Well they bailed out Greece and now they are going to bail out Ireland. This is proof that there is a pot of gold with every rainbow. Who bailed out Greece and Ireland? And with what from where? Now we have Spain, Portugal and Italy waiting in the wings. Grab a tin cup and queue up, it's free money!
These European government "train wrecks" are the result of borrowing and spending too much money in the past for things that they couldn’t afford in the first place. Many countries are broke and raising taxes is not an option. Ireland doesn’t need a bailout loan, they need to wipe the slate clean and start over. If they don’t do that, their citizens will leave the country in droves. Saving the financial world order will enslave us to our debts. Idealistic planning and dreaming got us into this mess. The good times are over. The world’s great social programs are underfunded or bankrupt. The people that benefited most from them could never be expected to contribute their fair share. When is enough too much?
In the United States, we are now spending money we never even dream of spending when times were good. The only way to pay the bills today, is to print dollars; it certainly won’t be raised in taxes. Four million homes in foreclosure and twelve percent unemployment, kind of suggests tax collections will be very lean in Obama-land this year and for many more years down the road.
Where all of these new found funds are coming from to bail out everyone? In Europe, it is the IMF to the rescue. Ever wonder who's in charge at the IMF?-- Ben and Tim!
In this country The Federal Reserve is buying Treasuries from Goldman Sachs; which is very logical when you think about it. The Fed needs to maintain interest rates of bonds already sold on the secondary market; therefore they have to buy every bond presented at par to maintain the interest rate. This insures that the rates at auction stay low without the perceived hand of government bidding at the auction. This could increase the money supply on a rather large scale (depending on how much is presented for redemption). The Treasury sells T-bills to China. China, later, dumps the bills on the open market and Goldman Sachs buys them for Bernanke at the Fed, keeping the interest rates low.
Are we really facing deflation or an end of “The good times?” The free-ride-gravy-train jobs are gone. In the 1930’s there was a measured drop in wages, people were desperate for work. The hourly wage didn’t keep dropping, there were limits as to what people would accept. The jobs that really took the hit were high paying ones, they disappeared (a lot of them were government jobs). Things returned to more reasonable levels.
Presently a lot of “million dollar homes” are slowly being revalued back to 240K. Is this deflation, or a return to reality? We could consider the release of air from the real estate bubble as a form of "deflation."
The Germans could be the key to this whole mess. Why should they have to foot the bill to keep the public restrooms in the rest of Europe clean? Their financial system has been through the wringer twice, once just before the Great Depression and again at the end of WWII. More debt is not a solution to solving the world’s financial crisis. The assumed financial responsibility to pay this borrowed money back is not there, "Just put it on our tab." The German’s are going to say “NEIN” to the PIIGS in Spain and that could spell the end of the Euro. This won’t set well with Das Über Führer Ben Bernanke.
Copyright 2010 All rights reserved
Friday, November 26, 2010
Sunday, November 14, 2010
Bernanke the Great Invisible Tax Assessor
QE2 used to refer to a luxury liner that sailed the ocean. In today’s world “Quantitative Easing 2” sounds like a euphemism for a bowel movement in a retirement home. Notice that no one has described this easing using the word “Titanic,” or the word “Gigantic.” The first portends an aurora of imminent doom and the latter suggests something that is going to cost a lot, like government health care. The average person has no idea of the financial impact on their wallet. QE2 is just another government program.
The idea that Ben Bernanke can take 20% of everyone’s savings without Congressional approval and spend it on bailouts is to say the least very upsetting. The average guy on the street has no clue as to what the Federal Reserve is doing. Their money is safe in the bank. Ben’s technique is called Inflation. We’ve lived with it all our lives. Nobody loses a dollar on the deal. Your $100 dollars only buys $80 of food after the fact. Debtors love inflation; you borrow real dollars and pay the loan back with cheaper inflated dollars later. Heaven help us if deflation was to creep into the mix—our savings would have more buying power. The biggest debtor that comes to mind is the US government ---HMMMM
The average worker making 40k a year, still gets 40K, but after QE2 it will only buy 32K of goods and services. The worker hasn’t seen the hand of the government messing with his pay check, but the price of everything went up. The bank depositor is a babe in Toyland. Oblivious to what is going on behind the curtain. The worker that saved up one million dollars now only has the buying power of 800K and he's clueless until he tries to spend it. Of course, the person without a dime to his name has lost nothing.
Add up the taxes, Social Security, Health Care, Federal tax, State tax, gas tax and sales tax. These are all visible. Then there is the dirty little Ben Bernanke tax (It’s not a tax, they are going to pay it all back—Guffaw, Guffaw).
The Federal Reserve's powers need to be curtailed. This institution was not created to perform the functions it is now exercising. Bernanke has been delegated tremendous power over our financial system without any Congressional say so. He needs to be reigned in and throttled down or maybe just throttled and fired.
