Japan had an earthquake, tsunami and a very bad nuclear accident, with the loss of ten to thirty thousand lives. There has been no mention of possible U. S. insurance claim involvement for Buffet and AIG.
Then we have the Euro, a currency renown for its flatulence. The European Central Bank is going to save the European Union,---from what, they’re not quite sure of at this point. It depends on which country you live in.
The Middle East has people rising up and demanding an end to the tyranny. Our newspapers Stateside, translate that as a demand for Democracy. Where is their middle class, the necessary ingredient for a stable Democracy? Gee, they don’t have one, just a few rich people and a hell of a lot of poor people (that want to be rich).
I’m glad to see Obama finally going after the pirates attacking our shipping. Unfortunately he got his countries mixed up. Somalia, not Libya is where all the hostages are. Thomas Jefferson already did Libya. The UN’s effort to make Libya a “No Fly Zone” is admirable. I hope they include Fruit flies along with House Flies. God bless these UN health initiatives. Kidding aside, getting rid of the present regime will not solve any of Libya’s present social unrest, and it will acerbate survival for many in the country. The UN lost points on this. The Arabs are more into religion than material wealth, and they will remember what the UN (the Christians) did to an Arab brother.
At home, there is a hiring freeze on all new government employees. And if Congress fails to keep on passing one of these temporary budgets every two to three weeks, the Federal Government won’t be able to meet payroll. Government employees are anywhere from 3 weeks to one day away from being layed off. It depends on how close it is to payday. Come Friday, if they tell you not to come to work Monday, you can’t whine about not being paid a week later, now can you?
Our dollar is buying less gas, food and utilities, and that's just not world news. Of course, if you live in the Middle East, you may beg to differ. Bernanke’s inflationary policy is changing the world. Everyone’s currency is buying less. In the US, we cut cable and the extra vacation. In the Middle East, it’s the amount of food on the table that gets cut.
The real news in the world is not about a move towards Democracy, it is revolt against perceived injustice. There is a lot of anger out there. It’s in Wisconsin, Egypt, California, Libya, Illinois, Tunisia, Nevada, Mexico and Florida to name a few.
I’m thinking of discontinuing the newspaper, not much in it any more. The depression is over, we’ve licked inflation, the national debt is no longer a problem and stocks are bouncing off of new highs.
29 comments:
We're going thru lots of changes and will continue to do so, globally and domestically here in the USA, and this will continue for some time. Change occurs slowly when it comes to politics and economics. It is an evolution. New and better systems are forthcoming. Have faith.
Hi Anon 9:14
If you have 100k in the bank, the Obama administration just taxed it, and took half of it.
Thinking of retiring in your motor home? Think again, you can't afford to drive it!
Under normal circumstances change takes place slowly, but when food gas and energy double in two years, we are talking inflation by way of government printing presses.
I have faith in religion, they promise the after life, and ask for little in return. Government asks for way too much and delivers very little in return.
Government fiscal policy is driving this country into the ground. We are bankrupt and no one cares or comprehends the concept of what that means.
The basic fact is this your retirement savings are toast. They aren't there, they were spent. Of course this problem is not evident yet, there are funds still available to pay those making withdrawals. Wait until the baby boomers want cash for their investments. A lot of funds are already insolvent.
"New and better systems are forthcoming" and I agree, but it won't help the silver foxes like me that saved a life time to enjoy the good life.
What's happening now will repeat again in another 100 years, and it will ruin lives just like it is doing now.
Thank you for your comments.
Hi Jim, just letting you know I'm still visiting.
If you're interested, I post occasionally on Seeking Alpha and since I tend to share your views, I get a fair bit of abuse from the future Masters of the Universe, mixed in with the nods of agreement from the silverbacks.
Anybody with money/savings sitting in the bank deserves to lose it. If you are not willing to actively invest it in order to maintain its purchasing power, you deserve to lose it. If you are lazy and are not willing to put the thought, time and effort into actively investing it for the needed return, you deserve to lose it. If your money isn't earning above 10% you are not keeping up with inflation and are losing purchasing power. Stop whining and take action.
Anon 9:14 is right. We are going through evolutions and into improvement as old unworkable systems are abandoned. We will go through dips and crises on our way to better systems and the individual has to do his part to survive and thrive through those dips and crises. Instead of watching TV and following all their favorite sports teams, Americans need to be cracking the books and developing their financial intelligence. You get what you deserve. Good results only come from the correct focus and hard work. YOU are responsible for your condition and always will be, the economy, Obama, the Fed, Congress, etc. are NOT responsible for your condition. Toughen up, become vigilant, get educated, take action.
