Category Archives: Inflation

Money On The Bonfire

Jeffrey Immelt Hosts the President

WAIT! ALL IS NOT LOST. The circumspect Harry S. Dingey writes for us once again:

So. It is exactly like I have been preaching for the last 15 years since America joined NAFTA and the WTO. At some point the American working class will totally run out of money from having all the better jobs moved off shore to China where the international companies can hire slave labor for $2/day. American Workers have maxed out their credit cards and now working for minimum wages flipping hamburgers at McDonalds and Sonic. The Chinese workers who worked for slave labor can not afford to purchase the same items they manufactured. So the game was forced to stop. This is exactly where we are right now in America.

The American President and Congress have not figured out yet they are pushing on a string with all of these Trillions of Dollars in Bailouts because what they are doing is creating a Temporary Consumer Product Demand.

Since the bailouts are creating only a temporary product demand it will fizzle out very, very soon and the Depression will continue. But, America will be even worse off because will be burdened with all this extra national debt created from all these bailouts. They just don't get it. GLOBALISM will not work under any circumstances it is just that simple.

Solution? PULL OUT OF NAFTA and the WTO and stop all these trillion dollar bailouts and things will start to improve over night. Then go back to accomplishing international trade the exact way America did for well over 215 years and America will become that shining light on the hill again.

I'd like to see this happen in my lifetime, or it may never happen again. The numbers are just not there.

The Demographic Winter (Or Summer Snowman)

Abortion or contributing to global overpopulation and dwindling resources...

REMEMBER THE 1970s FEAR of the scary global population bomb? Just warming up to the new demographic winter. Now we are being told that we must deal with the world population implosion. Not enough workers. Abort that girl or face child abuse charges. Global cooling, global warming. This God, that God. This way of worship, that way of worship, This food, that food. Free speech, Orwellian speech, conservative speech is not allowed here. World hunger, obesity nations. Undereducated, no jobs for you. Overeducated, no jobs for you either. Diversity groups, no whites allowed. This drug, that drug. Carbon footprint calisthenics, China's smog castles. Government disinterest, government over-reach. What's the bloody difference as long as somebody has a job telling somebody else to jump onto some new bandwagon. What's the alternative to a world bloated with alternatives? That's easy.

No alternatives at all. Go man, go.

—Gabriel Thy

The Gears Of Preparedness

BATTLING FEARS OF THE FUTURE? Here's what one fellow says you can do to help ease your mind. Consider the necessities of life—purchase now in bulk, especially storable food.

  • if inflation ensues, it will be worth more tomorrow.
  • if deflation, it may not be available tomorrow due to shortages.
  • If a complete financial breakdown follows, you're already more self-sufficient and can barter for other necessities.
  • If nothing happens, you will have paid off the future now instead of later.

    When storing food away, stay organized.

    Begin buying in your local area now, and keep buying there. Tell your friends what you are doing, and encourage them to do the same. We also need to slow down on purchasing imported items. I am one who doesn't believe we MUST buy imported anything! Globalism has suffocated American industrial know-how and can do, and thus the skills of self-preservation.

    The problem in America is the same problem as in the rest of the nations on our planet; it's the rich/poor system. As long as rich people get richer, the country and the world will continue to spiral towards the oblivion we see elsewhere around the world. We must again tax the rich according to the benefits they have acquired through a system slanted in their favor at the outset; once upon a time if one earned in excess of the masses annually, one would be obliged to give back in kind to the system.

    I am not a socialist or a communist. Nor am I currently poverty-stricken. But we are our brother's keeper, and as long as competition squashes the natural caring for our nation, we will keep slouching as a civilization toward that beastly keeper of Hell crushed by the gears of our own unpreparedness.

    On the national front, here's some advice from an old codger:

  • Cut non-essential government spending. Nearly all of it is non-essential. Cut all social programs. Cut all pork spending. Cut at least half of the humongous Federal work force (the government will run better.)
  • Bring our troops home who are scattered all around the world. We'll be stronger. Drastically downsize our armed forces, but maintain a large reserve in case we're attacked.
  • Bail out no one. No home owners, no Companies. For every company or homeowner that fails there is someone there to pick up the pieces at a bargain price. We're a resilient people. We'll bounce back.
  • Tighten our belt. If we survived The Great Depression—we can survive anything. I'm near eighty and I remember the depression. It was awful. Incidentally, we were slowly pulling out of it before WWII started.

  • Making Every Nickel Count

    THE ECONOMIC CRISIS HAS STAGGERED Wall Street and here is a man who says that the worst is still to come. He's been right too many times to dismiss. Try 2012 on for size. He also says President-elect Barack Obama doesn't have a prayer in fixing this mess.

    Gerald Celente of the Trends Research Institute is a highly respected prognosticator. Here's another Celente forecast from the December 2007 newsletter called Top Trends 2008:

    America’s going broke and the whole world knows it. Betting that its economy will spiral down and that the dollar will fall with it, foreign creditors are dumping dollars on the market—and even Third World street vendors don’t want to take greenbacks any longer. The further it falls, the less it’s worth. The less it’s worth, the less it buys. In the real world they call it "inflation." In America they call it "good for business."

    Failing banks, busted brokerages, toppled corporate giants, bankrupt cities, states in default, foreign creditors cashing out of US securities … whatever the spark, the stage is set for panic in the streets. When the giant firms fall, they'll crush the man on the street...

    It's all rather frightening. And yes, we believe this is a true outlook. There is nothing to stop this financial collapse. America is changing.

