Sunday, June 28, 2020

News Services panic the Nation on the Kung Flu virus

Since more testing is being done on the Corona 19 virus, the number of cases are highlighted in each news report. You have to google “Deaths Today [pick a State]" to find out that the number dying per day; the number of deaths is decreasing. This is very misleading reporting. The news services will always report total deaths and point out that the number is increasing.

Reading the reports, 20 million people are estimated to have had the Corona 19 virus in the USA. States are re-closing down because of the increase in cases reported. The way the press is handling this, is that if you test positive, you are going to die. And that is a farce. The other thing that is grossly misunderstood is the fact that if we all social distance and wear masks, this virus is going to go away and next year we will be Okay. Wrong! We are only slowing it down. We gain “herd immunity” when 80 percent of the population has had the disease; that’s about 260 million people. Most people think that if they stay at home and hunker down this will all blow over after a while. The trouble is, the time concept of how long, is missing; 6 months? 12 months? 2 years? As far as the virus is concerned 20 million served, 240 million to go. A face mask or social distancing may save you today, but the virus wants you and will wait patiently.

The other thing not mentioned, is that the less virulent strains of the virus may pass through the population at a faster rate. If it kills you, it goes no further, so we would expect it to be less deadly over time.

So, stay at home and run out of money or go back to work? This virus is not killing very many people under the age of 60.

If you are a Democrat, “We have to stay home until it is safe.” And while you’re at it, riot and tear down a monument or two.

If you are a Republican, accept the risk and open up. This disease could kill 130,000 (mostly over the age of 65). Heart disease and cancer kill 4 times more a year.

And look at the positive side, if we kill off all of the old farts (like me), Social Security won’t go bankrupt.

From an economic point of view, this shut down could ruin the country. The government has has screwed over the retirement income for those 65 and older by reducing the interest rates to zero. Compound interest is no longer the 8th wonder of the world. So if you're ready to retire, you have two nemesis; an under performing nest egg and the virus. So, go get a seat belt for your rocking chair and tour the world from your living room. Maybe you'll get to babysit the grandkids over the weekend ;>). If you stop listening to the news, you might just enjoy retirement. Influenza kills 60,000 every year in this country and no one bats an eyelash, go figure.

Saturday, May 23, 2020

The Rest Home Problem

Retirement, Ahhh the land of fulfillment. Everyone is wondering why New York sent Corona virus patients back to rest homes.

Let’s figure it out. You retire and later on when you get really old you have a stroke or get Alzheimer’s; you have a problem. Nursing homes cost $50.000 to $140,000 a year for complete care. Now if you are married, the other spouse may be in good shape, not needing the services. Paying for the service could deplete you family’s retirement savings very fast. In most states you don’t have to sell the house to get Medicare benefits for your spouse.

Usually the first step is the rest home, and then it progresses to the nursing home. Most of these places have to make a profit. So, if you have run out of funds, they try to unload you onto a Medicare home. The wait times to get in are ridiculous. If at any time you come down with an emergency health issue; heart attack, stroke, influenza or Corona virus, the hospital will accept you for treatment.

Once their situation has been addressed by the hospital, they try to ship them back to the rest home they came from. If the person is indigent, the rest home doesn’t want them back. And in some states like New York, the governor made a point that the people had to go back to the rest home they came from, otherwise they became wards of the state. The real issue was who had to pay for the person’s expenses. Gov. Cuomo did not want to fund it. And by State government decree, he inadvertently killed about 4,000 rest home patients by returning recovering corona case patients back to their rest home.

The other problem here is one that escapes most people. 50 years ago, interest rates ranged between 6 to 13 percent. And most people who saved for retirement were getting about 8 percent on their savings and their nest egg doubled every 9 years. So, today, it isn’t surprising to see retired people with savings of one million dollars. The catch is, the money no longer returns 8% interest or 80K per year, maybe about 10K. This is where seniors are getting ripped off, very low artificial interest rates.

