http://www.schiffforsenate.com/index.php/site/news_detail/peter_schiff_announces_bid_for_us_senate/
The opposition has already issued statements criticizing Schiff, moments after his announcement this morning, including pointing out his lack of experience in Washington and politics. This lack of experience is one of Schiff's greatest assets in this race, as the Washington elites and career politicians have been the source of our problems through their misguided policies, decisions, and meddling in the economy. If Schiff is able to secure the Connecticut seat (and it will be difficult, given the four Republicans he will face for the primary before challenging Chris Dodd), we will be assured of at least one voice of reason in the Senate regarding our economy and the tough choices that lie ahead.
Thursday, September 17, 2009
Tuesday, September 1, 2009
Why Doesn't the Federal Reserve Know What It Did with $10,000,000,000,000?
If you enjoyed the clip from my July 23 post depicting Rep Grayson (D) excoriating Fed Chairman Bernanke, then you will certainly revel in his skewering of Fed Inspector General Elizabeth Coleman:
http://www.youtube.com/watch?v=cJqM2tFOxLQ
The clip is self-explanatory, but in short, the individual with the responsibility for internally auditing the Fed has no clue who received $1,200,000,000,000 in recent Fed loans, nor does she have the slightest idea how another $9,000,000,000,000 in off-balance sheet transactions in the last eight months came to be. The supreme incompetence on display at our nation's central bank should be frightening at best, and worthy of vigorous investigation at the very least.
http://www.youtube.com/watch?v=cJqM2tFOxLQ
The clip is self-explanatory, but in short, the individual with the responsibility for internally auditing the Fed has no clue who received $1,200,000,000,000 in recent Fed loans, nor does she have the slightest idea how another $9,000,000,000,000 in off-balance sheet transactions in the last eight months came to be. The supreme incompetence on display at our nation's central bank should be frightening at best, and worthy of vigorous investigation at the very least.
Wednesday, August 19, 2009
Thank You Barney Frank, May We Have Another?
Our Congressmen have obligated our children, grandchildren and great-grandchildren to a staggering debt load of over $11,000,000,000,000, and they are doing their level best to add to it every day. This has caused a severe reaction amongst many opponents of the current health care bill (in its myriad forms) and its associated cost, who have lashed out at their politicians, mostly through local town hall events. While the conduct of some of the individuals at these events cannot be described as polite or exemplary, the public has a right to be enraged at the profligate and reckless spending occurring in Washington.
But it seems the politicians aren’t taking the disrespect lying down. In fact, “the smartest man in Congress,” Barney Frank, is just plain not having it. Here are some snippets of Congressman Frank’s disgust toward the crowd assembled at his town hall event this week:
“On what planet do you spend most of your time?”
“Trying to have a conversation with you would be like trying to argue with a dining room table. I have no interest in doing it.”
“Do you really think that's thoughtful conversation? I thought you were thoughtful people who were here to have a conversation. I guess I don't understand.”
“What's the matter with you all? I don't understand your mentality.”
Thank you for putting us down, Congressman Frank. Thank you for putting us in our place. But I digress.
Democrats say these shows of anger are staged. (I guess that means the Republicans are the most organized party in America right now.) The Republicans say people are just upset, and none of the outbursts have been staged. (That’s probably a bit disingenuous.) The truth is somewhere in the middle, most likely, but that’s not the real point. The point is some citizens are finally taking the initiative to say what needs to be said, as the government continues to do everything conceivable to foul up the economy.
So to Barney Frank and the other politicians who have to go slumming at these town halls with the common folk, I’d say this: it’s one thing to steal $11,000,000,000,000 (and counting) from our generation and those to come; it’s another to insult us while doing it.
But it seems the politicians aren’t taking the disrespect lying down. In fact, “the smartest man in Congress,” Barney Frank, is just plain not having it. Here are some snippets of Congressman Frank’s disgust toward the crowd assembled at his town hall event this week:
“On what planet do you spend most of your time?”
“Trying to have a conversation with you would be like trying to argue with a dining room table. I have no interest in doing it.”
“Do you really think that's thoughtful conversation? I thought you were thoughtful people who were here to have a conversation. I guess I don't understand.”
“What's the matter with you all? I don't understand your mentality.”
