Sunday, February 22, 2009

The Next Tea Party



A lot of people think our present financial crisis can be blamed on one political party or the other. The Republicans did this, the Democrats did that, and from there you have a raging argument. Once you accept this premise, you vote accordingly, its payback time. Anybody with a political ax to grind has plenty of fodder and a good share of devoted listeners. Kind of a real waste of time.

If we jump back to a President that was qualified to lead in recent history, I would pick Eisenhower. The guy ran a world war machine that defeated the Germans. He knew what sort of logistical costs were involved in moving thousands of men to a foreign land. His concept of getting something done, had to have answers on how to keep these men supplied, logistics is the name of the game in any successful war plan. His decisions were weighed in men’s lives not political BS.

With the present financial mess, I think Ike would have come to the conclusion, we cannot successfully support the banks, it’s logistically impossible. They have to fail and be taken over. Too big to fail means that they should have never been given the chance to get that big. Pay now, or pay later.

We need to fix the present mess and doing nothing is a viable solution. Rick Santelli’s comments from CNBC put it out for everyone to see. Why do we have to pick up the bill for these losers? The rebuttal from the White House Press Secretary was in the clouds. He would have had more credibility announcing that his kids had just won a Posturepedic bed wetting contest. This press secretary needs to take some public speaking lessons, “um” is not something you slip in every third word. The guy reminded me more of a rest room attendant handing out towels; not sure of why he's there or what he's suppose to be doing.

The financial commentators on CNBC are not dummies, they have interview hundreds of people and in their own right, have good financial acumen. Mark Haines has been grilling some of these financial pundits and exposing their narrow comprehension of the situation. It's fun to watch.

I think that we are seeing a consolidation of what the financial commentators consider a solution. The crap has to be marked to market. The banks need to fail for that to happen. If the process is speeded up, it is the foreigners that have the most to lose; they are the ones currently pulling out their money with no loss.

Doing nothing is a solution. What do we have to lose? The country is broke as it is. The bail out money has to be printed and we all know that. Rick Santelli called for a "Chicago Tea Party." Here's a Link to it. Congress needs to wake up and read the tea leaves!

54 comments:

Anonymous said...

I only drink herbal tea. Hope that it is chamomile/peppermint this time.

I agree. Do nothing... let the banks fail. Take them over and then merge or consolidate them with good strong banks that have demonstrated their aptitude and smart business sense.

But also do something... mark debt to market and let it take its toll. Also reduce the size of government, cut government employees in half, and cut income taxes (but 2009 and 2010 should be an income tax holiday before we go into lower income tax rates in 2011 and beyond). Let the government borrow or print to support themselves for a few years so that the economy can get going again. That would be better than using it to bail out banksters. Then in a few years the government will again be receiving high tax revenues.

AIM

Jim in San Marcos said...

Hi AIM

I agree, but unfortunately it's too simple of a solution. It won't bring in any votes or campaign dollars when our Representatives run for re election.

Anonymous said...

Teaparty. I'm in.
Catholic girl.

Sackerson said...

Hi, Jim. You're right, but that isn't enough, is it? What do you think actually will happen, and how should we take advantage of it?

Jim in San Marcos said...

Hi Sack

Common sense suggests that once all this junk is marked to market, there would be a severe shortage of actual cash. I would expect interest rates to jump up to about 10% to 15% for a month or two. That would trash the long term bond market. The net result could be countries repudiating their debts (which is a sovereign's way of filing bankruptcy)

The real worry here is the possibility of a domino effect on the banks of the world.

dearieme said...

"The guy ran a world war machine that defeated the Germans and the Japanese." No; Ike was a fine fellow, but it was just the Germans who fell to him.

Jim in San Marcos said...

Hi Dearieme

Old age is creeping up on me. I'll sneak back in and edit that. Thank you for pointing it out.

Anonymous said...

Letting the system collapse on its own dead weight is not an option, though very tempting to the purists. Our collapse could mean a collapse of Western civilization. It could plunge the world into the Dark Ages as states splinter and war erupts like mushrooms. We are the king, and we must not give the impression we have lost control, even if we have incurred perhaps a mortal wound.

That is why this crisis will be dragged out-- must be dragged out-- until either we die or we heal.