The real question that needs to be asked, did risk leave the market? Increased risk implies higher interest rates. 1 to 2 percent return on your savings has to be a joke. The market has no risk? Is this even possible?

If the government wanted to tax someone with money how can they do it? One, by taxing the total amount saved or by printing more dollars that makes the saved dollars’ worth less. By reducing the interest rates to 1% the government is taxing savers about 7% on their money in the bank. Notice how clean this is, you don’t have to ask anyone how much money they have in the bank, the saver just get less interest.

So, if you are a senior in retirement, you get hit twice, no real interest on your savings and inflation on your savings of about 8 to 12 percent a year. And of course, you’re too old to do anything about it. And if you did, your lawsuit would outlive you. You don’t buy green bananas when your 85.

We have a new group of people in the mix, the young adults. To them cigarettes have always been $8.00 a pack. They are not about to save any money; the miracle of compound interest is dead. They will go out and buy a home, and the government loves that, more taxes and the taxes increase with the homes “value.” The old people (like me) can warn them about cigarettes costing 25 cents a pack way back when-- and that has a name “inflation.” “But grandpa that was a long time ago, times have changed.”

So, we the seniors can see that there are no future incentives to save with these very low interest rates, and now we know why our plans for retirement no longer deliver the interest rates we anticipated 40 years ago. If we live to be 85, we have a very good chance to run out of our savings if we have to go into a rest home. The governments artificially set low interest rate is stealing from those who have saved money, the people who saved for retirement. Congress knows that they can’t tax people that are broke.

If all the banks want to pay is 1 percent, convert your holdings to gold silver and platinum. Nobody on the internet can steal your savings if it is in a deposit box. It is invisible nobody knows you have it. There is absolutely no reason to have a bank account for savings, the present inflation rate of 12 percent will eat you alive (mostly in the medical field). The Government is counting on everyone to contribute to an IRA or 401 K to save on income taxes. Forget that, cigarettes will be $140 a pack when the young retire. Congress cannot print gold and silver. People need to realize that there is no risk buying precious metals. There is a risk on holding on to savings long term, the return is not there.

Friday, May 01, 2020

The Corona Virus, the Terror Fear Creates

This Corona-19 virus is killing people, but not at the rate implied by the statistics. This article in USA Today April 24th shows that:
"Hospital administrators might well want to see COVID-19 attached to a discharge summary or a death certificate. Why? Because if it's a straightforward, garden-variety pneumonia that a person is admitted to the hospital for – if they're Medicare – typically, the diagnosis-related group lump sum payment would be $5,000. But if it's COVID-19 pneumonia, then it's $13,000, and if that COVID-19 pneumonia patient ends up on a ventilator, it goes up to $39,000."

If the deceased patient had no health insurance normally there would be no reimbursement to the hospital. But if they can attribute it to Corona virus, they get paid. Notice you get more for Corona than Influenza. As a hospital administrator you can increase your bottom line by selecting how the person died.

New York and New Jersey are way out of specs on confirmed cases. Most states have a death rate of about 42 per million of population. New York claims 1,200 deaths per million and New Jersey claims 744 per million people at this time due to Corona Virus. 89 percent of all Corona-19 deaths are over the age of 65. We knew in December of last year that New York City had a storage problem at the morgues, they had run out of space. So, the additional refrigeration units needed for bodies was no surprise. Notice any exaggeration of the number of deaths due to the virus, tends to add to the panic and the need for public officials to do more now. And this is an election year, God help us! Here is a link to the mischief being done: NYC Funeral Homes

We have contained the virus outbreak to where it did not overwhelm the health care system. The people dying were the elderly especially in rest homes. These people were the prime consumers of health care. But now we have inadvertently shut down the regular health care system for heart attacks, strokes, cancer surgery, chemo therapy, and blood testing. People are scared to death to see a doctor especially if retired. Now we have people dying from causes other than corona virus. And the funny thing, the doctors and nurses that support these operations are being laid off.

