MONEY: Zero debt is best

Saturday, March 14, 2009

http://www.lewrockwell.com/schiff/schiff7.html  

March 14, 2009
Credit Card Cancer
by Peter Schiff
Peter Schiff is president of Euro Pacific Capital and author

*** begin quote ***

Lastly, savings can always be relied upon whereas credit is ephemeral. Remarks this week from the Chinese premier Wen Jiabao should serve notice to all Americans that the day will soon come when the Chinese stop lending us their umbrellas. When that happens, the average American will be soaked to the bone.

*** end quote ***

One does NOT have to have a crystal ball to see the future.

The Chinese will stop buying Treasury debt. Interest rates to will go thru the roof. And, the economy will slow further.

The only defense is to have ZERO bad debt. That is nothing but a fixed rate mortgage that is well below 15% of your annual income.

Maybe Dave Ramsey is right. ZERO debt is best?

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BIGOTRY – RACIAL: “buy only from black-owned businesses”

Friday, March 13, 2009

http://www.americanthinker.com/blog/2009/03/buying_black.html

March 10, 2009
‘Buying black’
David Paulin

Fascinating piece here about a black Chicago couple living in an upper-class white suburb who are going out of their way to “buy black.”

http://www.chicagotribune.com/business/chi-buying-black-09-mar09,0,5889126.story

Oak Park couple travel far and wide to buy only from black-owned businesses
Ebony Experiment encourages other African-Americans to do the same
By Ted Gregory | Tribune reporter
March 9, 2009

*** begin quote ***

Maggie Anderson drives 14 miles to buy groceries, which might seem curious given that she lives in bustling Oak Park. She and her husband, John, patronize gas stations in Rockford and Phoenix, Ill. They travel 18 miles to a health food store in Chicago’s South Shore neighborhood for vitamins, supplements and personal care products.

The reason? They want to solve what they call “the crisis in the black community.” They want to, as they say, “buy black.”

The Andersons, African-Americans who rose from humble means, are attempting to spend their money for one year exclusively with black-owned businesses and are encouraging other African-Americans to do the same. It is part experiment, part social activism campaign.

*** end quote ***

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Well, if a “white” (What does that label mean?) did that, they’d call it racism.

And, it’s inefficient. 14 miles times 2 / 20 miles per gallon times 2 bucks per gallon means that they are paying a $2 dollar “black tax” on every grocery order. That two bucks could by something they could use. (A can of tuna for when prices soar in the coming inflation! Int heir children’s college fund

And, harmful. When they decide to discard this experiment, the business will be hurt. They will have had a years experience making more and when it stops, they will be confused and worse off. Heaven help them, if the decided to “expand” or otherwise count on this “new business”.

Now even a stopped clock is right twice a day. And, the beauty of America is that you can do that “pursuit of happiness” stuff however you want. But, don’t go into the media seeking sainthood.

DIdn’t Martin Luther King WANT to patronize those white-only lunch counters? I’m sure it wasn’t for the food. It was the principle.

Nope, racism is wrong. For the principle it violates. “All men are created equal and endowed by their Creator with certain inalienable rights.”

Among these is the right to be a fool!

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JOBSEARCH: Age Discrimination? No, really!

Friday, March 13, 2009

http://blogs.jobdig.com/wwds/2009/03/11/age-discrimination-is-the-new-reality-in-job-market-says-guest-expert-dave-opton/comment-page-1/#comment-117011  

Age Discrimination is the New Reality in Job Market Says Guest Expert Dave Opton
Posted in March 11th, 2009
By Dave Opton, CEO and Founder of Execunet, AARP member, exclusive for WWDS.

*** begin quote ***

If you are anything like me, while you always knew there were laws against age discrimination on an intellectual level, it wasn’t until you got out there in the real world looking to make a change at say 45+ that you came to internalize emotionally age discrimination was more than a phrase you read about from time to time but actually came with raw nerve endings. To understate the case, not a great feeling.

*** end quote ***

Unfortunately, you’re right. Exponentially.

From a societal pov, with the market crash killing 401ks and “savings”, as well as the home value crash, “we” as a society have a big problem. “We” are raising the social security retirement age, and more importantly the Medicare age. And, “companies” are shooting anyone under 40 at their first opportunity. How many “consultants” can our economy support?

As you know, I’m advising turkeys that after 50, they will find it IMPOSSIBLE to get another salaried position. (Now that may be a SLIGHT exageration, but NOT MUCH!)

I’ve revised my “emergency fund required” formula. The age component multiplier goes from a one multiplier at ages below forty to a plus one multiplier for every five years of age OVER 40. (That is 40-45 is DOUBLE; 50-55 is quadruple; 60-65 is five times. SHOCKING? You should see the old farts, myself included, who I tell that they will never work again at a salaried job like the old days! Their stunned. Some have high school age or younger kids in second marriages. Are they surpprised!)

