I really cannot imagine what this must be like.
What is amazing to me is what good spirits these guys are in.... although I guess they are happy just to be alive.
Read somewhere that they sang the Chilean national anthem, trapped over a half mile under the earth.
Not a bad thing to pray about, if you pray.
Chile seeks to speed up rescue of trapped miners | Reuters
Tuesday, August 31, 2010
This is why our family buys from a local food co op
As much as possible, anyway.
In general. smaller is better, local is better, ..... for everything.
U.S. egg producers failed to follow own safety plans | Reuters
In general. smaller is better, local is better, ..... for everything.
U.S. egg producers failed to follow own safety plans | Reuters
How DARE you challenge my peer reviewed articles!!!!!
Cheap political crap masquerading as science.
Express.co.uk - Home of the Daily and Sunday Express | UK News :: Climate change lies are exposed
Express.co.uk - Home of the Daily and Sunday Express | UK News :: Climate change lies are exposed
Monday, August 30, 2010
Woman’s Body Found Under House Clutter After Four Months - TIME NewsFeed
THIS was so bizarre and weird I had to laugh, despite the obvious tragedy.
Nothing surprises me any more. NOTHING.
Woman’s Body Found Under House Clutter After Four Months - TIME NewsFeed
Nothing surprises me any more. NOTHING.
Woman’s Body Found Under House Clutter After Four Months - TIME NewsFeed
It's Not A Question Of IF Sovereign Nations Will Default, But HOW
If you think "it can't happen," please read this. These are not screeching fringe winguts out there saying this stuff.
It's Not A Question Of IF Sovereign Nations Will Default, But HOW
It's Not A Question Of IF Sovereign Nations Will Default, But HOW
Eyeless In Gaza by John Taylor Gatto
EXCELLENT article about the state of education. Not so much a wail or lament about our problems (although there is plenty of that) as a statement about what is important in helping your own child to be literate. Definitely worth a read.
Eyeless In Gaza by John Taylor Gatto
Eyeless In Gaza by John Taylor Gatto
Rise of sea levels is 'the greatest lie ever told' - Telegraph
More evidence of environmentalist alarmist crap.
The sea is NOT rising.
This stuff makes Piltdown look like child's play.
Rise of sea levels is 'the greatest lie ever told' - Telegraph
The sea is NOT rising.
This stuff makes Piltdown look like child's play.
Rise of sea levels is 'the greatest lie ever told' - Telegraph
Sunday, August 29, 2010
The Great Deleveraging Lie by Jim Quinn
Have you heard that we are "paying down our debt" and that consumers are spending less? Not so. Consumer debt at the end of 2008 was 13.8 trillion and now sits at 13.5 trillion. This is supposed to be evidence that Americans are taking in their belts, paying off credit cards, living more responsibly, right?
Just a minute, please. This ignores entirely the activity of banks, who have actually be responsible for FORGIVING (or at least writing off) much of that debt. In fact, it is actually worse than that. When you look at the real numbers, we have not stopped spending at all. Rather, we have taken on MORE debt.
Banks have written off approximately 500 billion of consumer debt since 2008.
If consumer debt was $13.8 trillion at the end of 2008 and the banks have since written off $800 billion, total write-offs were 5.66% of that debt. If total consumer debt now sits at $13.5 trillion, then consumers have actually taken on $500 billion of additional debt since the end of 2008. The consumer hasn't cut back at all. They are still spending and borrowing. It is beyond my comprehension that no one on CNBC or in the other mainstream media can do simple math to figure out that the deleveraging story is just a Big Lie.
Perhaps this is a deliberate and calculated lie. We are, after all, a CONSUMER economy. Consumption and spending is what makes the wheels go round. The gang of idiots at the top truly believe that if we can be convinced to go deeper into debt and spend more, the economy will recover. I ain't buying it, anyway.
The Great Deleveraging Lie by Jim Quinn
Just a minute, please. This ignores entirely the activity of banks, who have actually be responsible for FORGIVING (or at least writing off) much of that debt. In fact, it is actually worse than that. When you look at the real numbers, we have not stopped spending at all. Rather, we have taken on MORE debt.
Banks have written off approximately 500 billion of consumer debt since 2008.
If consumer debt was $13.8 trillion at the end of 2008 and the banks have since written off $800 billion, total write-offs were 5.66% of that debt. If total consumer debt now sits at $13.5 trillion, then consumers have actually taken on $500 billion of additional debt since the end of 2008. The consumer hasn't cut back at all. They are still spending and borrowing. It is beyond my comprehension that no one on CNBC or in the other mainstream media can do simple math to figure out that the deleveraging story is just a Big Lie.
Perhaps this is a deliberate and calculated lie. We are, after all, a CONSUMER economy. Consumption and spending is what makes the wheels go round. The gang of idiots at the top truly believe that if we can be convinced to go deeper into debt and spend more, the economy will recover. I ain't buying it, anyway.
The Great Deleveraging Lie by Jim Quinn
Saturday, August 28, 2010
Natural Element 47
This is a pretty good video. Celente (the first spokesman) is always a howling at the moon emoting jeremiad, but don't let that turn you off. The solid, nuts and bolts financial reasons silver is destined to rise (no, not rise, EXPLODE, so I believe) are touched on in the vid (which also has some cool special effects). This video is not designed to be a documentary, with tons of supporting links and reports and verifying info. That stuff all exists, but it is glossed over here to give you a panoramic view of why silver is, I believe, the best hedge and best investment in the financial world. This is a great introductory view into why you should consider buying silver.
...... and no, I am NOT a silver broker or dealer. You cannot buy any from me. I don't sell it. Every gram of silver I buy, I keep. I am not trying to hype my own little business here.
...... and no, I am NOT a silver broker or dealer. You cannot buy any from me. I don't sell it. Every gram of silver I buy, I keep. I am not trying to hype my own little business here.
Sebastian Mallaby: “Nobody Would Know Whom or What to Trust” — DollarCollapse.com
Pretty good analysis of the situation in which we find ourselves. We know that we are at the limits of where we can go re: debt, yet the guys at Treasury have no other political choice. All roads lead to the printing press.
Buy non-perishable food. It is not foolishness to have six months or so of stuff stored away and is very very cheap. Buy a good (Berkey is recommended) water filter and a generator.
Buy gold and silver. Real gold and silver. Not etf funds, not gold mining stocks, not futures. Real stuff you can hold in your hand. Keep it safe...., and if you keep it in a safe deposit box at a bank (not recommended!!) then at the very very very first sign of lines in front of the bank for people to get their money out (it is too late to plan, then), get it out.
There are other prudent things to think about, but continuing to put your faith and hope in the government to fix this mess they have created is a fool's errand.
Friday, August 27, 2010
Editorial: Watching is a crime? | Salisbury, NC - Salisbury Post
Editorial: Watching is a crime? | Salisbury, NC - Salisbury Post
It amazes me how when articles like this are posted on "conservative" sites, there is always a contingent who jump up and decry "cop haters!"
Seems that the cops (the bad ones, anyway) fear a camera worse than guns. Thuggish and pitiful. My advice is to be sure your phone has a "record" button on it and have it going whenever you are approached by police. You don't need to be open and blatant about it. In fact, it would be better if you simply recorded it without anyone knowing.
The vast majority of cops are good guys. Cameras and recorders help the rest of them.
Thursday, August 26, 2010
Even Tony Robbins Is Warning That An Economic Collapse Is Coming
I am torn. Really torn. When Tony Robbins, the the world's best known "motivational speaker" and the star of all those late night infomercials (ok yeah, I don't have a tv, but I saw him whenever I visited relatives.......) starts telling you about upcoming doom, you know things are looking bleak. Mr "unleash the power within you" and take charge of your own life is now saying we are facing a catastrophic economic retrenchment and you had better prepare, things are gloomy.
