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2013 The Summer Of Suckers, The Year The Housing Market Turned Upward

Tue, 12 Feb 2013 22:09:00 GMT

The housing market is coming around, after five years of collapsing prices and waves of foreclosures.

This is the summer to make your move or purchase your first home – so they say. The Fed continues to add money to the system at 85 billion per month, holding interest rates at under 3 percent on a 30-year mortgage.

Maybe this is the time to move back into real estate investing, buying up property at bottom prices when the market it just starting to turn the corner.

The foreclosure market is also interesting. The number of foreclosures on the market is lower than it has been for 3-4 years in most areas, which means the supply of homes is quickly decreasing and home builders are going to be busy this summer as the demand for homes is already picking up. This means the foreclosure market is no longer going to be suppressing the prices of non-foreclosure homes.

So much so that there is probably going to be a shortage of experienced home builders because of the increase in demand and the number of home builders that have gone out of business in the last few years. This is going to contribute to a steady increase in the prices of new homes throughout the summer and into fall.

But I think it’s a trap

The other side of the coin is the pending collapse of the US Bond market. The world is quickly accelerating into a currency war that the Fed started and all other majors nations are now aggressively following.

The rating of US Bonds should have already been lowered many times over, but the rating agencies are politically unable to lower them. The US is in a world of trouble. Asset prices are out of control and way higher than the value of the collateral they are priced at – translation, the stock market is approaching a bubble in prices.

Soon something is going to have to give in. Either the stock market may begin to crash or the bond market.

The stock market may begin to collapse because the value of the collateral they represent is not worth the high bubble prices – just like when the housing market began to collapse in 2007. This would keep the US Bond market afloat for a little while during the crash, but eventually it would trigger a Bond market collapse as the collateral of sovereign debt could come into question.

After the smoke clears, debts will remain.

National debts, which are much higher than they were in 2008, will continue to push up interest rates in Europe and Asia and the US. The Fed will probably try to print money by the trillions this time, but this time the nations of the world may turn to something other than the dollar as stop the nations of the world from printing money in their own currency.

Rampant inflation around the world will cause the world to stop buying US Bonds. Instead the central banks will start selling US Bonds. This would put an end of the Fed’s ability to print money and virtually export inflation to the world. The flood of dollars coming back to the US would cause major inflation, forcing the Fed to reverse course and rather than adding money into the market they would have to take it out.

The Fed will be forces to sell US Bonds, but no one will be buying them, so they will become the only buyer. US Bond prices will sink, interest rates will climb and everyone that purchased property in the summer of 2013 will be sorry they did. They will be stuck with debts they cannot afford to repay and assets that they cannot sell nor affort to keep.

The housing market will collapse again, leaving new buyers underwater.

It may not happen this way, but the risk that it could are increasing and for this reason I’m not moving back into the housing market any time soon.

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Savings Are The Foundation Of Economic Growth, Without Savings There Is No Recovery

Fri, 11 Jan 2013 21:04:00 GMT

Has the world gone mad? I am astonished at how quickly they have turned on the greatest source of wealth the world has ever seen – capitalism.

Capitalism is a system based on savings that increases the wealth of any nation. Capitalism begins with savings. Savings is withholding spending some of your earnings on consumption today so that it can be used in the future.

Without savings, capitalism cannot function and wealth cannot be produced. Government spending is not savings. Government handouts are not savings. Government lower interest rates are not savings. Government bailout of businesses and banks that make bad investments are not savings.

Savings can only come from the people, because only people have income that comes from the labor of their hand to produce something that has new value.

Governments do not produce things. New value only comes from new production, in which savings can be gathered.

Here is an excerpt from article by Peter Schiff:

“According to Nobel Prize-winning economist Paul Krugman, only the political cynicism of Republicans, who try to wring votes out of Americans’ misplaced hopes for upward mobility and their stubborn fixation on thrift, prevents this painless and readily available cure.

But as usual, they have it exactly backwards. The savings that they find so unproductive is actually the foundation upon which the economy rests. Nothing can be consumed until it is produced. The act of spending is meaningless without something to buy. The savings of the rich forms the capital that funds business investment which increases productivity. The more that society produces, the more that can be consumed. The key here is the supply, not the demand. The grass that feeds the zebras comes from seeds, not rain. Capitalists provide the surplus seeds that are planted. “

Many of the leading economists of the day seem to think like Mr. Krugman, who blames the economic problems on our “stubborn fixation on thrift” – or in other words our savings.

This is crazy as I have just explained, because savings is necessary for capitalism to produce new wealth. If all we do is eat our seeds (spend our capital), we will have no harvest for the future. Wealth comes from savings. Without savings, no wealth.

What we really need is new value being created today. And that cannot happen unless capitalism is allowed to function, which means people are saving and investing money. It is easy to convince people to spend money and the government has been doing that for 25+ years.

But the last 10 years, the government went way beyond letting people spend all their money, they have taken an active role is helping and rewarding people for spending all the money they can, even old money and future money.

Until our nation returns to its senses and rewards people for savings there is not going to be an economic recovery.

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How Ron Paul Has Used The Well Intentions Of His Followers To Push A Radical Agenda Against The GOP

Tue, 28 Aug 2012 13:58:00 GMT

The Republican National Convention is underway, and Romney/Ryan are going to be announced as the nomination.

But the Ron Paul supporters are not happy. They want more of everything. They want more recognition of Ron Paul, they want more of their ideas added to the Republican platform and they want to blame the Republican Party for the mess our nation is in.

In some ways they are correct, the national debt is a major problem and the Federal Reserve is the primary reason for our ongoing economic collapse.

Unreasonable

But they are also unreasonable and unwilling to come to terms with anyone that is not Ron Paul. He is the idol of their ideas. He has captured their emotional response to the economic collapse and commands their sense of justice by directing them to try to disrupt the RNC by having their delegates not vote for Romney.

The anger towards the Republican Party that motivates them is very similar to the anger behind the Occupy Wall Street movement.

Here is a video of how the Occupy Wall Street supporters are the same as Ron Paul supporters.

Several of my Republican friends are asking, “Why doesn't the GOP just compromise and let the Ron Paul supporters have more say in the Party Platform?”

My answer is that I don’t think they can because the Ron Paul supporters don’t want to compromise, they want everything right now. They want to completely dismantle the entire military offshore, they want the budget cut so deep that it would send the nation into a depression overnight and they want several government departments completely closed, like the Department of Education.

These are interesting ideas to consider and the nation will probably be forces to make several of these cuts in the next few years, but to it is not reasonable or rational to do all of these things at one time like they are asking for. Therefore the Republican Party cannot make these drastic changes without losing the election to Obama, which will drive the nation further into debt.

The Ryan plan is just the beginning of many years of government cuts, but it is a plan that is more reasonable and rational then Obama’s plan to keep spending or Ron Paul’s plan to cut everything now.

Delusional

I have several friends that are strong supporters of Ron Paul, I have read his books and I understand his ideas. But I also realize that Ron Paul is delusional in many ways.

For example, he thinks that world peace will results if we pull our military from around the world, regardless of the daily attacks and threats by many nations that have their finger on the trigger pointed at their neighbors. The world is full of real threats that our military personal is vital to protecting millions of lives against. Sure there are bases that we could close and military operations that do not seem like they have much value and the military complex expense to the nation. I get that. But wishful thinking does not make the world a safer place. Our strong military has saved more lives then any other nation in the history of the world.

Another example is Ron Paul's belief in states-rights vs. Federal government control. I agree the Federal government has overstepped its authority in many ways. But states-rights alone do not solve the problem of a growing government. Local and state governments are just as likely to grow in power and control as the Federal government. California and Connecticut are examples of state governments that have grown beyond their means.

So states-rights alone do not stop government growth or tax increases or over regulations that drive the economy into recession. Like every successful politician, Ron Paul is very good at using language fragments like “smaller government” to rally supporters and special interest groups.

But the idea of “smaller government” by supporting more states-rights is missing a critical component that Paul conveniently leaves out of his speeches because it goes against some of his strongest special interest groups funding.

The signers of the Constitution said that without a moral people, the Constitution would not be sufficient to govern the nation. That is to say; "Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other." - John Adams

The Constitution is a short document, which leaves much of the governing up to the branches of government and the state governments. And because it contained few restrictions, it requires a people that is self-governed by the 10 commandments. The reason the government has grown is because the Constitution is inadequate to govern a people that is not self-governed by moral and religious convictions, just as John Adams said. This is the reason the Patriot Act was created, because people are abandoning God’s laws – just as predicted (Matt 24).

If Ron Paul was a true Constitutionalist he would not leave this key point out of his rally cry to “return to the Constitution.”

The only way the Constitution can govern the nation, without controlling people with laws like the Patriot Act, is if the people are committed to the truth found in Christianity which reveals sin as our true enemy. The truth demands that we take action against it. Ron Paul says no way. He says the government has no business being involved in teaching morality. This shows the Ron Paul is in denial about how the Constitution was designed to work.