This reflects the reality that “jobs” are really hard to come by.

I tell anyone who will listen that: “Success for future generations is: (1) ruthless financial discipline — no bad debt; (2) a life long interest in learning — education — a degree — they can’t take it away from you; (3) a white collar job in order to save big bux; (4) a blue collar skill for hard times — never saw a poor plumber; (5) one or more internet based businesses — your store is always open; (6) a free time hobby that generates income; and (7) a large will-maintained network of people who can “help” you.” Funny how no one believes me?

ERISA changed the corporate behavior of discharging “old” aerospace engineers before their pensions would vest. SO to we will need such a “game changer” to allow us to “bridge” “old age” to retirement.

I suggest that old farts, or those soon to be old farts, like myself, INSIST on an employment contract before they jump to the next opportunity. Can’t get it; be advised! You’ll soon be screwed. We have to change from an “at will” employment culture to something else.

:-(
fjohn
the big fat old turkey hisself

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GOVEROTRAGEOUS: Cramer (a leftist) points out how O doesn’t get it!

Wednesday, March 11, 2009

http://www.mainstreet.com/article/moneyinvesting/news/cramer-takes-white-house-frank-rich-and-jon-stewart?page=6

Posted March 09, 2009
Cramer Takes on the White House, Frank Rich and Jon Stewart
By Jim Cramer

*** begin quote ***

Suddenly, bloggers, opinion people, columnists and, yes, pundits who haven’t paid attention to anything I have been saying or writing for the past 18 months are all over me. Suddenly, I find myself in the center of a firestorm over Obama’s economic policies, taking enfilading fire from the “liberal” media (from serious columnist Frank Rich to entertainer Jon Stewart) while being defended by Rush Limbaugh, the standard-bearer for the Republicans.

*** and ***

The answer lies in the way the two administrations handled criticism.

The Bush administration, I believed, simply chose to ignore my warnings, perhaps because of a brutal combination of ideology, fecklessness and complacency.

*** and ***

President Obama’s team, unlike Bush’s team, demonstrates a thinness of skin that shocks me. When I somewhat obviously and empirically judged that the populist Obama administration is exacerbating the crisis with its budget and policies, as evidenced by the incredible decline in the averages since his inauguration, I was met immediately with condescension and ridicule rather than constructive debate or even just benign dismissal.

*** and ***

The markets thought he could stop it; hence the giant relief rally when he was elected. But in fewer than 50 days of his ascendancy, the markets’ hopes were totally dashed and the averages are now forecasting the worst decline since the Great Depression. As someone who listens to what the averages are screaming, I think they are accurately predicting the future.

I welcome any serious exchange with the administration on the issues that are not beyond my ken: fixing house price depreciation, stopping the destruction of wealth as demonstrated by the stock market’s plunge, and solving the banking crisis before we nationalize every bank.

*** and ***

It’s time to get serious. It’s time to take the issue from the pundits and from the left and right, and put it where it belongs: serious non-ideological debate to put out the real firestorm, the collapse of the economy from Wall Street to Main Street and the ensuing Great Wealth Destruction for all.

But if it stays ad hominem, we will all be betrayed and the train wreck will become inevitable.

*** end quote ***

The inept politicians from both sides of the aisle have destroyed the investments of most people. And, all we get from them is “spend more” and “borrow more”.

STOP!

You’re putting future generations in a hole they will never get out of.

Let the failures go bankrupt. Tough medicine.

We are training future generations NOT to invest.

I’ve had two conversations that are noteworthy.

A young woman has pulled out of her 401k because the losses have eaten into her employer’s contribution and hers. A doctor is moving from equities to bonds and his “financial advisor” at the brokerage house thought it was a good idea (i.e., he gets a commission on trades; not results).

The Market’s P/E ratio is either in or going into the single digits. (Last time that happened the market doubled in a year!) The “natural recovery” from a downturn has already begun. See the uptick in home sales as the “affordability” measure is it’s lowest in decades.

Note to O: (1) Reinstate the uptick rule. (2) Aim the corporate beggars to the bankruptcy courts. (3) Grab your various regulators and ask them to resign. (4) Eliminate Federal guarantees of ARMs, Interest only, and any mortgage that’s not 20% down 30 year fixed “conforming”. (4) Tell the FBI anf your Federal Prosecutors you want some FRAUD convictions for all the bad paper. (5) Tell the SBA that you want a plan to stimulate small business by the end of the day.

Cut the spending, cut the debt, cut the waste.

Argh!

Like that’s ever going to happen!

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POLITICAL: If we can’t kill the FED, should they get a proctology exam?

