVERONE on stage…including Ron Paul…said Social Security and Medicare should be saved. And apparently, Governor Perry felt fine about writing in his book that SS was a Ponzi scheme, but when faced with voters, he nearly soiled himself trying to get away from those words. SS and Medicare are indeed Ponzi schemes, and ALL the candidates who want to save them are criminals. Deal with it.

*** end quote ***

I think that calling “Social Security Insurance” a Ponzi scheme is unfair to old Ponzi. It does quickly communicate and editorial about the value of SSI, but Ponzi could NOT make folks participate. He had to defraud them the old fashion way by deceiving them into voluntarily giving him their wealth. Uncle Sam sam put a gun to your head and says: “Pay me”! It is many things: mislabeling (it ain’t insurance), fraudulent (terms are subject to the whim of Congress), and ineffective (inflation exceeds roi). But, not Ponzi, because you were forced to play along. We know how to unravel it; Herman Cain brought up Chile. We know how bad it is (i.e., a wealth transfer from poor minority men to rich white women). We know the ROI (i.e., estimates are between a negative 2% to as high as negative 6%).

There is an element of good public policy in it. Future taxpayers ought not be burdened with your welfare cost should you fail to provide for your old age. If you disagree with the mean old Libertarians who say “that’s your problem if you starve” knowing full well that there will be sufficient private charity to care for those truly in need. Then, be “liberal”, and say that as a condition of your protection provided by the military, you must provide for your old age to a certain level. Use the Insurance Companies to help individuals meet that minimum obligation through annuities that would be guaranteed by the pool of Insurance Companies selling such coverage. (Ever see Insurance Companies scrutinize each other in a “pool”. Think proctology exam. No one wants to be stuck with the other’s liabilities.)

So, let’s find a better word than “Ponzi”. Unfortunately all the ones that I could come up with were not suitable for polite company.

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http://www.reuters.com/article/2011/08/31/us-usa-obama-housing-idUSTRE77T6DV20110831

White House could unveil mortgage plan next week
By Margaret Chadbourn
WASHINGTON | Wed Aug 31, 2011 6:40am EDT

*** begin quote ***

While mortgage rates have been hovering around record low levels, banks remain stingy with lending although they are sitting on more than $1 trillion in excess reserves. Homeowners without a job or good credit histories have been essentially shut out of the refinancing process.

Some investors say the economic benefit of a government-encouraged refinancing wave would be minimal.

“It’s a political hail Mary. It’s unclear why they want to throw a monkey wrench into a $5 trillion market,” said John Kerschner, head of securitized products at Janus Capital Group in Denver. He said the net benefits for the economy are negligible, perhaps adding $20 billion to $30 billion “at best” to the U.S. economy.

*** end quote ***

Old King Canute, aka BHO44, is trying to pick winners and losers again.

The Gooferment has nothing. All it can do is move “stuff” around. The “poor homeowners” are going to be the “winners” and the “rich bondholders” will be the losers.

In actuality, the winners are the politicians and bureaucrats. They will be rewarded by the lobbyists and the voters.

Aren’t these the same “bad assets” that we bought, or were supposed to buy, under one of the many TARPs?

Sorry, but wishing doesn’t make it so.

Any wonder why I’m a Gold Bug? Told you not to get caught in the bear trap (i.e., move to the “safety” of bonds from “risky” stocks”).

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http://www.wnd.com/index.php?fa=PAGE.view&pageId=339129#ixzz1WWLEj7y4

Kudos to Perry and Paul
Pat Buchanan
Posted: August 29, 2011

*** begin quote ***

What should be done to high officials of the U.S. government who consciously set out to dilute and destroy the savings and income of working Americans? What should be done to those who have sworn an oath to defend the Constitution and then steal the wealth of citizens by secretly manipulating the value of the currency, the store of wealth upon which those people depend?

*** end quote ***

An excellent question?

Linkage of the dollar to gold would prevent this. That’s Ron Paul’s attack on the FED and out of control Gooferment spending.

Think it’ll ever happen?

The politicians and bureaucrats will fight tooth and nail to keep their unlimited checkbook.