Maybe the fact that more and more people are howling doom and disaster is a sign the worst is past? I don't think so, but it the one item out there that makes me think "maybe we aren't headed over the cliff yet." Not much to cling to, I know. "Everyone is saying it, so it must be wrong."
Not that I have any EVIDENCE things are not going to get a lot lot worse. Everything I read makes me think "you know, I should buy some more non-perishable food" or "I should really enhance the skills I have in plumbing, or learn to fix a car, or learn wiring, or learn to weld" or "maybe I should buy a generator or some more ammo."
On the other hand, the one thing I have learned over the years is that the public is phenomenally stupid and lemming-like. My brother used to amuse me with stories of how Japanese people (he taught English in Japan for years) would resist new sporting events or cultural trends, and then all swarm in like some tsunami type wave. We are only slightly different in America, as we are amazingly homogenized, at least in popular culture.
The "man in the street" like you and me usually does not assess his culture so much as he swims in it like a fish and is unaware of how much it shapes his values, ideas and perspective. Before we were "post Christian" we at least had some sort of objective basis (the Bible, and the internal Holy Spirit) for saying "you know, I really don't CARE what all the people think, they are wrong!" This is cultural courage and the ability to stand alone, if need be, in the face of a culture addicted to lies.... of whatever stripe. This is gone, even in the evangelical world, as Christians remain appallingly ignorant of the book they claim is "truth," and instead select preachers according to their wishes, like an AM radio junkie who selects "Air America" over Rush Limbaugh.
When I die, I had rather be known as a weird, odd, "doesn't fit in" guy who held preposterous ideas but did not compromise, than slosh along in the soup of fools, lies, and outright wickedness that passes for popular wisdom.
Of course, I would like even MORE to be thought a man who displayed courage and was RIGHT in the face of a culture addicted to lies, but that is not my call to make. God both writes and reviews history, and I don't have His perspective. I just want to approximate the truth as best I can.
For the record, I hope Tony Robbins is wrong.
Maybe the fact that more and more people are howling doom and disaster is a sign the worst is past? I don't think so, but it the one item out there that makes me think "maybe we aren't headed over the cliff yet." Not much to cling to, I know. "Everyone is saying it, so it must be wrong."
Not that I have any EVIDENCE things are not going to get a lot lot worse. Everything I read makes me think "you know, I should buy some more non-perishable food" or "I should really enhance the skills I have in plumbing, or learn to fix a car, or learn wiring, or learn to weld" or "maybe I should buy a generator or some more ammo."
On the other hand, the one thing I have learned over the years is that the public is phenomenally stupid and lemming-like. My brother used to amuse me with stories of how Japanese people (he taught English in Japan for years) would resist new sporting events or cultural trends, and then all swarm in like some tsunami type wave. We are only slightly different in America, as we are amazingly homogenized, at least in popular culture.
The "man in the street" like you and me usually does not assess his culture so much as he swims in it like a fish and is unaware of how much it shapes his values, ideas and perspective. Before we were "post Christian" we at least had some sort of objective basis (the Bible, and the internal Holy Spirit) for saying "you know, I really don't CARE what all the people think, they are wrong!" This is cultural courage and the ability to stand alone, if need be, in the face of a culture addicted to lies.... of whatever stripe. This is gone, even in the evangelical world, as Christians remain appallingly ignorant of the book they claim is "truth," and instead select preachers according to their wishes, like an AM radio junkie who selects "Air America" over Rush Limbaugh.
When I die, I had rather be known as a weird, odd, "doesn't fit in" guy who held preposterous ideas but did not compromise, than slosh along in the soup of fools, lies, and outright wickedness that passes for popular wisdom.
Of course, I would like even MORE to be thought a man who displayed courage and was RIGHT in the face of a culture addicted to lies, but that is not my call to make. God both writes and reviews history, and I don't have His perspective. I just want to approximate the truth as best I can.
For the record, I hope Tony Robbins is wrong.
Wednesday, August 25, 2010
Three things the statists fear the worst......all there on my desk!
Hmmm. I was sitting at my desk the other night, reading (a REAL book, not the internet) and I happened to glance down. I had come in and placed my glock 26 on top of a book. I had also picked up some silver dollars and thrown them down beside the book. The thought hit me: "Those three items are feared more than probably much of anything else. An informed populace, who are ready to stage a tax revolt. An alternative currency, one founded on something other than "the full faith and credit of the US Government." A populace who is armed and unwilling to bleat in helpless submission to whatever some despot decides they want to declare the law to be.
The book, by the way, is on the FAIRTAX, which is a well documented and well thought out proposal that we scrap the personal income tax (repeal the 16th amendment) and replace it with a national sales tax, like a VAT. It is heartily endorsed by Neil Boortz, the radio host.
No Exit – Stage Left or Right | Euro Pacific Capital
Peter Schiff on the fed and the choices before it:
Those who fear a double dip recession are justified in their concerns, but they are also missing the big picture. The 2008 recession never ended. It was merely interrupted by trillions of dollars of stimulus that purchased GDP “growth” with borrowed money. But as the bills come due, GDP should now contract so we can settle up– but instead we’ll take on more debt.
I expect the coming doses of quantitative easing will finally spark adverse reactions, first in the dollar and later in the bond market. When a falling dollar forces consumer prices and long-term interest rates to rise, the Fed’s actions will be rendered impotent. The Open Markets Committee will have to make a horrific choice: fight inflation by tightening policy into a weakening economy, or fight recession by allowing inflation to burn out of control. I think it’s obvious that they will choose inflation, all the while pretending that it doesn’t exist.
No Exit – Stage Left or Right | Euro Pacific Capital
Those who fear a double dip recession are justified in their concerns, but they are also missing the big picture. The 2008 recession never ended. It was merely interrupted by trillions of dollars of stimulus that purchased GDP “growth” with borrowed money. But as the bills come due, GDP should now contract so we can settle up– but instead we’ll take on more debt.
I expect the coming doses of quantitative easing will finally spark adverse reactions, first in the dollar and later in the bond market. When a falling dollar forces consumer prices and long-term interest rates to rise, the Fed’s actions will be rendered impotent. The Open Markets Committee will have to make a horrific choice: fight inflation by tightening policy into a weakening economy, or fight recession by allowing inflation to burn out of control. I think it’s obvious that they will choose inflation, all the while pretending that it doesn’t exist.
No Exit – Stage Left or Right | Euro Pacific Capital
Tuesday, August 24, 2010
A reasonable scenario for how hyperinflation could/might/will occur
One day—when nothing much is going on in the markets, but general nervousness is running like a low-grade fever (as has been the case for a while now)—there will be a commodities burp: A slight but sudden rise in the price of a necessary commodity, such as oil.
This will jiggle Treasury yields, as asset managers will reduce their Treasury allocations, and go into the pressured commodity, in order to catch a profit. (Actually it won’t even be the asset managers—it will be their programmed trades.) These asset managers will sell Treasuries because, effectively, it’s become the principal asset they have to sell.
It won’t be the volume of the sell-off that will pique Bernanke and the drones at the Fed—it will be the timing. It’ll happen right before a largish Treasury auction. So Bernanke and the Fed will buy Treasuries, in an effort to counteract the sell-off and maintain low yields—they want to maintain low yields in order to discourage deflation. But they’ll also want to keep the Treasury cheaply funded. QE-lite has already set the stage for direct Fed buys of Treasuries. The world didn’t end. So the Fed will feel confident as it moves forward and nips this Treasury yield jiggle in the bud.