Of course, between Obamas health care and Bernanke's bailout we have a plan that works only because nobody has to pay for it. This must be heaven. I'm sure this will become even more plausible after consuming a 12 pack of beer.
Copyright 2010 All rights reserved
The idea that Ben Bernanke can take 20% of everyone’s savings without Congressional approval and spend it on bailouts is to say the least very upsetting. The average guy on the street has no clue as to what the Federal Reserve is doing. Their money is safe in the bank. Ben’s technique is called Inflation. We’ve lived with it all our lives. Nobody loses a dollar on the deal. Your $100 dollars only buys $80 of food after the fact. Debtors love inflation; you borrow real dollars and pay the loan back with cheaper inflated dollars later. Heaven help us if deflation was to creep into the mix—our savings would have more buying power. The biggest debtor that comes to mind is the US government ---HMMMM
The average worker making 40k a year, still gets 40K, but after QE2 it will only buy 32K of goods and services. The worker hasn’t seen the hand of the government messing with his pay check, but the price of everything went up. The bank depositor is a babe in Toyland. Oblivious to what is going on behind the curtain. The worker that saved up one million dollars now only has the buying power of 800K and he's clueless until he tries to spend it. Of course, the person without a dime to his name has lost nothing.
Add up the taxes, Social Security, Health Care, Federal tax, State tax, gas tax and sales tax. These are all visible. Then there is the dirty little Ben Bernanke tax (It’s not a tax, they are going to pay it all back—Guffaw, Guffaw).
The Federal Reserve's powers need to be curtailed. This institution was not created to perform the functions it is now exercising. Bernanke has been delegated tremendous power over our financial system without any Congressional say so. He needs to be reigned in and throttled down or maybe just throttled and fired.
Of course, between Obamas health care and Bernanke's bailout we have a plan that works only because nobody has to pay for it. This must be heaven. I'm sure this will become even more plausible after consuming a 12 pack of beer.
Copyright 2010 All rights reserved
Saturday, November 06, 2010
Payback's a Bitch
Now that the elections are over, the Congress and the President can get back to business. Or can they? The honeymoon is over and we are starting divorce proceedings. The Democrats, with the health care bill, snuck up on the Republicans and hit them over the head with a shovel. Now, the shovel is gone and Obama says he will work any way he can, with the Republicans to get us out of this mess.
Obama had to have known the repercussions when he forced the health care legislation through. In essence, he told the Republicans to go fly a kite; we don’t need your votes or your input.
So what happens during Obama’s next two years of office? Figure that, the Republicans will act like a mad crazed foreclosed home owner; concrete in the toilets, sell the appliances and trash the house. Forcing this health care bill through Congress in this manner was the wrong way to go. I would chalk his mistake up to pompous arrogance (let the GOP eat cake).
Revenge for the Republicans’ will be sweet. Obama will have his health care plan (without financing) and a non functional Congress. This could be a good thing. The economy is a mess and there is no political solution.
Tax revenues are decreasing as government expenditures are rising. More Social Security, Food Stamps, Unemployment, Health Care, Bank Failures, Freddie Crapola, Fannie Caca and the list goes on. Reality is right around the corner, along with Deck Chairs, Icebergs and Lifeboats.
The Republicans and Democrats in Congress are kind of like a husband and wife. There is a lot each of them might want to do, but if they’re not equal partners, there is no marriage. President Obama will figure it out; no new Democratic legislation unless he signs every bill the Republicans pass. How likely is that? It's a little like the wife catching the husband kissing the neighbor's wife. He's going to pay for that kiss a million times over.
Copyright 2010 All rights reserved
Obama had to have known the repercussions when he forced the health care legislation through. In essence, he told the Republicans to go fly a kite; we don’t need your votes or your input.
So what happens during Obama’s next two years of office? Figure that, the Republicans will act like a mad crazed foreclosed home owner; concrete in the toilets, sell the appliances and trash the house. Forcing this health care bill through Congress in this manner was the wrong way to go. I would chalk his mistake up to pompous arrogance (let the GOP eat cake).
Revenge for the Republicans’ will be sweet. Obama will have his health care plan (without financing) and a non functional Congress. This could be a good thing. The economy is a mess and there is no political solution.
Tax revenues are decreasing as government expenditures are rising. More Social Security, Food Stamps, Unemployment, Health Care, Bank Failures, Freddie Crapola, Fannie Caca and the list goes on. Reality is right around the corner, along with Deck Chairs, Icebergs and Lifeboats.
The Republicans and Democrats in Congress are kind of like a husband and wife. There is a lot each of them might want to do, but if they’re not equal partners, there is no marriage. President Obama will figure it out; no new Democratic legislation unless he signs every bill the Republicans pass. How likely is that? It's a little like the wife catching the husband kissing the neighbor's wife. He's going to pay for that kiss a million times over.
Copyright 2010 All rights reserved
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