Thank you for putting us down, Congressman Frank. Thank you for putting us in our place. But I digress.
Democrats say these shows of anger are staged. (I guess that means the Republicans are the most organized party in America right now.) The Republicans say people are just upset, and none of the outbursts have been staged. (That’s probably a bit disingenuous.) The truth is somewhere in the middle, most likely, but that’s not the real point. The point is some citizens are finally taking the initiative to say what needs to be said, as the government continues to do everything conceivable to foul up the economy.
So to Barney Frank and the other politicians who have to go slumming at these town halls with the common folk, I’d say this: it’s one thing to steal $11,000,000,000,000 (and counting) from our generation and those to come; it’s another to insult us while doing it.
Wednesday, August 12, 2009
Exiting the U.S. Dollar: An Approach for Weathering the Storm
If you’ve read some or all of the posts on this blog, by now you might be asking yourself “what am I to do about all this?” Given that, I’ve outlined below some thoughts on my own approach to the present economic realities, which you can adopt or discard as you wish. Note that my own philosophy behind investing is essentially based on three tenets:
1) virtually no exposure to the U.S. markets (you’ll see why as you read on)
2) exposure to foreign markets with all of the money that I can afford to lose
3) stockpiling into black swan protection protocols the money that I cannot afford to lose
(This post will address numbers 1 and 2; item 3 will be expounded upon in a later post.)
One of the underlying themes to my personal investment portfolio is simple: reduce my exposure to the U.S. dollar as quickly as possible. The reason for doing so is fairly obvious, especially if you’re a regular visitor to this site. The dollar is being devalued through deliberate monetary policy, for reasons ranging from “stimulation” of a stagnant economy to the need to pay off mounting debts by printing money out of thin air. This dollar devaluing means you are losing purchasing power steadily, even as your portfolio might be gaining in empirical value. In even simpler terms, inflation is going to reduce the real value of your portfolio. What good is having a net worth of $5M at retirement if your yearly living expenses have hemorrhaged to $500,000 a year due to inflation and a weaker currency? The bottom line is this: if you know the government’s monetary policy is to continue weakening the dollar in order to pay the ballooning interest off the crushing debt they have obligated us to, then a good policy for an investor would be to remove yourself from that currency and seek ones that are retaining more relative value.
To add to the urgency behind this flight from the dollar, there are several individuals whose opinion I value deeply who are actually forecasting, and in some cases building funds oriented towards, hyperinflation. (See 1920’s Germany for a great hyperinflation vignette...and yes, it unfortunately involves using a wheelbarrow to cart your money around.) Namely, Nassim Taleb’s Universa Investments (run by Mark Spitznagel), is actually developing a black swan protection protocol (see my July 15 post) that hedges against hyperinflationary scenarios. Marc Faber made an appearance earlier this year on a financial network and claimed that it is a near 100% certainty that the U.S. will experience hyperinflation—that it simply could not be avoided now that the government has created several trillion dollars out of thin air in such a short time span. Jim Rogers has trumpeted essentially the same message, labeling the dollar a “flawed currency.”
These predictions are nothing short of dire, but here’s why they really should be heeded: the individuals making the assertions have a remarkably good track record at being correct. Of course, contrast this to every forecaster and analyst you see on a regular basis on CNBC, FOX Business, and Bloomberg, where being wrong is the primary stipulation for employment there. (In fact, it would be entirely possible to make an investing career out of choosing the exact opposite stance to whatever you hear and see through these mainstream media outlets. That would be an interesting experiment, but I digress.)
I became cognizant of the above themes through individuals like Euro Pacific Capital president and owner, Peter Schiff, initially through his best seller Crash Proof, and then later through his web postings, video blogs and TV appearances. (Others, like Jim Rogers and Marc Faber, have been saying similar things on the financial networks and through other outlets.) Schiff’s philosophy centers on the notion that foreign stocks in particular afford a much higher potential for gain, given three basic realities:
1. foreign stocks purchased in the respective foreign currency provide protection from the rapidly-weakening U.S. dollar (foreign currencies move opposite to U.S. dollar fluctuations)
2. foreign stocks have the potential for paying more substantial dividends (upwards of 10% are not difficult to find; I own an Australian utility company that paid a 10.25% dividend in January 2008, and moved to 15% by the end of 2008)
3. foreign stocks in conservative industries have a reasonably good outlook for stability when coupled with the notion that the economies they are situated in are also more likely to be stable, based on increasing capital savings and productive capacity, as opposed to currency devaluation and reliance on consumer spending and debt assumption (such as in the U.S.)