The Fed’s buying of Treasuries will occur in such a way that it will encourage asset managers to dump even more Treasuries into the Fed’s waiting arms. This dumping of Treasuries won’t be out of fear, at least not initially. Most likely, in the first 15 minutes or so of this event, the sell-off in Treasuries will be orderly, and carried out with the idea (at the time) of picking up those selfsame Treasuries a bit cheaper down the line.
However, the Fed will interpret this sell-off as a run on Treasuries. The Fed is already attuned to the bond markets’ fear that there’s a “Treasury bubble”. So the Fed will open its liquidity windows, and buy up every Treasury in sight, precisely so as to maintain “asset price stability” and “calm the markets”.
The Too Big To Fail banks will play a crucial part in this game. See, the problem with the American Zombies is, they weren’t nationalized. They got the best bits of nationalization—total liquidity, suspension of accounting and regulatory rules—but they still get to act under their own volition, and in their own best interest. Hence their obscene bonuses, paid out in the teeth of their practical bankruptcy. Hence their lack of lending into the weakened economy. Hence their hoarding of bailout monies, and predatory business practices. They’ve understood that, to get that sweet bail-out money (and those yummy bonuses), they have had to play the Fed’s game and buy up Treasuries, and thereby help disguise the monetization of the fiscal debt that has been going on since the Fed began purchasing the toxic assets from their balance sheets in 2008.
But they don’t have to do what the Fed tells them, much less what the Treasury tells them. Since they weren’t really nationalized, they’re not under anyone’s thumb. They can do as they please—and they have boatloads of Treasuries on their balance sheets.
So the TBTF banks, on seeing this run on Treasuries, will add to the panic by acting in their own best interests: They will be among the first to step off Treasuries. They will be the bleeding edge of the wave.
Here the panic phase of the event begins: Asset managers—on seeing this massive Fed buy of Treasuries, and the American Zombies selling Treasuries, all of this happening within days of a largish Treasury auction—will dump their own Treasuries en masse. They will be aware how precarious the U.S. economy is, how over-indebted the government is, how U.S. Treasuries look a lot like Greek debt. They’re not stupid: Everyone is aware of the idea of a “Treasury bubble” making the rounds. A lot of people—myself included—think that the Fed, the Treasury and the American Zombies are colluding in a triangular trade in Treasury bonds, carrying out a de facto Stealth Monetization: The Treasury issues the debt to finance fiscal spending, the TBTF banks buy them, with money provided to them by the Fed.
Whether it’s true or not is actually beside the point—there is the widespread perception that that is what’s going on. In a panic, widespread perception is your trading strategy.
So when the Fed begins buying Treasuries full-blast to prop up their prices, these asset managers will all decide, “Time to get out of Dodge—now.”
Note how it will not be China or Japan who all of a sudden decide to get out of Treasuries—those two countries will actually be left holding the bag. Rather, it will be American and (depending on the time of day when the event happens) European asset managers who get out of Treasuries first. It will be a flash panic—much like the flash-crash of last May. The events I describe above will happen in a very short span of time—less than an hour, probably. But unlike the event in May, there will be no rebound.
Notice, too, that Treasuries will maintain their yields in the face of this sell-off, at least initially. Why? Because the Fed, so determined to maintain “price stability”, will at first prevent yields from widening—which is precisely why so many will decide to sell into the panic: The Bernanke Backstop won’t soothe the markets—rather, it will make it too tempting not to sell.
The first of the asset managers or TBTF banks who are out of Treasuries will look for a place to park their cash—obviously. Where will all this ready cash go?
Commodities.
By the end of that terrible day, commodites of all stripes—precious and industrial metals, oil, foodstuffs—will shoot the moon. But it will not be because ordinary citizens have lost faith in the dollar (that will happen in the days and weeks ahead)—it will happen because once Treasuries are not the sure store of value, where are all those money managers supposed to stick all these dollars? In a big old vault? Under the mattress? In euros?
Commodities: At the time of the panic, commodities will be perceived as the only sure store of value, if Treasuries are suddenly anathema to the market—just as Treasuries were perceived as the only sure store of value, once so many of the MBS’s and CMBS’s went sour in 2007 and 2008.
It won’t be commodity ETF’s, or derivatives—those will be dismissed (rightfully) as being even less safe than Treasuries. Unlike before the Fall of ’08, this go-around, people will pay attention to counterparty risk. So the run on commodities will be for actual, feel-it-’cause-it’s-there commodities. By the end of the day of this panic, commodities will have risen between 50% and 100%. By week’s end, we’re talking 150% to 250%. (My private guess is gold will be finessed, but silver will shoot up the most—to $100 an ounce within the week.)
Of course, once commodities start to balloon, that’s when ordinary citizens will get their first taste of hyperinflation. They’ll see it at the gas pumps.
If oil spikes from $74 to $150 in a day, and then to $300 in a matter of a week—perfectly possible, in the midst of a panic—the gallon of gasoline will go to, what: $10? $15? $20?
So what happens then? People—regular Main Street people—will be crazy to buy up commodities (heating oil, food, gasoline, whatever) and buy them now while they are still more-or-less affordable, rather than later, when that $15 gallon of gas shoots to $30 per gallon.
If everyone decides at roughly the same time to exchange one good—currency—for another good—commodities—what happens to the relative price of one and the relative value of the other? Easy: One soars, the other collapses.
When people freak out and begin panic-buying basic commodities, their ordinary financial assets—equities, bonds, etc.—will collapse: Everyone will be rushing to get cash, so as to turn around and buy commodities.
So immediately after the Treasury markets tank, equities will fall catastrophically, probably within the next few days following the Treasury panic. This collapse in equity prices will bring an equivalent burst in commodity prices—the second leg up, if you will.
This sell-off of assets in pursuit of commodities will be self-reinforcing: There won’t be anything to stop it. As it spills over into the everyday economy, regular people will panic and start unloading hard assets—durable goods, cars and trucks, houses—in order to get commodities, principally heating oil, gas and foodstuffs. In other words, real-world assets will not appreciate or even hold their value, when the hyperinflation comes.
This is something hyperinflationist-skeptics never quite seem to grasp: In hyperinflation, asset prices don’t skyrocket—they collapse, both nominally and in relation to consumable commodities. A $300,000 house falls to $60,000 or less, or better yet, 50 ounces of silver—because in a hyperinflationist episode, a house is worthless, whereas 50 bits of silver can actually buy you stuff you might need.
Right now, I’m guessing that sensible people who’ve read this far are dismissing me as being full of shit—or at least victim of my own imagination. These sensible people, if they deign to engage in the scenario I’ve outlined above, will argue that the government—be it the Fed or the Treasury or a combination thereof—will find a way to stem the panic in Treasuries (if there ever is one), and put a stop to hyperinflation (if such a foolish and outlandish notion ever came to pass in America).
Uh-huh: So the Government will save us, is that it? Okay, so then my question is, How?
Let’s take the Fed: How could they stop a run on Treasuries? Answer: They can’t. See, the Fed has already been shoring up Treasuries—that was their strategy in 2008—’09: Buy up toxic assets from the TBTF banks, and have them turn around and buy Treasuries instead, all the while carefully monitoring Treasuries for signs of weakness. If Treasuries now turn toxic, what’s the Fed supposed to do? Bernanke long ago ran out of ammo: He’s just waving an empty gun around. If there’s a run on Treasuries, and he starts buying them to prop them up, it’ll only give incentive to other Treasury holders to get out now while the getting’s still good. If everyone decides to get out of Treasuries, then Bernanke and the Fed can do absolutely nothing effective. They’re at the mercy of events—in fact, they have been for quite a while already. They just haven’t realized it.
Well if the Fed can’t stop this, how about the Federal government—surely they can stop this, right?