Maybe the Chinese will help us out?

After all one can print money, but you can’t print wealth.

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http://www.getrichslowly.org/blog/2011/08/21/reader-story-geographic-arbitrage-in-real-life/

Reader Story: Geographic Arbitrage in Real Life
Sunday, 21st August 2011 (by J.D. Roth)

*** begin quote ***

You can save money by traveling to a place where a given item is cheaper to buy, but time and travel costs need to be considered which may negate any savings. But because I travel regularly, usually by car, to visit family members (mine and spouse’s), I’m able to take advantage of pricing differences between my home area and theirs.

Though it may sound like it, I’m not exploiting overall cost of living differences in the sense that it’s generally cheaper to live in Tennessee than in California. This is an item-specific phenomenon, so it works for me when I visit family members, and it works for them (on different items) when they visit me. Below are some examples of how this has helped me save money.

*** end quote ***

I don’t travel that much.

Yet!

Perhaps there’s a interest in this strategy.

The only time I ever did anything like this was bringing home cheap butts for the in-laws.

That was before instituting my Zen-like policy of “I don’t have anything to do cigarettes”. Part of “walking gently on the earth”.

:-)

Sigh!

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http://www.mercurynews.com/california-budget/ci_18716703?nclick_check=1

Teacher pension fund joins California auditor’s risk list
Associated Press
Posted: 08/19/2011 09:17:05 AM PDT
Updated: 08/19/2011 09:20:58 AM PDT

*** begin quote ***

SACRAMENTO — The state auditor’s office on Thursday added teacher pensions to the list of high-risk issues facing California government.

The report by State Auditor Elaine Howle added the nation’s largest teacher pension fund because it can’t meet the costs of retirement benefits beyond the next 30 years. The pension funding problem was added to a list of risks that includes California’s chronic budget deficit, unfunded retiree health costs and prison crowding.

*** end quote ***

Unfunded liabilities are not just for the Federal Gooferment.

Just like the Delta pilots, everyone is going to take a haircut.

The only question is how much will be taken …

… by the corrupt politicians.

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http://reason.org/news/show/eliminate-mortgage-interest-deducti

Study: Time to Eliminate the Mortgage Interest Deduction
Removing homeowner subsidies would allow everyone’s income tax rates to be lowered
July 28, 2011

*** begin quote ***

The mortgage interest deduction does not increase homeownership rates and amounts to little more than a subsidy for wealthy homeowners, according to a new Reason Foundation study that recommends eliminating the deduction and streamlining the tax code. The Reason Foundation report suggests a revenue-neutral solution: eliminate the mortgage interest deduction and lower federal income tax rates for all Americans by 8 percent.

*** end quote ***

Seems like the time for deductions and such are past.

Tithe seems like more than enough for God; should be more than enough for Gooferment.

Flat 10%?

Now I think that all taxation is theft.

Hopefully, the absurdity of all of this will swing you to my way of thinking.

Time to get the Gooferment out of all our business.

The Dead Old White Guys thought that tariffs and excise taxes would be enough.

They were wrong. It’s never ever enough. For the pigs.

If we want a product or service, we should buy it. Gooferment is just another product.

Money is a product as well.

Gold is the answer to keeping the Gooferment under control. No hidden taxes.

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http://www.nationalreview.com/kudlows-money-politics/274153/bernanke-rescue

Bernanke to the Rescue
August 9, 2011 5:28 P.M.
By Larry Kudlow

*** begin quote ***

Damn the torpedoes! Up periscope! Full speed ahead! Ben Bernanke and the Fed to the rescue!

In a startling move Tuesday, the FOMC announced that its zero-interest-rate target would be extended for two more years through the middle of 2013, marking the first time the target rate has ever been pegged to a date certain.

*** end quote ***

Absurd!

The FED is the problem.

Let the market operate and reset the prices to value. Will folks take a hair cut? Yup. But remember Japan’s lost decade. How’s that working out for them? Want that here? Just let the Gooferment muck about with no plan!

Argh!