    Health Insurance Bait And Switch

    Photo by Laurie Hicks

    ONE UNDERREPORTED STORY of this election is how heavily John McCain has been damaged by Barack Obama's television ad assault on his health-care insurance plan. A lot of voters seem to believe the Democrat when he says that Mr. McCain wants to deny them coverage or bankrupt them with crushing hospital bills.

    Mr. McCain has himself to blame for not defending his own reform ideas, during the debates and in TV ads, against attacks that have been misleading when not flat-out false. Even so, Mr. Obama's tactics are especially cynical because his own health-care advisers support plans much like Mr. McCain's. Or at least they did before joining up with Mr. Obama.

    Put simply, the McCain plan seeks to remedy a distortion in the health-care market that economists have spent decades begging politicians to fix: The tax code subsidizes insurance only if it is provided through employers. Individuals can't take the same tax deduction for buying insurance that businesses can. So Mr. McCain wants to "spread the wealth" of these tax breaks to individuals of any income through a refundable tax credit, no matter where they get coverage.

    "The fact that the tax subsidy, which supports the employer-sponsored system, is better than nothing is a feeble excuse for resisting any changes to the status quo." That's not John McCain's judgment. It's a quote from Jason Furman, who happens to be Mr. Obama's economic policy director. In a cri de coeur published in the journal Democracy in 2006, Mr. Furman implored fellow Democrats and other progressives to confront "a critical missing link" in their health ideology—the same link his boss now spends most of his time demagoguing.

    Read the entire Wall Street Journal report.

    Japan Considers World Bailout

    Not that this generosity would be anything but a stop gap for the ailing American economy, thanks to a dwindling industrial base and our need to tack our economy to production of real goods.

    The Obscene Activity

    TOKYO—Kotaro Tamura, an investment banker turned Japanese lawmaker, has an immodest proposal for healing the sick global economy, making all Japanese richer and compelling the United States to be more deferential toward Japan.

    "We are in a special position because we have huge money," Tamura said, referring to about $950 billion in government foreign reserves, $1.5 trillion in public pension funds and $15 trillion in personal financial assets, about $8 trillion of which is on deposit at shockingly low interest rates in Japanese banks. "We should send the signal that we are ready to save the world with this money," he said in an interview.

    Tamura leads a group of 65 lawmakers from the ruling Liberal Democratic Party who have proposed to Prime Minister Taro Aso that Japan treat the global financial meltdown "as a huge opportunity for us." They are urging the government to inject some of its abundant cash into troubled U.S. and European banks, in return for equity, and to purchase distressed corporate assets at fire-sale prices.

    "The economy of every major power has crashed, and Japan has the least tainted market in the world," Tamura said. The chronically risk-averse habits of Japanese savers, who keep most of their trillions in accounts that pay less than 0.5 percent interest a year, suggest that Tamura's plan to save the world and make Japan richer is unlikely to generate much popular support.

    "We are a bank-centered nation that avoids risk, even good risk," said Akira Kojima, chairman of the Japan Center for Economic Research.

    Kojima called the idea of investing some of Japan's cash in the midst of the financial crisis a good one, if done prudently. "It could be a catalyst for changing Japanese investment management strategy," he said. At the same time, he said, it would be all but impossible to carry out, given the conservative bent of the government and the public.

    Read it all.

    The Fraud, The Fix, The Fool

    Andy Kessler of the WSJ has piped in with some good news in the works which should help ease the tensions of us little folks seared with doubts and fears over this Wall Street monstrosity. But then, why in the world should we believe the holy writ of the very folks who is supposed to scrutinize the swindlers who nuanced this mess?

    Salma Hayek and Oliver Stone Doing the Universal Grope...

    IN 1992, HEDGE FUND MANAGER George Soros made $1 billion betting against the British pound. In 2007, John Paulson's Credit Opportunities fund correctly bet against subprime mortgages, clearing $15 billion for the year and $3.7 billion for him. Warren Buffett is now hoping to make big money on Goldman Sachs. But these are small-time deals. My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion—yes, with a "t"— for the United States Treasury.

    Here's what's happened so far. New technology like electronic trading meant that Wall Street's bread-and-butter business of investment banking and trading stocks stopped making much money years ago. So investment banks took their enormous capital and at first packaged yield-enhanced, subprime mortgage loans into complex derivatives such as collateralized debt obligations (CDOs). Eventually and stupidly, these institutions owned them for themselves—lots of them, often at 30-to-1 leverage. The financial products were made "safe" by insurance products known as credit default swaps, a credit derivative from companies such as AIG. When housing turned down, the mortgages and derivatives were worth a lot less and no one would lend Wall Street money anymore.

    Then the piling on started. Hedge funds could short financial stocks and then bid down the prices of CDOs stuck on Wall Street's balance sheets. This was pretty easy to do in an illiquid market. Because of the Federal Accounting Standards Board's mark-to-market 157 rule, Wall Street had to write off the lower value of these securities and raise more capital, diluting shareholders. So the stock prices would drop, which is what the shorts wanted in the first place. It was all legit.

    There is a saying on Wall Street that goes, "The market can stay irrational longer than you can stay solvent." Long Term Capital Management learned this lesson 10 years ago when it got its portfolio picked off by Wall Street as its short-term financing dried up. I had thought the opposite—hedge funds picking off Wall Street—would happen today. But in a weird twist, it's the government that is set up to win the prize.

    Read it all.

    The Fraud, The Fix, The Fool.