In a word, no. They certainly lack the means to prevent a run on Treasuries. And as to hyperinflation, what exactly would the Federal government do to stop it? Implement price controls? That will only give rise to a rampant black market. Put soldiers out on the street? America is too big. Squirt out more “stimulus”? Sure, pump even more currency into a rapidly hyperinflating everyday economy—right . . .
(BTW, I actually think that this last option is something the Federal government might be foolish enough to try. Some moron like Palin or Biden might well advocate this idea of helter-skelter money-printing so as to “help all hard-working Americans”. And if they carried it out, this would bring us American-made images of people using bundles of dollars to feed their chimneys. I actually don’t think that politicians are so stupid as to actually start printing money to “fight rising prices”—but hey, when it comes to stupidity, you never know how far they can go.)
In fact, the only way the Federal government might be able to ameliorate the situation is if it decided to seize control of major supermarkets and gas stations, and hand out cupon cards of some sort, for basic staples—in other words, food rationing. This might prevent riots and protect the poor, the infirm and the old—it certainly won’t change the underlying problem, which will be hyperinflation.
“This is all bloody ridiculous,” I can practically hear the hyperinflation skeptics fume. “We’re just going through what the Japanese experienced: Just like the U.S., they went into massive government stimulus—hell, they invented quantitative easing—and look what’s happened to them: Stagnation, yes—hyperinflation, no.”
That’s right: The parallels with Japan are remarkably similar—except for one key difference. Japanese sovereign debt is infinitely more stable than America’s, because in Japan, the people are savers—they own the Japanese debt. In America, the people are broke, and the Nervous Nelly banks own the debt. That’s why Japanese sovereign debt is solid, whereas American Treasuries are soap-bubble-fragile.
That’s why I think there’ll be hyperinflation in America—that bubble’s soon to pop. I’m guessing if it doesn’t happen this fall, it’ll happen next fall, without question before the end of 2011.
From Zerohedge, which in my opinion is, along with Seeking Alpha , one of the best financial blogs out there.
This will jiggle Treasury yields, as asset managers will reduce their Treasury allocations, and go into the pressured commodity, in order to catch a profit. (Actually it won’t even be the asset managers—it will be their programmed trades.) These asset managers will sell Treasuries because, effectively, it’s become the principal asset they have to sell.
It won’t be the volume of the sell-off that will pique Bernanke and the drones at the Fed—it will be the timing. It’ll happen right before a largish Treasury auction. So Bernanke and the Fed will buy Treasuries, in an effort to counteract the sell-off and maintain low yields—they want to maintain low yields in order to discourage deflation. But they’ll also want to keep the Treasury cheaply funded. QE-lite has already set the stage for direct Fed buys of Treasuries. The world didn’t end. So the Fed will feel confident as it moves forward and nips this Treasury yield jiggle in the bud.
The Fed’s buying of Treasuries will occur in such a way that it will encourage asset managers to dump even more Treasuries into the Fed’s waiting arms. This dumping of Treasuries won’t be out of fear, at least not initially. Most likely, in the first 15 minutes or so of this event, the sell-off in Treasuries will be orderly, and carried out with the idea (at the time) of picking up those selfsame Treasuries a bit cheaper down the line.
However, the Fed will interpret this sell-off as a run on Treasuries. The Fed is already attuned to the bond markets’ fear that there’s a “Treasury bubble”. So the Fed will open its liquidity windows, and buy up every Treasury in sight, precisely so as to maintain “asset price stability” and “calm the markets”.
The Too Big To Fail banks will play a crucial part in this game. See, the problem with the American Zombies is, they weren’t nationalized. They got the best bits of nationalization—total liquidity, suspension of accounting and regulatory rules—but they still get to act under their own volition, and in their own best interest. Hence their obscene bonuses, paid out in the teeth of their practical bankruptcy. Hence their lack of lending into the weakened economy. Hence their hoarding of bailout monies, and predatory business practices. They’ve understood that, to get that sweet bail-out money (and those yummy bonuses), they have had to play the Fed’s game and buy up Treasuries, and thereby help disguise the monetization of the fiscal debt that has been going on since the Fed began purchasing the toxic assets from their balance sheets in 2008.
But they don’t have to do what the Fed tells them, much less what the Treasury tells them. Since they weren’t really nationalized, they’re not under anyone’s thumb. They can do as they please—and they have boatloads of Treasuries on their balance sheets.
So the TBTF banks, on seeing this run on Treasuries, will add to the panic by acting in their own best interests: They will be among the first to step off Treasuries. They will be the bleeding edge of the wave.
Here the panic phase of the event begins: Asset managers—on seeing this massive Fed buy of Treasuries, and the American Zombies selling Treasuries, all of this happening within days of a largish Treasury auction—will dump their own Treasuries en masse. They will be aware how precarious the U.S. economy is, how over-indebted the government is, how U.S. Treasuries look a lot like Greek debt. They’re not stupid: Everyone is aware of the idea of a “Treasury bubble” making the rounds. A lot of people—myself included—think that the Fed, the Treasury and the American Zombies are colluding in a triangular trade in Treasury bonds, carrying out a de facto Stealth Monetization: The Treasury issues the debt to finance fiscal spending, the TBTF banks buy them, with money provided to them by the Fed.
Whether it’s true or not is actually beside the point—there is the widespread perception that that is what’s going on. In a panic, widespread perception is your trading strategy.
So when the Fed begins buying Treasuries full-blast to prop up their prices, these asset managers will all decide, “Time to get out of Dodge—now.”
Note how it will not be China or Japan who all of a sudden decide to get out of Treasuries—those two countries will actually be left holding the bag. Rather, it will be American and (depending on the time of day when the event happens) European asset managers who get out of Treasuries first. It will be a flash panic—much like the flash-crash of last May. The events I describe above will happen in a very short span of time—less than an hour, probably. But unlike the event in May, there will be no rebound.
Notice, too, that Treasuries will maintain their yields in the face of this sell-off, at least initially. Why? Because the Fed, so determined to maintain “price stability”, will at first prevent yields from widening—which is precisely why so many will decide to sell into the panic: The Bernanke Backstop won’t soothe the markets—rather, it will make it too tempting not to sell.
The first of the asset managers or TBTF banks who are out of Treasuries will look for a place to park their cash—obviously. Where will all this ready cash go?
Commodities.
By the end of that terrible day, commodites of all stripes—precious and industrial metals, oil, foodstuffs—will shoot the moon. But it will not be because ordinary citizens have lost faith in the dollar (that will happen in the days and weeks ahead)—it will happen because once Treasuries are not the sure store of value, where are all those money managers supposed to stick all these dollars? In a big old vault? Under the mattress? In euros?
Commodities: At the time of the panic, commodities will be perceived as the only sure store of value, if Treasuries are suddenly anathema to the market—just as Treasuries were perceived as the only sure store of value, once so many of the MBS’s and CMBS’s went sour in 2007 and 2008.
It won’t be commodity ETF’s, or derivatives—those will be dismissed (rightfully) as being even less safe than Treasuries. Unlike before the Fall of ’08, this go-around, people will pay attention to counterparty risk. So the run on commodities will be for actual, feel-it-’cause-it’s-there commodities. By the end of the day of this panic, commodities will have risen between 50% and 100%. By week’s end, we’re talking 150% to 250%. (My private guess is gold will be finessed, but silver will shoot up the most—to $100 an ounce within the week.)
Of course, once commodities start to balloon, that’s when ordinary citizens will get their first taste of hyperinflation. They’ll see it at the gas pumps.
If oil spikes from $74 to $150 in a day, and then to $300 in a matter of a week—perfectly possible, in the midst of a panic—the gallon of gasoline will go to, what: $10? $15? $20?
So what happens then? People—regular Main Street people—will be crazy to buy up commodities (heating oil, food, gasoline, whatever) and buy them now while they are still more-or-less affordable, rather than later, when that $15 gallon of gas shoots to $30 per gallon.