It's never fun to live through an empire's decline. You feel impotent at the age of twenty five.

Lastly, a lot of people on here worry, very legitimately, about the future supply of food. One family in Pasadena, California, is able to grow six thousand pounds (6000lbs) of food on just one tenth (1/10th) of an acre. Amazing, huh? Perhaps we won't need to move to the boonies after all.

http://urbanhomestead.org/journal/2008/04/19/ny-times-the-green-issue

AngryTaxPayer said...

Not long after the Tea Party, Common Sense... a pamphlet written by Thomas Paine was published in 1776 during the American Revolution. Here is a quote...

"Society is produced by our wants, and government by wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher. Society in every state is a blessing, but government even in its best state is but a necessary evil."

My have things changed since the Revolution. Is there any common sense left in America? For a society over 230 years ago that "encourages intercourse" as a form of happiness, I don't believe they were implying that we should bent over by the government! Sex of this nature is what the Tea Party was all about.

ATP

Rob in NS said...

I'm not sure if this TeaParty is spark that will set off the revolt. We'll see. I'm guessing that powers that be are quaking in their boots right now wondering where the blowback is going to come from. When and where it happens is likely going to be a surprise to everyone.

It should be a interesting year, maybe something I can't tell my grandchildren about in twenty years or so.

rob

Anonymous said...

Time for a 3rd party.

1. Eliminate or severely reduce income taxes. Replace with a consumption tax.

2. Recodify workplace rules and regulations. Limit the amount Unions can charge their members for their "services".

3. Open health care to all. No one who wants health insurance can be denied, except smokers, drinkers, and those engaged in high risk activities. Workers must pay for their own policy and for their family.

4. Seed money for production/manufacturing start ups. Like Small Business Admin loans, but with caps on Executive Pay and Mandatory Employee Ownership.

5. Reduce oil consumption by 50%. Emphasize green and renewable forms of energy.

6. Curtail medical malpractice and liability law suits. Reform tort laws. Not with caps, but all judgments can be paid in annual installments of no more than 4 times the yearly minimum wage over the lifetime of the recipient plus 5 years.

7. Term limits on Senators and Congressmen. First increase Congress to every 4 years instead of 2. Then limit all to 3 terms each, then a mandatory break before running again. No more lifers in any seat of Congress.

8. No more lifers in the Supreme Court either. 20 year terms with another 4 years at the option of the justice.

9. No more overseas military bases unless the host country pays for ever single dollar of the cost.

Just a few ideas that will never happen.

Anonymous said...

Glad that network channels are putting clips like Santelli's on the air. It will expedite the masses into experiencing the realization that Obama is just a puppet of the international bankers and that he will turbo charge the crash velocity of this country.

They are trying to prop up the prices of homes... prices that were created by the bubble. He is trying to resurrect and continue the bubble! The prices need to come back down to true affordability.

What a moral hazard to save losers who bought too much house or lied on their loan apps, or lost their jobs and didn't have the foresight to save and build reserves up for a possible economic winter or job loss; or the foresight to start their own business on the side or develop new skills that are marketable (besides zero integrity, this is a result of Americans having no financial education).

What a moral hazard to reward the Wall St. recalcitrant miscreants who created all of these toxic packages and sold them all over the world.

Look at what Soros and Volker just said...

George Soros: Financial system has disintegrated. Crisis more severe than Great Depression. Decline comparable to fall of Soviet Union.

Volcker: Cannot remember any time, even in the Great Depression, when things went down so fast and quite so uniformly around the world.

At Columbia University last Friday, legendary hedge fund manager George Soros shocked his audience, proclaiming ...

”We witnessed the collapse of the financial system. It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom.“

Soros went on to say that ...

The crisis is actually more severe than the Great Depression ...

It’s like watching the demise of the Soviet Union, and ...

There is no prospect of a recovery any time soon.
Former Fed chief Paul Volcker — President Obama’s top economic advisor — laid his cards on the table as well — declaring that the U.S. economy may be deteriorating even faster and more broadly around the globe than it did during the Great Depression.

We've still got bank failures, more foreclosures of all mortgage types, more bankruptcies, default on credit cards, auto and student loans and then the BIGGIE is coming... credit default swaps (derivatives in the tens of trillions).