It is important to note that none of the above is guaranteed to yield gains or meant to represent a one-size-fits-all approach for a potential investor. Each individual must evaluate his/her situation and decide upon what risks they are willing to assume. The point is, when examining economic fundamentals, it is not hard to distinguish between an economy like the one we have in the U.S. (based largely on consumption and over-leveraging, coupled with intentional weakening of the currency) and ones in places like China, Australia, New Zealand, and Japan. There, central banks have far less leeway in manipulating their currency, since none of them enjoys reserve currency status (like the U.S.). These economies are not running enormous trade deficits and racking up trillions in debt, thus there is greater stability to the underlying economic foundation and virtually no need to inflate the currency to pay back debts by printing more money.
An interesting phenomenon perpetuating itself these days on the financial networks, is that the talking heads who work there appear to believe there is only one country left to invest in on the planet. They have skewered guests (such as Schiff) who refuse to buy into the notion that the U.S. is the best place to invest right now, ignoring the fact that foreign stock markets have risen even more dramatically since the February/March lows compared to U.S. markets. Granted, the U.S. indices have shown significant growth, but those numbers need to be discounted based on the inflation that was created to generate such lift. On the other hand, foreign markets have not received nearly as dramatic a boost from our voodoo economic policies, and their growth is more rooted in an actual recovery. Thus, when you compare the S&P 500’s 44% rise since March to the Hang Seng’s dizzying 70% gains (China’s index), the difference is not only empirically dramatic but even more so once inflation is factored in.
So you might be asking how one can actually go about implementing this approach and achieving the three advantages I mentioned a few paragraphs above. While there is more than one brokerage firm that will invest in this manner for you, my choice was an easy one: Euro Pacific Capital. No other firm’s president has been more visible and more accurate in forecasting the present conditions and recent market volatility. Peter Schiff has been unwavering in his commitment to stating the truths about our economy and where we are headed, regardless of the criticism and scorn which has been heaped upon him (YouTube “Peter Schiff was right” and you will understand why I say this). But whatever firm you choose, talk to your broker about buying into foreign markets in the respective currencies, and begin fashioning your own shelter from the dollar.
To summarize, the long term outlook for economies that maintain solid fundamentals is simply going to be better than one that does not. As an investor, I want my money situated in sound economies with strong foundations, wherever that place may be. Such is the reason why I’ve implemented the kind of investment approach outlined above for the money that I wish to put into play in the market. As mentioned above, a future post will address what I am doing with the money which I absolutely do not want exposed to the systemic risks of the market.
1) virtually no exposure to the U.S. markets (you’ll see why as you read on)
2) exposure to foreign markets with all of the money that I can afford to lose
3) stockpiling into black swan protection protocols the money that I cannot afford to lose
(This post will address numbers 1 and 2; item 3 will be expounded upon in a later post.)
One of the underlying themes to my personal investment portfolio is simple: reduce my exposure to the U.S. dollar as quickly as possible. The reason for doing so is fairly obvious, especially if you’re a regular visitor to this site. The dollar is being devalued through deliberate monetary policy, for reasons ranging from “stimulation” of a stagnant economy to the need to pay off mounting debts by printing money out of thin air. This dollar devaluing means you are losing purchasing power steadily, even as your portfolio might be gaining in empirical value. In even simpler terms, inflation is going to reduce the real value of your portfolio. What good is having a net worth of $5M at retirement if your yearly living expenses have hemorrhaged to $500,000 a year due to inflation and a weaker currency? The bottom line is this: if you know the government’s monetary policy is to continue weakening the dollar in order to pay the ballooning interest off the crushing debt they have obligated us to, then a good policy for an investor would be to remove yourself from that currency and seek ones that are retaining more relative value.