If everyone decides at roughly the same time to exchange one good—currency—for another good—commodities—what happens to the relative price of one and the relative value of the other? Easy: One soars, the other collapses.
When people freak out and begin panic-buying basic commodities, their ordinary financial assets—equities, bonds, etc.—will collapse: Everyone will be rushing to get cash, so as to turn around and buy commodities.
So immediately after the Treasury markets tank, equities will fall catastrophically, probably within the next few days following the Treasury panic. This collapse in equity prices will bring an equivalent burst in commodity prices—the second leg up, if you will.
This sell-off of assets in pursuit of commodities will be self-reinforcing: There won’t be anything to stop it. As it spills over into the everyday economy, regular people will panic and start unloading hard assets—durable goods, cars and trucks, houses—in order to get commodities, principally heating oil, gas and foodstuffs. In other words, real-world assets will not appreciate or even hold their value, when the hyperinflation comes.
This is something hyperinflationist-skeptics never quite seem to grasp: In hyperinflation, asset prices don’t skyrocket—they collapse, both nominally and in relation to consumable commodities. A $300,000 house falls to $60,000 or less, or better yet, 50 ounces of silver—because in a hyperinflationist episode, a house is worthless, whereas 50 bits of silver can actually buy you stuff you might need.
Right now, I’m guessing that sensible people who’ve read this far are dismissing me as being full of shit—or at least victim of my own imagination. These sensible people, if they deign to engage in the scenario I’ve outlined above, will argue that the government—be it the Fed or the Treasury or a combination thereof—will find a way to stem the panic in Treasuries (if there ever is one), and put a stop to hyperinflation (if such a foolish and outlandish notion ever came to pass in America).
Uh-huh: So the Government will save us, is that it? Okay, so then my question is, How?
Let’s take the Fed: How could they stop a run on Treasuries? Answer: They can’t. See, the Fed has already been shoring up Treasuries—that was their strategy in 2008—’09: Buy up toxic assets from the TBTF banks, and have them turn around and buy Treasuries instead, all the while carefully monitoring Treasuries for signs of weakness. If Treasuries now turn toxic, what’s the Fed supposed to do? Bernanke long ago ran out of ammo: He’s just waving an empty gun around. If there’s a run on Treasuries, and he starts buying them to prop them up, it’ll only give incentive to other Treasury holders to get out now while the getting’s still good. If everyone decides to get out of Treasuries, then Bernanke and the Fed can do absolutely nothing effective. They’re at the mercy of events—in fact, they have been for quite a while already. They just haven’t realized it.
Well if the Fed can’t stop this, how about the Federal government—surely they can stop this, right?
In a word, no. They certainly lack the means to prevent a run on Treasuries. And as to hyperinflation, what exactly would the Federal government do to stop it? Implement price controls? That will only give rise to a rampant black market. Put soldiers out on the street? America is too big. Squirt out more “stimulus”? Sure, pump even more currency into a rapidly hyperinflating everyday economy—right . . .
(BTW, I actually think that this last option is something the Federal government might be foolish enough to try. Some moron like Palin or Biden might well advocate this idea of helter-skelter money-printing so as to “help all hard-working Americans”. And if they carried it out, this would bring us American-made images of people using bundles of dollars to feed their chimneys. I actually don’t think that politicians are so stupid as to actually start printing money to “fight rising prices”—but hey, when it comes to stupidity, you never know how far they can go.)
In fact, the only way the Federal government might be able to ameliorate the situation is if it decided to seize control of major supermarkets and gas stations, and hand out cupon cards of some sort, for basic staples—in other words, food rationing. This might prevent riots and protect the poor, the infirm and the old—it certainly won’t change the underlying problem, which will be hyperinflation.
“This is all bloody ridiculous,” I can practically hear the hyperinflation skeptics fume. “We’re just going through what the Japanese experienced: Just like the U.S., they went into massive government stimulus—hell, they invented quantitative easing—and look what’s happened to them: Stagnation, yes—hyperinflation, no.”
That’s right: The parallels with Japan are remarkably similar—except for one key difference. Japanese sovereign debt is infinitely more stable than America’s, because in Japan, the people are savers—they own the Japanese debt. In America, the people are broke, and the Nervous Nelly banks own the debt. That’s why Japanese sovereign debt is solid, whereas American Treasuries are soap-bubble-fragile.
That’s why I think there’ll be hyperinflation in America—that bubble’s soon to pop. I’m guessing if it doesn’t happen this fall, it’ll happen next fall, without question before the end of 2011.
From Zerohedge, which in my opinion is, along with Seeking Alpha , one of the best financial blogs out there.
As egg producers consolidate, problems of just one company can be far-reaching
This is PRECISELY the problem with such a highly specialized GRID produces. When one aspect of it goes down, the whole thing goes down.
This is a serious problem when you consider the warnings of the prepper/survivalist crowd.
As egg producers consolidate, problems of just one company can be far-reaching
This is a serious problem when you consider the warnings of the prepper/survivalist crowd.
As egg producers consolidate, problems of just one company can be far-reaching
Guest Post: How Hyperinflation Will Happen | zero hedge
Very interesting article by Tyler Durden on hyper inflation. Two things are interesting to me.
1) He distinguishes between Inflation and Hyperinflation. One is an overheated economy, the other is a collapse of faith in the currency, and the two are only nominally related.
2) He believes the onset of hyperinflation will be a "flash" event brought on by what every one with four functioning neurons has been telling us: we have simply shifted our toxic asset bubble from tech (1999) to real estate (2008) to treasuries (now). US Treasury debt has ballooned out to gargantuan levels (1.5 trillion of new debt, 2.5 times in two years what it took us 200 years to accumulate). His scenario for how this will happen looks very reasonable to me.
Guest Post: How Hyperinflation Will Happen | zero hedge
1) He distinguishes between Inflation and Hyperinflation. One is an overheated economy, the other is a collapse of faith in the currency, and the two are only nominally related.
2) He believes the onset of hyperinflation will be a "flash" event brought on by what every one with four functioning neurons has been telling us: we have simply shifted our toxic asset bubble from tech (1999) to real estate (2008) to treasuries (now). US Treasury debt has ballooned out to gargantuan levels (1.5 trillion of new debt, 2.5 times in two years what it took us 200 years to accumulate). His scenario for how this will happen looks very reasonable to me.
Guest Post: How Hyperinflation Will Happen | zero hedge
Monday, August 23, 2010
YouTube - Japan: America's Lost Decade
This is, contrary to the title, not about Japan, but about Japan compared to the USA. This is a must watch video
The best thing you can do is watch it all the way through, and sign up for the mailing list. 10 years from now you WILL be glad you did.
YouTube - Japan: America's Lost Decade
The best thing you can do is watch it all the way through, and sign up for the mailing list. 10 years from now you WILL be glad you did.
YouTube - Japan: America's Lost Decade
Sunday, August 22, 2010
Amazon review of "Nowhere to Run" by CJ Box
I reviewed on Amazon Amazon the book by CJ Box, "Nowhere to Run."
If you are interested:
This was my first Box book. My wife has been raving about him, so I picked it up...., and could not put it down. It is a great read. It has action, excitement, a verbal panorama of the western mountain states, and does something that few mainstream writers have the courage to do. He attempts to explain the deep undercurrent of populist resentment against the "government men" who are, according to the populists, destroying the freedoms that built the country. I was shocked at the book, because you almost never find these sentiments expressed in popular culture. They are usually limited to websites and groups concerning themselves with guns, libertarianism, and various political fringe groups. Splinter groups and survivalists are either the heroes or (more often) crazy right wing loons. It is interesting to me that Box shows an awareness of the issues stirring these groups, and even a sympathy for them, without aligning himself with them. I found the ending to be fairly gripping, as Joe Pickett holds on to a loyalty to the existing legal structures while recognizing that something is very very rotten in them. Maybe I find that compelling because that is where I find myself.