The tide is going out fast, I can see the tsunami in the distance.

Soon, I'm gonna be swimming with the fishes unless I come up with and enact a strategy to protect my family and I... FAST!

AIM

Anonymous said...

And also...

Short of a cushy, totally secure government job with an excellent pension and healthcare plan. I only see the following for survival:

These are my two definitions for GOLD:

A.
A successful business that you own which is a system and run by a loyal and competent employee. It is not a job for you personally, other than 1) oversight; 2) business strategies; and 3) creation of marketing, expansion or correction programs to be implemented by your employees.

B.
Income properties that you own free and clear that give great cash flow, tax advantages, and appreciation and have excellent property management.

AIM

Rob in NS said...

Jim

Well Dow is down 200 or so today. Jim where do you see bottom in this market? All my family had me labelled as a doomer when I called the bottom at 7500. Today it's hovering around 7200. I'm not an economist but there is nothing I see to support a rally right now. I can't discuss this with anyone I know as they all have their heads stuck in the sand. I guess that is why I like this site. It's nice to be able to go somewhere for frank debate on economy.

Maybe this teaparty might be a good start to get things back on track.

rob

Anonymous said...

This is the best article I have read in years..

http://www.globalresearch.ca/index.php?context=va&aid=12418

Debt peonage...

Think about it.

Jim in San Marcos said...

Hi Rob

If I was to call a bottom, it would be Dow 2000. I don't really think that it will ever get that low, but from there it can"t go much lower.

The government intervention in the market is the big unknown. The question is will they screw it up for all of us, I think the answer is yes.

Anonymous said...

Hi JISM;

Looks like BofA and Citi are going to be taken over with some sort of a "nationalization" action within the next few months.

My wife and I have our personal and business accounts with BofA. We just keep enough in the accounts to pay our living expenses and basic operating expenses for our businesses. (Our big cash is in a safe FDIC insured money market account in a top rated bank.)

I pulled out of our local bank (Guaranty Bank) about 2 months ago because it had a low rating and I felt it was just a matter of time before it failed. I was afraid of our accounts being frozen or other inconveniences so I transferred over to BofA. Now I'm thinking that I'd better pull out of BofA. What a hassle!

But I realized that with FDIC, etc. no matter what happens with BofA, the worst that could happen is the bank being closed for a few days or a week for whatever restructuring or receivership actions are necessary and then it'd be up and running again. We'd be able to access our checking accounts, still able to use the same check books, etc.

So I'm gonna just stick with BofA. As a precaution I pulled some cash out to keep at home. Enough to pay our basic bills for a few months, just in case BofA freezes up.

Do you think I'm being negligent or do you think I'm approaching this prudently?

Rob in NS said...

Jim

Geeze 2000 well I won't tell anyone they would likely have me committed. It's sad the ignorance out here in the real world. I had discussion with co-worker yesterday about this. He told me that by keeping an eye on market and spreading the bad news I am making it worse. I'm still trying to get my head around that one. The MSM have done a good job keeping the heaving masses in the dark. I am noticing now that fear is starting to creep into conversations I have with people who only a couple of months ago had a "don't worry be happy" mentality. When this indifference switches to widespread fear then I think something along the lines of this teaparty will take place. Things are moving fast, it should get interesting.

rob

Anonymous said...

"Government is not reason, it is not eloquence, it is force; like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action." -- George Washington

posted by

AACC

Jim in San Marcos said...

Hi Anon 9:08

There isn't a real problem with the banks, it's the government you might have a problem with. In the 1930's they restricted the amount of cash you could withdrawn in a week.

I can't see anything wrong with your setup, it looks good. I might suggest that you keep the cash in a bank safety deposit box. They can't stop you from accessing that.

Jim in San Marcos said...

Hi Rob

I know, 2k sound too low, usually the pendulum swings too far in a correction, but from what I read about the stock market in 1932, no body wanted to play in it. Everyone was broke.

We have front row seats, I'm just not relaxed enough to enjoy whatever we are watching.

Anonymous said...

"We have front row seats, I'm just not relaxed enough to enjoy whatever we are watching."

Glad you have front row seats Jim. I hope you have seasonal tickets, and that you've got plenty of popcorn and nachos and drinks (and a warm blanket). Might as well figure out how to relax.