Friday, March 6, 2009

http://www.lewrockwell.com/paul/paul509.html  

End the Fed’s Secretiveness by Ron Paul

Before the US House of Representatives, February 26, 2008

*** begin quote ***

Madame Speaker,

I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.

Serious discussion of proposals to oversee the Federal Reserve is long overdue. I have been a longtime proponent of more effective oversight and auditing of the Fed, but I was far from the first Congressman to advocate these types of proposals. Esteemed former members of the Banking Committee such as Chairmen Wright Patman and Henry B. Gonzales were outspoken critics of the Fed and its lack of transparency.

Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed’s susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests.

The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed’s negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.

More importantly, the Fed’s funding facilities and its agreements with the Treasury should be reviewed. The Treasury’s supplementary financing accounts that fund Fed facilities allow the Treasury to funnel money to Wall Street without GAO or Congressional oversight. Additional funding facilities, such as the Primary Dealer Credit Facility and the Term Securities Lending Facility, allow the Fed to keep financial asset prices artificially inflated and subsidize poorly performing financial firms.

The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve. I urge my colleagues to support this bill.

*** end quote ***

I can’t think of any monopoly that is allowed to exist unexamoned.

I’m hard pressed to think of single reason We, The People should permit it.

We are drowning as a nation in a sea of paper money. William Jennings Bryan, who railed about NOT crucifying the farmers on a “gross of gold”, couldn’t have forseen this “crucification” of the American people on a “cross of paper”.

Andrew Jackson went to political war over the “Bank of the United States” and won.

We have to do the same thing.

While the FED is not the source of ALL of our problems, it’s at the root of most of them.

As Thoreau said “… strike at the root”!

That’s the FED!

Don’t empower COngress with their current powers to set the value of money. Return it to the marketplace.

We do that by repealing the “legal tender laws” and allow people to use what ever they deem “money” to be.

Gold anyone?

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MONEY: FDIC is not really insuring banks

Thursday, March 5, 2009

http://www.lewrockwell.com/blog/lewrw/archives/025671.html

March 04, 2009
Re: Bair (or Is That Bare?) Says FDIC Going Broke
Posted by Kathryn Muratore at March 4, 2009 05:11 PM

*** begin quote ***

Lew, the counter-intuitive response of government-sponsored bureaucracies like the FDIC make me laugh. So we already know that the FDIC is not really insuring banks in any meaningful sense, although they keep that “Insurance” word in the title. But, imagine what an actual above-board insurance company would do in an emergency – say a hurricane hitting a populated area. In the days before and after the hurricane, can you imagine State Farm sending a bill to all of its customers in the Southeast for an emergency premium hike to cover the payouts that it knows are imminent?

*** end quote ***

Yeah, like Social Security Insurance, which isn’t “insurance” either.

When this musical chairs game stops, who will be left standing?

Taxpayers, the old, those on fixed income.

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MONEY: Inflation on the horizon!

Thursday, March 5, 2009

http://www.lewrockwell.com/buchanan/buchanan105.html

Pitchfork Time by Patrick J. Buchanan

*** end quote ***

Where the U.S. government usually consumes 21 percent of gross domestic product, this Obama budget spends 28 percent in 2009 and runs a deficit of $1.75 trillion, or 12.7 percent of GDP. That is four times the largest deficit of George W. Bush and twice as large a share of the economy as any deficit run since World War II.

Add that 28 percent of GDP spent by the U.S. government to the 12 percent spent by states, counties and cities, and government will consume 40 percent of the economy in 2009.

We are not “headed down the road to socialism.” We are there.

Since the budget was released, word has come that the U.S. economy did not shrink by 3.8 percent in the fourth quarter, but 6.2 percent. All the assumptions in Obama’s budget about growth in 2009 and 2010 need to be revised downward, and the deficits revised upward.

Look for the deficit for 2009 to cross $2 trillion.

*** end quote ***

I don’t know about anyone else, but I can’t afford the Obama budget!

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POLITICAL: Poor Economy and the Gooferment

Wednesday, March 4, 2009

http://irisheagle.blogspot.com/2009/03/its-not-all-media-hype.html

Wednesday, March 04, 2009

It’s not all media hype

*** begin quote ***

Twice this past weekend I found myself talking to two men – separate conversations – who believe that the “economic crisis” is mostly media hype. “They’ve got to sell papers”, is what one of them told me.

I didn’t know what to say. As someone who’s fairly well convinced that we’re heading down and fast I didn’t know where to start. I simply let each of them say what they had in mind and walked on. I was shocked. I have no idea what these men do for a living, but I hope to God they’re right. I’m sure they’re wrong, but I hope they’re right.

