Sunday, July 24, 2016

The Coming Election and Reality

Obama says that the economy is hunky dory. And Donald Trump thinks that we are going to hell in a hand basket.

Let’s address the issue. We are in a World Depression that is beyond anything experienced by man in world history. You can get 6 percent back on a credit card purchase, but you get zip back for money in the bank. 60 million people have stopped looking for work and 43 million people are on food stamps. The government message is this, "Don’t acknowledge the depression, if you do so, it becomes self-fulfilling." We do not have to worry about it becoming self-fulfilling we are there.

The options we have from here are several, we need to rebuild our infrastructure. We can afford to spend trillions on roads, water and electrical. We cannot afford to spend any more on Government Quantitative Easing programs. The odd thing is that the money borrowed from savers got us to where we are now. The government cannot pay back what it has borrowed or even pay the interest on what was borrowed at a fair market rate. Government is ripping off retired people of their interest income, that they expected to be generated from their savings.

From a realistic point of view, 20 to 30 cents on the dollar is about all the government is going to pay on its debts. Just what does that mean? It means if you have savings in the bank, you are about to lose 70 percent of your purchasing power through inflation, government taxation or a new currency. The neat thing, if you are broke, it is totally painless, you have nothing to lose.

What you have to realize is, the Federal Reserve, the Treasury and Congress have turned our financial markets upside down. The expected outcome is unknown. The people in charge of this financial economic experiment, have no historical guidelines to gauge what is happening. The only thing that can be deduced is that this is not going to end well, when it ends.

We didn’t build this country spending money to get 6 percent back, we built it saving money for a rainy day. We haven’t saved anything and now we have a rainy day. It’s a little like going camping and using the toilet paper to start the fire. You’ll enjoy the meal and then discover that there is no toilet paper. It was not a problem until it became a problem.

Friday, July 22, 2016

Congress and Laws

Some Congressman by the name of Elijah Cummings is screaming that we need to pass more laws to control guns and violence. He doesn’t even impress me as an adult, he’s one of those that could panic theater viewers if the rest room lines were too long

Think about it for a minute, have the laws against handguns eliminated murder? People have killed others since the beginning of time. Everyone in this country is entitled to buy a gun before they commit their first felony. What we need to realize is that laws are there to prosecute people that violate the written law. They do not prevent people from trying to kill you. I remember back 30 years ago, a man in Cheyenne Wyoming, kicked in the restroom door on a women’s restroom and took pictures of the girl in there. The police arrested him, but he had violated no laws that could send him to jail. So they released him. Later, Wyoming fixed that by passing a law making it a crime. Of course, a week later, they found the gentleman tied to a fence post with his testicals removed.

Laws do not curb behavior; they only threaten to you with jail or prison if you get caught. If the driver next to you cuts you off and you get mad and kill him with a hand gun, you’ll get 5 years if you are caught, and with good behavior you’ll be out in 2 ½. Your odds of getting caught, about 1 in 5.

Hand guns, when mixed with alcohol and drugs, become a lethal combination. Many will go to jail for doing something very stupid they would have never done sober, like rob a store.

Believe it or not, forbidding the sale of fully automatic weapons, enabled the terrorist to kill more people. Pull the trigger on a fully automatic weapon, the clip is gone in one second and you have probably missed everyone or cut one person in half, but I digress.

The urge for Congress to act every time there is a problem is probably what has put us in this mess. We cannot regulate behavior with laws, we regulate behavior with financial rewards. You don’t shoot a Congressman; you bribe him or her. So in most cases, passing a law restricting the flow or sale of something only raises the price to the consumer. The wholesaler can charge more for illegal items. The laws created by the legislatures only change the mode of delivery and cost.

Let’s back off of the idiots in Congress. Most voters when confronted with a problem, demand an immediate government solution. Common sense suggests that if a government solution was available, it would have been applied a long time ago.

Maybe that is why most new business' start out of a garage, there are no government restrictions.