His supporters see no need to commit to a moral standard, even though no nation is the history of the world has been successful without it and the bible is littered with nations that have failed because of this denial.

They want government out of everything so that people can do whatever they want – but this will lead to a disaster without first having a strong Christian culture that holds people responsible to a personal morality.

They think they are asking for “freedom” but they are not. Freedom and liberty do not exist without of a commitment to the truth.

Another reason Paul leaves this out is because it is exactly that several leading Conservative Republicans like Sarah Palin, Michelle Bachmann, Allen Keyes, Rick Perry, Tim Pawlenty, Rick Sandorum, etc. have been saying forever.

If Ron Paul was a real Constitutionalist he would be just like many other Republicans and he would not be able to get the support he does from his special interest groups that hold him out as different from the rest.

The Damage

The Ron Paul campaign is so upset at the Republican party that they are using their delegates to threaten the RNC and by doing so, that have forced the RNC to try and change the rules that decides what delegates can and cannot do. Here is what the FRC had to say about it yesterday;

“Believe it or not, there's a bigger threat to the GOP convention than the weather. During meetings last Friday, the Republican Rules Committee surprised a lot of people by changing the way delegates are selected. Under the new system, the GOP's presidential nominees would have the power to override state parties and pick their own delegates. Essentially, the local party would have to surrender its authority to the candidate in naming representatives--even if the delegates are legally elected.
Without getting further into the weeds of convention politics, much of this has to do with the Republicans' fears over candidates like Rep. Ron Paul, who have such strong grassroots support. If they succeed in rewriting these rules, leaders like Paul would be prevented from having their delegates seated in future conventions. But in trying to head off these potential coups, the GOP is giving future nominees an unprecedented amount of power. “
“Once this proposed change goes into effect in 2016, a more socially liberal nominee tied to the GOP establishment (which is most of them) could shut out delegates with conservative views. And with fewer pro-family delegates, groups like FRC Action have fewer friends on the inside to impact the language.
Left unchallenged, this could jeopardize the entire GOP platform which would have significant ramifications on core principles like life, marriage, and religious liberty.”

Conclusion

In conclusion, many of the Ron Paul supporters have good intentions to lead the nation back to its roots, but they are inadvertently supporting some misguided ideas that are not helping to improve the GOP and are actually making it worse.

I find few Republicans can articulate a strong argument against Ron Paul and even fewer articles like this one pointing out why Ron Paul is wrong and how he is misleading people.

I hope this is just the beginning of your research into how many well intended Ron Paul supporters are being used by some of the radical Ron Paul supporters to push out some of the strongest pro-family, pro-life and Christian supporters in the GOP.

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Are You Ready For The Big Financial Crash Of 2013?

Tue, 14 Aug 2012 20:29:00 GMT

I ran across a recent video of Max Keiser and Alex Jones talking about the coming financial crash.

They talk about how the global markets are maybe six months away from crashing. The central banks are already in collapse and are being told to prepare for a major crash.

At the center of the idea is the hundreds of trillions of dollars in derivative funds that cannot be repaid and the national banks aren’t worth a fraction of the money they have on their books. JP Morgan is a leader in the derivative market and it has already began to collapse as last quarter they claimed to lose 2 trillion, which was later said to be more like 15 trillion.

The financial collapse that began five years ago is still underway. The entire system is unsustainable because of the increase in wickedness around the world. The decrease in morality and the culture of moral education around the world over the last 30 years has resulted in leaders that have no education of the value of morality. They are the leaders that run the world banks today.

Enron is a perfect example. They were a great company for many years and then one day someone realized that they had been lying about their books for many years. It became known as the ‘Enron Accounting’ scandal.

The problem with the leaders of Enron is the same problem with most of the financial bankers around the world today. They have traded honesty for short term glory, at the expense of their businesses.

Dishonesty is as the heart of the global financial collapse, just as the good book warned us about thousands of years ago.

“Dishonest money dwindles away” – Proverbs 13:11

Here is the video.

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Obama’s Tax Plan Will Only Help The Rich Get Richer And The Poor Get Poorer

Thu, 12 Jul 2012 17:20:00 GMT

Obama wants to extent the Bush tax cuts for everyone with an income under $250,000.

He tells us that the reason for this is became the government needs more money and the rich can afford to pay more.

To convince us to go along with this idea, he tells us that the rich are getting richer on the backs of the poor. He tells us that the rich are not paying their ‘fair share’ because they are not yet becoming poor like the rest of the nation.

And because the rich are not getting poor like that rest of the nation, they must be manipulating the rest of us and hiding the money they earned from the rest of us.

But there is a problem with this line of thinking.

There is a problem with the idea that the rich are wrong to try to save their money from the wealth destruction that is underway.

Obama Created The Rich

The problem is that progressive taxes like what Obama is proposing are the reason for the growing income gap we have today.

Obama’s ideas created some of the richest people in America.

His tax plan will not help the poor like he talks about, instead it will help the rich – many of his friends and advisors – will be the biggest beneficiaries.

Instead of raising the Federal income, the rich will simply lower their stated incomes below the $250,000 limit. They can easily do this by changing how much money their business pays them or how much investments they sell each year.

The result will hurt the poor in several ways, here are a few;

First, more money becomes stored in Corporate assets and equipment much like it is today in non-profit organizations, which will decrease the debt ratio of Corporations and increase the value of Corporate stock – which are primarily owned by the rich. The adjustment will cause businesses to have less cash to hire workers, leaving the poor and middle class with less money to pay for things like food and rent.

Second, the rich will be making longer term investments leaving less money for short-term investments like venture capitalists that invest in entrepreneurs. Small new businesses create 80-90% of the jobs in our nation. Fewer jobs will deepen the recession and cause more people to lose their homes, cars, boats, etc. The rich will be the only people with money to purchase these assets and so they will get even richer by purchasing these assets from the middle class at fire-sale prices. Then the rich will rent these things back to the poor and middle-class at higher interest rates then they had before, locking them in to a life of poverty.

Third, if that is not bad enough, the government will project much higher Federal income and with those projections they will spend the money before it even comes in with new programs and existing programs that are already bankrupt. When the projected new money does not come in, they will increase the debt limit and borrow more money from the future generations of children of the poor and middle-class. And by the time the national debt comes do, the rich will be so rich that they will leave the country and move to a different place.

Obama’s progressive tax plan has been tried most recently in California over the past decade and it has bankrupted the state, and it has caused the rich to get even richer and driven the poor and middle class into generational poverty.

The poor and middle-class need to understand what Obama’s tax plan will really do. Obama’s promises of handouts will not put more money in your hands. It is a trick to take what little money you have left. The promises are empty.

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Peter Schiff Shows How Clueless Congress Is Regarding The Economy They Have Destroyed

Mon, 02 Jul 2012 11:25:00 GMT

This video is amazing. Peter talks about the high costs that congress pushes onto taxpayers by getting involved in the housing market.

This congressional meeting was about the FHA and congressmen/woman were being asked to fund FHA multi-family homes just like they have funded simple-family homes.

When a congresswoman asked the supporters of FHA funding if they published information on delinquent loans, they could not provide any published numbers. What are they hidding?

The FHA supporters went on to suggest lower interest rates will help provide more affordable housing to help people at a time when the nation is in a recession.

Then Peter Schiff went on to explain why this is not true. Government backed lower interest rates cost taxpayers money is many ways, first by putting people in houses that they cannot afford which results in defaults which are directly paid for by taxpayers.

The poor are given houses that they cannot afford and then when they default the loses cause an increase in taxes on them and they end up even poorer than they were before with lower credit and higher interest rates on any other debts in the future.

Mr. Schiff predicted the defaults on government supporting housing will be 20-30 percent, much higher than the supporters of FHA loans suggest.

The real beneficiary of government funding in the housing market are the homebuilders, real estate agents, and banks.

The congressional panel then tried to turn the conversation to government subsidized flood insurance, which Mr. Schiff quickly showed how subsidized flood insurance does not really help people.

What it does is lower the cost of living in areas that are prone to flooding, therefore costing everyone money when the floods come – by increasing the taxes to pay for the damages.

If the government didn't subsidized flood insurance, fewer people would build house in flood prone areas, which would lowing the cost of housing + damages for everyone.

This video is a clear example of just how congress has gone off the deep end and instead of helping people they are causing them to sink further into poverty. Government housing subsidies convince people to make bad decisions about the homes they purchase that result is costing everyone billions of dollars.

Freddie Mae and Fanny Mia are prime examples that have cost hundreds of billions of dollars already and are likely to cost tax payers trillions before they are complete dismantled.

Here is the video of Mr. Schiff at this congressional meeting;

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4 Reasons Why Fiat Money Always Results In A Crash

Mon, 11 Jun 2012 15:29:00 GMT

Fiat money is money that is not backed by any other collateral, like gold or silver or other commodity. After WWII the dollar was made the international currency by making all oil sales in dollars. At the time the dollar was backed by gold by the US government.