I read the book on the anniversary of Ruby Ridge (August 21, 1992) and was struck by how many of the issues that prompted that mess have remained the same, and are now bubbling to the surface in contemporary literature.
If you are interested:
This was my first Box book. My wife has been raving about him, so I picked it up...., and could not put it down. It is a great read. It has action, excitement, a verbal panorama of the western mountain states, and does something that few mainstream writers have the courage to do. He attempts to explain the deep undercurrent of populist resentment against the "government men" who are, according to the populists, destroying the freedoms that built the country. I was shocked at the book, because you almost never find these sentiments expressed in popular culture. They are usually limited to websites and groups concerning themselves with guns, libertarianism, and various political fringe groups. Splinter groups and survivalists are either the heroes or (more often) crazy right wing loons. It is interesting to me that Box shows an awareness of the issues stirring these groups, and even a sympathy for them, without aligning himself with them. I found the ending to be fairly gripping, as Joe Pickett holds on to a loyalty to the existing legal structures while recognizing that something is very very rotten in them. Maybe I find that compelling because that is where I find myself.
I read the book on the anniversary of Ruby Ridge (August 21, 1992) and was struck by how many of the issues that prompted that mess have remained the same, and are now bubbling to the surface in contemporary literature.
Movie "Lord of War" and Victor Bout
For those of you who read the story of Victor Bout's recent court case where Thailand extradited him to the USA to face trial, you might remember the Movie Lord of War (skewered pretty good here).
The hypocrisy of the USA is astounding here. We are the largest "merchant of death" in the world, eclipsing other countries by exponential factors, see the chart on this page. Evidently, the audacious and unforgivable action of Mr. Bout was recognizing a profit opportunity, utilizing his connections, and taking market share away from the USA....., the "moral" supplier of these weapons!
There are two things interesting to me here. One, Bout is clearly portrayed (accurately it seems) as helping to loot the vast storehouses of weapons which were cached in the old Soviet Union, selling them abroad. It would seem that the Russians, Ukranians, Georgians etc, would be the ones wanting him. Instead, they are his defenders......, which tells you that there is more here than simply a rogue capitalist.
Two, Bout is portrayed as an inveterate philanderer, which prompts his wife to turn him in. The movie portrays her as the one who finally hands him over to the authorities. I don't know about his horn dogging (many rich and powerful men seem to share that characteristic), but the article below reveals his wife as weeping over his indictments, refuting them, and claiming they are "all political."
This just reaffirms my contention that when you go higher up, things get murky and all kinds of political links appear. Secondly it is just one more illustration that the entertainment industry should stick to things it knows about -- special effects and steamy sex and vapid gossip -- and spare us the morality sermons. That crowd, which would not know a moral absolute if it bit them on the butt, is nevertheless determined to prate unctuously about villainy and heroes. What they do instead is reveal their own moral bankruptcy and obtuseness in the process.
Arms Suspect Viktor Bout Vows to Win Case After Extradition to U.S. - NYTimes.com
The hypocrisy of the USA is astounding here. We are the largest "merchant of death" in the world, eclipsing other countries by exponential factors, see the chart on this page. Evidently, the audacious and unforgivable action of Mr. Bout was recognizing a profit opportunity, utilizing his connections, and taking market share away from the USA....., the "moral" supplier of these weapons!
There are two things interesting to me here. One, Bout is clearly portrayed (accurately it seems) as helping to loot the vast storehouses of weapons which were cached in the old Soviet Union, selling them abroad. It would seem that the Russians, Ukranians, Georgians etc, would be the ones wanting him. Instead, they are his defenders......, which tells you that there is more here than simply a rogue capitalist.
Two, Bout is portrayed as an inveterate philanderer, which prompts his wife to turn him in. The movie portrays her as the one who finally hands him over to the authorities. I don't know about his horn dogging (many rich and powerful men seem to share that characteristic), but the article below reveals his wife as weeping over his indictments, refuting them, and claiming they are "all political."
This just reaffirms my contention that when you go higher up, things get murky and all kinds of political links appear. Secondly it is just one more illustration that the entertainment industry should stick to things it knows about -- special effects and steamy sex and vapid gossip -- and spare us the morality sermons. That crowd, which would not know a moral absolute if it bit them on the butt, is nevertheless determined to prate unctuously about villainy and heroes. What they do instead is reveal their own moral bankruptcy and obtuseness in the process.
Arms Suspect Viktor Bout Vows to Win Case After Extradition to U.S. - NYTimes.com
Just in the past year's debt....
The amount of debt load dropped on the country in the year 2010 by the government of Obama, Reid, and Pelosi-- the entity known as ORP - exceeds the GDP of any country in the world except: China, Japan, Britain, Germany, France, Italy, Spain, Brazil, or Canada.
Greece is a perfect example of what happens when the public sector spending eclipses private sector spending.... what we are racing towards now at breakneck speed. The lesson is that once this public sector spending reaches a certain level, it becomes impossible to undo the spending without tearing the economy completely apart..... and NO politician will ever do that. It either dies a violent death or a slow gurgling strangling one. Simply put, once that line is crossed, it will take a revolution to set things right, and even that is no guarantee. In times of collapse and revolt, there are always despots and tyrants who see "political power lying in the streets" who then say "I am going to pick it up" (Vladimir Lenin). Revolutions, even those "successful" rarely go down well.
We have a window of opportunity to take the medicine (which will be painful) and get the country on a track to fiscal sanity. That window is closing rapidly. Chile beckons. I am listening, but I fear for my children.
And the Answer Is …. - Exchequer - National Review Online
Greece is a perfect example of what happens when the public sector spending eclipses private sector spending.... what we are racing towards now at breakneck speed. The lesson is that once this public sector spending reaches a certain level, it becomes impossible to undo the spending without tearing the economy completely apart..... and NO politician will ever do that. It either dies a violent death or a slow gurgling strangling one. Simply put, once that line is crossed, it will take a revolution to set things right, and even that is no guarantee. In times of collapse and revolt, there are always despots and tyrants who see "political power lying in the streets" who then say "I am going to pick it up" (Vladimir Lenin). Revolutions, even those "successful" rarely go down well.
We have a window of opportunity to take the medicine (which will be painful) and get the country on a track to fiscal sanity. That window is closing rapidly. Chile beckons. I am listening, but I fear for my children.
And the Answer Is …. - Exchequer - National Review Online
Friday, August 20, 2010
Obama and religion... Obama is a Muslim???
The WAPO has these headlines, saying that Obama is not very overtly religious. Christian people don't like this very much, it seems, at least the Christian people I hang out with. However, I think it is a good thing. Being religious in a public setting is often just a tool to gain your trust so they can stick it to you more effectively. It doesn't really bother me that O doesn't go to church........, especially when I consider the content of the sermons of the church he DID go to in Chicago.
Lots of speculation on O's religious views out there. For me, I care less about his personal religious views than the way he runs things, and I cannot for the life of me see why there is a fascination with this stuff. The idea that you can tell how a politician will govern from his professed religious views should be so dead that you need a coroner's inquest to dig it up, but people still cling to it.
As for my own views on Obama's religious convictions, I just think he is not very religious at all. Submission to Allah, Jehovah, Christ or whoever would demand that Obama's own ego be replaced as an object of worship. I don't see that happening at present. There is never space for more than one God in the room.
Lots of speculation on O's religious views out there. For me, I care less about his personal religious views than the way he runs things, and I cannot for the life of me see why there is a fascination with this stuff. The idea that you can tell how a politician will govern from his professed religious views should be so dead that you need a coroner's inquest to dig it up, but people still cling to it.