Hi Sack
Thanks for dropping by.
I noiced your comment about Cameron going into Libya. Kind of hard to figure out why. I thought dictators were allowed to kill their own citizens. And now they can't?
Hi Anon 12:40
You raise and interesting point. Most people are working too hard and have very little expertise in investing let alone the time to devote to it. So when you get ready to retire, you have to accept responsibility for what you end up with. As you suggest, making time available and learning how to invest, is time well spent.
What we are whining about is the government induced inflation. A real silver quarter will still buy a gallon of gasoline. I'm in no hurry to spend my silver coins. They sure disappeared from circulation real fast.
Here is how I see it Jim --
An American is their own 1st worst enemy. Enemy #2 is the US government (Congress, Judicial and Executive). Enemy #3 would be The Federal Reserve. Enemy #4 would be corrupt sectors or corporations that actually damage our economy (Goldman Sachs, Monsanto, etc.). Enemy #5 and forward would be the IMF, Bank of International Settlements, the elite behind these groups.
With this many enemies we all need our own tanks and F-15 fighter jets to have victory.
Hey maybe someday we Americans will have enough piss and vinegar to pull off an ouster like those guys over in the Middle East and North Africa. All the boomers who protested in the 60s all want their entitlements now so I guess we won't see a new uprising from them, eh? It's up to the Echo Boomers I guess.
China maybe a little pissed Jim that Japan got in first in a big time liquidation of American holdings, lets hope it doesn't start something bigger?
Now to give an example of inflationary price gouging, Steak that was $9.00 (kilo)a month ago is now $33, lamb that was $12 is now $27.
It does look like we are evolving into some vegan based, Milton Friedman inspired, debt fueled economic recovery over here, how are you doing?
:)
Hi Jim
Libya: Gaddafi's a bad man but we've tolerated or even supported bad men in the past. What we should be doing now is a vexed question, but some of us suspect that the initial rebellion was stirred up from outside. Did this whole thing start so that Cameron and Obama could be seen to have finally grown a pair? Is this part of Hillary Clinton's long-term plan to get the Presidency? It's a fertile ground for conspiracy theorists.
There's dirty work going on. And we don't know who these "freedom fighters" are - will they be the Taleban of the future?
Time to re-read Thomas Jefferson, mind our own business and concentrate on retaining the people's democracy of the US.
The article in the link below is very pertinent. I agree with it fully. I peruse this blog regularly and I am aware that Jim in San Marcos has the retirement mentality. Many other posters here probably do too. We Americans have become effete people. We've lost the rugged individualism and self sufficiency and character of the earlier days. I believe one should be working in harness until the day they die. Goals, work and contribution is what keeps a person healthy and going forward. Retirement is a degraded concept that only government could create (creating a population of purposeless, productionless, aimless citizens). It didn't exist before the 50's. Continuing to work is good for you, the community, the country and the world at large. It is one of the paradigm shifts needed to reverse our course as Americans and slough off all of the non-survival beliefs and attitudes and decayed morality that has creeped into our zeitgeist. Read the article and confront the fact that you may be living a lie and doing yourself a disservice by retiring. Retirement = stepping away from life. That shouldn't even be a remote thought in the mind of a strong and able being.
http://whiskeyandgunpowder.com/never-retire/
Recent article in the Market Oracle, gives "core" inflation in the U.S. as dropping from .5% to .2% in the last few quarters (what ever that means), casts a little more doubt on the hyperinflationists take on our immediate future?
Libya seems to be the victim of schizophrenic western diplomacy at the moment, I do hope Tony Blair is not still a house guest at the bombed dictators bunker? Could be quite embarrassing if it was a French jet that targeted the bunker (might bring back some old rivalries)?
Jim I imagine most people that read your blog are quite conservative, pro western, and realise we are in a bit of an economic tussle with other non Western nations at the moment, unfortunately our current crop of leaders seem to be scoring too many "own" goals at the moment, with rather questionable judgment ....
Hi Sack
I agree, this Libya thing has a dead fish smell to it. Now we can have a more fair civil war, we've gotten rid of the tanks and airplanes.