The rest of the world currencies were backed by dollars and therefore indirectly backed by gold, until 1971 when President Nixon removed the backing of gold.

Since this point in history, all major world currencies became fiat currencies. Many individual nations have experienced a financial collapse resulting from using a fiat currency, but never before has the entire world used a fiat currency – leading to a global financial crash.

Here are 4 reasons why no nation can remain under fiat money;

Fiat money is inflationary; it benefits a few at the expense of many others; it causes boom-and-bust cycles that destroy capital collection and investment needed to create new wealth.
It leads to over indebtedness; bankrupting millions of families with each bust
It corrupts society's morals by rewording sins like coveting and stealing other people’s money and punishing the things that build strong and stable businesses like honest and integrity. A culture that rewards sin ends up destroying the foundation of every nation - the families – which results in a massive increase to government to try and replace the support system that only health families can give.
It depletes motivation to work hard, innovate and create as government grows it takes away the freedom and opportunity to build a successful career or business. Ultimately ends in a depression on a grand scale, stealing the life’s work of millions of people that have worked and saved.

Fiat money is evil and evil destroys everything that it touches. No nation can openly endorse evil for very long before it is completely destroyed.

Money is the means of exchange of goods, which is created by people’s labor. The state has no claim over the goods produces by the people and it is a grand mistake to give the state controls of money.

When governments get control of the people’s money, their thirst for more is never enough. The result is always the same. They begin to print money that does not exist in order to pay for what they do not have funds for.

The new injected money creates inflation, thereby setting the boom-and-bust economic cycles in motion. Each growing larger than the previous, until the system completely collapses under the weight of the debt and the inability of the people’s labor to create enough new wealth to support the large government system or pay back the previous debts.

This is the point of no return, which is typically when a nation’s debt reaches 80% of its GDP. Of course, this is nearly impossible to determine this because as nations approach this mark they skew their GDP and debt numbers to avoid exposing their obvious financial calamity.

In effect, fiat money is worse than counterfeiting money because counterfeit money is only a small portion of the entire base money, while fiat money is counterfeiting the entire supply of money at the source and lying about it to everyone.

Fiat money is a state run counterfeit operation that lies to the people and slowly steals everything they have. Fiat money is a grand deception, and because the US dollar is the international currency it has become the largest deception in the history of the world.

Much of the world’s population has been fooled into believing the greatest lie ever told.

The big crash is still coming. It started by in 2008, when the real estate market crashed, which exposed banks around the world that are in more debt than they can ever pay back. Now in the fourth years, with all major nations injecting more money than imaginable, Europe is falling apart with four nations in major financial crisis.

This is the time to slap yourself in the face and say “what were we thinking?” Debt is not a good thing, even if the market is temporarily rewarding it, it is a trick. Then tell everyone else. We need the entire nation to realize they have been bamboozled into believing in debt.

Then we need to preach the truth on every corner, that we need savings, which come from forgoing consumption today in order to survive tomorrow. We need self-induced austerity before the dollar collapses and we are forced into very drastic austerity measures.

Peter Schiff has just released his new book, “The Real Crash”, in which he discusses many of the ways we will be forced into drastic austerity measures in the coming years.

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The Economy Cannot Recover Because the Fed Damaged The Process of Wealth Creation

Mon, 04 Jun 2012 21:49:00 GMT

Last week we saw the Q1 GDP get revised from 2.2% to 1.9% and with inflation running above 2% we are already in economic decline. Q2 GPD is likely to be lower than Q1.

We also saw the May jobs numbers come in at 69,000 jobs, which is far lower than the 150,000 that many economists were hoping for.

What is going on?

We conclude that, contrary to Bernanke, his loose policies didn't save the US economy from anything. The FED only delayed the massive recession that is still on the horizon.

The reason the economy cannot recover is because the FED has damaged the process of real wealth creation.

Bernanke's loose policies have helped to create another bubble at the expense of wealth creation and thereby setting course for continuous economic decline.

It looks like I was right in 2008 when I wrote my eBook “Why America May Never Recover From the Recession”

How Wealth Is Created

Few politicians realize how wealth is created nor do they seem to care. But they need to start, because their ideas are completely wrong.

Wealth is created by entrepreneurs coupled with investors that have an opportunity to produce something valuable.

This can only happen when entrepreneurs are allowed to freely innovate without costly regulations that make it impossible for them to get started.

And money needs to have value, so that investors have a reason to get involved and entrepreneurs have a reason to borrow it from them.

When interest rates are held at near zero by the FED, the government is not allowing this to happen.

Over time, the longer the FED holds rates down the culture of entrepreneurs and investors are destroyed. That is what has happen over the last several years.

Because of the damage that low interest rates have caused to the culture of entrepreneurs and their partnering investors, it is going to take extra high interest rates and massive cuts to regulations to rebuild the damage that has been done before any new jobs are going to be created again.

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Fascism and the Fusion of Business and State

Fri, 23 Mar 2012 21:35:00 GMT

This is what is happening today, entrepreneurs and business-owners are being forced into politics because the government has expanded into their industry.

When the government expands into your industry, you have no choice but to gain political influence or be run out of business by those that do.

With each economic intervention, by way of bailouts, handouts, price controls, etc. the government destroys the real economy, and increases the value of political influence, shifting the effort from production to political lobbying.

So the political lobbying system is feeding itself on the economy like a vampire, draining the life out of the economy as it continues to grow.

Each time the economy begins to collapse, the government steps in to take over more of the economy which draws in more business owners into political lobbying, all the while the economy is not getting better – but much worse as each collapse is worse than the previous.

But because there is no incentive for those in control of the state to avoid the approaching disaster, they continue to add to their lobbying power.

The only cure to the state controlled economy is for the state to stop controlling the economy and return the power to the entrepreneurs, but the cure threatens the livelihood of the state bureaucrats and lobbyists of the ruling regime. And neither party can walk away without the other taking complete control of the economy and running the businesses of the party that walked away into the ground.

The idea of economic freedom and liberty are rooted in Christianity, so the underlining reason that the economy is collapsing is because the nation has turned away from believing in God and his Son. To make matters worse, God told us this would happen a long time ago as it is written in scripture, so we have no excuse.

For a longer version of this, here is a great article on mises.org and here are a few quotes that summaries it.

Fascism and the Fusion of Business and State

"He is therefore motivated to consume more of his property than he otherwise would, and to use his savings to buy political influence, rather than engaging in productive endeavors. He is motivated, in short, to engage in political rather than economic entrepreneurialism."
"This leads to a concentration of economic power in a few large firms, who are able to rely on government contracts to boost their income, while at the same time using captured regulatory bodies as a means to block smaller competitors from their market."
"Over a period of time, this process means that productive firms and economic entrepreneurs are destroyed, while unproductive (parasitic) enterprises run by political entrepreneurs take their place."
"The fascist economic system causes a convergence of economic and political power, both through the politicization of existing private capitalists, and the enrichment of political figures. The attempt to form a partnership between business and state eventually leads to a situation where business is the state, and the state is business."
"Since they have no method to objectively value competing projects, their interventions will involve a misallocation of resources compared with the free-market case, and will frequently involve an aggregated loss of resources even ignoring opportunity costs. Thus, despite any pretensions to the contrary, the state is unable to increase total economic output through its central planning; instead, it destroys the price system and causes loss.[20] This gradually leads to economic decline."
"The result is obvious: under an authoritarian system, political entrepreneurialism increases, and production decreases. This further politicizes the economy and leads to ever-greater distortions of prices, making rational calculation impossible."
"The problems with the fascist economic system become more and more clear, but there is no incentive for those in control of the state apparatus to avoid the approaching disaster. Since the only antidote to the problem is liberalization of the economy from state control, the cure for the economic decline threatens the personal livelihoods of the state bureaucrats and the ideological program of the higher-level members of the ruling regime."

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Why Obama’s Definition Of Economic Fairness Is Fundamentally Wrong

Sat, 28 Jan 2012 00:24:00 GMT

During the state of the Union address, President Obama once again made his case for economic ‘fairness’ to argue for more taxes and a larger government.

Obama believes that fairness cannot be achieved by the private sector of the economy, because people and nations are not fair to each other and they will never be without government policy to level the playing field.

Obama said it this way,

“We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

The only solution that Obama can see is for the government to step in and change the rules that are causing unfairness that result it economic inequality. Part of this is correct and I’m glad that Obama realizes the source of the unfairness – government policy.

But the part that he does not seem to realize is that no amount of government policy has ever been able to level the playing field. And that is because it is impossible for government to make economic policies that are ‘fair’ and without competitive advantages and disadvantage for someone. The only thing that government policies can do is change which businesses/nations get the competitive advantages and disadvantages.

All Obama can do is take unfair policies away from some companies and create new unfair policies for other companies. The only question is which companies are politically connected to Obama, so they can get the new policies that create unfair advantages for them. But this kind of politically determined ‘fairness’ is not fair at all. In fact, all he is saying is that his influence is for sale to the highest bidding lobbyist.