To add to the urgency behind this flight from the dollar, there are several individuals whose opinion I value deeply who are actually forecasting, and in some cases building funds oriented towards, hyperinflation. (See 1920’s Germany for a great hyperinflation vignette...and yes, it unfortunately involves using a wheelbarrow to cart your money around.) Namely, Nassim Taleb’s Universa Investments (run by Mark Spitznagel), is actually developing a black swan protection protocol (see my July 15 post) that hedges against hyperinflationary scenarios. Marc Faber made an appearance earlier this year on a financial network and claimed that it is a near 100% certainty that the U.S. will experience hyperinflation—that it simply could not be avoided now that the government has created several trillion dollars out of thin air in such a short time span. Jim Rogers has trumpeted essentially the same message, labeling the dollar a “flawed currency.”
These predictions are nothing short of dire, but here’s why they really should be heeded: the individuals making the assertions have a remarkably good track record at being correct. Of course, contrast this to every forecaster and analyst you see on a regular basis on CNBC, FOX Business, and Bloomberg, where being wrong is the primary stipulation for employment there. (In fact, it would be entirely possible to make an investing career out of choosing the exact opposite stance to whatever you hear and see through these mainstream media outlets. That would be an interesting experiment, but I digress.)
I became cognizant of the above themes through individuals like Euro Pacific Capital president and owner, Peter Schiff, initially through his best seller Crash Proof, and then later through his web postings, video blogs and TV appearances. (Others, like Jim Rogers and Marc Faber, have been saying similar things on the financial networks and through other outlets.) Schiff’s philosophy centers on the notion that foreign stocks in particular afford a much higher potential for gain, given three basic realities:
1. foreign stocks purchased in the respective foreign currency provide protection from the rapidly-weakening U.S. dollar (foreign currencies move opposite to U.S. dollar fluctuations)
2. foreign stocks have the potential for paying more substantial dividends (upwards of 10% are not difficult to find; I own an Australian utility company that paid a 10.25% dividend in January 2008, and moved to 15% by the end of 2008)
3. foreign stocks in conservative industries have a reasonably good outlook for stability when coupled with the notion that the economies they are situated in are also more likely to be stable, based on increasing capital savings and productive capacity, as opposed to currency devaluation and reliance on consumer spending and debt assumption (such as in the U.S.)
It is important to note that none of the above is guaranteed to yield gains or meant to represent a one-size-fits-all approach for a potential investor. Each individual must evaluate his/her situation and decide upon what risks they are willing to assume. The point is, when examining economic fundamentals, it is not hard to distinguish between an economy like the one we have in the U.S. (based largely on consumption and over-leveraging, coupled with intentional weakening of the currency) and ones in places like China, Australia, New Zealand, and Japan. There, central banks have far less leeway in manipulating their currency, since none of them enjoys reserve currency status (like the U.S.). These economies are not running enormous trade deficits and racking up trillions in debt, thus there is greater stability to the underlying economic foundation and virtually no need to inflate the currency to pay back debts by printing more money.
An interesting phenomenon perpetuating itself these days on the financial networks, is that the talking heads who work there appear to believe there is only one country left to invest in on the planet. They have skewered guests (such as Schiff) who refuse to buy into the notion that the U.S. is the best place to invest right now, ignoring the fact that foreign stock markets have risen even more dramatically since the February/March lows compared to U.S. markets. Granted, the U.S. indices have shown significant growth, but those numbers need to be discounted based on the inflation that was created to generate such lift. On the other hand, foreign markets have not received nearly as dramatic a boost from our voodoo economic policies, and their growth is more rooted in an actual recovery. Thus, when you compare the S&P 500’s 44% rise since March to the Hang Seng’s dizzying 70% gains (China’s index), the difference is not only empirically dramatic but even more so once inflation is factored in.
So you might be asking how one can actually go about implementing this approach and achieving the three advantages I mentioned a few paragraphs above. While there is more than one brokerage firm that will invest in this manner for you, my choice was an easy one: Euro Pacific Capital. No other firm’s president has been more visible and more accurate in forecasting the present conditions and recent market volatility. Peter Schiff has been unwavering in his commitment to stating the truths about our economy and where we are headed, regardless of the criticism and scorn which has been heaped upon him (YouTube “Peter Schiff was right” and you will understand why I say this). But whatever firm you choose, talk to your broker about buying into foreign markets in the respective currencies, and begin fashioning your own shelter from the dollar.