It is going to be a long long... very long game.

AIM

Jim in San Marcos said...

Hi Anon 2:31

Thank you for the link.

Jim in San Marcos said...

Hi AIM

I agree there is more to come.

You definition of gold eludes me. Your examples could be wiped out by just one riot in LA or an earthquake and resulting fire.

There is even a chance that we might not have the same government in 3 years. Your whole premise is on the assumption of no rule changes. My argument is that gold is gold no matter who makes the rules.

With gold coin, you can take your toys and move, in your example you cannot. Gold is an insurance policy against the unknown.

AngryTaxPayer said...

Jim,

Its not getting much media attention, but what do you make of several states, i.e. NH, OK, TX and many others recently claiming sovereignty from the federal government under Article 10 of our Constitution?

When the actions of the federal government are over-reaching, waiting for the next election cycle could be too late to change course. Secession from the Union is a peaceful, non-violent separation from the government.

I do believe that states are slowly being stripped of their powers by federal mandates. Since it's illegal to attempt to overthrow the federal government, is the sovereignty claim of these states a similar action to the historical Boston Tea Party?

ATP

Jim in San Marcos said...

Hi AIM

I agree it's going to be a long game. The thing that bothers me, is that I didn't buy a ticket to this event and I don't even want to watch it.

I've got the nachos and beer, I just need a cardboard box big enough that will sleep me and the wife and have room for the 42 inch plasma screen.

Jim in San Marcos said...

Hi Tom (ATP)

I think that the Civil War pretty much defined states rights, No Divorce!

I do feel that things are going to be worse than they are now for the next 6 to 10 years. Bearing that in mind, we could end up a new government if the present people in power mess it up bad.

Germany went from a Democracy to a Dictatorship in the 1930's. If Adolf Hitler had died before he started World War II, he would have been hailed as the father of the German nation. He cured their massive unemployment and put everyone to work.

Today we look at Hitler as a monster, but it didn't quite start out that way, he had a solution to the problems of the times, their Congressional body was so full of BS that the transition of power was accepted, throw the bums out.

It could happen again.

AngryTaxPayer said...

Interesting thoughts Jim. Having a "No Divorce" stance would suggest a state's total submission to any and all government action and Washington D.C. claiming ultimate power over the people. I'm assuming the King of Great Brittan also held a similar belief prior to the American Revolution.

It holds some possibilities in my mind, but Washington D.C. has obtained so much power over the states that it would never agree to such a separation even if states pushed the issue legally through the Justice Department. I'm just wondering what the recent move by these states to "claim sovereignty" really means for the Country?

The US could use a fresh new government, but unfortunately do not believe it will ever happen through elections with a two-party system. The division of fundamental beliefs between these two parties is as wide as the Grand Canyon.

Never underestimate the will of the people, regardless of their religion, fundamental beliefs, and willingness to die for a cause they believe in. Strange things happen when folks believe they've been cornered and with few options. And with the economy sinking daily, the walls are closing in.

If I understand what your saying by using the Hitler example, its that a new government would be created by a Fascist regime from within, and not from states threatening to denounce a pledge to the Union's flag?

Tom (ATP)

Anonymous said...

The government's job at this moment is to reduce the pain and suffering of the populace. Extend the safety net to cover the jobless. As long as there is food on the table and basic medical care-- and the option to file bankruptcy-- there won't be a tea party.

The people understand the magnitude and complexity of the mess. They don't expect a miracle. They do expect a helping hand, and they do expect average competence at the national level.

Morever, there already is a tea party with the 2008 election. The country elected a black man. Isn't that shocking enough?

Anonymous said...

Anon 10:27 is right.

Tea party happened. We went from orange pekoe to black tea. Big change. (Not to me, because tea has never been a path to betterment.)

The masses are uneducated, definitely not pro-active and very apathetic. As long as they have the points he mentioned (along with sports, beer and big screen tv) they'll remain docile, good little slaves.

There are only a small percentage of Americans that are awake and will revolt. Plus you have all of the criminals and miscreants that will take advantage of the situation (the crime rate will go UP big time).

The military and the national guard will have their hands full with this sector of the population (the revolutionaries and the criminals).

Anonymous said...