Obama is saying that the economy is distorted because the government is corrupt with crony capitalism and he is going to fix it with his own crony capitalism. This is exactly what he is doing with his green energy programs, his support for public education to limit school choices and Obamacare crowding out healthcare alternative competitors. He is giving the lobbyist and companies that support him politically the competitive advantages by giving them easy government loans, tax subsidies, price controls and direct handouts.

This is anything but FAIR.

Matthew Spalding from the Heritage Network had this to say;

“The idea that the government can and should step in to guarantee economic fairness is contrary to the founding principles that make America so great-and that enable its citizens to achieve success. It is contrary to the very meaning of the American Dream.”

In all fairness, the fairest thing to do is to reduce government policies, subsidies, price controls and direct handouts. This would provide more opportunity for more people – equally opportunity – to compete in the marketplace for solutions. The result would be lower costs, more jobs and a growing economy.

Obama's idea of fairness is the sources of economic inequality.

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Obama Calls For Prolonged Detention Of Anyone That May Commit A Crime

Thu, 22 Dec 2011 15:51:00 GMT

This is unbelievable; in a speech a few days ago the leader of the free world blamed the previous administration for created an adhoc legal approach to fighting terrorism to hold people indefinitely, then told the nation he was going to do the same thing.

After condemning the previous Administration, in a speech which contained his signature poetic language, Obama told the world that we will hold people for 'prolonged detention' without committing a crime regardless of our laws that say otherwise.

This is against the U.S. Constitution, in which we are a nation ruled by laws, yet Obama has gained the power to act outside of the rule of our law - this is an act of lawlessness.

In the same speech that he condemned the Bush Administration for an adhoc legal approach to fighting terrorism, Obama said his Administration will create his own adhoc legal strategy which will operate outside the legal court system in which all Americans are protected from illegal detention until proven guilty.

Obama is clearly the most radical President the nation has ever seen.

Here is a startling video showing how radical the Obama Administration really is;

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Federal Reserve Begins To Panic As Global Banks Ratings Are Cut

Thu, 01 Dec 2011 21:03:00 GMT

Yesterday S&P ratings services downgraded more than a dozen of the largest banks in the world, including the six biggest U.S. institutions.

Fearing a major stock market meltdown, the Federal Reserve issued a statement that they are more than willing to make is easier for distressed banks to get access to dollars whenever needed.

The rating cuts will make is more expensive for them to fund their day-to-day borrowing needs, by increasing the interest rates they will be expected to pay when borrowing money.

The rating agencies have been criticized for underestimating the risks of debt for several years, starting with the market crash of 2008.

The funny thing is that S&P only downgraded the banks by one notch, when just about everyone in the financial community known that most of the banks are still insolvent and without the government bailout money from the Fed’s lower interest rates and TARP, most of these banks would already be gone. They should be rated at junk.

According to the Wall Street Journal article, if S&P would have lowered the rating of Bank of America within the third quarter, they would have had to post an additional $5.1 billion in collateral. But since S&P waited until after the end of the third quarter they don’t have to.

What kind of games are the rating agencies playing?

Today, S&P said in a report that Europe is likely headed back into a recession, with a 40 percent chance of a severe recession.

But S&P didn’t even downgrade the European banks, like they did with all six major U.S. banks. So it Europe is headed for a severe recession, what is the U.S. headed for?

That is why the Fed hit the panic button.

The debt crisis is snowballing, which is decreasing the likelihood that government bonds will ever be paid back.

When government bonds default, nations go broke and financial systems unravel. The global financial system is so intertwined in the computer age that any nations bonds can threaten to take down the entire system.

That is why the Fed hit the panic button.

The stock market shot up 400+ points, but there is little the Fed can actually do at this point. The debt has been allowed to spread to so many nations for so many years that is has changes the entire global economy, from savings and producing to spending and consuming.

Just like the Fed could not stop the housing bubble from bursting, they cannot stop the global debt bubble from bursting.

The problem with financial bubbles is that sooner or later they always burst and no one can stop them.

Bubbles burst when the price to pay becomes higher than anyone is willing to pay, and each person is part of the equation. Bubbles burst when the value of money or work is higher than we are willing to pay for our labor.

The reason the global debt bubble is bursting is because people all over the world are no longer willing to work to pay for bloated governments and unemployed workers. The prices have become too high.

The Fed cannot stop the bubble from bursting because it cannot force people to work more hours than they are willing to or capable of working to support the systems that are dependent on their labor.

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Obama’s Job Plan; More of The Same, Bigger Government, More Spending

Tue, 06 Sep 2011 15:18:00 GMT

In Obama’s Job speech on Thursday, he is likely to call for more than 1 trillion in new spending.

Obama has completely ignoring the utter failure of the last few trillion in spending while he continues to boldly claiming that more government spending is the only way to create jobs.

The reason Obama is unable to look at the mounting evidence against his economic policies, is because he is completely convinced of the liberal economic ideology that government can create wealth by taking money away from productive businesses and spending it on unproductive government projects.

Obama believes that government spending cannot go wrong. He believes that politicians can make better decisions then CEO’s. He believes that CEO’s are only interested in their own careers at the expense of their workers, while politicians have the best interest of the nation in mind when they spend money.

Obama does not understand that CEO’s must invest in people in order to create wealth and that productivity and profits are the keys to creating jobs and producing wealth. Business owner cannot produce wealth without creating jobs, and therefore they have a build in incentive to find ways to create jobs.

On the other hand, politicians have a build in incentive to take wealth from the CEO's that are producing wealth and give it to anyone that will secure their votes. The larger the government, the more money that is squandered away as Obama has become the champion of wealth destruction.

Obama’s misguided view of economics also gives him the reason to further hinder economic growth by creating more regulations and government agencies to keep businesses in line.

These expanded government agencies cost businesses a lot of money, increasing the cost of labor and the products they are trying to sell, which force them to move to other nations to reduce costs and stay competitive or go out of business.

In most cases, business CEO's are not to blame. They are not the enemy. But as long as Obama is leading the nation in his war on business, wealth depletion will continue and real jobs will never materialize. For an anti-war guy, he has become the worlds greatest anti-business war-lord.

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President Obama and Senate Liberals Make History Bringing Down America’s Credit

Mon, 08 Aug 2011 16:24:00 GMT

The Tea Party leaders in the house, did all they could to stop the President from raising the debt limit past the GDP, triggering a credit rating downgrade.

But in the end, Obama and Senate liberals refused to cut spending in anything and a bill was passed last Wednesday at the last minute before a national default would have begun.

Since then, President Obama continues his rhetoric of class warfare, dividing the nation with anger rather than leading the nation into common understanding of the grave economic outlook we face.

Tea Party To Save Nation

Rory Cooper, of heritage.org, had this to say regarding the Tea Party and Obama.

“The Tea Party’s primary focus is our nation’s fiscal health. If it were not for the Tea Party’s positive influence, Congress would still be spending, taxing, and borrowing with little regard for the burden it is placing on future generations. Only months ago, President Obama was demanding a so-called “clean” debt limit increase that would allow him to keep on borrowing without any cuts to spending.”

“President Obama, congressional liberals, and their allies believe that if we remain silent on our fiscal future, then markets and credit agencies will not notice our perilous future. Thus we heard from liberal pundits and politicians who called the debt debate a “manufactured crisis”—as if everything would be fine with more blank checks. The problem of federal over-borrowing and over-spending was and is real, as the credit downgrade and market reactions reflect.”

“Government spending will have increased by 22 percent just on President Obama’s watch.”

Yet, the President and Liberal allies remain delusional, even as the stock markets are crashing around the world. Contrary to all the evidence, they remain convinced that if only they were allowed to increase taxes and continue spending trillions of dollars the economy would be restored.

They owe the nation an apology and their resignation.

According to Zachary Keck, DC Foreign Policy Examiner

“On Tuesday the United States net public debt to GDP ratio reached 100%. That is, the federal government's accumulated debt is equal (actually surpassed) the United States Gross Domestic Product in 2010.

After Congress and the Obama administration passed the debt ceiling limit, the Treasury borrowed $238 billion on Tuesday. This brought public debt to $14.58 trillion dollars, slightly higher than the United States GDP in 2010, which was $14.54 trillion.

Richard Haass, the President of the primer Foreign Policy organization, the Council on Foreign Relations President, has repeatedly argued that the nation's growing debt is the greatest national security threat the country faces. As Yale diplomatic historian Paul Kennedy has convincingly demonstrated, the rise and fall of great powers since the time of the Roman Empire has been driven by the economic vitality of the country. “

In two years, Obama has managed to destroy America’s financial system and once again prove that the economic ideas of socialism (class warfare “tax the rich” by way of forced the redistribution of earned wages or “stealing and spending”) never produce anything but poverty.