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http://www.smartmoney.com/spend/family-money/10-reasons-im-cancelling-my-credit-cards-1310065287880

*** begin quote ***

10. Cash helps people I want to help. The money goes to the merchant and his suppliers. When I go into my local credit union to cash a check, I’m keeping a couple of local tellers in work. Credit cards? I’m helping finance bank executives, marketing teams and call centers in India. I am sure they are all fine people, and I wish them well. But if I had to choose, and I do, I would rather help my local merchants and credit union staff.

*** end quote ***

Interesting take on the value of using cash.

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http://www.getrichslowly.org/blog/2011/07/24/reader-story-estate-planning-the-first-month/

Sunday, 24th July 2011 (by J.D. Roth)
Reader Story: Estate Planning – The First Month
This guest post from Jeffrey G. is part of the “reader stories” feature at Get Rich Slowly.

*** begin quote ***

What would happen if you, your spouse, a parent, someone who you shared a financial life with died today? Not next week after the car payment is sent in. Not next month when you’ve finally gotten around to writing down all of your passwords and account numbers. Not next year when you’ve updated your will. What would happen if they died today?

*** end quote ***

Clearly, you need an emergency fund for the year after the death of a spouse. Depending upon how into the spouse you were.

Wonder how long it takes to return to “normal”?

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http://irisheagle.blogspot.com/2011/07/marshall-plan-is-not-what-eu-needs.html

WEDNESDAY, JULY 06, 2011
A Marshall Plan is not what the EU needs

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A column in the Guardian calls for a new Marshall Plan to save the EU, but unfortunately the EU’s dominated by leaders who believe in unconstrained free market capitalism, according to Mark Mazower. That’s a load of twaddle.

The EU’s problem right now is that EU enthusiasts ran too far out in front of the citizens of the various nations. They pushed for an integrated EU that required a lot more solidarity and a lot less nationalism than the people of the EU were ready for. Unfortunately they ended up with a fudge – a unified currency stretched over loosely unified national economies. It’s stuck in between integration and a loose confederation, which is a disaster.

*** end quote ***

Seems like it also overlooks that the entropy of large states is crashing. The USSR is a classic example. Shattered to bits and parts by an unsustainable economic model. The USA may be going the same way. That is the 80 year experiment with the FED’s fiat currency may be concluding with disastrous effects. You can NOT trust politicians and bureaucrats to restrain their base human emotions to give the mob bread and circuses to stay in office. Looting the public treasury by crony capitalism while expecting the world to pay for it in the hidden tax of inflation. Sadly, it’s those who trust in the value of a dollar, or a euro, that are going to pay the price. The Rich, like roaches, always survive; it’s the Poor that get hurt. Argh! What fools these mortals be. There’s a reason that gold has always been money; it keeps the politicians honest.

Besides “no entangling alliances” seem still to be good advice.

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http://lewrockwell.com/north/north1001.html

Never Say Retire
by Gary North

*** begin quote ***

I had concluded that millions of baby boomers would discover at age 65, much to their chagrin, that their plans for a comfortable retirement had been smashed by the reality of low economic growth, low returns from the stock market, their own insufficient savings programs for decades, and inflation. I figured that I might create a Website based on the theme, “never say retire.” I have not developed that site, but at least I set up a department on my Website. So, if anyone types the words “never say retire,” he is directed to my department.

*** end quote ***

The truth about retirement. Argh! “We”, as a society, waste the first 25 years and the last 20+ years of life. “School” isn’t about reading children to take their place in the civilization creating wealth. “Retirement” isn’t about the “golden years”; they are removed from the workforce at the height of the wealth creation capability. Argh!

Retire? fuhgeddaboudit! (translation from the Brooklyn dialect: “forget about it” with a sneer.)

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http://www.doughroller.net/investing/rollover-401k-to-ira

Should You Rollover a 401(k) to an IRA

by DR
in INVESTING

*** begin quote ***

I quit my job last month. After more than six years investigating the financial audits of public companies, I’ve decided to go back to the private practice of law. So after a summer sabbatical, I’ll be returning to my old firm in August. And that raises one important question—should I rollover my 401k to an IRA.