As for my own views on Obama's religious convictions, I just think he is not very religious at all. Submission to Allah, Jehovah, Christ or whoever would demand that Obama's own ego be replaced as an object of worship. I don't see that happening at present. There is never space for more than one God in the room.
What is all this stuff about an "altar"?
Psalm 26:6 says "I wash my hands in innocence, and go about your altar O Lord"
Anyone with the slightest bit of familiarity with the Bible, and especially the Older Covenant (testament) knows that the talk of an "altar" runs constantly through it. This morning, I was especially struck with the talk of innocence and goodness, and an altar.
An "altar" is simply a symbolic reference to the idea so hateful to modern man that God is a God of justice, and that rebellion is not just glossed over in a grandfatherly "tut tut" but must be paid for. The slaughter of "innocent" and "pure" beasts in a symbolic ritual of appeasement to a God who dares to be furious at our misdeeds continues to offend the sensibilities of men.
That is at the core of Christian thought. I need an altar. What struck me this morning is that the Psalmist proclaims his "blameless life" unwavering trust in God, truthfulness, integrity and refusal to hang out with the wicked......, and he only does that in the context of "going about the altar," which is a blunt admission that his life is NOT good, and must be cleansed of its filth. Thus the statement about "washing hands." We have no moral fiber of our own. It is all derived and alien. The thing that an unbelieving society hates about us....., and has a right to hate... is the perception that we think we are "better than them." Our statements about our own moral standards are perceived as smug and superior. Some of that is unavoidable, as Jesus said that we all naturally hate God and his goodness. However, it is hard to hate a man who is truly humble and knows that every bit of good character he has is from an altar where someone else had to be utterly consumed so that I can claim to be "innocent."
Today I would love to be innocent. I really would. But I want even more to know why I am innocent. I want a glimpse of another altar, where God himself took the fiery judgment so I don't have to.
Anyone with the slightest bit of familiarity with the Bible, and especially the Older Covenant (testament) knows that the talk of an "altar" runs constantly through it. This morning, I was especially struck with the talk of innocence and goodness, and an altar.
An "altar" is simply a symbolic reference to the idea so hateful to modern man that God is a God of justice, and that rebellion is not just glossed over in a grandfatherly "tut tut" but must be paid for. The slaughter of "innocent" and "pure" beasts in a symbolic ritual of appeasement to a God who dares to be furious at our misdeeds continues to offend the sensibilities of men.
That is at the core of Christian thought. I need an altar. What struck me this morning is that the Psalmist proclaims his "blameless life" unwavering trust in God, truthfulness, integrity and refusal to hang out with the wicked......, and he only does that in the context of "going about the altar," which is a blunt admission that his life is NOT good, and must be cleansed of its filth. Thus the statement about "washing hands." We have no moral fiber of our own. It is all derived and alien. The thing that an unbelieving society hates about us....., and has a right to hate... is the perception that we think we are "better than them." Our statements about our own moral standards are perceived as smug and superior. Some of that is unavoidable, as Jesus said that we all naturally hate God and his goodness. However, it is hard to hate a man who is truly humble and knows that every bit of good character he has is from an altar where someone else had to be utterly consumed so that I can claim to be "innocent."
Today I would love to be innocent. I really would. But I want even more to know why I am innocent. I want a glimpse of another altar, where God himself took the fiery judgment so I don't have to.
Taxing "the rich"
In just six months, on January 1, 2011, the largest tax hikes in the history of America will take effect.
They will hit families and small businesses in three great waves.
On January 1, 2011, here’s what happens... (read it to the end, so you see all three waves)...
First Wave:
Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families.
These will all expire on January 1, 2011. Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Certain itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.
The full list of marginal rate hikes is below:
The 10% bracket rises to an expanded 15%
The 25% bracket rises to 28%
The 28% bracket rises to 31%
The 33% bracket rises to 36%
The 35% bracket rises to 39.6%
Higher taxes on marriage and family. The "marriage penalty" (narrower tax brackets for married couples) will return from the first dollar of income.
The child tax credit will be cut in half from $1000 to $500 per child.
The standard deduction will no longer be doubled for married couples relative to the single level.
The dependent care and adoption tax credits will be cut.
The return of the Death Tax.
This year only, there is no death tax. (It’s a quirk!) For those dying on or after January 1, 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes, a business, a retirement account, could easily pass along a death tax bill to their loved ones. Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money. Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax. Think about your own family’s assets. Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million. Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash! That’s 55% of the value of the assets over $1 million! Do you have that kind of cash sitting around waiting to pay the estate tax?
Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.
Second Wave:
Obamacare
There are over twenty new or higher taxes in "Obamacare." (HA, and you thought this was about HEALTHCARE? Sucker!) Several will first go into effect on January 1, 2011. They include:
The "Medicine Cabinet Tax" Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).
The "Special Needs Kids Tax" This provision imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.
There are thousands of families with special needs children in the United States , and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington , D.C. ( National Child Research Center ) can easily exceed $14,000 per year. Under tax rules, FSA dollars can not be used to pay for this type of special needs education
The HSA (Health Savings Account) Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave:
The Alternative Minimum Tax (AMT) and Employer Tax Hikes. When Americans prepare to file their tax returns in January of 2011, they'll be in for a nasty surprise-the AMT won't be held harmless, and many tax relief provisions will have expired.
The major items include:
The AMT will hit over 28 million families, up from 4 million last year.
According to the left-leaning Tax Policy Center , Congress' failure to index the AMT will lead to an explosion of AMT taxpaying families-rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.
Small business expensing will be slashed and 50% expensing will disappear.
Small businesses can normally expense (rather than slowly-deduct, or "depreciate") equipment purchases up to $250,000.
This will be cut all the way down to $25,000. Larger businesses can currently expense half of their purchases of equipment.
In January of 2011, all of it will have to be "depreciated."
Taxes will be raised on all types of businesses. Idiots howl in glee at the thought of "sticking it to the man" with all those businesses paying taxes, not realizing they are just applauding themselves paying higher prices for goods and services. There is no "business" there you whose pocket you can pick. They just pass the prices on to you.
There are literally scores of tax hikes on business that will take place. The biggest is the loss of the "research and experimentation tax credit," but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced.
The deduction for tuition and fees will not be available.
Tax credits for education will be limited.
Teachers will no longer be able to deduct classroom expenses.
Coverdell Education Savings Accounts will be cut.
Employer-provided educational assistance is curtailed.
The student loan interest deduction will be disallowed for hundreds of thousands of families.
Charitable Contributions from IRAs no longer allowed.
Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.
This contribution also counts toward an annual "required minimum distribution." This ability will no longer be there.
And worse yet?
Now, your insurance will be INCOME on your W2's!
One of the surprises we'll find come next year, is what follows - - a little "surprise" that 99% of us had no idea was included in the "new and improved" healthcare legislation .
Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that's a private concern or governmental body of some sort.
If you're retired? So what... your gross will go up by the amount of insurance you get.
You will be required to pay taxes on a large sum of money that you have never seen. Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That's what you'll pay next year.
For many, it also puts you into a new higher bracket so it's even worse.
This is how the government is going to buy insurance for the15% that don't have insurance and it's only part of the tax increases.
Not believing this??? Here is a research of the summaries.....
On page 25 of 29: TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001, as modified by sec. 10901) Sec.9002 "requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income."
They will hit families and small businesses in three great waves.
On January 1, 2011, here’s what happens... (read it to the end, so you see all three waves)...
First Wave:
Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families.
These will all expire on January 1, 2011. Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Certain itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.