We have a problem for the world. No work, no food. Translated: no money and you starve to death. This could kill billions. And the bad thing about starving people is, they are the Petri dish for new diseases.

Where to from here? Let’s assume that the virus has done its damage and has moved on. We need to get back to work. We could lose more elderly people to the virus, but they are the ones that we need to be more protective with. Otherwise the cure is worse than the disease. BTW I’m 73.

As a post script.

My grandmother was put in a rest home when she was 90. At the age of 96 the rest home called me and said she was dying. I went to her bedside and called emergency and they informed me that if it wasn’t a heart attack, stroke or something that they could treat, they would not be able to help her and she would not be admitted to the hospital for care. I took her off all 30 of her medications. She recovered and lived another 3 years. At that rest home, there were many people in very bad shape that had no idea of who they were or why they were there.

People do not realize that rest homes charge from $50,000 to $90,000 a year for taking care of a loved one. Usually the person makes it to the home when they can no longer take care of themselves because of dementia, lack of mobility from physical problems, or whatever. They need around the clock care. Just tripping on a rug and falling to the ground can break a hip or an arm.

On my grandmother’s 99th birthday I went to visit her at the rest home and commented with a smile, that in one more year, she would be 100. This woman, had all of her wits about her, she looked straight at me and said tersely “How would you like to be a 19 year old woman trapped in a 100 year old body.” I didn’t have an answer.

Monday, March 16, 2020

The Corona Virus Media Hype

I guess the first symptoms of the Corona Virus are the urge to buy toilet paper, drinking water and hand sanitizer.

Several pieces of information are not forthcoming, but can be gotten if you know where to look. Is there an increase in hospital bed occupancy? If you are going to be tested for the virus, can the test detect that you all ready had it and are no longer infected or does it just test if the virus nailed you. The big difference here is a guilt trip on a positive test after you have had it and want to return to work. Can you return to work? Imagine getting a phone call saying you are infected. What is the health worker going to tell you? “If you hurry home you might have enough time to say goodbye to the wife.”

With any disease, there is a term called “herd immunity” With measles the herd immunity rate for immunization has to be 90 to 95%; at that point it doesn’t spread. That means you either had the disease or got a shot for it. The herd immunity rate for Corona could be a lot lower, we do not know the communicability rate on it yet. It could be low and not high like measles. Any way you look at it, herd immunity is at zero. So, until there is a vaccine, we are at the mercy of the virus.

I believe that the first indications of problem in China was the increase in hospital beds occupied. That would have alerted the government to the problem. From there, we have been accusing China of covering up the problem. I don’t think that they knew what hit them. It probably took them 8 weeks to figure out what was happening. It appears to have started in the city of Wuhan China in November of 2019. The city has a population of 11 million. I don’t think that test kits for the virus were available in any form at that time. What we can probably deduce is that they now have some measuring system to evaluate the virus.

We don’t know how virulent the virus is. Without knowing the TOTAL number of people infected, we have no idea how deadly it is. So far, we know the number dead. We don’t know the total number infected. Testing will give us that number, but you have to realize, that testing does not cure the disease. It just tells everyone else that this person has\had the disease. From a personal point of view, that isn’t a good thing for the person who tested positive. Right now, there are people that tested positive and are still quarantined because they still test positive after 38 days.

Most people for the next 3 weeks, are avoiding all contact with sports, rallies etc. The virus will wait, and attack again. Admittedly it will lessen the numbers hitting the ER—we have lengthened the time for the virus to act.

The question does arise, are we running amok with fear without reason? Influenza kills 20,000 people in the US every year and we do not have even 80 deaths for Corona Virus in the US this year. As mentioned in my last article, we have 7,700 people dying in this country every day normally. Just like we have 9,000 births a day. 80 people over how many days have died from corona virus?

We have a problem here, but it is not from the virus, it is from the perspective of what people consider normal. They are panicking needlessly. This virus is attacking the elderly. The vector that spreads it is the young. We need to isolate the old from the general population.