To summarize, the long term outlook for economies that maintain solid fundamentals is simply going to be better than one that does not. As an investor, I want my money situated in sound economies with strong foundations, wherever that place may be. Such is the reason why I’ve implemented the kind of investment approach outlined above for the money that I wish to put into play in the market. As mentioned above, a future post will address what I am doing with the money which I absolutely do not want exposed to the systemic risks of the market.
Thursday, July 23, 2009
Ben Bernanke Gave Foreign Central Banks $500,000,000,000 on Behalf of You and I...How Generous of Him
Watch this first: http://www.youtube.com/watch?v=n0NYBTkE1yQ
I believe this clip speaks for itself. However, I also believe it is worth highlighting the following:
1) Most importantly, the private bank which oversees our banking system and much of the economy handed out half a trillion dollars to foreign countries, without anyone in Congress ever voting on it or even being apprised of it (until this hearing, and only after Rep Grayson had the wherewithal to ask). If we are interpreting the Constitution even remotely in the spirit of its text, then this is an outright violation of the Constitution.
2) So that might beg the response, "but the provision to do so is in the Federal Reserve Act, which amended the Constitution, so therefore it's ok." This is flawed logic to say the absolute least. If the Fed Reserve Act indeed makes this allowable, then shouldn't we repeal the Act? Why would any American citizen want a law that allows its central bank to give away billions of dollars to foreign banks (thus obligating future generations to the resulting debt burden)? Has any citizen witnessed a resultant economic benefit from this action? Also note that the Act was drafted by six bankers and one senator 99 years ago (in 1910). I have an inkling that the bankers wrote the Act to reflect their interests, not yours or mine. Just a hunch.
3) Rep Grayson probably deserves our support for questioning Bernanke in this fashion. Of course, to be thorough, his entire record on this subject should be scrutinized (which I have not done).
4) Rep Grayson is small proof that, once in a while, Congressmen actually read the relevant documents upon which they are making legislative and oversight decisions.
5) Bernanke does not appear to be confident in his knowledge of the legal authorities and Fed Reserve Act provisions affecting his chairmanship. But who needs to be when you can essentially commit the larceny of 300 million people and not be held accountable for it.
6) The Chairman of the Congressional committee (Barney Frank) sounds eager to end this line of questioning as Grayson's time limit expires.
7) It will be interesting to see how this kind of revelation affects the Audit the Fed bill (HR 1207) that Congressman Ron Paul initiated in February of this year. You can track the bill's progress here: http://www.govtrack.us/congress/bill.xpd?bill=h111-1207
I believe this clip speaks for itself. However, I also believe it is worth highlighting the following:
1) Most importantly, the private bank which oversees our banking system and much of the economy handed out half a trillion dollars to foreign countries, without anyone in Congress ever voting on it or even being apprised of it (until this hearing, and only after Rep Grayson had the wherewithal to ask). If we are interpreting the Constitution even remotely in the spirit of its text, then this is an outright violation of the Constitution.
2) So that might beg the response, "but the provision to do so is in the Federal Reserve Act, which amended the Constitution, so therefore it's ok." This is flawed logic to say the absolute least. If the Fed Reserve Act indeed makes this allowable, then shouldn't we repeal the Act? Why would any American citizen want a law that allows its central bank to give away billions of dollars to foreign banks (thus obligating future generations to the resulting debt burden)? Has any citizen witnessed a resultant economic benefit from this action? Also note that the Act was drafted by six bankers and one senator 99 years ago (in 1910). I have an inkling that the bankers wrote the Act to reflect their interests, not yours or mine. Just a hunch.
3) Rep Grayson probably deserves our support for questioning Bernanke in this fashion. Of course, to be thorough, his entire record on this subject should be scrutinized (which I have not done).
4) Rep Grayson is small proof that, once in a while, Congressmen actually read the relevant documents upon which they are making legislative and oversight decisions.
5) Bernanke does not appear to be confident in his knowledge of the legal authorities and Fed Reserve Act provisions affecting his chairmanship. But who needs to be when you can essentially commit the larceny of 300 million people and not be held accountable for it.
6) The Chairman of the Congressional committee (Barney Frank) sounds eager to end this line of questioning as Grayson's time limit expires.