The full list of marginal rate hikes is below:
The 10% bracket rises to an expanded 15%
The 25% bracket rises to 28%
The 28% bracket rises to 31%
The 33% bracket rises to 36%
The 35% bracket rises to 39.6%
Higher taxes on marriage and family. The "marriage penalty" (narrower tax brackets for married couples) will return from the first dollar of income.
The child tax credit will be cut in half from $1000 to $500 per child.
The standard deduction will no longer be doubled for married couples relative to the single level.
The dependent care and adoption tax credits will be cut.
The return of the Death Tax.
This year only, there is no death tax. (It’s a quirk!) For those dying on or after January 1, 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes, a business, a retirement account, could easily pass along a death tax bill to their loved ones. Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money. Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax. Think about your own family’s assets. Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million. Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash! That’s 55% of the value of the assets over $1 million! Do you have that kind of cash sitting around waiting to pay the estate tax?
Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.
Second Wave:
Obamacare
There are over twenty new or higher taxes in "Obamacare." (HA, and you thought this was about HEALTHCARE? Sucker!) Several will first go into effect on January 1, 2011. They include:
The "Medicine Cabinet Tax" Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).
The "Special Needs Kids Tax" This provision imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.
There are thousands of families with special needs children in the United States , and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington , D.C. ( National Child Research Center ) can easily exceed $14,000 per year. Under tax rules, FSA dollars can not be used to pay for this type of special needs education
The HSA (Health Savings Account) Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave:
The Alternative Minimum Tax (AMT) and Employer Tax Hikes. When Americans prepare to file their tax returns in January of 2011, they'll be in for a nasty surprise-the AMT won't be held harmless, and many tax relief provisions will have expired.
The major items include:
The AMT will hit over 28 million families, up from 4 million last year.
According to the left-leaning Tax Policy Center , Congress' failure to index the AMT will lead to an explosion of AMT taxpaying families-rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.
Small business expensing will be slashed and 50% expensing will disappear.
Small businesses can normally expense (rather than slowly-deduct, or "depreciate") equipment purchases up to $250,000.
This will be cut all the way down to $25,000. Larger businesses can currently expense half of their purchases of equipment.
In January of 2011, all of it will have to be "depreciated."
Taxes will be raised on all types of businesses. Idiots howl in glee at the thought of "sticking it to the man" with all those businesses paying taxes, not realizing they are just applauding themselves paying higher prices for goods and services. There is no "business" there you whose pocket you can pick. They just pass the prices on to you.
There are literally scores of tax hikes on business that will take place. The biggest is the loss of the "research and experimentation tax credit," but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced.
The deduction for tuition and fees will not be available.
Tax credits for education will be limited.
Teachers will no longer be able to deduct classroom expenses.
Coverdell Education Savings Accounts will be cut.
Employer-provided educational assistance is curtailed.
The student loan interest deduction will be disallowed for hundreds of thousands of families.
Charitable Contributions from IRAs no longer allowed.
Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.
This contribution also counts toward an annual "required minimum distribution." This ability will no longer be there.
And worse yet?
Now, your insurance will be INCOME on your W2's!
One of the surprises we'll find come next year, is what follows - - a little "surprise" that 99% of us had no idea was included in the "new and improved" healthcare legislation .
Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that's a private concern or governmental body of some sort.
If you're retired? So what... your gross will go up by the amount of insurance you get.
You will be required to pay taxes on a large sum of money that you have never seen. Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That's what you'll pay next year.
For many, it also puts you into a new higher bracket so it's even worse.
This is how the government is going to buy insurance for the15% that don't have insurance and it's only part of the tax increases.
Not believing this??? Here is a research of the summaries.....
On page 25 of 29: TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001, as modified by sec. 10901) Sec.9002 "requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income."
Ayn Rand on "Equality"
“Equality,” in a human context, is a political term: it means equality before the law, the equality of fundamental, inalienable rights which every man possesses by virtue of his birth as a human being, and which may not be infringed or abrogated by man-made institutions, .... with special privileges granted to some and denied to others. The rise of capitalism swept away all castes, including the institutions of aristocracy and of slavery or serfdom.
But this is not the meaning that the altruists ascribe to the word “equality.”
They turn the word into an anti-concept: they use it to mean, not political, but metaphysical equality—the equality of personal attributes and virtues, regardless of natural endowment or individual choice, performance and character. It is not man-made institutions, but nature, i.e., reality, that they propose to fight.....
Since nature does not endow all men with equal beauty or equal intelligence, and the faculty of volition leads men to make different choices, the egalitarians propose to abolish the “unfairness” of nature and of volition, and to establish universal equality in fact—in defiance of facts. Since personal attributes or virtues cannot be “redistributed,” they seek to deprive men of their consequences—of the rewards, the benefits, the achievements created by personal attributes and virtues. It is not equality before the law that they seek, but inequality: the establishment of an inverted social pyramid, with a new aristocracy on top—the aristocracy of non-value.
From "The Age of Envy"
But this is not the meaning that the altruists ascribe to the word “equality.”
They turn the word into an anti-concept: they use it to mean, not political, but metaphysical equality—the equality of personal attributes and virtues, regardless of natural endowment or individual choice, performance and character. It is not man-made institutions, but nature, i.e., reality, that they propose to fight.....
Since nature does not endow all men with equal beauty or equal intelligence, and the faculty of volition leads men to make different choices, the egalitarians propose to abolish the “unfairness” of nature and of volition, and to establish universal equality in fact—in defiance of facts. Since personal attributes or virtues cannot be “redistributed,” they seek to deprive men of their consequences—of the rewards, the benefits, the achievements created by personal attributes and virtues. It is not equality before the law that they seek, but inequality: the establishment of an inverted social pyramid, with a new aristocracy on top—the aristocracy of non-value.
From "The Age of Envy"
Thursday, August 19, 2010
Guidance
"Once these signs are fulfilled, do whatever your hand finds to do, for God is with you." (I Samuel 10:7)--Sometimes the guidance of God is not specific, nor detailed, nor full of liver quivers. Preceding verse says the Spirit of God came on Saul and he was "changed into another man" (what a beautiful little word picture). Then there is no record of "go do this" or "go do that." God was sovereignly guiding, yet through no specific leading. Maybe that is a picture for me today. The important thing is that I am indwelt with, and aware of an alien presence in my life, and then simply do the things I find to do. Sometimes there might be a "do this" leading. Sometimes it might just be a leading that says "do whatever your hand finds to do, for God is with you." No less guidance, just different signals.
Time is running out for the West - Telegraph
I remember a short 8 months or so ago when I was mocked for saying the US faces the possibility of junk bond status as early as 2018 (I was quoting a Senator's floor testimony).
Here is news that the collapse of government debt instruments may well come as early as 2013.
Time is running out for the West - Telegraph
Here is news that the collapse of government debt instruments may well come as early as 2013.
Time is running out for the West - Telegraph
Savings accounts will become "obsolete"
Interesting article in the London Telegraph. It is really common sense. When inflation rates become high enough that people LOSE purchasing power by saving money, the incentive to save disappears.
This is why, in an inflationary environment, goods fly off the shelves and people do not save. They must spend the money on "things" rather than simply watch the purchasing power of their money go to zero. Prices respond by going up, as more and more "dollars" (or pounds, or euros, or francs, or whatever) are chasing the goods. It is a vicious cycle and very difficult to stop once it gets going.
Savings accounts will become "obsolete" - Telegraph
This is why, in an inflationary environment, goods fly off the shelves and people do not save. They must spend the money on "things" rather than simply watch the purchasing power of their money go to zero. Prices respond by going up, as more and more "dollars" (or pounds, or euros, or francs, or whatever) are chasing the goods. It is a vicious cycle and very difficult to stop once it gets going.
Savings accounts will become "obsolete" - Telegraph
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