I am in the at risk group most likely to die from it. I can see how the vector (infected person) could infect me. It distresses me but the overall panic is very disturbing. The stores are running out of drinking water and toilet paper for no real reason. I can only come to one conclusion; the media has turned the majority of people in this country into mindless idiots. The perceived threat is, that some horrendous disease that is going to kill everyone. The Boogeyman that was under my bed as a child was very real to me. This group fear complex is getting out of hand. People will die, but it is not every 10th person in line. 320 million people in this country and they figure it might contribute 30,000 deaths in a year. Remember 7,700 people in the US die every DAY.

This panic will end, after the news media finds something better to hype.

Monday, March 09, 2020

Corona Virus, Panic the World With Insignificance

Here is a little something from a CDC report from 2018. Link:

Let’s go a bit further, divided the total deaths in 2017 (2,813,503) by 365 and we get 7,708 people die a day in this country. And here we are, the US and the world is in a panic over the Crona Virus. The newscasters claim it will kill 18,000 people in the US this year. That's an extra 50 people per day.

40,000 die in auto accidents and 60,000 die in drug overdoses in this country every year. I had no idea that 7,700 people died every day in this country.

Let me see, 8 deaths, on a cruise ship from Corona Virus. And they quarantined 3,500 people. Consider the age of the passengers, I would expect a death now and then.

The news services are a joke; trying to panic the populace before an election. Real perspectives here have been grossly distorted. Chicken Little is alive and well.

Tuesday, February 25, 2020

Money and interest a pipe dream

Once upon a time:---- It used to be that people saved money because they were rewarded with interest. You surrendered your right to immediate gratification for the same right in the future for a fee, called interest. The person that borrowed the money, was charged interest and that rate was determined by the risk that the borrower might not be able to pay the loan back.

The interest that banks pay has dropped to about 1%, while their loans are being offered at 3.2% interest. Right now, the banks of the world are discussing negative interest rates on savings. Have they gone mad? This is an exercise in absurdity. At this point, free money loans will be free until the banks run out of money to loan.
Interest rates are a function of risk. It appears that there is no market risk. Or there is an unlimited amount of money to loan. And of course, everyone will pay back their loans. This is what an opium smoker would call a pipe dream.

"Once upon a time" was a place in time where things were real. We need to realize that today, things are not real, something is severely wrong. There is no penalty for failure. Go Figure.

Wednesday, December 25, 2019

The Coming New Year Boom Economy

Our economy is now taking off. Here is the logic. Remember back to WWII, the rest of the world was destroyed and the US supplied the product that everyone needed. Filling the orders from the rest of the world in 1946, created full employment for the U.S.

This time around, we have told the rest of the world to take a hike, we don’t need them to produce our products. We will produce it ourselves. This demand for product previously produced overseas is stimulating our economy while putting the skids on everyone else’s economy.

It was cheaper to produce products in the third world, but the middlemen costs were beginning to take too big of a slice of the pie. The evaded tax consequences of offshore production were a big loss for our government.

In the past, the American manufacturer went to China and made shirts for a dollar apiece. He then sold them to a wholesaler, who happened to be his wife. The wife sells them to an importer at $15 apiece and the shirts hit the shelves at $35. The only American making money is the “Manufacturer.” $14 a shirt tax free. It is still going to cost about $12 a shirt to make them in the US. Most of it going to labor and production costs. In this case the return for the manufacturer (one person) is a lot less, but the benefits of onshore production stimulate our economy and create jobs.

Notice that this production out of country was considered “Globalism.” It literally wiped out industry in the United States. We could not compete on a labor or regulation basis. Their quality was good as was the price. Right now, heavy industry is returning. We still have a long way to go, much of the consumer goods manufacturing is still offshore.