Hi Anon 1:03
You made me chuckle with your comment that " Jim in San Marcos has the retirement mentality." I'm 64 and love my job, and I wouldn't think of quiting. The article you referenced has a hollow ring to it. No real life experience.
I've known people that have hated their job from the day they started. I've known others that wouldn't work unless it was necessary to survive. These people really want to retire for a good reason. Can you imagine doing some repetitious job for 30 years, retirement is something to look forward to. Fishing and drinking beer might last for a year or two and then boredom sets in. But they don't have anybody telling them what to do, and that can be a great feeling.
My bitch about inflation hitting the retirees so bad has to do with old age. My grandmother lived to be 98 and the last 15 years were spent in a rest home. She died 20 years ago and at that time her yearly rest home bill was 60k and Social Security only covered 12K of it. It was a church home so they took a big hit on her (Medicare and Medicaid don't pay for rest homes).
We are all going to get old to where we can't work and or be trusted to function as an adult. This is where inflation play a cruel joke on your retirement savings. Rest homes now probably want closer to 80k a year now. Of course, you can quit your job and have mom come live with you can't you? How will that set with the wife?
Another factor not realized until you get old, is that old people are invisible, they don't exist. Go apply for a job, a cute young girl will get that job every time. Reality is not the mirror we look into everyday, that mirror is far too unkind.
Hi Frakrak
Your prices for meat are about the same as they are here. I guess it's cheaper if you buy it by the pound instead of the Kilo ;>)
I don't think you have to go vegan. Don't you have an over abundance of 4 legged chickens there? I love rabbit.
As for inflation indicators,there's not much left when you strip out food and energy. It's kind of like weight watchers measuring only skeletal mass. It doesn't tell you much.
As you suggest our leaders are exercising some very questionable judgment in Libya. We confiscate a dictators bank holdings and then blow up his military, what would you do? With a couple of billion dollars well placed, he could set civilian air travel back 100 years. I don't think Gaddafi is as dangerous as the people who may replace him. It looks like civil war from here, and I don't see Gaddafi losing-- he has the cash.
This Libyan fiasco has the trappings of someone with a very big ego stirring the mix. Obama is the only one that comes to mind. This ought to really unite the Arabs to go get "The Great Satan."
Anon 1:03 again ----
Sorry if I misinterpreted your comments over since I've been reading your blog. But I just got the idea that you were looking forward to retirement and were upset that the economic downturn and inflation was taking your retirement away. If you plan to work until you drop, then I highly commend you for that.
I think the best thing that could happen to those who were planning and hoping to retire is that they now have to keep on working. America will have a paradigm shift too and the elderly will wind up having employment. Putting the elderly out to pasture is a bad meme that must be removed. Demographically, after the Echo Boomers retire there won't be an up and coming big workforce. We need the silver foxes and immigrants to keep America strong.
If you get to the point where you are too sick and feeble to work or contribute to society it's time to do the noble thing and off yourself. Apparently that is what was done in the native american culture. They wouldn't allow themselves to be a burden to the tribe. Americans are very unhealthy due to their diet and lifestyle. It being expected that you would off yourself if you became feeble is just the incentive needed for people to eat a good diet and take care of themselves so that they can remain vital and contribute to society until the end of their days. Otherwise they'll have to take a long walk off a short plank. Actually I believe that when a person feels that they are a burden, can't contribute and want to leave with dignity they should be able to go somewhere and get a shot.
To Anon 9:12
There is nothing wrong with retiring and living off your savings as long as you aren't a burden on society. I'm 45 have a FICO score of 770 and plan on having house paid off by the time I'm 53. After that I'll have no debt and will have ability to pick and choose who what where and when I work for. Being a slave to a bank doesn't sound to me like a great way to live out my years.
rob
The only way to do well in the western world is to "be the bank". There are two types of people-- those who pay interest and those who collect interest.
The banks have always had a real scam going with home loans. If it is a 30 year loan you wind up paying 3X the cost of your home! That is insane. It will be even worse in the future due to the housing collapse. Can you imagine having paid 500k for a house 20 years ago which means you will pay 1.5M for it when the loan is paid off. And when it is paid off it will only have a fair market value of 300k. Paying 1.5M for a 300k home! Yikes!
Never been a home owner. I'm a renter and plan to stay a renter for a long time. I've saved hundreds of thousands as a result.