*** end quote ***

I’d suggest that the GENERAL rule of thumb is ROLLOVER. The SPECIFIC rule is you better have a superior reason for not doing it.

Rationale:

(1) 401Ks have sponsors (your old employer) and providers (e.g., Fidelity; Vangard; others) rarely does this relationship not have its conflicts. The literature is replete with examples of often illegal activities. You have to be very skeptical of what decisions are being made for you.

(2) Fees. You don’t know all the fees and guess who pays them.

(3) Investment options. Always limited by comparison. I’m a perma bear! (Have you seen what the US Gooferment has done to the money, the debt, the deficit, the spending, and the entitlements? And, you think this is going to be good!) Try and put your retirement money into gold. You can in certain IRAs.

(4) As a bear, I am interested if my retirement savings retain their value. A nice account denominated in Swiss Francs or Chinese Yuan would be comforting. How sure are you that you’re going to keep your wealth?

(5) If you have multiple accounts, and you have multiple mutual funds labeled GROWTH and or VALUE, how in heaven’s name will you diversify. They could be investing in the same stuff wildly increasing your risk. They could be even taking opposite sides of the same bet. So you’re paying fees to bet both red and black.

(6) Underlying the whole proposition is the trustworthiness of the “casino”. At least with an IRA, you’re picking your poison.

As a bear, I think the days of “invest in anything cause it all appreciates” are over. I remember the Sixties bear, and have grandfolks who lived through the Great Depression. They were scared. And so should we be.

BTW did I mention I like the Tea Party and “vote the bums out” strategy. Cutting Gooferment drastically is the only way to save the economy and our retirement money. We need more producers and less drones / vampires in DC.

imho ymmv fwiw

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Maybe you shouldn’t be in a 401K in the first place? Heresy!

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http://www.sovereignman.com/expat/get-your-hands-on-the-governments-playbook

GET YOUR HANDS ON THE GOVERNMENT’S PLAYBOOK
by SIMON BLACK

*** begin quote ***

Sure enough, in the “Seventh Quarterly Report” that President Obama’s Council of Economic Advisors released on Friday (right before a long weekend, naturally), the numbers show that the administration’s Keynesian stimulus spending has saved 2.4 million jobs at a cost of $666 billion. That’s a total of $278,000 per job, all at taxpayer expense.

In the world of Keynes where debt does matter and inflation doesn’t exist, this number is completely acceptable, right comrades? In the real world, it’s further evidence of how horrific misallocations of capital are bankrupting the economy.

*** end quote ***

When does the insanity end?

Stop the Gooferment from spending future generations into poverty.

It’s all funny money!!!

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http://dailyreckoning.com/bear-traps-in-the-bond-market

Bear Traps in the Bond Market
By Bill Bonner

*** begin quote ***

This is probably the trap Mr. Market is setting. The Great Correction will prove to be more bad news for investors – except for those who have put their money in ‘safe’ US dollars…and US treasury debt. Gradually, investors will move more and more of their money out of ‘risky’ assets and into bonds. Then, Mr. Market can spring his trap. As Lindsey warns, that is when they will stop worrying about debt ceilings and Congressional budget talks. That is when they will realize that it is too late. That is when bond yields shoot up and bond prices fall. That is when investors regret having lent money to Washington.

How far ahead will that be? We wish we knew. But Bill Gross, who famously sold US bonds, could turn out to be years early.

Then, Mr. Market – the joker – will have such a laugh. All those people who tried to get away from risk…by moving to the dollar and US Treasury bonds…will get whacked.

*** end quote ***

Bonds are the “guaranteed option” in 401ks. A bear trap can make it a 201k real quick. With the current climate, you have to question if one should be in a 401k in the first place.

401Ks have SIGNIFICANT risks in today’s climate imho.

(1) “Your” 401K really isn’t yours. There are a few hands in it. Some that you might not even be aware of. The company and the plan provider have an interesting relationship to your money. Some of “yours” will become theirs in the process.

(2) Open and supposedly above board, there are fees and commissions in “placing” your investment into the 401K.