America is headed for a decade of poverty, unless the people figure this out quickly and put a stop the destruction path we are on that result from “stealing and spending”.

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Capitalism Is The Collection of Peoples’ Desire For Fair Prices And Fair Wages, Who Can Be Against It?

Fri, 08 Jul 2011 20:43:00 GMT

It’s seems so easy today for people to say; “capitalism has failed and as a result, we need new policies to redirect and manage the economy”.

Yet an honest look at capitalism reveals just how stupid it is to attack capitalism, the only system that the world has ever been able to product wealth and the source of economic growth for the past century.

By definition, capitalism is the collection of peoples’ willingness to pay a fair price for the products they need and to get paid an honest wage for the work they do.

Anyone that is against capitalism is therefore against the collection of peoples’ desire for fair prices and wages.

To say that capitalism failed, is to say that people have failed to pay fair prices for goods and have failed to work for fair wages. That is not what has happen.

Capitalism has not failed. The rules that guide the economy have caused prices (houses, cars, higher education, etc.) to exceed there fair market value. Those rules are created by the government, but the people elect the government to create the rules that best control competition and the direction of investment funds.

So if capitalism is the collection of peoples’ desire for fair prices and wages, and the government is the means by which a small group of people can circumvent fair prices and wages (capitalism), then the people using the government to circumvent capitalism are the true source of the problem and the cause of the recession.

Some say this is the weakness of democracy. When people realize that it is easier to circumvent fair prices and wages (or cheat other people) by electing someone willing to create policies in their favor that give them a competitive advantage, the system begins to fall apart.

The reason the financial system is collapsing is because of a loss of belief in moral goodness. There is a greater number of people willing to cheat each other, by lying and stealing then by working for a fair wage.

Without a cultural majority that upholds a moral conscious, democracy breaks down until no one in politics can be trusted anymore as corruption engulfs the nation, resulting in a complete government controlled economy.

That is the path we are on.

Capitalism didn’t fail, it has been circumvented. The solution is to return the nation to its previous moral high standard.

Of course that is not an easy task, as the bible has been removed from the public schools for several generations which resulted in a nation that continues to attack its foundational Christian values that created the cultural that brought it success, without realizing they are destroying the foundation for future economic success.

Returning to prosperity is not so much about how much money we are borrowing and spending, as it is about what we believe. These are symptoms of the underlining problem. If we truly believed “dishonest money dwindles away” – (Proverbs 13:11) and taught it to the next generation, capitalism (fair prices and fair wages) would lead the nation right back to prosperity.

So if you want to help rebuild the economy, you can start by teaching your kids why it is so important to first believe in this simple truth.

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Why Your Grandfather's Economy Was Better Than Yours

Fri, 17 Jun 2011 21:34:00 GMT

My grandfather was thirteen when he was living on the streets, riding the rails from town to town looking for work.

The financial lessons he learned at a young age, never left him as he remained aware of the value of money (work) his entire life.

The great depression was a difficult time, but the government eventually did save the nation after many years of failed economic policies by restoring the value of the dollar.

This time, the Federal government is a lot deeper in debt and so far has refused to face the recession, but instead has borrowed and printed more money than any time in the history of the world. Instead of facing the recession, both state and federal governments have managed to push the nation farther and farther into debt while making the economic conditions for growth much more challenging.

During the Great Depression the housing market dropped 31%, while today it has dropped 33% from the 2006 highs. The housing market is a major economic indicator because as much as 25% of the economy is driven by the housing market. Many of the banks remain insolvent, and propped up by the Fed's zero percent interest rates that allow them to remain in business.

During the Great Depression my grandfather didn’t have zero percent interest rates. The government raised interest rates in order to grow the economy out of the depression. Zero percent interest rates results in zero percent growth, because without the motivation to save money, no new real savings can be invested in new businesses that have the ability to produce wealth.

Real savings is saving money that represents a measure of work, which can only happen when (1) the value of money is fixed or stable and (2) there is a reason to save it.

First, the value of money need to remain the same otherwise the work you do to get money will not be worth the money that you worked for. Without the value of money remaining constant, people that have money and are capable of creating wealth have little incentive to work. Without motivating the people that are capable of creating wealth to work, there is no new wealth that is created and no economic growth.

Second, there must be a good reason for saving money. The reason needs to be greater than the desire to enjoy it by spending it. Zero percent interest rates remove the reason to save money. Without the possibility of an increase in your money when you save it, there is no reason to save money. And without savings, there is no money to invest in business opportunities that produce new wealth. The results are no economic growth.

So here we are, in the summer of 2010, with zero percent interest rates because of the housing market crash that began in 2008 – with no economic growth.

There is no easy way out, and now what we are five trillion further in debt then when the recession stated, it is going to very difficult to increase interested rates – but it is the only way the grow the economy.

The sin of our generation, which was to covet our neighbor house that put politicians into office to create policies to redistribute wealth, is to blame. We are reaping what we have sown. We have rejected God and his ideas, thinking we had a better idea and now we face the consequences.

The laws of God are like gravity, they are unforgiving, they cannot be ignored and the consequences are directly reflected in the economy.

The reason your grandfather's economy was better than yours is because your grandfather’s generation took the wisdom of God's laws to heart, while this generation has nearly completely forgotten them.

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3 Steps to Finding a Summer Job, Regardless of the Deepening Recession

Thu, 02 Jun 2011 20:16:00 GMT

With nine percent unemployment and much higher percent for young adults, getting a summer job is not an easy task.

When I was a young adult, it was common for parents to help their children get jobs. Learning how to get a job was something that schools didn’t teach and so parents taught their children this important skill.

Of course the only way parents can teach these skills to their children is if they knew them themselves.

From what I can remember, it sure seems like more people knew the skill of job hunting twenty years ago then they do today. And if fewer parents today have these skills, then they cannot teach them to their children. Perhaps we have lost this skill during the boom years, when jobs were much easier to find.

Here are three steps that I learned from my years as a young adult looking for summer jobs.

1. Take the Difficult Job

I still remember some of the jobs my older brother had to take just to make enough money to pay for college the next year. He doesn’t even like to talk them because of the bad memories they stir up. I also worked a few difficult jobs. One summer I remember taking a job for $8.25/hour for a construction company that was responsible for assembling a conveyor belt for a local factory.

The hours were great and the people were pretty good to work with, but the frame that we were constructing was twenty to thirty feet high in some places. Guess who had to climb up and walk the steel beams to line up the bolts? The reason I could do that job was because I grew up climbing trees in the woods. This is what I mean by taking the difficult job. Sometime you need to take a difficult job because few people want to do it. But the difficult jobs can sometime be the most rewarding.

At the end of the summer, the construction company offered me a job if I wanted to continue working for them rather than going back to college. I didn't take the job, but this opportunity was only presented to me because I was willing to take this difficult job. Don’t wait for the perfect job to come your way. It’s not going to come anytime soon, perhaps ten years. The companies that have difficult jobs are always hiring. I have several factories and farms related jobs in the area that anyone could get a job at within one day. Don’t spend all summer looking for a job, when you could have been working all summer.

2. Use Relationships

When you go to grad parties and weddings this summer, don’t just go for the food and fun, but use them to look for opportunities to ask your friends and relatives for summer jobs openings. Perhaps some of them are looking for summer help at their businesses, but didn’t want to post a job to the public and now that you mention you are available they may be willing to create an opening for you because of the relationship with you or your parents that reduces their risk of hiring someone.

When I was a young adult, almost everyone got jobs this way. If you don’t have a grad party coming up or you forgot to ask your relatives when you attended a grad party, then pick up the phone and call your friends and relatives. Start the conversation with reminding them of the party that they just saw them at and how good they looked since you last saw them. Then ask them if they know of anyone looking for summer help.

3. Be Persistent

When I say this to young people today, they don’t seem to understand what I’m saying. I don’t mean to continue to apply for thousands of jobs until one day someone hires you. That is not the persistence that I’m talking about. Back in the day when I was looking for a summer jobs in high school and college, I learned this important lesson.

Each summer I used to make a list of about 10 businesses that I thought would be a good summer job for me, based my by criteria of how many hours I would be able to work and how much money I needed to make by the end of the summer for the next year of school. When applying for the jobs I would try to get a name or a phone number of the manager. Then after waiting a few days I would begin calling them and asking for the manager. They would usually tell me that they have not had the chance to look over the applications yet, in which I would remind them that I am every interested.

I would then persist in calling them back every few days, asking for them by name until they began to remember by name. At this point, I have gain name recognition and a leg up on every other application. Consider these phone conversations as part of the applicant process. They show that you are willing to work hard to get the task done and that you have good communication skills which are very useful in helping customers. Of course you need to remain honest and polite, even if they say no because you may need to call the back next year.

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White House Committed Fraud Releasing Fake Birth Certificate

Mon, 23 May 2011 20:16:00 GMT

It’s official, the birth certificate that the White House released on April 27th has been ruled a fake my many experts.