So, for the coming new year what do we have? Some things will do better, I see unemployment down for the year. Manufacturing should go up. I can’t do much for predicting the stock market, I was never any good at reading chicken entrails. At McDonalds, you may have to push the start button to get your Big Mac. (I wish they would go back to their old coffee instead of trying to copy Starbucks. And while we are at it, give us the old French fries with animal fat—they were so delicious).

I think there will be some blowback on environmentalists. The low flush toilet has to go, as well as the restricted flow shower head. The government needs to get out of our lives. If they want to tell someone what to do, let it be the homeless. Taxpayers have a right to expect better government services than the deadbeats who pay no taxes.

I can stop stockpiling the old incandescent light bulbs, Government regulations have been dropped, so companies can keep making them now. I used one of the new ones over the kitchen table and the food looked absolutely horrible. I think we can expect many more government regulations to fall by the wayside.

Here's hoping everyone had a Merry Christmas (ie the kids got what they wanted for Christmas). Here's hoping that everyone reading has a Happy New Year.

Saturday, December 21, 2019

Precious metal "The Buy of the Century"

If we go back in history, we see gold and silver as the universal medium of exchange. Usually it was in a ratio of 15 to 1: silver to gold. Put another way, a day’s wages were an ounce of silver, a week’s wage was an ounce of gold. Not sure it has kept up to its historic norm.

The big thing to remember is that the medium of exchange got spent. Gold or silver, it was gone by the end of the month; laborers were waiting for the new payday. Some savings was occurring. But it wasn’t something that would have made the precious metals more valuable, and make them worth more. The system had no inflation. A silver dollar was a dollar.

In today’s world, gold and silver float in a commodity’s market. The currency systems of the world are all about paper currency; no gold is necessary. Inflation is a function of printing more currency instead of taxing the people.

Is our currency as good as gold? The answer is no. Inflation (a disease of paper money) will eat the perceived value of the dollar alive. The price of gold and silver over time will reflect the inflationary effect of government spending and printing of currency.

The big thing about buying gold and silver now is that it costs very little to retain ownership over time. it used to be that you got 8% interest on your savings. Now you only get .05%. There isn’t much reason to put your money in the bank anymore. Buy gold, it doesn’t comprehend inflation.

Inflation is a tax on old people, not the young. Retirees have saved a lifetime and many can no longer work. They are stuck with what they have saved over the years. The extremely low interest rates on savings have literally ruined retirement plans for many of the elderly. An 18-year-old buying a pack of cigarettes for $8.00 today, has no idea that they costed 25 cents a pack 40 years ago. Mix the mindset of the young person with that of the retiree. It takes a lifetime to realize that you have been ripped off silently.

The real problem right now is not the scarcity of gold silver or platinum. The problem is the perceived value of the government currency. If too much currency is printed, the buying power of one million dollars may in the near future, only buy one hundred thousand dollars’ worth of goods.

What we are looking at here is an option that most have overlooked. There is no investment loss on buying precious metals. The banks cannot even match the yearly inflation rate loss of 7 percent; they’re paying .75 percent interest. So, I am suggesting that people 20 years away from retirement, put their savings in gold and silver. The Hell with an IRA. Congress created the IRA so they could borrow more money; not enough people were saving the dollars that Congress desperately needed to borrow, to fund government spending.

You are not buying gold as an investment; you are buying precious metals as a backup for a government induced inflation. It cost you nothing at the present bank interest rates. In fact, the whole retirement IRA scheme falls apart at these low bank interest rates. There is no incentive to save dollars today for consumption 20 years in the future.

Reflect back, with an interest rate of 7 percent, your nest egg will double in 10 years. With and interest rate of .75% your money will double in in 95 years.

Imagine if a politician told retirees that they are taxing everyone’s savings at 7% a year and keeping the interest rates extremely low, they would be voted out of office. The funny thing is that the retirees can’t do much about it. Inflation and interest rates are not parts of a party platform for reelection. Inflation is a little like sex, as you get older—you get too much of one and too little of the other.