Japanese banks have generational mortgages that go for a hundred years. Your kids take over when you pass on, and your grandkids wind up paying it off! That will wind you up paying ten times the original price of the home. Here in the US we already have 40 year mortgages and they are now talking about 50 year ones.
I agree. BE THE BANK.
I have a good deal of my money in 12% first trust deeds. I love having my money work hard for me and I love getting those checks each month that pay for my rent, food and other basics. I'm gonna keep working at being a bank. They are the winners in this society.
I am 61, and have been retired for 3 years. We are thoroughly enjoying it.
I started working at age 12, delivering morning papers in Mich., in the snow and dark.
Worked all through high school, put myself through college, ran my own business,so I know what hard work is.
If you have a few interests,and a curiosity about life, you won't be bored in retirement.
I go to the gym 4 days a week, to stay limber and slow down old age "creep". I am restoring an old sports car, and go to car shows in the summer.
I finally have the chance to read the books I missed earlier in life.
We can travel mid-week, and get the discounts that weekend travel does not offer.
We go to museums (many are free one day a month), zoos, and National parks.No golf- too boring.
We volunteer with a local animal rescue group, a local charity, and habitat for Humanity.
When you are dying, are you going to think-"Wish I had spent more weekends in the office." or
"Wish I had spent more time with my kids" (or grandkids).?
Work has it's place, but if you
never retire, you miss out on the enjoyment of best years of your life- the freedom to do what you want.
When you are retired,"Every day is Saturday!"
Dear Anon 8:22,
You're not retired. You just are not working a job. You are active and contributing to the society. This is not the retirement mentality being discussed here.
Hi Anon 12:34
Oooh, your riding rough shod over one poster, that's not nice! You're making the mistake that everyone ought to think the way you do.
If you enjoy what you are doing and manage to get paid for it, thats what counts. A retirement check is no different than a paycheck.
Some jobs reward you with a real feeling of importance. A person I use to work with had a volunteer job at the Salvation Army feeding people from 5 to 7:30 every morning. He was a very important person there, while at his day job, he was just another employee.
Anon 8:22 has been retired only 3 years, wait until he hits year 5. His wife will probably kill him for pestering her in the kitchen;>)
Retirement could be defined as a where you get a paycheck for doing nothing and you are just waiting in line to die. I think that a majority of people that go into retirement with some funds, find a way to get back into the work groove, so they can enjoy the feeling of being productive.
There is nothing really off topic here in the comments, we are having fun. All I ask is just respect everyone else's views.
Hey if someone has the assets and money and wants to retire that is their choice. More power to them. Retirement is different for every retiree I would bet... some might hang around the golf course until they die, others might volunteer their services to the community, write a novel or take the grandkids for a trip around the world. What a "job well done" to have created a situation where one has enough net worth so as to not have to work a job and be free to do what they want. And the earlier in life one can achieve that, the better.
And it would be nice to be able to tell the government to screw themselves and that you don't want any part of social security and they can keep their checks.
Wealth, self-sufficiency, entrepreneurship, creativity and innovation are all great characteristics that have enabled people to be better contributors to the society. The wealthy always get slandered yet they are the ones that make most all of the good things happen.
Our ignorant government doesn't realize how much better off our country would be if they just got out of the way and let business and entrepreneurship flourish and also got out of the private lives of the people.
This oversized, welfare/socialist, out of control, fiscally insane, prying, soon to become fascist government in the USA will be the demise of the country.
Social Security, Medicare, Unemployment, disability, etc. etc. are all concepts that came right out of Das Kapital/The Communist Manifesto. The SEC, Fannie and Freddie and all of those other related creations have proved to be unworkable and to have caused major problems for the USA. We went socialist in the 30's thanks to FDR and the people behind him. Now we are starting to see how all of these unworkable concepts have destroyed the USA.
We're going into a collapse and then a rebirth. USA was a great experiment that unfortunately failed. I'm sure we'll evolve to a better system this next time.
"I’m thinking of discontinuing the newspaper, not much in it any more. The depression is over, we’ve licked inflation, the national debt is no longer a problem and stocks are bouncing off of new highs." Nice one. BTW, Michael Panzner wrote a good post about this "disconnect" yesterday:
http://www.financialarmageddon.com/2011/03/capitalize-on-the-disconnect.html
THEN TOO, THE HOUSING MARKET IS ABOUT TO HIT A BRICK WALL:
99.99% of the general public are unaware of monumental government regulation changes taking place on April 1st for the mortgage industry. The Fed has come out with obscure guidelines on how banks and mortgage lenders can pay their Loan Officers. It's so complicated even for those in the mortgage industry that it's causing major turmoil among lenders. At this writing, one week from the new rules going into effect, many lenders still don't have any idea how they are going to comply. This is going to lead to:
Padding rates and costs = bad for consumer.
