This week, nations across the world have been aggressively buying dollars, trying to stop the dollar's continuous fall. For the dollar is the world's underlying currency and if it collapses, it could take their economies with it.
On Wednesday, speaking from Tokyo, U.S. Treasury Secretary Tim Geithner tried to calm the situation by repeating the Obama Government's often made assurances that the U.S. is committed to a strong dollar.
But as there has been no U.S. action to support the dollar, his statements were not taken seriously. Japan is America's second largest creditor and Mr. Geithner is likely there to assure them their investment in U.S. government debt is safe and that they should buy more in the face of rapidly growing U.S. deficits.
Nations across the globe have good reason to be worried. So do you and I. If you have not yet done so, please buy some one ounce or even 1/10 of an ounce gold coins. Buy and store them as an inflation hedge and if we are fortunate, they will never be needed and become over-priced keepsakes.
And enjoy every day of your life, as you also bring joy into the lives of others. And if you can afford to, make charitable donations to help others in need. Together we will get through this mess and hopefully build a better, more compassionate nation, not one burried in bailouts, earmarks, weapons and wars.
Dick
Thursday, November 12, 2009
Wednesday, November 11, 2009
The Stock Market Bubble Will Burst
Since March, the U.S. stock markets have skyrocketed. And for Wall Street there's even more good news: the U.S. government declared the Recession over as the Gross Domestic Product jumped 3.5% last quarter, up from negative numbers.
But if you've been reading this website, www.saneramblings.com, you know the GDP rise was based on massive government stimulus money and other programs such as cash for clunkers and its equivalent in the low end real estate market. It's not real.
Yet, the stock markets have been shooting through the stratosphere since March which coincidentally is when the Fed sharply escalated its printing of money out of thin air. That money printing continues today. Along with the rest of the staggering sized stimulus, we are awash in dollars.
Where is most of that money going? Into wild speculation. It's flooding the stock markets and chasing commodities such as gold, silver, oil and copper and other speculative investments such as junk bonds and low end real estate.
This is going to end badly for there is no substance behind it. The next crash will be in commercial real estate and before we're done, the stock markets will crash as well.
Already, the dollar is sinking against every major currency, and not just the Euro and the Yen but even the Brazilian Real. Just since January, the dollar has lost 1/3 of its value vs. the Real as fears of U.S. hyper-inflation steadily spread across the world.
What can you do to protect yourself? Cross train so that you have valuable skills to offer employers. Educate yourself in fields that will remain strong such as health care services or residential real estate management.
And if you can afford to, acquire assets long known to be effective inflation hedges, such as rental residential real estate in prime communities, for we all have to live somewhere. And buy one ounce or even 1/10 of an ounce gold coins. Buy and store them. If we are lucky, they will never be needed and become over-priced keepsakes.
Most important of all, enjoy your life and bring some joy into the lives of others. And if you can afford to, make charitable contributions to help others in need. As people did in the Great Depression, together we will get through this mess.
Dick
But if you've been reading this website, www.saneramblings.com, you know the GDP rise was based on massive government stimulus money and other programs such as cash for clunkers and its equivalent in the low end real estate market. It's not real.
Yet, the stock markets have been shooting through the stratosphere since March which coincidentally is when the Fed sharply escalated its printing of money out of thin air. That money printing continues today. Along with the rest of the staggering sized stimulus, we are awash in dollars.
Where is most of that money going? Into wild speculation. It's flooding the stock markets and chasing commodities such as gold, silver, oil and copper and other speculative investments such as junk bonds and low end real estate.
This is going to end badly for there is no substance behind it. The next crash will be in commercial real estate and before we're done, the stock markets will crash as well.
Already, the dollar is sinking against every major currency, and not just the Euro and the Yen but even the Brazilian Real. Just since January, the dollar has lost 1/3 of its value vs. the Real as fears of U.S. hyper-inflation steadily spread across the world.
What can you do to protect yourself? Cross train so that you have valuable skills to offer employers. Educate yourself in fields that will remain strong such as health care services or residential real estate management.
And if you can afford to, acquire assets long known to be effective inflation hedges, such as rental residential real estate in prime communities, for we all have to live somewhere. And buy one ounce or even 1/10 of an ounce gold coins. Buy and store them. If we are lucky, they will never be needed and become over-priced keepsakes.
Most important of all, enjoy your life and bring some joy into the lives of others. And if you can afford to, make charitable contributions to help others in need. As people did in the Great Depression, together we will get through this mess.
Dick
Sunday, November 8, 2009
Will The Stimulus Save The U.S. Economy?
In 2008, President Bush rushed through massive corporate bailouts and a $160 billion stimulus to save the U.S. Economy. When that failed, President Obama added to the corporate bailouts and rushed out a $787 billion stimulus. Are these newest bailouts and stimulus going to save the Economy?
On Friday, the U.S. Labor Dept. stated that in October 600,000 more workers lost their jobs and the total number of unemployed is now 15.7 million people. That does not count the millions more who've run out of jobless benefits.
These people are now drawing unemployment benefits rather than paying taxes and they've slashed their buying of consumer goods which is what drives our Economy.