(3) Under the table, and possibly, illegal things happen around your 401K. Read about front running, shadowing, and past posting. Just a few of the things that can happen.

Add to the mix: inflation, or maybe hyperinflation, changing tax laws, tax rates, … etc.

And, throw in the wild card trial balloon that keeps coming up out of DC: the exchange of 401Ks and IRAs for an “enhanced social security benefit”. (Would that bring folks out into the street?)

So after all that, I’m no longer sure that automatically recommending 401K participation is such good advice.

Maybe a silver round per week is a better choice.

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http://moneyland.time.com/2011/06/29/inside-the-fed’s-vault-1-billion-worth-of-unused-coins/

THE ECONOMY
Inside the Fed’s Vault: $1 Billion Worth of Unused Coins
By JOSH SANBURN | @joshsanburn | June 29, 2011 | 50 COMMENTS

*** begin quote ***

In the basement of a Baltimore vault the size of a soccer field, 1 billion dollar coins are just sitting there. Thanks, Congress.

NPR’s Planet Money reporters recently investigated the $1 presidential coin program, which was a Congressional effort to get more $1 coins into circulation while also trying to be educational.

The problem is that nobody really wants them.

*** end quote ***

Only the Gooferment can lose money making money!

Argh!!!

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http://dumpdc.wordpress.com/2011/06/24/dreams-of-the-gold-standard/

Dreams of the Gold Standard by Linda Brady Traynham

*** begin quote ***

Chances are we’ll do better solving that problem than wriggling out of the financial messes caused by corruption, vote-buying, deliberate waste, and pretty fairy tales that everyone can lead a nice, safe middle class life like the Cunninghams on “Happy Days.”

What we really want is a stable currency along with a stable interest rate, traditionally 4%. What are developing are panics, lengthy recessions, stagflation, and growing fright and anger. I pledged to think of something “nice” that could happen, and I can only think of two. First, I could be wrong. Who am I to think I know better than the self-proclaimed “best and brightest?” Well…to be brutally blunt, I think I’m a very nice lady who has had a long, pretty priveleged life who is concerned about the future and usually calls a pig a pig, although I do know how to concoct sentences such as, “As always, it is not the case that stochastic analysis can compensate for human variability.” Meaning that in a world of random chance and individuals anything could happen.

*** end quote ***

Interesting?

How does one get back to a “gold standard”?

First, if you’re going to save, you have to save in metals; not dollars.

Second, you’re going to change your thinking. Buying stocks and bonds; price it in gold. IRA or 401k, evaluate it in ounces of something.

Third, you’re going to have to go back to basics. No debt. Pay “cash”. Stock up what you need for the hyper-inflation.

Fourth, think like our depression era forefathers, the Amaish, or the Mormans. Batten down the hatches, we’re in for a rough ride.

Fifth, try your hand at barter, your own business, or anything that you can think to earn wealth.

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http://www.smartmoney.com/invest/stocks/are-financial-markets-still-fair-1307902907446/?cid=djem_sm_dailyviews_t

STOCKS

Are Financial Markets Still Fair?

*** begin quote ***

As exchanges let high-speed traders move in, what it means to the little guy.

*** end quote ***

What makes anyone think that they have been getting a “fair shake”?

Front running, commissions, fees, hidden incentives to anyone in the money stream, and out and out fraud.

Bullion coins make sense if the “casino” is rigged!

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http://dumpdc.wordpress.com/2011/06/14/what-the-gold-standard-is/

What the Gold Standard Is
courtesy The Lehrman Institute

*** begin quote ***

The classical gold standard is simple and it works.

*** and ***

The classical gold standard does not mean that we will be carting around gold pieces in a purse like the nobles of Merrie Old England. We will still carry around currency, use bank accounts, checks, and credit cards. The classical gold standard simply means that you can, for any reason or no reason at all, cause your paper dollars and bank deposits to be exchanged for an equal value of gold dollars. That legal option keeps the currency honest, and valuable, causing no long term inflation or deflation, not least because the government is bound by the same law of convertability.

*** and ***

The classical gold standard works.

*** end quote ***

I don’t know might be kinda have gold coins like our great grandparents used.