The liberal media has done an excellent job at discrediting and lying about Obama’s birth certificate, but Dr. Jerome Corsi’s new book, “Where's the Birth Certificate?” has quickly become a best seller because it contains undeniable evidence that Obama is not eligible to serve.

In an interview, Dr. Jerome Corsi said

“If people read my book, Barack Obama’s Presidency will not survive. … and the White House committed a criminal act in producing a fake birth certificate just to keep his Presidency alive.”

After several years and millions of dollars in legal fees that the White House has spent to protect the release Obama's birth certificate, the growing public skepticism forced the White House to respond.

Mr. Trump also played a key role in recent weeks repeatedly bringing up the issue in interview after interview, which forced the White House to release a birth certificate, as Obama was plummeting in the polls with as much as 30% of the public no longer believing he was born in the U.S.

Even the Hawaii government to this day says that the official birth certificate is locked away in a safe place, which contradicts the White House claim that they have released a copy of the official birth certificate.

Here is a recent interview with Dr. Jerome Corsi about the proof contained in his new book.

Here is a document expert showing how the birth certificate is a complete fake;

This issue it's over and Obama is worse off now that the White House has released a fake birth certificate in order to fool the public with the full cooperation of the media to try and discredit the questioners and bury the issue.

Yet not one document expert has been able to explain the clear layers within the fake document that has been released by the White House. This is sure to lead to many legal cases for years to come as the truth remains hidden and the White House continues to lie.

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I Planted My Salad Garden Last Weekend, And It Looks Like One-Third of the UK Joined Me

Mon, 11 Apr 2011 19:11:00 GMT

With food inflation approaching new highs around the world, millions and perhaps soon billion will be planting their own gardens.

According to a recent article more than a third of adults in Britain claim that they will grow the majority of all the vegetables and fruit they need this season.

I usually don’t begin planting this early, but over the years as my gardening knowledge has increased, my planting season has also increased. Yesterday I planted by salad garden.

This year, I created a garden schedule to help me manage my planting and harvesting which has become too complicated to remember. April 10th is the earliest that I have ever planted up here in central MN.

My salad garden consists of foods like lettuce, onions, radishes, peas, carets, kohlrabi and spinach, most of which like to grow in the cooler weather, so I should be able to get away with this unless we have a late freeze.

With a growing family, twelve percent food inflation last year it’s time to start planting earlier. My garden schedule this year stretches 22 week, with some food getting replanted up to four times (like lettuce).

I would also like to use the new acre of land I purchased a few months ago to double my food production. A few years ago, I ran the numbers and realized that my garden at that time was worth about $3300 per years at $27 per hour.

These figures give me two ways to improve, I can increase the amount I produce and I can increase my efficiency by lowering the time I spend in the process.

Food Trends

The increase in food prices and the lengthening recession have created an increase in local farmers markets and community garden projects all around Central MN. This year, we even have a new food co-op that just started up in my neighborhood.

It will be interesting to see how the food co-op competes with local grocery stores that get most of their food from distant food producers.

Can small local food producers compete with distance large food producers? Rising gas prices drive up both the cost to produce and to transport food, taking away the advantage of the efficiencies of larger food producers. As gas prices increase, the closer your food grows to you the cheaper it becomes.

The high unemployment rate also adds to the equation, as idol labor begins to realize they can grow and sell food in their local community without filling out a job application. And if they become proficient at it, $27 per hour is good money in Central MN.

Then add in the rich soil that we have in Central MN, and I expect nothing less than a gardening frenzy to sweep across the state – just as I predicted years ago. Unlike many other states, we could grow food anywhere even along the highways and roadways, and when the phony economy comes crashing down, we probably will.

A Free Market Solution

By the way, this is an example of the free market economy in response to the damage that Obama has done by intervention and spending. This is the free markets response to the governments solution to steal money from people through inflation. The free market is our friend because it puts money in our pocket. The liberal politicians that have taken control of much of the economy under the disguise of social welfare economics are not our friends because they take money out of the economy and leave everyone poorer.

The ability to freely redirect labor and capital to increase production of food to lower its cost can only be achieved with a free market driven economy. Other nations that do have not these freedoms, because there government has complete control of food production or transportation, will not be as lucky. They will suffer a much greater loss of wealth because of the food inflation that has just begun.

This is a clear example of how the government intervention has again failed, causing food inflation as they continue to print money and spend more than we have. The free market (what's left of it) is the solution. It always has been and it always will.

The negative consequences of liberalism and its central planned economy are always greater than the consequence of the free market. Yet somehow we continue to elect people that believe in an economic strategy that is doomed to fail.

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Does America Have What It Takes To Choose The Path Back To Prosperity?

Thu, 07 Apr 2011 21:17:00 GMT

This is the question of our age. This is the question that will define our generation. This is the question that Rep. Paul Ryan has proposed a solution for. This is question that the Democrats have no answer for.

A few days ago Rep. Paul Ryan submitted a national budget proposal that would save the nation from economic collapse. The question is, does the nation of the brave have enough bravery to make the decisions that need to be made?

Rep. Paul Ryan has done what no one else has been able to do and for that he should be rewarded and congradulated. Ryan’s budget proposal is a complete budget solution that addresses all of the hardest questions, including Medicaid and Medicare that almost no politician is willing to even talk about.

Ryan’s budget is astounding. It shows that there is hope and we can save the nation from economic collapse. It can be done. Leadership in Washington does exist. The nation should fully support this proposal. It's time to act in unselfishness and come together in agreement to make the cuts that need to be made.

Here is a short video of Ryan’s budget proposal.

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5 Reasons Why Obama’s Plan to Increase Taxes on the Rich, Is the Reason for High Unemployment and Poverty

Mon, 04 Apr 2011 20:54:00 GMT

When Obama campaigned on the promise that he would not increase taxes on anyone accept the ‘wealthy’ and repeatedly blamed the government debt problem on the Bush tax cuts, he showed us his economic policy.

Since then, Obama has raised taxes on everyone and admitted he was completely wrong to blame the Bush tax cuts for the government debt problem by reversing course and extended the Bush tax cuts.

But he also promised that he would work hard in the last two years of his term to achieve his goal of increasing the tax on the ‘wealthy’ – because he believes it would increase the fairness – between the rich and the poor.

Despite Obama’s many economic policy failures, reflected in the high unemployment rate and massive government budget that is nearly completely out of control, his cunning use of words like ‘wealthy’ and ‘fairness’ resonate with people’s natural instinct to envy our neighbors.

The obvious solution is to increase the education of the public with the truth about these lofty claims to tax the ‘wealthy’.

The truth is that envy creates poverty and decreased prosperity.

Here are five reasons …

Higher tax rates discourage wealth production, by discouraging productive behavior. Higher taxes on saving, investing and income, cause people to avoid these things and leads to lower living standards for everyone and lower revenue collected by the government – forcing cuts in government programs. Raising taxes does not help the poor, but rather increases poverty.
Higher tax rates generate less government revenue, as shown by the Laffer Curve and proven several times in history as illustrated in the video below.
Progressively higher tax rates on the rich, hurt the poor the most. As the poor suffer from the increase in unemployment and drop in non-profit contributions by the rich, and these conditions cause a drop in higher education of the poor and middle-class, which prolongs there income level perhaps by an entire generation or more.
Higher corporate and income taxes drives jobs overseas, as the global economy forces nations to compete for labor and capital. The U.S. is already among the highest nations for corporate tax rates and the evident of job losses can be found in every industry. Obama’s tax plan is would increase the loss of jobs, increasing the unemployment and poverty.
Progressive tax rates, lead to higher tax rates on everyone. Because before the money is ever collect, local and federal governments begin expanding programs and spending. And when the money doesn’t come in as projected because of the previous four points that I made, the politicians turn to higher sales tax and property tax to make up the difference.

Obama’s class workfare and progressive tax rates are the source of the problem. It is the already high tax rates that continue to punish the poor and increase the poverty in America. Obama’s war on the rich are punishing the poor and the middle class.

Here is a video from the Cato Institute that further explains.

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Organized Protests In Opposition to the Democratic Process Will Deepen the Recession

Mon, 28 Feb 2011 22:52:00 GMT

Democracy is the process of a population voting for elected officials to make policy decisions that represent their interests. The job of the elected officials is to make policy and budget decisions for the good on the entire population, whether over a city, state or nation.

The organized protests in Wisconsin and the elected officials that have fled the state are not helping anyone.

The reality is that the federal bailout money is gone (700 million went to Winconsin, most of which when to fund the public unions); the state is broke and cannot afford the current compensation for public employees.

Something has to give. The people voted in new elected officials that they thought would make the best decisions to balance the budget. Those newly elected officials are doing their job, while some of the elected officials refused to vote and instead fled the state.

This is not how democracy works.

Mob Rule

The protesters are not in support of democracy, but against it. They don’t want the elected officials to vote. They appear to be getting angrier each day and not because they are starving or living without freedom, like we see in other nations - but because they are in opposition to the democratic process.