Ok, Jim you have a point on my definitions of gold. Altho my little businesses and my income properties would not be in major cities. They'd be tucked away in more of a rural environment to avoid civil unrest, etc.

Your gold could be confiscated or limited by the government, so that would end it for you too. (Look, the government is already clamping down on Switzerland. Fined them 850M and forced them to turn over the bank account names of all Americans.) This is just the beginning. The government will control the currency, tell you what the currency is, and nail everyone that tries to evade taxes. And taxes are going to go up heavily.

Ok, here's a new definition of gold: a working farm (you've got food and you can sell food to obtain the other things that you need). Can't get any more basic than that.

AIM

Anonymous said...

Before we get too gloomy, let's remember this is a "money crisis". Just money. We have not been hit by the plague. No one has nuked us. Aliens have not trashed our planet. Our infrastructure and knowledge remain intact. We can produce the things we need, like food. Physically we are fine.

Our financial system is screwed up, that's for sure. Fixing it can take years. If we can't fix it and it crumbles, there's the option to void all debts and start with a new currency. Folks who are net lenders won't be happy, but they'll be outnumbered by the penniless.

In the mean time there will be high unemployment. Solution is to give people unemployment benefits so they won't cause trouble. Their lifestyle will take a dive, as will ours.

Just try to stay calm and live a humble life. Apocalypse is *not* inevitable.

Jim in San Marcos said...

Hi AIM

The government can't confiscate what it can't find.

Picture yourself 80 years old in a wheel chair on oxygen in need of nursing care. If the government trashed our savings, 100 ozs of gold might buy you 4 years of nursing care or more.

Anonymous said...

The Thinkers on this page are to be commended. Though opinions are disparate, civility rules. Thanks Jim.

The problem is easy to identify. It's the Government. Not the theory of government per se, but the mechanics. For lack of a better term, government is broken.

No longer do we elect statesmen and civil servants. We elect career demagogues whose primary objectives are twofold: obtain more power and get re-elected.

K Street the the lobbyist/special interest contingent discovered this a long time ago. Feed the egos of the power hungry with money to get re-elected.

Ahh, but the quid quo pro...that's the problem. Congress doesn't work for you or me or Main Street. It works for Wall Street.

Could it be any more evident? Pity the fool - Obama or anyone else - who attempts to reign in Wall Street. Money is power. Absolute power corrupts absolutely.

Wall Street is the center of the finance/banking/insurance oligopoly. It may be down, but it is not out. Too many "wrong way" bets...but the game favors the house....and they are the house.

Once we figure this out and admit that we are just powerless cogs in the machine that keeps these Masters of the Universe in complete dominion over nearly every facet of our economic existence...then we can begin to take charge.

It is time for 2 things in earnest. First, publicly funded elections. Second, term limits on all elected officials.

Those two changes would break the stranglehold of big money corporate style Fascism over the Congress. In short order the work of the people would be the main concern and that....that my dear colleagues is CHANGE WORTH MAKING.

AR

Anonymous said...

Hi Jim,
What would it really take to have a tea party? How much worse would things have to get with government? What percentage of the American people would need to be aware of what is really going on to stir them to start having tea parties?

The main stream media hardly allows any real diagnosis and prognosis of our economy because they don't want to lose their sponsor revenue.

They (Bloomberg & CNBC) even go so far as to go to commercial when Bernanke is forced to answer some of Ron Paul's pointed questions.

Government is hiding the real statistics and giving us watered down versions? (How can you have a CPI that omits food and energy?!)

The new administration, Bernanke, Congress... pretty much the whole government infrastructure is trying to make the American people feel like everything is under control and we'll be back to growth in a year or so.

I guess we'll have to descend deeper into nasty doo doo. Doo doo that is so nasty that it impinges heavily on your average American.

Are Americans too anesthesized, docile, complacent, apathetic, fearful and indoctrinated to rise up?

If not... how much doo doo and how much time will it take until some semblance of a revolution begins?

AIM

JMS said...

"Are Americans too anesthesized, docile, complacent, apathetic, fearful and indoctrinated to rise up?"

YES

Benjamin Franklin once said "when the people find they can vote themselves money, that will herald the end of the republic".

I believe we are there.

Anonymous said...

AR,

"It is time for 2 things in earnest. First, publicly funded elections. Second, term limits on all elected officials."