7) It will be interesting to see how this kind of revelation affects the Audit the Fed bill (HR 1207) that Congressman Ron Paul initiated in February of this year. You can track the bill's progress here: http://www.govtrack.us/congress/bill.xpd?bill=h111-1207
Wednesday, July 15, 2009
Black Swan Conjecture
I'm currently reading a book called The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb. Taleb was a trader and derivatives expert on Wall Street, before eventually releasing the aforementioned book, as well as Fooled by Randomness in 2001. I encourage people to learn more about Taleb and his black swan conjecture (you can Google/Wikipedia both items), as well as read the book.
In short, the title is derived from the fact that in 1697, Dutch explorers in Australia discovered the first black swans -- negating centuries of assumption that all swans were white. Taleb expounds on this by stating that black swan events fit the following three criteria:
1) the event is completely unexpected
2) it is highly impactful
3) it is retrospectively distorted; that is, afterward it is rationalized as if it was expected
If you're hesitant or wondering what the practical application is, consider the fact that Taleb's Universa Investments fund (he advises them but does not get directly involved in trading) saw gains between 50 and 110% by the end of 2008. Compare that to the standard 40-60% losses sustained by most fund managers and investment gurus during the same time frame.
To underscore the point, check out the following clip:
http://www.youtube.com/watch?v=_Jli7xPOvIA
It's worth watching the following clips as well:
http://www.youtube.com/watch?v=krU1wPb7i6c
http://www.youtube.com/watch?v=uX4P6I-7JTI
Finally, his website: www.fooledbyrandomness.com
I will continue to post on this general subject going forward, including some upcoming thoughts on utilizing the black swan conjecture in conjunction with strategies proffered by Peter Schiff and Jim Rogers.
In short, the title is derived from the fact that in 1697, Dutch explorers in Australia discovered the first black swans -- negating centuries of assumption that all swans were white. Taleb expounds on this by stating that black swan events fit the following three criteria:
1) the event is completely unexpected
2) it is highly impactful
3) it is retrospectively distorted; that is, afterward it is rationalized as if it was expected
If you're hesitant or wondering what the practical application is, consider the fact that Taleb's Universa Investments fund (he advises them but does not get directly involved in trading) saw gains between 50 and 110% by the end of 2008. Compare that to the standard 40-60% losses sustained by most fund managers and investment gurus during the same time frame.
To underscore the point, check out the following clip:
http://www.youtube.com/watch?v=_Jli7xPOvIA
It's worth watching the following clips as well:
http://www.youtube.com/watch?v=krU1wPb7i6c
http://www.youtube.com/watch?v=uX4P6I-7JTI
Finally, his website: www.fooledbyrandomness.com
I will continue to post on this general subject going forward, including some upcoming thoughts on utilizing the black swan conjecture in conjunction with strategies proffered by Peter Schiff and Jim Rogers.
Friday, July 10, 2009
Ben Bernanke Has Gotten Everything Wrong...So Naturally He's the Best Guy for the Job
http://www.youtube.com/watch?v=HQ79Pt2GNJo
This must be why the administration strongly endorsed Bernanke recently as the best guy for the job, as they prepare to reappoint him as Fed Chairman. At least he's consistent.
This must be why the administration strongly endorsed Bernanke recently as the best guy for the job, as they prepare to reappoint him as Fed Chairman. At least he's consistent.
Tuesday, June 23, 2009
I Guess the Greedy Oil Execs Took the Winter Off
So you’re wondering, how are gas prices going up all over again? An average of approximately $2 just this spring has skyrocketed 50% in a matter of months, leaving us with a $3 average 2 weeks shy of the July 4 holiday weekend. A barrel of oil has risen from about $35 to nearly $70 in this same time period.
But what about the greedy oil execs? Did they take the winter off from their rampant greed, decrease gas prices for us, and then decide to jack them up just in time for your summer vacation?
Or maybe global demand went into a slumber during the winter and has awoken just in time for the summer driving season?
Or maybe the Middle East conspirators decided to spring back into action and manipulate oil prices, after conveniently taking the last several months off from their…conspiring?
Or maybe, it’s none of the above. Maybe, just maybe, the flooding of the global marketplace with trillions of dollars has forced up the price of a barrel of oil (which of course is denominated in dollars), thus resulting in higher gas prices being passed along at the pump. Scary thing is, those trillions have just begun to make their way into the economic system, so we’re only experiencing the leading edge of the resultant effects.