The key thing that the “gold standard” IS is a restraint on the number of “dollars”, francs, yen, or rubles that the Gooferments can print.

Then, every piece of paper has value. Not as intrinsic as a gold coin, but by what it can be exchanged for.

Simple!

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http://lewrockwell.com/spl3/gold-roadmap-to-1700.html

Gold & Gold Stocks: Roadmap to $1700
by Morris Hubbartt

*** begin quote ***

The US government is spending approximately three dollars for every one dollar taken in. You are told this is being done to create “economic recovery”. Houston, we have a US dollar spaceship problem, because there is no balance sheet recovery.

*** end quote ***

Where does it all end?

Scary!

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http://www.governing.com/columns/smart-mgmt/Whats-a-Pension-Perk-Worth.html

SMART MANAGEMENT
What’s a Pension Perk Worth?
Employers can’t pinpoint what the real value of retiree benefits is to them.
BY: KATHERINE BARRETT & RICHARD GREENE | JUNE 2011

*** begin quote ***

It’s conventional wisdom that there’s an awful lot of cash being spent to keep pension promises made to employees during the course of their work life. But what benefits — aside from the obvious humanitarian desire to provide a good quality of life for retirees — are these pensions buying for the entities that offer them?

One argument has been that higher pension benefits make for lower turnover and more qualified applicants. There have been a small handful of studies over the past two decades that support the very broad idea that employees of governments that offer pensions are often more loyal than those working for entities that don’t offer pensions. But even if we accept those assumptions without question, there doesn’t seem to be anyone who can tell us what the marginal value each additional dollar of post-retirement benefits buys — and what we give up if we cut benefits by any given amount.

*** and ***

Flying blind like this means governments that have been pushing for steep cuts in retiree benefits are risking a long-term negative change in their workforce that will make services costlier and less effective. By the same token, if cuts at a certain level could be shown to have minimal impact on workforce considerations, then there are a whole passel of states and cities that should consider making cuts without delay.

We don’t know the answer. But we sure believe somebody should.

*** end quote ***

If managers are trying to figure out the value of the “pension”, or any “benefit”, then “employees” aka “wage slaves” should be figuring it out as well.

Argh!

Remember that the “rules” for “Success in Your Generation” have shifted away from “pensions”. (As well as imho 401ks and IRAs!)

(To explain that parenthetical remark. First, 401ks are a captive of the employer. Abuses like Enron were the very tip of the iceberg. The current crop of 401ks are full of abuses. And, the mutual fund choices inside of them are also abusive. Read Ric Edelman’s writings bout mutual funds. Second, there continues to be rumors of taking “tax deferred accounts” in exchange for “enhanced social security”. Third, tax rates in the future and the value of the dollar cast doubt on the value of a pension. Especially when that supposed pension is decades down the road. Fourth, a pool of savings might provide the capital for a business venture. That might be a good bet. Or at least a better bet.)

You can create your OWN pension. It’s nothing more than a very very expensive annuity.

Read the blog post about a 5 year quarterly cd ladder.

You can do it yourself … cheaper.

And, gold, silver, and junk silver coins may be the best bet over all.

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*** begin quote ***

I’ve been preaching silver to my friends. It’s shocking that people don’t recognize how devalued the dollar really is. A hockey team moved to Canada from Atlanta today and the radio guy said a few years ago that was unthinkable because the dollar vs canadian dollar was so lopsided Canadian businessmen couldn’t compete. The NFL wants a franchise is Toronto and again the writer referenced that the dollar being so weak allows Canadians to compete in signing players. I’ve also been following the disaster better know and the Federal Reserve- Bernake may be a smart guy and a depression era expert but he can’t get out of his own way and talks himself into trouble.

*** end quote ***

I like to use the 30¢ / gallon of gas (i.e., 3 silver dimes) and at today’s silver rule of thumb (20 x pre-64 face value) that means you have $6 for a gallon. :-) It’s so OBVIOUS! And, I remember gas at 20 with trading stamps and an ugly glass and the fellow cleaned the windshield, checked the oil, and spoke english. Argh!

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