Closing delays = higher prices = bad for consumer.
Low loan amounts will be unprofitable = lower income consumers will be turned away and have few choices.
Great borrowers with high credit scores and lots of cash down will now be subsidizing borrowers with poor credit and little cash down.
Just as this is happening, Fannie Mae and Freddie Mac are settling the foreclosure scandal mess and are going to be dumping approx. 1 to 2 million foreclosed homes on the Housing Market this spring. What do you think that is going to do to prices?
Well as far as I am concerned the end is near for this country. $5 for a gallon of gas this summer and 6-7 million foreclosed homes hitting the market within a year. This will stop this economy and this country dead in its tracks. This will ruin the middle class and say bye bye to buying and the stock market.
In other countries they have the rich and the poor. Everything in this country is based off of the middle class. However the big differance between us and the third world countries is that while they throw rocks and bottles, we have a ton of guns and ammo!!!! I predict another american revolution against the government and the fat cats that runs this country now.
As for Fannie mae and Freddie mac fixing the foreclosures is a big fat JOKE! Me and my wife have been going through the modifiction process for over 2 years already!!! Went to a chase/freddie mac sponsored event. Chase didn't tell us anything that we already knew and nobody from freddie mac was there. Blind leading the Blind.
I will say I hope that we re declined. In 6 months are house won't be worth nothing, already $40k upside down in the house. So what do I care, they can have it, good luck.
Time to get the money out of the banks and get a safe and guns to protect the family. God knows the government and the banks won't when they go, WILL go under!
God speed everybody, we are in for a helluva ride!
Anon 11:17,
The end isn't near for the USA. The USA has too many assets to fail. Everyone looks at the income and the debt... but not the assets. The assets can offset a lot. The USA will still be around,,, it will just reconfigured.
The USD will still be the reserve currency for a long time (there isn't any currency that could come close to the job). People will still run to US treasuries during crises,,, that won't change for awhile. (The EU and the Euro are a failed experiment and that will all unravel over the next 3-5 years.)
The middle class will be gone,,, there will just be the rich and the poor,,, the haves and the not-haves.
Housing values will continue to deflate over a protracted period,,, long way to a bottom. Construction and new homes will die. Houses will become very cheap.
Wages will drop. Unemployment will go higher and stay higher for a long long time. Taxes will go high. Government services on the state and federal level will drop off. Consumerism will drop off. The standard of living for the majority will drop.
Government will continue to cause havoc and volatility with all their incompetent and corrupt intervention. We'll have stagflations, deflations and inflations... probably dominated by very high inflation eventually.
We'll have more of a police or fascistic country. Many who have wealth will go offshore (they've started already). Many more businesses will go offshore too.
My parents were born into a depression and will now die in a depression. Nice bookends for a lifetime. I was born into affluence and will die in a depressed economy as well.
How to prepare is the question,,, but there is so many variables and possibilities it is really hard to predict what is coming and what to do to protect oneself. Stay in USD? Buy gold and silver? Buy energy,food and water related stocks? Buy hard assets like real estate for the income? Move to Mexico Costa Rica or Panama? Learn new skills? Stockpile food and water? Buy a farm? Start a commune/farm for security and community? Or just take it all day by day?
The EU and the Euro are doomed. I'll give it 3-5 years max. Germany and France are not going to want to carry everybody else. You can't have 16 diverse countries all tied up with the same currency and all having to follow strict fiscal requirements that don't meet their individual profiles. Most of the countries are already breaking the rules. A failed experiment. Because of this the USD will remain the world reserve currency.
Jim,
I just read that inflation isn't the destruction of wealth it is the redistribution of wealth. And deflation is the same. The products and assets are still there. They just wind up belonging to someone else.
Hmmm... so how does one position themselves to be on the receiving side of all of this redistribution that is and will continue to go on?
Figure that out and you can come out of this giant mess a winner.
http://content.usatoday.com/communities/driveon/post/2011/03/toyota-raises-prices-of-almost-all-scion-lexus-toyota-vehicles/1
makes me think of your projection for the $150K car
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