Friday, August 03, 2012

The Election is getting closer

I can hardly wait for the election to be over. The winner will be the big loser. The economy is tanking at a faster rate as every day ticks by. It’s Democrats against Republicans in the Congress. I would expect the people in Congress to keep their mouths shut and legislate. But oh no, they are too busy trying to get reelected. Naturally it’s all the other party’s fault. Turn on the TV and if you can’t tell the speakers party affiliation after 15 words, you have a problem—not the guy talking.

The biggest mistake of the present administration was trying to bring Democracy to the Middle East. Liberia, Egypt, Syria, Iraq, and Iran are all in a state of flux. Oil revenues were their “food stamp” program for the masses. We have destroyed that system of guaranteed delivery with a promise of Democracy. Hillary Clinton thinks that Democracy will spring up if the despots are disposed of. With dreams like that, even Lewis Carroll would dub her a “Snow Queen.” It’s all about power, the more you have, the more money and sex is yours for the taking.

We have Israel with nukes. We have a President that has wiped out two Arab leaders, Osama Bin Laden and Muammar Gaddafi. Where is the major population of the Middle East looking to for guidance? No food, no political order, they don’t give a damn about Democracy. The funny thing is that these people don’t give a damn about the oil, its water rights that determine whether their family lives or dies. Nobody is paying attention to the dams being built surreptitiously in the region (ok maybe Israel is).

Neither candidate has a real chance of solving “The Greatest Depression to ever be experienced.” The greatest hurdle facing the nation is our declining tax base. The United States is broke and we have Republicans and Democrats fighting over taxing the rich. When they pass this next tax bill, how’s that going to work? Obama’s speeches seem to imply, If you’re a Democrat, you don’t have to pay the tax, but if you are a Republican, you do. Maybe we can deduce from the heated political arguments, that “A Republican is a Democrat with money.”

Hiding money for the rich is very easy. I knew a doctor that formed a corporation and paid himself $600 a month. I asked him how he could live on so little, he said his wife was an RN making good money. These people write their own W-2’s, they are the employer. Show me a worker that would rather spend his paycheck on higher taxes than on his family? How many Congressmen have been caught cheating on their taxes as well as their wives?

The issue for the next election is higher taxes for the rich. The problem is, raising tax rates in this economy does not guarantee more taxes coming in. Common sense suggests that if you double the tax rate, you double revenue. What history teaches us, in a depression, you end up with less.

Obama stuck a broom in a hornets nest when he passed Obamacare. What happens from here is all scripted, Obama will get his comeuppance from Congress. Paybacks are a bitch.

From here, it’s all on TV, Republicans against Democrats. The trouble is, is anybody listening? Let’s face it; the voter is fed up and tuned out. Do we have a President or a jive ass pimp lookin to sell us what we want for our vote?

Copyright 2012 by Jim Brubaker


Sackerson said...

Time to reevaluate the benefits of tertiary education in the age of the Internet, the Infinite Electric Library and masses of people who (like you) contribute for free.

Time to stop eating longlife cornstarch-heavy blood-sugar-seismic products off supermarket shelves and fastfood counters.

Time to live as healthily as possible and starve Big Pharma. And stop hoping doctors will make you immortal.

Time to take your money out of the bank.

This rebellion needs to be a peaceful, personal one.

Anonymous said...

Do you rally think we are headed to the greatest depression ever?

Jim in San Marcos said...

Hi Sack

Its always refreshing to hear from you.

There is one question that bothers me that I haven't got an answer for. If Greece and Spain's depositors withdraw all of their money from their banks (take my word for it, they are) where do the banks get funds to create new loans? And of course, all of the loans on the books are still there so all of the government printed dollars that secure the loans keep the banks functional, but the depositors have left.

During the Great Depression, the first people in line got their dollars and the last ones didn't.

This depression is different. Your money is safe, or is it? Inflation could eat it up. Gold which pays no interest is a lousy investment, but if the interest rate is zero, why not store your dollars in gold? They can't print gold!

Jim in San Marcos said...

Hi Anon 6:58

I thought this depression would take about 3 years. Well, it looks like it could be about 6 years, and we will get there.

You'll know when its had gone full cycle, your credit card won't buy anything.

Sackerson said...

Hi Jim

Put the money back into second-line banks that don't have a gambling arm and are run conservatively and frugally. The US has lots more strength in depth than the UK, where the bank monsters have eaten almost all their potential competitors.

Quite possibly a bank run (or series of them) is what could bring it all down.