Here, here! Well said. This is exactly what is needed.

Yet...

No matter how strong the popular consensus was to enact this, the legislators would ignore it. They'd have to be forced at gun point to put that through.

I'm afraid the system is too corrupt with career politicians that have hidden agendas, special interests behind them and many favors to pay back.

Plus, the global power elite are working through country's financial sectors in order to control governments. They'll never let Wall St. get washed away.

AIM

Anonymous said...

JISM,

I still hold the conviction that vegetables and fruits, growing in crop fields and orchards that I own, will be my gold. Commodities that people will pay for no matter what currency or barter matter.

Yet, you have made good points and further reading on the subject has also convinced me. When I shortly flow in a chunk of money from my next real estate project I'm going to take some of that money and buy myself 10 ounces of gold and some gold coins just for safety reasons.

AIM

Jim in San Marcos said...

Hi AIM

Gold doesn't look like a very good buy at the present time. I wouldn't buy it at this price of $1,000. $500 or below, would seem OK to me.

With the 15 to 1 ratio for valuing silver to gold, it looks as if the present value of silver is quite low and a better buy. I bought $1,000 bag of silver 50 cent pieces way back when. As far as money goes, it is still a very good trading medium. The proof is that there is practically none of it in circulation.

Silver coinage is something to consider. A 100 oz silver bar might be hard to buy groceries with. The drawback with silver is that 1,000 oz of silver weighs about 87 pounds. Since US coinage is only 90% we end up with only 819 ounces of pure silver in the bag.

The math might not seem right, but there is the Troy ounce which is 32 grams and the regular ounce which is 28 grams. So when the US government says 90% silver, it falls short if you are using Troy ounces.

Good Luck and thank you for your post.

Jim in San Marcos said...

Hi AR

Thank you for your complements.

I don't really thing that term limits would work, but I do think appointing Congressional Representatives from each state legislature would solve a lot of the election crap.

The fact that Congressmen needs 50 million dollars to get re elected makes you wonder, why not take the election money and just retire.

The present absurdity of the system could be its downfall.

Thank you for your comments and take care.

Jim in San Marcos said...

Hi Anon 11:27

I agree, there has been no physical disaster or nuclear event. It seems clear cut that there is nothing to worry about, it's only money. The problem is if you are in retirement. You stand to lose everything you have worked your whole live for.

75% of bank assets are gone. They aren't coming back. If you are retired, you just took one hell of a haircut.

To say there has been no destruction is a misnomer. If you are too old to work and are crippled up you have been shafted.
Retirement is not what you imagined it would be. Youth is the luxury that the retired wish that they could afford. Old age is very unforgiving and makes everything awkward and impossible.

When you destroy the savings of the elderly, you destroy a retirement concept.

Anonymous said...

Jim,
I was just being quick in my last post. When my next chunk of money comes in I will have done the research before I purchase.

Some combination of gold and silver coins will probably be the ticket. Maybe even some ingots.

Also looking at the Perth Vault in Australia. It would be out of the country and in an Aussie govt vault (altho maybe a govmt vault wouldn't be so smart).

Some good gold mining stocks could be nice as well.

I'm just spouting off. I'll need to study up.

Ok... a farm, rental properties on the farm, gold and silver, guns and ammo, 1 month supply of stored food and water. I think I've got it now.
Whadda ya think?

Jim in San Marcos said...

AIM

You look like you may be set, I would recommend 3 months of food stores not one. The reasoning behind this is that you can feed people that can help you.

Three months of food stores sounds like a lot, but one 20 pound bag of rice and about 100 cans of chili or whatever could be more than enough. That could be on the low end, but it gives you a starting point.

Anonymous said...

Jim,

The next question is WHERE to set up a new home/farm so as to hunker down for the duration of my life (not to mention weathering this depression). I'm getting out of California (a high tax, welfare state like Calif is not the place to be... and it will get worse).

It's not going to be so easy for food to be shipped long distances once energy and other costs begin to go up. The Southwest will be in trouble because of that aspect.
Best to be in a semi-rural area with a lot of local farms around.

You also want to be in a rural or semi-rural environment far away from cities and metropolitan areas, where civil unrest and crime is apt to be.

