Archive for June, 2014

OMG – First There Was Piketty and Now This …

First, the govt unleashed Piketty, and now they are calling in a favor from their biggest zillionaire donors, to once again distract the masses from the real source of the economic black hole – govt over spending to protect govt jobs, perks, and power. It’s amazing how the good intentions of zillionaire’s and govt can create so many paved roads to hell. Mr. Hanauer, you are right. The solution will not start in Washington, because no one in govt will downsize themselves as long as their careers are at stake.

I have a much easier solution, Nick. Why don’t you and your zillionaire buddies simply STOP bribing politicians for special tax exceptions, reversing banking laws (i.e. Glass-Steagall) that have already lit a derivative nuclear time bomb, and stop lobbying for anti-competitive laws that have given large corporations unfair competitive advantages, causing prices to rise instead of decline with technological improvements. The healthcare lobby is the biggest example of a fraudster industry that is destroying this country. How, you ask? Spending on healthcare has risen 9.3% per year for over 30 years. Put those numbers in your exponential calculator and smoke it! Combine this increase with Defense spending and unsustainable pension payments, and one can begin to understand how yearly govt deficits (and the accumulated interest payments on the debt) are now consuming such a large percentage of our productive capacity.

Nick, if you really want to help poor Americans and this country, then bring an end to the career politician. If you want real reform to start, and the rule of law to be observed, then fight for term limits. Unfortunately, the only thing that  scares a zillionaire more than sheeple brandishing pitchforks, is the rule of law.

The fact that Nick thinks his plan of a higher minimum wage will reduce the demand for govt services is exactly why it won’t happen. The govt will stop anything that reduces demand for its services. However, let’s assume Nick and his zillionaire friends are successful. What makes them think the supply of govt will be reduced with the demand for its services?

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Real Wages Down 18% Since 1973 (before taxes)

If it feels like your hard-earned income does not go as far as it used to, you’re right! As Mish and Doug Short document, real weekly wages in the US have declined below $677 from $825 in 1973. This is not a misprint or an accident.

I agree with Mish’s causes for this THEFT – the Fed, fractional reserve lending, and government bureaucrats that are more concerned with their own jobs, perks and power. Nixon closing the gold window, removing the constraint on debt creation, was icing on the cake.

There is one more important cause that should not be ignored. Every one of us who has chosen to simply follow the trend or stick our heads in the sand also bears responsibility for permitting our so-called representatives from running roughshod over our rights and sensibilities. As Ben Franklin said, we’ve got a Republic, if we can keep it.


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Another Desperate Nail for the Economy – Negative Interest Rates

Politicians needing bankers to finance unsustainable political promises with ever increasing amounts of debt is the second biggest reason we are imploding. The primary reason we will implode is because politicians can never admit they are wrong, which is why the ECB just “officially” imposed negative interest rates to force people out of savings and into riskier or hard assets that they will lose (again) to the politically connected class. The US will do something similar to protect their govt jobs/perks/power when the NSA’s attempt to track down money only drives it further underground. Yes, the collection of everything on everyone, including the capture of faces and facial recognition is all about collecting money for a broke govt and identifying who is protesting against intrusive govt, which your govt wants to classify as domestic terrorism, and calls whistleblowers traitors and cowards.

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Nails of Desperation in the World Economic Coffin

When you read the headline, “U.S. says 77,000 banks, firms sign up to fight tax evasion“, what comes to your mind?  Do you think like a bureaucrat, believing we can now get those tax-dodging rich people? Before providing some additional background on this devastating, brain-dead law that is already negatively impacting global trade, answer these questions:

– Do you think every American that has a foreign bank account is trying to evade taxes?

– If American businesses and individuals working abroad are trying to evade taxes, or simply trying to minimize them, what do you think they will do with their money now?

As the article mentions, “foreign firms that do not comply with FATCA face a 30 percent withholding tax on their U.S. investment income and could effectively be frozen out of U.S.  capital markets.”  Even though the enactment of this law was just delayed by a year, likely because they realized the harm it is already causing, most  international banks are already refusing to open accounts for Americans to avoid the headaches and potential fines. Instead of the money being available for loans and other investments that would drive business and job growth, the money is going to be sunk into high-end real estate, diamonds, art, precious metals, and in private vaults to get it off the grid.