Gold: you're preaching to the (reluctantly) converted. I don't like buying in at this price but long run it's been trading below par and really the current price is merely a correction and not a bubble yet. I'm slowly buying with a view to capital protection rather than real-terms gain; though I think gold could do well vs. house prices.

Jim in San Marcos said...

Hi Sack

If you own a home, you really don't need gold.

Your right gold at these prices seems a bit high. I like silver. Not as much down side on price. Plus it weighs a lot, which makes it a lot more difficult to steal. A nice set of sterling silver flatware sets a real nice dinner table and its functional.

Anonymous said...

For the poor and middle class, that can not afford gold bars, are good old American tools a decent investment?

Sackerson said...

Probably. Certain kinds of work can't be outsourced and will always be in demand. But if you're middle class, you can probably manage a couple of gold coins, like me.

Jim in San Marcos said...

Hi Sack

I'm not really a gold bug, but in the past, owning gold cost you the interest you would have made keeping it in the bank.

With interest rates at zero (taking inflation into consideration) I see no reason to let a bank fool around with my money for free.

The thing to really examine is the silver to gold ratio. It has been 16:1 historically. Based on that, gold is either way overpriced or silver is a real bargain.

If you examine the thought of a new world monetary currency, it would probably revolve around platinum, gold, silver and copper. Platinum is way under-priced if you consider its very limited supply.

When we examine zero interest rates, all it means is that the government has guaranteed all loans and there is no risk to the investor. Which means that the losses will be absorbed by printing more currency.

If interest rates went back to say 6.5% or better, I wouldn't consider holding metals at all.

Of course I'm not about to get rid of the sterling silverware or my 100oz "lead" door stop.

Jim in San Marcos said...

Hi Anon 12:13

Don't look at gold as an affordability issue. Having no money, will not hurt you if the currency turns worthless. If you are poor and in hock up to your eyeballs, that will all go away.

Investing in yourself and buying tools that you need for your trade are always a good investment and I'm not talking shovels, those are for leaning on.

If you were referring to old antique American tools, as an investment, they are out there, but the trouble is, after you clean them up they become a very good friend, and something very hard to part with. I have quite a few of them.

naive youngster said...

the depression may be i n 6 years, maybe 10 years, just keep increasing the timeline, you'll be eventually right and we'll all be dead.

you are so married to your thesis that even though most facts don't support it,currently, you will continue to go down with the ship.

most of you oldies have to talk to your kids, the younger generation, and see that we are not rolling over but continuing to push the American dream.

the next time you see facebook or google open its doors in another country, we'll talk about depression, you guys just don't get it!!!!

google is a country by itself, qualcomm, is a country by itself, all this gives us a huge margin of error. this country has made mistakes but we are still kicking ass and taking numbers...

Jim in San Marcos said...

Hi Youngster

I hate to break the news to you, we have been firmly in a great depression for 3 years.

The thing little understood about the Great Depression, is that it actually started in 1926. The government and the people finally faced reality in 1933. It was only then that it was refered to as the Great Depression. Most of the people in 1931 would have looked at you as being crazy, if you had call those hard times a depression.

Today people look at history and say oh yea, the Great Depression started with the stock crash in 1929. The punch bowl was still full in 1931. At that time in history, it crept up on the world like a disease. It was just a bad cold, only it kept on getting worse. The people then didn't realize they were in a depression until it was so obvious you couldn't overlook it.

Plus the government is the last body to point out a depression. To admit it, would spread fear and unrest.

Google stock trading at $660 dollars paying no dividend is what you define as reality? They mise well have called it the South Sea Trading Co.

ATP said...

I wonder under what circumstances "youngster" found himself coming across your blog Jim? For someone so convinced that he's sitting on the green side of an imaginary golden fence, how could the word "depression" ever of entered his brain to want to type the words into Google's search engine to begin with?

I doubt it Jim, but do you have the ability to track someones IP as the author of this blog? If you could pinpoint the location of this fool, something tells me it would zero in on an office located within Google's headquarters in the Bay Area, to a cubicle behind some door with a sign "Authorized Employees Only" on it.

Its an election year after all, and the fully funded paid internet trolls appear to be out in full force like they were back in 2008.

Anonymous said...

This person did not read all your previous posts, to become well rounded, before proclaiming there is no depression.

I'm sure this person still has his Biden/Obama sticker proudly placed on his rear end, and still feels good about Obamacare.

Jim in San Marcos said...

Hi Anon 1:29

Thanks for coming to my aid.

Most of those Obama bumper stickers were recalled with the cash for clunkers program.