The immediate political reaction was to consider rushing through another stimulus. Will doing more of what is not working rescue the Economy? Have the stimulus plans not been big enough? And if the U.S. does more bailouts and stimulus, where will the money come from?
The nation is now so deeply in debt it is running the printing presses to create more money out of thin air.
Perhaps the answer is the opposite of what the Bush and Obama governments have done, each in their own way spending vast sums we don't have on bailouts, stimulus and weapons and wars. Let us instead, end those bailouts and stimulus and the wars and slash military spending, which morality aside, only add to the staggering taxpayer burden.
Also, instead of giving massive sums of money away, raise interest rates to reward savers and to attract more money to America as we support the dollar, strengthen our capital base and build global confidence we actually know what we're doing.
As for companies demanding bailouts, let the bankruptcy courts restructure or sell their assets as new businesses rise from their ashes. For badly managed firms, these bailouts haven't saved jobs, they've just created giant corporate zombies stumbling from mishap to mishap.
While the government may be irresponsible with your money, you can't afford to be for your family, and your extended family which is our nation, depend upon you to weather this storm and then wisely help us get back on our feet. For the bedrock of our nation has always been its hard work, its willingness to help one another and its determination to succeed.
Dick
On Friday, the U.S. Labor Dept. stated that in October 600,000 more workers lost their jobs and the total number of unemployed is now 15.7 million people. That does not count the millions more who've run out of jobless benefits.
These people are now drawing unemployment benefits rather than paying taxes and they've slashed their buying of consumer goods which is what drives our Economy.
The immediate political reaction was to consider rushing through another stimulus. Will doing more of what is not working rescue the Economy? Have the stimulus plans not been big enough? And if the U.S. does more bailouts and stimulus, where will the money come from?
The nation is now so deeply in debt it is running the printing presses to create more money out of thin air.
Perhaps the answer is the opposite of what the Bush and Obama governments have done, each in their own way spending vast sums we don't have on bailouts, stimulus and weapons and wars. Let us instead, end those bailouts and stimulus and the wars and slash military spending, which morality aside, only add to the staggering taxpayer burden.
Also, instead of giving massive sums of money away, raise interest rates to reward savers and to attract more money to America as we support the dollar, strengthen our capital base and build global confidence we actually know what we're doing.
As for companies demanding bailouts, let the bankruptcy courts restructure or sell their assets as new businesses rise from their ashes. For badly managed firms, these bailouts haven't saved jobs, they've just created giant corporate zombies stumbling from mishap to mishap.
While the government may be irresponsible with your money, you can't afford to be for your family, and your extended family which is our nation, depend upon you to weather this storm and then wisely help us get back on our feet. For the bedrock of our nation has always been its hard work, its willingness to help one another and its determination to succeed.
Dick
Snowballing Job Losses Threaten Each Of Us
On Friday, the U.S. Labor Dept. stated 600,000 more people lost their jobs in October and 15.7 million are out of work. That doesn't count the millions more whose jobless benefits have run out. How will it affect you?
The U.S. shipped most of its manufacturing jobs overseas and now unfortunately, 70% of its economy is based on consumers buying goods, mostly made elsewhere.
Your job may well depend on consumers buying cars, televisions or other appliances, furniture, clothing, shoes and toys. Or on consumers eating in restaurants, going on vacations, staying in hotels, or maybe buying motor homes, motorcycles or jet skis.
The 15.7 million unemployed people and the millions more uncounted, AND THEIR FAMILIES, are slashing their expenses and every company that provides these goods and services will be affected. It's a snowball affect as those firms cut their number of employees. And there is no end in sight.
Meanwhile, banks are failing faster than at any time since the Great Depression and as they are merged into other banks, many of their employees are being fired.
Whatever you do, please manage your money very carefully, by saving it in FDIC insured accounts and by slashing credit card purchases you can't pay off in one month for the interest rate charges are severe. And invest in yourself, by further developing your job skills.
The worst of this Recession is yet to come, but as people helped each other during the Great Depression, together we will too and get through it and we will hopefully build a wiser, more peaceful nation because of it.
Dick
The U.S. shipped most of its manufacturing jobs overseas and now unfortunately, 70% of its economy is based on consumers buying goods, mostly made elsewhere.
Your job may well depend on consumers buying cars, televisions or other appliances, furniture, clothing, shoes and toys. Or on consumers eating in restaurants, going on vacations, staying in hotels, or maybe buying motor homes, motorcycles or jet skis.
The 15.7 million unemployed people and the millions more uncounted, AND THEIR FAMILIES, are slashing their expenses and every company that provides these goods and services will be affected. It's a snowball affect as those firms cut their number of employees. And there is no end in sight.
Meanwhile, banks are failing faster than at any time since the Great Depression and as they are merged into other banks, many of their employees are being fired.
Whatever you do, please manage your money very carefully, by saving it in FDIC insured accounts and by slashing credit card purchases you can't pay off in one month for the interest rate charges are severe. And invest in yourself, by further developing your job skills.
The worst of this Recession is yet to come, but as people helped each other during the Great Depression, together we will too and get through it and we will hopefully build a wiser, more peaceful nation because of it.
Dick
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