The Coming Storm

When you turn on the news, you can tell the difference between a Democrat and a Republican just as easy as you can discern a woman’s voice from that of a man. 99 percent of the people speaking think that by some stroke of luck, what they say will change someone’s vote. My grandfather use to say, if you want to waste some time, talk about religion or politics. People are willing to die for their beliefs. You are not going to change their mind, no matter how long you talk.

I’m not sure how the Presidential election will go, but I do know that the economy is in a horrible mess. We have learned how to produce more with 20 percent less labor using computers. Raising the minimum wage to $15 per hour didn’t create any more jobs but it did raise the pay of those working for 2 dollars more than minimum wage. Everyone got a pay raise, not just the entry level worker.

We are getting one percent interest on our savings. It doesn’t look like the Democrats have our best interests at heart with this very low rate. The savers are being taxed at 5 to 7 percent minimum with these rates if you consider the “lost” interest from the lack of a realistic interest rate.

Stock markets and real estate are the real booming markets to make money in. The economy kind of offers up a question of “How is this possible?” The world credit orgy party could be ending soon.

The thing that could really start a financial meltdown is the exit of Great Britain from the European Union on June 23rd. Financial leaders talk about negative interest rates as if it is some tried and tested method of fixing the economy.

How dare people save money all their life and become rich—go figure. The funny thing is that most of the poor people spend all of their earnings trying to appear rich. Governments depend on banks for loans. And the banks loan their savers' deposits. Now you see why the banks were not allowed to fail. The government needs them, in order to juggle 21 trillion of borrowed debt. Common sense would suggest that a government cannot spend its way from bankruptcy back into prosperity.

At some point this house of cards will collapse. In 1929 individual investors panicked and brought the market down quite suddenly. In today’s market, there are investment advisors, they get paid to keep you in the market. If they sell everything, they are out of a job. So they are going to ride your 401k into the ground.

We have been here before in the Great Depression of 1929 and the pundits are right, it will be different this time. The people of 1929 were stupid and didn’t know what they were doing (believe that and I will tell you another). The people in charge right now are holding on by their fingertips. A straight face and a little hyperbole and they come across as financial wizards.

Turn on your TV and listen to the ads. Retirement is going to be fun. You’ll have gobs of money from your 401k. The new “Rule of 72” for interest rates has been changed. You work until you are 72 and then hope you don’t outlive your savings. The eighth wonder of the world is no longer “Compound Interest,” but “Unlimited Government Benefits.”

The one thing that should stand out, is that putting money in the bank and saving it, is an act of futility. If you have savings, convert it to cash and put it in a safety deposit box or buy some gold and silver. There is no reason to allow the bank to use your deposits at this low interest rate. If enough people do it, interest rates have to rise.

I think Bernie Sanders, Donald Trump and I are looking for the wheels to fall off of this Obama agenda band wagon before the election. Common sense, has value, but it's discovery, is often times late to the table.

Jobs Leaving the Country, a Public Joke

Ford Announced plans to move a plant to Mexico and create 2,800 jobs. You have to wonder if they are paying $15 an hour. Who is getting to full employment first? the hamburger flippers in this country or the people of Mexico?

In the US, the UAW had pushed for higher wages in its contract talks with the automaker last year, and Tuesday's announcement prompted a swift reaction. "Today’s announcement...is a disappointment and very troubling," UAW President Dennis Williams said in a statement. "For every investment in Mexico it means jobs that could have and should have been available right here in the USA."

This guy from the UAW is the first guy I know that can pull a rug out from underneath himself, while standing on it.

Then I hear that companies have evaded 100’s of billions of dollars in US taxes by moving overseas. Don’t get me wrong, but do corporations belong to countries like people do? They are machines that make money. By all means move if it increases the bottom line. Dividends is what the game is all about.

Then in Kalifornia people are outraged that the state colleges are taking more out of state students at the expense of in state students. They pay a lot higher tuition. It kind of lends to the opinion that the outraged were economically challenged, they might have to pay for their kid to go to college

Clinton got elected president in 1992 only because Ross Perot ran as an independent. Ross saw the jobs being sucked out of our economy. He was right, but it is a little too late to do much about it now. We could get some of it back over 20 years with the right policy, but it won’t happen overnight. Don’t hold your breath on this one, the word “Never,” comes to mind.

June seems like the month that everything will hit the fan. The primary election process in the US comes to a head, and the vote for Great Britain to stay in the Euro comes to a vote on June 23. And let’s face it, the European Union has flooded the countries in it, with minority populations that they didn’t want and now they have a way of saying “No more immigrants.”

As things get worse, expect more of the unexpected. We could invade Mexico and make it the 51'st state. That way we wouldn't have to worry about jobs leaving the country or the illegal immigrants; they would no longer be illegal.