The irony of this situation is that if the protesters help block the legislator from voting, the democratic process fails. If a mop can overrule public officials who seek to save their state from insolvency, then America is no longer governed by democracy but by mob rule.

If America moves to be governed by mob rule, than we are all doomed because there is only so much money to go around and if the biggest mob gets the majority of it, then the rest of us will end up with nothing. The democratic process is the fairest process we have.

The president should be trying to dissolve the situation rather than further agitate it. He should be calling for civility, rather than questioning the elected officials that are doing the job they were elected to do. He should be asking all Americans to cut expenses and increase savings to strengthen the entire nation’s financial situation, rather than suggesting we deserve more money to spend.

After all, Obama’s polices are a large part of why we are still in this recession and likely to be for several more years.

Wealth does not come from saying that you deserve it. And wages and benefits don’t come from demanding them. Wealth and wages only come from savings and production. If Wisconsin wants to increase their wages and benefits, they need to increase their savings and production.

There is nothing wrong with peaceful protesting, but the elected officials should not be allowed to flee the state and stop the process of voting for budget cuts. After all, in the next election the population can elect difference people to vote the other way. That is how democracy works.

Delaying the budget cuts will only make matter worse, as debts continue to rise and the tax burden forces more businesses to cut jobs. As the market roles over, when the recession double-dips, the next rounds of cuts are going to have to be much deeper than this.

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Amid Dismal Job Market and Massive State Budget Cuts, Americans Grow Warier of Labor Unions

Wed, 23 Feb 2011 18:37:00 GMT

Faced with massive state budget cuts, the Wisconsin teachers union protests seem to be increasing public awareness of the high wages and benefits paid to public union members, which is further galvanizing public support for Gov. Scott Walker.

It’s not that labor unions are all bad or all good. They serve a purpose that is sometimes more favorable than other times.

About a year and a half ago a Gallup poll found that the public has become less supportive of unions than at any time since Gallup began asking that question in 1936.

Forty-eight percent of the 1,010 respondents in the Aug. 6-9 telephone poll said they approved of unions, down from 59% a year earlier, Gallup said.

And 51% now say unions "mostly hurt" the economy in general, up from 36% in 2006, the last time that question was asked.

Until now, the previous low in the public approval rating of unions was 55% in 1981 and 1979 -- during the last severe recession.

The nature of labor union contracts are to fix wages and benefits over a period of time. But during a deepening recession these contracts are holding the wages of union workers at elevated levels, which results in fewer jobs for both union and non-union workers.

Labor unions are very useful when businesses take advantage of workers to drive up profits while refusing the pay workers competitive wages or benefits.

But labor unions can also become a hindrance when they drive up wages and benefits much higher than competitive workers.

Recession Brings Awareness

This can also happen during a recession, when the wages of competitive workers suddenly drop and high unemployment lingers while union workers compensation remains the same.

This is what has happen in Wisconsin and across the nation as much of the private sector has already cut wages and benefits, while entrenched union contracts hold union wages and benefits at elevated levels.

During sudden shifts in the economy, like during the major recession we are facing, wages need to be free to move up and down with the economy in order to compete with the availability of workers. A high unemployment rate, such as we have, creates a very strong market force to pull down on wages.

The longer the recession the stronger the market forces pull down on wages. Labor unions contacts do not typically respond very quickly. If the economy was really recovering we wouldn’t see the major push to renegotiate union contracts.

The primary reason that union wages have become a target for state budget cuts is because Obama’s policies and promises to restore the economy have completely failed. Obama has failed to restore the economy and that is why labor unions wages are being scrutinized.

If the economy was recovering, then private sector wages and benefits would have been restored and the difference between private and union compensation wouldn’t remain so wide.

Obama has failed, primarily because he clearly does not understand economics as his policies have shown. He was hoping the economy would recover on its own, ignorant of the damage of his policies have further burdened the economy with debt.

The economy has not even begun to recover and every state is sooner or later going to have to deal with it.

Here is a video of Gov. Scott Walker, discussing the budget cuts in Wisconsin.

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Obama Refuses to Lead the Nation and the Tea Party Refuses to Neglect Leading the Nation

Fri, 18 Feb 2011 19:35:00 GMT

Obama’s budget proposal is a clear sign that Obama is unwilling to lead the nation at a time when we face the most difficult financial decisions in many decades.

The Obama $3.7 trillion budget proposal says to the nation “I don’t know what to do, so let’s just keep borrowing and spending and worry about it another day”.

But that is not leadership. That is a refusal to lead. We need a President that is not afraid to put his butt on the line and lead the nation, with new ideas and tuff negotiations.

On the other hand, the Tea Party leaders seem to refuse to step away from the negotiating table and eager to face the reality of our financial challenges.

The Liberal Democrats that support Obama and his spending agenda seem to be talking a good talk against the Tea Party agenda to cut costs, yet they realize that without the cuts that they are unwilling to make, they cannot continue their agenda.

Obama and supporters are double-minded, unable to lead for fear they will lose support from labor unions, yet hopeful that the Tea Party Republicans are successful so that they can continue spending. Without money to spend, there is no purpose for a big spender.

Obama seems to believe that he is more likely to get re-elected if he stays out of the budget cutting, while hoping the media will give him enough credit for the weak economic grows and that the public will turn to him out of anger for the Tea Party budget cuts that he had nothing to do with.

Obama seems more willing to gamble his political future on public anger against the very leadership that is critical to turn the nation around, then he is to find the courage to lead the nation himself.

No President has ever become famous for refusing to lead the nation and I don’t think Obama is going to be the first.

If Obama did what the nation needs him to do and led the nation out of this financial recession, we wouldn’t need the Tea Party to do it. His refusal to lead the nation has created the leadership void that the Tea Party is fulfilling.

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I Bought My First Acre Of Farmland A Few Days Ago

Thu, 17 Feb 2011 20:23:00 GMT

Food prices are projected to continue to climb for several years, primarily because of the trillions of dollars that the Federal Reserve has flooded the market with.

A few weeks ago I purchases 1 acre of farmland, not because I was actively looking for land to purchase, but because I stumbled upon an opportunity.

Years ago I wrote an article titled, “The Best Financial Advice I Received and How I Use it Practically” and in the article I said that my number one financial advice is “to convert an opportunity into results”.

The 1 acre of land that I purchased is just a few blocks from my house. The owner purchased the land several years ago with the adjacent house. About two years ago the owner moved to Washington and sold the house.

Knowing this history, I called the realtor last summer and asked how much the land was selling for. At the time, the owner wanted $20k with an unknown assessment for a new road project bordering the property. At the time I told the realtor that the unknown assessment could be up to $50k and that the owner should consider selling me the property for $5k. He declined my offer.

Then, about a year later after the new road project was completed, the owner who has now been living out of state for over two years had become motivated to sell. The realtor sent a letter to the neighboring houses saying that the price has dropped to $5k.

Within a week I got a hold of the letter and called the realtor to verify. It turns out that the new road assessment was $7.7k and financed by the city on a 15 year loan at 5.5%. The realtor said that a few of the neighbors were considering but none had yet made a commitment. I spend some time and did some research to understand the requirements of the standing water on part of the land along with the city taxes. The city tax is $134 per year, because it is not homesteaded. That is very low.

Everything checked out and with a few weeks I purchased the land. This is a great investment that will someday be sold for much more than I paid.

Until then I have many uses for this land, primarily to expand my garden, which I have calculated to be worth $7.85 per square foot.

A 420sq garden, like the one I currently have in my yard, is worth 420sq x $7.85 = $3300. In two years a will have gained more than I paid for the property - minus the road assessment.

Real-estate is a great investment option, but it’s all about timing. I’ve read the ‘Rich-Dad Poor-Dad’ books and I understand the secret is in finding good deals or desperate sellers, but most of the time that is a job in itself.

Five years ago, when I considered investing in real-estate, I looked at the housing market and saw a major bubble, which is why I stayed away. But now that the housing market is clearly in a double-dip and desperate sellers are beginning to find me rather than me having the find them, I’m reconsidering.

Over the next few years I will continue to look for good deals like this one that I stumbled upon. The critical factor in being able to quickly take advantage of a good deal by having the cash in hand and that takes a willingness to save rather than spend everything on consumption.

This is a great time for the frugal to take advantage of a massive wealth transfer as the financial collapse continues to unfold. My investments in the next few years will likely be of historical importance over my lifetime.

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My Average Food Inflation Is Over 12 Percent

Mon, 14 Feb 2011 21:30:00 GMT

At the end of each year, I spend some time looking at my budget expenses over the last few years, looking for trends to help me with financial planning in the next several years.

Last year I wrote about several of my budget expenses, highlighting the major changes.

This year when I looked for trends, only one category really stuck out and that was food.

The cost of food for my family has increased by an average of 12.08 percent over the last three years.

Keep in mind that my family contains three growing children and I’m sure they are a major part of my increasing food expenses, and I’m not sure how to quantify how much of the 12 percent is due to my growing children.