But the above explanation is the hardest to swallow, because what it portends for the country is far worse than the $3/gallon pain you’re feeling right now. What it means is the US government cure for the recession has in fact sealed our fate with the promise of significant inflation, sparked by the money printing orgy that started in 2008 and came to a crescendo in February with the latest stimulus bill and Fed Reserve Treasury bond buybacks that promise to inject trillions of dollars into the economy.
This would also explain why your grocery bill has been rising steadily as well, as commodity prices are linked to dollars as well. In fact, it is generally true that inflation is going to show up most drastically in those goods that an individual or entity cannot do without: things like food, energy, and health care cannot be excised from people’s budgets…you essentially must pay the cost whatever it is. Even higher education, perceived as mandatory in developed countries, suffers at the hand of inflation, as institutions sense unlimited demand for their product and continually raise tuition costs. These costs are then absorbed through greater and greater leverage on the part of the student and/or their family, who are then saddled with crushing debt obligations upon graduation.
Of course the government will continue telling you inflation is under control at the standard issue 3-4% figure they disseminate every few months, but tell that to the family of four living on $45,000 a year, spending $300 a week on groceries now versus $225 a few weeks ago, and $50 a week on gas as opposed to the $40 a week recently as well. It’s no secret that families living anywhere near the median household income cannot well absorb 50+% increases in their standard purchases, like food and energy. But that’s what your “stimulus” bill will now demand of you.
In fact, the pain our country felt during the recent Great Recession was mitigated by the fact that commodity prices fell, leaving us with cheaper gas and food bills to offset rising unemployment and loss of home equity. The coming depression will put us through a period where prices will rise significantly as people lose their jobs and their homes. Then we will know what economic misery feels like, and the 2008 meltdown will appear pleasant by comparison.
But what about the greedy oil execs? Did they take the winter off from their rampant greed, decrease gas prices for us, and then decide to jack them up just in time for your summer vacation?
Or maybe global demand went into a slumber during the winter and has awoken just in time for the summer driving season?
Or maybe the Middle East conspirators decided to spring back into action and manipulate oil prices, after conveniently taking the last several months off from their…conspiring?
Or maybe, it’s none of the above. Maybe, just maybe, the flooding of the global marketplace with trillions of dollars has forced up the price of a barrel of oil (which of course is denominated in dollars), thus resulting in higher gas prices being passed along at the pump. Scary thing is, those trillions have just begun to make their way into the economic system, so we’re only experiencing the leading edge of the resultant effects.
But the above explanation is the hardest to swallow, because what it portends for the country is far worse than the $3/gallon pain you’re feeling right now. What it means is the US government cure for the recession has in fact sealed our fate with the promise of significant inflation, sparked by the money printing orgy that started in 2008 and came to a crescendo in February with the latest stimulus bill and Fed Reserve Treasury bond buybacks that promise to inject trillions of dollars into the economy.
This would also explain why your grocery bill has been rising steadily as well, as commodity prices are linked to dollars as well. In fact, it is generally true that inflation is going to show up most drastically in those goods that an individual or entity cannot do without: things like food, energy, and health care cannot be excised from people’s budgets…you essentially must pay the cost whatever it is. Even higher education, perceived as mandatory in developed countries, suffers at the hand of inflation, as institutions sense unlimited demand for their product and continually raise tuition costs. These costs are then absorbed through greater and greater leverage on the part of the student and/or their family, who are then saddled with crushing debt obligations upon graduation.
Of course the government will continue telling you inflation is under control at the standard issue 3-4% figure they disseminate every few months, but tell that to the family of four living on $45,000 a year, spending $300 a week on groceries now versus $225 a few weeks ago, and $50 a week on gas as opposed to the $40 a week recently as well. It’s no secret that families living anywhere near the median household income cannot well absorb 50+% increases in their standard purchases, like food and energy. But that’s what your “stimulus” bill will now demand of you.
In fact, the pain our country felt during the recent Great Recession was mitigated by the fact that commodity prices fell, leaving us with cheaper gas and food bills to offset rising unemployment and loss of home equity. The coming depression will put us through a period where prices will rise significantly as people lose their jobs and their homes. Then we will know what economic misery feels like, and the 2008 meltdown will appear pleasant by comparison.
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