The thing to realize here, is that all of your savings in a 401K or in the bank are an entry on a ledger. If through no fault of your own if the currency becomes worthless, precious metals in your possession have a basis of worth. You have to ask one question. Can this deficit spending go on forever? Or is there a limit? So far the answer is that it can go on forever. Common sense suggests that limits imply responsibility. There is no responsibility, so hold on to your hat.

Thursday, November 28, 2019

A Common Sense View of Congress

Once a Congressman gets elected to Congress, they begin to worry about getting reelected. In today’s world, it takes about 6 million to run an election campaign. So, who do they listen to when in office? Answer: The special interest groups and lobbyist’s in Washington. Most of these groups want to increase their profits and or power over the populace.

Pharmaceutical lobbyist’s want to increase the profit margins of the companies they represent. The school teachers lobby wants to keep their union strong. No Congressman has any real incentive in lowering prescription prices or getting rid of teachers who can’t teach.

We have Congressmen that will promise the world to the voter, without the will to follow through on their promises, (it doesn’t get them cash for reelection). They will bring up items to vote for that have to do with protecting women and children or protect minority rights. There won’t be anything in there for the average voter to benefit from, like lower drug prices or lower taxes.

So, if a bill comes up to lower drug prices and that Congressman just got 50K from the drug lobby, he votes “yes” after he adds a rider on the bill to give free health care to non-citizens. Net effect, the bill goes down to defeat and he looks good.

The basic realism about Congress, is that if they do nothing, they have a very good chance of getting reelected. Do something, like irritate the wrong person, and you will be out of office. They try to pass bills that help the poor, women and children, car safety, oppressed groups etc. Any legislation like a tax break, sunsets in 5 years, so they have to vote on it again; looks good but that tax cut has probably been passed again and again over a span of 50 years.

So, when it is election time, the politician promises the voter the world, higher minimum wage, health care, free college. It doesn’t matter what it is, the man running for election knows it has no chance of becoming law. Why? There isn’t a lobbyist that represents the voter. There is no money put in their pocket for reelection by representing what the American voter really wants. The one thing that hides this concept is the unwillingness of the Democrats and Republicans to get together and pass the necessary bills by any more than a simple majority in one house and have it die in the other.

The special interest groups don’t have to bribe half of either party to get a bill passed. Bribing or giving “a campaign contribution” to only 10% will get the job done.

This is why President Trump doesn’t fit in. He doesn’t need the money, he earned his billions before he ran for President; the special interest groups can go fish. And of course, the special interest groups aren’t going to drop any dollars on a Congress that can’t perform as desired. The coffers of many a Congressmen are very lean from the lack of contributions. Blame it all on Trump, he isn’t going to sign anything into law that increases big businesses’ cut on the average citizen.

It is not business as usual; the special interest groups, the unions the lobbyists and entrenched bureaucrats want their power back. These groups want a President who will listen to them. They know what is right for America. “Make America great won’t get them reelected;” but a large election kitty just might. The problems they want to solve are the ones they create, not the ones they overlook.

So, as the holidays lumber along, remember that in the past, it didn’t matter who you voted for; the Republicans and Democrats never got much done in Congress. It used to be that Thanksgiving and Christmas dinner was all about football and the kids, now it’s a political argument. Admittingly the directions of the two parties are different, but for the first time in many years, one party is doing what they promised to do. And it’s not as impossible as it was perceived to be, before the election.

Remember your Congressman’s first priority is to raise money to get reelected. And you as an individual don’t have the coin to help him get that done. So, President Trump could be your next best chance to get something done.

This Blog in the past has been politically neutral on politics. But after seeing how the media is after Trump and his actions defy every doom prediction, I stand by the guy. The people in the media think that they speak for the whole country, and I disagree, they don't.

Happy Thanksgiving to all, enjoy the moment

Saturday, November 09, 2019

Government Retirement Theft in Progress

Let’s see, If I retire tomorrow, I can live off of the interest on my savings. What is wrong with that assumption? 40 years ago, the interest rates were 7 to 10 percent. And if you wanted to take some risk, you could get 18% on triple D bonds.