Today the news is full of the “mini-budget” or emergency budget or whatever you want to call it coming at the end of the month. I’m sure there’s a reasonable explanation for waiting a month – having been about 4 months late realizing how bad things are – but it’s lost to me. I can’t understand why they don’t just impose the tax hikes right now. What does the state gain from such a delay?

There’s a small part of me wondering if there isn’t something bigger being planned for the economy than 2c extra on the tax rates.

*** and ***

Comment

It’s bad, there’s no denying that – but there is an element of Chicken Littleism to the media reporting, the herd pack mentality running headlong off the cliff together. The media moves its focus in shifts, and now the hot story of the moment is the sky falling; you have to sift to get the nuance and balance that goes beyond the populist trend. So yeah, I’d agree that we aren’t getting a true picture of what is going on. The media is a populist beast.

Carrie

*** end quote ***

MY RESPONSE:

Well, there is a measure of truth to the “hype” argument. If you extract the financial firms from the indexes, the numbers don’t look absolutely terrible. It’s the options and derivatives that are putting downward pressure on the market. Where everyone of the experts really “stepped in it” imho is the failure to use bankruptcy as “medicine”. If they (the gooferment) had said “Sorry, corporations can use the Chapter 11 or one of the other options.”, then there would have been some immediate pain, but it would have been over. Quick and clean. The gooferment could have properly provided the bankruptcy judge with transitional financing assistance to the debtors taking over.

Bet there would have been a lot more serious consideration of the corporation’s options. After all, hard to be an executive if there’s nothing to be an executive up. THe law and implications are well understood.

AND, the market would have formed of “carrior eaters” who would “feast” on the “bones”. A tranche of mortgages would have gotten a quick proctology exam to determine what was good and what was toxic. Various vultures would have bid on the “remains”. The results would have been well-known.

The real estate bubble would have been popped and, while traumatic, it wouldn’t be in “limbo”. That’s why the Street is reacting badly. Uncertainty.

And the gooferment acts like they could NOT find their own A Double Q in a dark closet with a flashlight. This is like the Great Depression in that the gooferment interference in the marketplace is making the problem worse.

My fear is we are going to have a gooferment induced “Lost Decade” for the next 20 years. Like Japan.

Argh!

reinkefj 03.04.09 – 11:37 am

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RANT: Drought is an excuse for more gooferment control

Sunday, March 1, 2009

http://www.reuters.com/article/marketsNews/idUSN2737316820090228?sp=true

Calif. declares drought emergency, mulls rationing
Fri Feb 27, 2009 7:20pm EST
By Peter Henderson

*** begin quote ***

SAN FRANCISCO, Feb 27 (Reuters) – California Governor Arnold Schwarzenegger on Friday declared a state emergency due to drought and said he would consider mandatory water rationing in the face of nearly $3 billion in economic losses from below-normal rainfall this year.

*** end quote ***

Interesting the RINO’s response … gooferment force.

Not that a democrat’s response would have been different.

Interesting how water if treated as a commodity could be different.

Interesting how gooferment in the “water” business manages to be unable to supply consumer demand. (Doesn’t happen at McDonalds!)

How about metering usage and having new more expensive water. Privatize “water”. Eliminate the gooferment in any role concerning water; no law, regulations, or interest.

Put people in control. And, we’d have water galore. Maybe someone might even invent a way to store water to even out the droughts. Or, even make it!?!

Argh!

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POLITICAL: Eliminate the corporate income tax

Sunday, February 22, 2009

http://www.reason.com/news/show/131556.html  

Economic Change We Can Believe In
To improve the economy, eliminate the corporate income tax
Jeffrey A. Miron | February 6, 2009

*** begin quote ***

President Barack Obama’s stimulus proposal entails an awkward tradeoff between spending and efficiency. Fiscal stimulation suggests large, rapid increases in spending, while efficiency means cautious, modest increases. Similarly, Obama’s plan favors tax cuts for low-income families, since they are most likely to spend rather than save, yet the drive for efficiency means cutting marginal tax rates on high-income consumers.

*** and ***

One policy change, however, can stimulate both the economy in the short-run and enhance efficiency in the long-run: repeal of the corporate income tax, which collects up to 35% of the difference between revenues and costs of incorporated businesses.

*** and ***

Corporate income taxation has other negatives. It requires a complicated set of rules and regulations, over and above the personal income tax system, generating compliance costs. Special interests ensure that corporate tax systems favor specific industries or activities, further distorting private investment decisions. Along those lines, corporation taxation reduces financial transparency, making it harder for investors to monitor corporate behavior.

So repeal of the corporate income tax is good policy independent of the state of the economy and would provide short-run stimulus.

*** end quote ***

Corporations don’t pay taxes; they hide them in the final price of goods sold!

Only people pay taxes!

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