I was considering Nevada. But now I'm thinking Northern Florida. FLA also doesn't have state income tax, plus, it has a long growing season and mild weather (no winters).

A Florida farm could be the ticket. What do you think?

JMS said...

I've been checking out properties in West Virginia. There are many properties for sale with 30+ acres. Some of them are even going for 2-3k an acre. I've seen an add for a 30 acre property at 1k an acre. I'm not sure how legit that one was.

Anonymous said...

Yes, I have a friend who is sold on W. Virgina. Land is very cheap. Beautiful country and mountains. He is going to leave Calif and buy something there. Low prop taxes too. But state income tax.

Jim in San Marcos said...

Hi Anon 11:11

I'd keep out of Florida, it was just too hot and humid for me. The winters aren't bad though.

My Cousin retired on a military disability. He bought a farm in Kentucky, 20 acres with a house and a barn for about 60K. After the kids left the nest, the loneliness got to them. They sold it and moved back to the city. And they didn't get what they paid for it.

If it is zoned as farm land, I wouldn't be too concerned about property taxes.

I use to maintain a half acre garden back in high school with my dad, and also when I moved out to Colorado. It is a lot of hard work. Peanuts and Potatoes were the easiest to grow. Deer, raccoons and rabbits love what you will be planting, not to mention the insect world.

Just as a guess, growing your own food probably costs about $2.00 per jar from growing it to canning it. But if the labor is free, your out of pocket costs are very low.

If you're retired and putzing around, I'd say go for it. If your wife buys a lot of air freshener, you could be on the path to a divorce. Farms are not known for being fragrant.

My advice, buy a house on one to 3 acres, you'll have more than enough room for vegetables, chickens and a horse or cow, depending on the zoning.

Jim in San Marcos said...

Hi JMS

2 to 3 k is about right for good farm land with water. You really have to look at what can be grown at that location and what the actual return per acre is. Wheat could return $160 per acre, and the right type of onions could return $1,500 per acre. It's a business and you have to know what you are doing.

When you get into fruit trees, the values change even more.

If you pick West Virginia, you want to grow corn and ferment it. 1K per acre seems a little high for that area. That area is a real poverty belt.

Anonymous said...
This comment has been removed by a blog administrator.
Shift said...

Good stuff:
"kids had just won a Posturepedic bed wetting contest"

Cracked me up!

Jim in San Marcos said...

To Anon 8:25

I deleted your post and put it down below.

It is considered rude to cut and paste someone else's blog into the remarks section, a link is OK.

Here is how your post should have looked:

GOOD LETTER. IF ONLY OBAMA COULD AND WOULD READ IT. THEN AGAIN, EVEN IF HE DID HE WOULDN'T CHANGE. HE IS NOT CAPABLE OF IT. THE GOVERNMENT IS A HUGE UNTHINKING FORCE, GAINING MOMENTUM AND HURTLING DOWN THE ROAD TOWARD ITS DESTRUCTION. (THERE IS NO THINKING GOING ON HERE. IT IS ALL PROGRAMMED RESPONSES. THE LIGHTS ARE ON BUT NOBODY'S HOME.)

Here is a link

Jim in San Marcos said...

Hi Shift

Glad you liked it. Tea Party to Pee Party is quite a stretch. The color is the same.

Take care

Anonymous said...

I'm going to buy a sail boat and go off and discover a new land so I can start a new country.

A republic run by committee per a sane charter.
No central banking system.
No fiat money.
GDP based on manufacturing and other production.
Accountability in business and government.
Clean, renewable energy.
Beer is free.
All pretty gals must be topless.

Anonymous said...

Ok. We are in deflation now, and we don't know how long it is going to last.

Because of our government, we know that eventually interest rates, taxes, and inflation are going to go up, up, up. The most important prices for the average American—food, utilities and energy prices—are going to soar. This inflation will really devalue the dollar, reducing its already low purchasing power even further. We could even have hyper-inflation.

This inflation (and the big price increases) could begin in 6 months, 1 year, 2 years... there is no way to tell.

What does one do? What are the rules to follow when heading for a high inflationary period (possibly an inflationary depression)? How do you prepare? What is the ideal situation to be in so that you can make it through these upcoming tough times? How do you maintain a decent standard of living? How do you maintain your existing wealth?