At this rate of inflation, my food costs will exceed my mortgage payment and become my largest expense in just two years.

This is why I’m planning an even bigger garden this year and expanding the types of foods that I grow. I’m also considering creating a planting schedule, so that I remember when to plant difference foods throughout the summer growing season. I always seem to get confused and forget when I planted what. Then I over plant something or forget to plant something else.

Years ago when I started gardening, it was much easier, I just planted once at the beginning of the summer. But as time went on I realized that different foods grow better at different times of the year and some can be re-planted several times. So this year I'm going to stop trying to remember everything and create a planting schedule.

Food prices are expected to continue to rise, due to an increase in natural disasters and an increase in printing money by central bank all around the world causing inflation.

The trend of food inflation looks like it will continue for many years. Therefore the more food that I can grow the better, perhaps I could even learn to grow more food than I need so that I can barter with it or sell food at a local food co-ops or farmer market.

Food prices have already become a major budget item for my family regardless of the bogus inflation numbers published by the government.

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French President Joins Leaders in Declaring Multiculturalism Has Failed With Economic Implications

Fri, 11 Feb 2011 14:25:00 GMT

In an interview on Thursday, French President Nicolas Sarkozy declared that multiculturalism had failed, joining a growing number of world leaders or ex-leaders who have condemned it.

Here is the yahoo news article.

The reason multiculturalism fails is because it destroys nationalism and nationalism is the foundation of a cohesive culture. A cohesive culture is the backbone of a strong economy that is essential to complete in the global economy.

Cultural diversity creates religious infighting, which breeds political polar opposites resulting in national division and class war fair. Class war fair destroys the middle class and further impoverishes the poor and drives the wealthy business owners out of the country taking the jobs with them.

I find it almost funny to see several European nations coming to this clear understanding, while America continues to embraces multiculturalism with Obama leading the nation down the path of further division - all the while bleeding the nation of wealth at the tune of $1.5 trillion per year and pouring gas on the class war fair fire with his ‘tax the rich’ rhetoric.

Sixty years ago, when America became the world’s leading manufacturer of goods with the highest per capita production rate, it was primarily because of our strong cultural unity built around the common values of Christianity.

Since the rebellion of the 60’s, when the nation began to turn from these common cultural values our rate of production has continued to drop. Today, America is very much a divided nation, bleeding wealth at an astounding pace that is clearly unsustainable and headed for a major financial correction.

Few national leaders seem to realize the importance of morality and it key role in cultural cohesion that results in energizing and motivating people around a common cause at a national level – created a national competitive advantage, which is critical in the global economy.

Common cultural values results in the highest level of wealth production.

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The Inevitable Market Correction Of 2011

Tue, 08 Feb 2011 16:45:00 GMT

The economy and the stock market appear to be headed in the opposite directions. The unemployment rate remaining high as food and energy prices continue to climb, yet the DOW just keeps on rising.

What is going on?

Here are a few of the most difficult questions:

1. Do we have deflation or inflation, with falling housing prices and rising food and energy prices?

2. Where are the jobs? Why are companies not hiring?

And here are my answers:

1. We have both deflation and inflation. The challenge is to try not to get clobbered by either one, and to find a way to benefit from both. For example, this is a great time to find desperate sellers of real estate that you can purchase for as low as 20 cents on the dollar. But if you are one of those desperate sellers, you are in a very difficult position.

Likewise, food and energy inflation are going to be very difficult to avoid. Investing in Agricultural and Energy is the best strategy to avoid getting clobbered by inflation. Wealthy investors may have an advantage in profiting from rising commodity prices, but there are many ways that the middle class can protect themselves from inflation. For example, purchasing precious metals like gold and silver coins or gardening or bulk shopping discounted items to fill your pantry are all great ways to fight inflation.

The source of inflation is the Fed’s money printing. The Fed is printing money in order to fight the deflation of the housing market, both to stop housing prices from dropping and to keep interest rates as low as possible so that more people can purchase houses.

The housing market collapse that started in 2008 was such a large bubble, that the Fed’s money printing has still not been able to put a floor under the housing market. The reason the housing market is so important is because the years leading up to the start of the 2008 collapse, housing became the largest part of the economy and the underlying support for the global financial system. Without strong housing prices, the banks are insolvent. So the Fed believed they must keep printing money.

The result of the Fed’s money printing has resulted in several other major problems, including the lack of jobs. This leads to my answer to the next question.

2. Where are the jobs? In response to the collapsing housing market, the unemployment rate remains at nine percent. High unemployment means that businesses don’t have to complete for labor and instead have been able to get more production out of fewer employees and at less pay. The flood of money from the Fed has kept consumers purchasing goods (other than houses), which has resulted in many businesses to remain profitable and even increase their cash reserves.

Businesses are sitting on over 1 trillion dollars in cash reserves. The Obama Administration wants businesses to spend their cash on new jobs, but businesses are reluctant to hire because they do not have a sound business model for growth because of the uncertainty of the global economy and political changes and growing influence of the US government.

The business community would like to spend some money and hire some good people while they are available, but without a sound business model their investors will not let go of the funds. The future is just too uncertain, and Obama has no one to blame but his policies to grow to government’s influence into the economy, with the takeover of the automotive industry (GM), healthcare (ObamaCare), the financial system (Bank bailouts), the higher education industry (student loan takeover) and the housing market (Freddie Mac and Fannie Mae).

What is going to happen?

The recent elections, in which the Republicans won the largest number of seats in modern history are about the change the situation.

They realize that a central planned economy by the government will only continue to bleed the wealth of the nation and will never be able to create real jobs. They are making plans to get the government out of the economy so businesses can once again find sound business models that their investors can sign off on to hire new employees. The only problem is that when reality is faced and the government stops propping up the economy with trillion’s in debt, it will cause the collapse of the phony stock market bubble that Obama and the Fed have been able to create over the last two years.

The real economy will show the real value of corporate stocks.

All of this is leading us to a market correction, because the consumers cannot continue to purchase products without paychecks, credit cards, student loans or unemployment checks, which will lead to a sudden drop in corporate profits resulting in dropping stock prices.

The good news is that jobs will return. They may not pay what they did during the housing market bubble, because the high wages during the housing boom where as fake as the housing prices.

Inflation will also become a major problem as the trillions that the Fed has been printing will be unleashed into the economy, the US will begin to face what China, India, and much of Europe have already been dealing with. The Fed will respond by raising interest rates, which will make purchasing a home even more difficult.

Perhaps the best news will be that innovation will regain its important role, as we turn to capitalism to once again save the world.

Perhaps one of the best explanations of what happen in the past can be found in Thomas J. Dilorenzo book, "How Capitalism Saved America".

How Capitalism Saved America: The untold history of our country

"How Capitalism Saved America"

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Mitt Romney and Likely 2012 Presidential Candidate Has a Much Better Plan than ObamaCare

Wed, 02 Feb 2011 20:24:00 GMT

Mitt Romney’s new book ‘No Apology: The Case for American Greatness’ is by far the best book I have read by a potential 2012 Presidential Candidate.

In his book, Mitt details his ideas and how he would implement them. I was amazed by how smart this guy appears to be and how well he understands how federal policy influences the economy.

As one of the most successful businessmen in America, Mitt has the knowledge that Obama is severely lacking to get the economy back on its feet. I think Mitt is going to be the leading Presidential Candidate in 2012.

Here is a resent video with Mitt about ObamaCare.

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Reagan Judge Rules ObamaCare Unconstitutional, Saving the Nation from Socialism

Tue, 01 Feb 2011 19:23:00 GMT

Who would have thought President Ronald Reagan would to this day have such a major impact in saving the nation from taking a devastating road of socialism?

Many years ago, Ronald Reagan warned us against socialized healthcare and the danger that it contains the potential to destroy the freedoms of our nation.

Yesterday, Judge Vinson became the second federal Judge to rule ObamaCare unconstitutional, delivering defeat to the crown jewel of the Obama administration.

The 78-page ruling was so thorough that it requires the government to stop implementing ObamaCare, at least in the 26 states that were plaintiffs in the case. The other states should jump on the case so that the Obama administration does not force them to pay for the massive increases in Medicare and Medicaid.

ObamaCare has already been repealed in the House of Representatives and is soon going to be discussed in the Senate. With two-thirds of the nation wanting to repeal the bill and the Suppreme Court now likely to rule against the bill, anyone that does not vote for the repeal in the Senate will be voting against the people of the nation and against the Constitutional provision for liberty.

The Obama administration is now facing a very difficult position. Do they continue to fight against the tide that has uncovered the unconstitutional ideas of socialism within ObamaCare and risk a major political loss in 2012 or do they admit they were wrong all along and are now ready to negotiate real healthcare reform targeted at lowing costs by reducing the role of government?

This is a very perplexing question, because either way ObamaCare is finished and the nation has been saved from complete financial ruin.

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