The car companies need twenty to thirty billion to stay in business till April of 2009. Kalifornia needs 30 billion to meet payroll up to July 2009 and they don’t have it (of course its only 18 billion right now—just wait a month or two). Sadly the only place to cut is in public services; fire, police, social programs and education. Government can raise taxes, but it does not increase incoming revenues, it does the exact opposite (the legislature will figure that out given enough time). The thing that irritates me is that some of us bloggers saw this coming and we were laughed at. Now when the reality of the situation is quite apparent, these same people have a solution that will work? Who are we fooling here?
It seems rather obvious that the government can’t spend us back into prosperity. The real problems of the 1930’s depression revolved around the failure of government to provide adequate services. The State and Local governments literally stopped functioning because of a lack of funds. The federal government should abandon this vendetta to save the banks and concentrate and focus on keeping local and state governments functioning on a realistic level.
It’s a little like old age, you can’t stop it, but if you can understand it, you can live accordingly. We can’t print our way out of this, there will be nothing left to buy unless we produce product for consumption. Printing money does not plant crops or build automobiles. But if you are a Congressman, you can save the world and redeem Democracy. The only trouble is we need real money to do it with. Of course if you subscribe to the Madoff philosophy, Congress can dazzle the world with little or nothing in the bank, and ruin millions that had millions.
Copyright 2008 All rights reserved
13 comments:
Jim
I had conversation with real estate developer here in Nova Scotia last weekend. He told me that their financing has dried up. He can still access funding but it is at around 20% interest rate. I guess all the huffing and puffing the government has done to lower rates to stimulate the ecomony have not filtered down to him. Looks to me like the credit crunch is starting to bite here in Great White North.
Merry Christmas, As I said before enjoy reading your blog.
Cheers
Rob
"The thing that irritates me is that some of us bloggers saw this coming and we were laughed at."
since you saw this coming, you must have made tons of money, right? if not, maybe that's why people laughed.
the guys who knew it all but for some reason, they didn't make any mony and are now in the same boat as all the others that didn't see it coming.
good luck to all and merry christmas.
Hi Rob
Glad you like the blog. That interest rate makes sense if real money is scarce. I expected to see that here, but with the new government spending programs, it's hard to figure out what they are using for brains. It's kind of like having a bed wetting contest at a slumber party. The real winner is the person who chooses not to participate.
Have a Merry Christmas--the snow up your way gives it more feeling.
Finally, I have heard the most truthful and brillant statement ever in the blogs, either bears and bulls:
"Printing money does not plant crops or build automobiles."
I just hope we don't become a third world nation that can't get any outsourced work (i.e., call centers, etc.) from industrialized countries.
Hi Anon 2:02
My point was: The people that got us into this mess are the same ones that everyone expects to get us out of this mess. These were the people who were laughing.
At the present rate, we will all be earning tons of money if this circus act gets on a roll.
Thank you for your comments and have a Merry Christmas
"It's kind of like having a bed wetting contest at a slumber party. The real winner is the person who chooses not to participate"
Just when you think the Fed is out of bullets & Jim must be running low on witty analogies....Wham. Very clever & funny.
Merry Christmas Jim
Hi Dan Mac
Glad you liked it. Thank you for the complement.
Here's wishing you and your family a Merry Christmas.
Hi Anon 2:46
I really didn't think much would come of this post, glad you liked it.
I sure hope that Congress as a group, can figure out that printing money doesn't cut it. Its so simple that even a caveman can understand it. Here's hoping they catch on soon. Otherwise Geico might start using Congressmen in their insurance commercials.
Merry Christmas
Love your blog. Witty and Intelligent.
Merry Christmas and Happy Holidays.
Just a quick comment to Anon
You don't bet the house when the cards are stacked against you. My primary financial ethos the past couple of years is to reduce debt (mortgage car payments) and have no consumer debt. It is a little boring but at least I won't be peeing the bed at night.
Rob from Great White North
Hi Shankar
You are too kind, thank you.
Merry Christmas and lets hope the best of health for everyone in the New Year
since you saw this coming, you must have made tons of money, right?
Well, I made money. Not tons of it, but while everyone else was piling on debt in real estate, I was reducing my debts in real estate. Sold 2/3 of my investment portfolio...
No, I didn't make tons of money. The only people who make tons of money are people who start with a ton of money or get extremely lucky (or steal it). It shouldn't be about getting rich kwik, it should be about sustainable growth over time. When my energy stocks grew by about 80% in one year, it seemed rather unhealthy to me. I thanked my lucky stars and sold after a 10% drop from their highs. I bought the energy stocks for sustainable growth, when it looked like the prices had gone crazy, I got out.
The crazy thing about investing is that people should be looking mostly for long-term sustainable growth but there is one large segment of society who has little concern for long-term growth: public servants. The servants who are elected mostly serve terms of 2 or 4 years and have little concern beyond that time horizon. Even government employees with over-generous pension benefits after 20 years of service aren't looking long-term enough. Listening to public servants is usually a mistake, especially when it comes to money.
Jim, I read all postings today and all I can say it is brilliant what you write, could not agree more.
makes me wonder even more what misinformation and delusions we are being served up daily in most media. do decision makers actually know what we are in for ? I believe yes, but I suspect to say as much is suicidal for them, so muddle on.
keep up the good work,
kind regards, WH (professa)
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