Remember the rule of 72 for interest rates? Divide the interest rate into 72 and that gives you the number of years it takes for your principle to double.

Take a retiree with one million in the bank right now. At 2% interest they are getting 20,000 a year in interest to live on. At 6% interest they would have 60,000 to live on. I can remember when I was starting my 401K, 8% or 80k was enough to do almost anything.

One could ask the question of why interest rates haven’t gone up; the government has been printing dollars like crazy. And there should be inflation. The only inflation I see is in health care costs, government services and property taxes.

Examine retirement plans like CalPERS that are claiming 6.7% returns on investments. They haven’t been getting that sort of return since the year 2000. The return for the last 15 years has been less than 4% if you average it out. The factor here is the rule of 72. Retirement plans pay through the nose if their rate assumptions are wrong long term. In this case, the state of California has to make up the shortfall. The trouble is, politicians can overlook the problem and pass it on to the next elected administration. Even 4%, doubles your principle every 18 years. A declared interest rate of 6.7 implies a doubling every 10 years. There is a problem here, that no one is pointing out. Of course if you are running for office in California, the problem is more than 4 years out, so there is nothing to worry about. keep quite and enjoy your term in office.

So, with 22 Trillion in national debt, what is the interest on that? At 4% it is 880,000,000,000. At 8% it is 1.7 trillion. Do you get the feeling that we as a country, can't do much more than pay the interest on the national debt? It kind of suggests that we will never pay the debt off. Which is a very interesting concept. Borrow until you can no longer afford to pay the interest demanded.

The problem here is that there is a mental separation between debt of government and obligations of citizens toward that debt. The government owes the debt, let the government pay it. Sounds logical for all the wrong reasons.

In a gold-based economy, most people hold very little gold. It is all spent paycheck to paycheck, no different than it is today. But savings are a different issue. In a gold economy, there is accountability for savings in the system. The irritating thing is that gold earns no interest. Investments currently make returns, but the returns are extremely low. The 1.5 percent interest return from the bank, won’t cover inflation, whereas a precious metals investment, probably will long term.

Many people may decide to put more of their savings into a non-productive investment like gold, as an insurance policy. Our current valid inflation rate is somewhere between 7 and 12 percent. This reflects the inflation created by our government spending. The reduced interest rate payed by the banks of 1.5 percent minus the inflation factor of say 10 percent reflects the taxes paid surreptitiously of those retired people with savings. A retiree with one million in the bank at 1.5 percent interest, is being taxed at (10-1.5) 8.5 percent, about 85 thousand dollars a year.

The tax is invisible. The interest rates are artificially low. The retirees do not understand the concept of interest manipulation by the Treasury Department. They are being robbed blind by government financial policy. Basically, there is so many printed dollars in circulation and very little demand for loans in relation to the size of dollars available. The Key thing, everyone is saving like mad to have a great retirement. This keeps inflation low, because it is not being spent.

At some point there will be a problem. Why save if there is no incentive? I think we are at that point and don’t realize it. Credit cards offer money back on purchases, and it is more than current bank interest rates. Something is upside down here. The logic is backwards. The real losers in all of this are the retirees. That is where most of the saved money is.

So the next time you hear that the price of gas went up or prescription drugs cost more. Think about it for one minute. The same gasoline sold for 25 cents a gallon 50 years ago. People will claim "That's just inflation." But as you move into retirement, the real world of government financing eats at your savings with lousy interest rate returns on your savings. And then there are the general yearly inflation price increases.

So what can we glean from all of this? If you are at retirement age, it might not be the retirement you expected. Growing old is not something that happens to government, it happens to people. The unfortunate thing is that health care problems are what pop up at retirement age.

The real problem is the government. The retiree is confused, trying to comprehend why the money he saved for retirement was not enough to satisfy his retirement dreams. And sadly it wasn't even his fault.