I’m not doomsday preaching.  This isn’t the end of the world.  It’s merely a financial recession/depression.  Life goes on. Not everybody loses their jobs or homes.  This is the normal course of things for any economy that perpetrates enough false growth through the abundant use of debt and newly created financial instruments that were unstable and risky at best.  It will end.  We were not on a sustainable path.  How many years can you spend more money than you make before you must change your ways?  I guess the answer is debatable.  Here is what we know.  The American Economy boomed in the last few years with all the financial instruments that allowed and encouraged cheap borrowing to finance the purchase of that  big fancy home.  The big fancy home was worth so much money that they had to get creative and create special borrowing programs with small teaser rates.    This isn’t news to any of you.  The people bought homes and spent money in record amounts.  Now they have to pay for it.  It’s really simple.  A large percent of the population rushed out and borrowed and spent well beyond their means all at the same time.  Now they have to stop spending as much and begin to pay for what they have already spent.  We needed this correction if we are to experience true economic growth in the future.

I, like most of you, have lost money.  Instead of paying down my student debt completely with all excess cash, I was socking cash into an investment account.  Talk about bad timing.  I was extremely bearish last year, but I read somewhere that historically most election years turned out positive due to all the rhetoric and promises offered by the politicians running for the Presidency.  I knew deep down inside that Obama would win (though I hoped for real change so that Ron Paul could have a chance!) and that he would promise the world to all through his rhetoric on change and hope.  I wrongly assumed a lot of people would think everything would be fine and continue spending like it was 1999. I assumed 2009 is when the Sh!t would first start to hit the fan.  I was off by 4 or 5 months, enough to say I was wrong about many things.  I thought USD would fall dramatically (it did, but it also rose dramatically at the end!), gold would rise (it stagnated year over year, though it did soar at one time) and oil would continue to rise (it dropped like a rock near the end of 2008 after a super crazy rise!).  As you can tell, my projections don’t hold much water, especially not my timing of them.  So it’s with that caveat that I will attempt to give an outlook for 2009 and beyond.  Hint: It is almost the same outlook I gave for 2008.  I don’t think this economic madness is over.  Deficits, over indebtedness of both country and citizenry, ageing demographics with large social programs and expectations and shaky economic fundamentals are all still very much part of our lives.  We need to deal with them head on and not pretend all we need to do is spend our way out of a recession.  That said, there is a light at the end of the tunnel: technology and increased living standards for the world.

President Obama

Contrary to what many think, Obama is not the Messiah nor can he walk on water or feed the world with a single loaf of bread.  He is but a mere mortal man and should not be worshipped (nor do I think he would want to be worshipped, but we’ve seen a bit of that already!).  Obama can do some good with his Presidency and he certainly has the political capital to do so.  But please realize there are some unfairly high expectations on him by the people that voted him into Office, he’s just human.  I personally wish him all the best in Office!  It isn’t an easy job.  But what many of the citizens need to realize is that it is YOU that must do the work.  Obama may lead, like your boss at work leads - but it is you, the employees/citizens that must do the work in the economy - Not Obama.  Stop sitting there watching TV pretending Obama will fix everything for you!  We need to shift our economy over to a technologically advanced one with virtually unlimited sustainable energy sources, higher crop yields, higher manufacturing efficiencies, improved living standards for the world, perform new space exploration, etc, etc.  Obama can’t do this for us, but he can put policies in place that encourage this to occur quicker.  It is going to happen anyways, whether or not he encourages it - but I truly think that this is our way to an economic recovery (it won’t happen overnight!) and it will occur in time.

Now that Obama has taken over the reigns we must wait and see what happens.  In fiscal terms, I expect Obama to take us FURTHER down the road Bush already had us on: Can you say DEFICIT?  There will be huge deficits that will loom over our economy!  This isn’t a revelation - everyone knows this.  Really, in terms of economics, he is following many of the same economic policies every politician loves to follow: namely the Keynesian ones that give them a reason to spend wildly on anything and increase social programs (buy those votes with the voters money!  Every politician does it!).  This will create a set of challenges and don’t work out as planned - essentially it’s just a big waste of money that can hurt us.

We don’t know which of his campaign promises he will follow through on and which he won’t (raising taxes? let’s hope he tosses that one in the garbage.).  Nonetheless, his flip flopping should be entertaining to watch.  “Are you not entertained?” (that’s a great quote from Gladiator!).

Politically speaking, I do expect him to do a much better job on foreign relations than Bush.  That’s about the extent of it.  I think his policies on fiscal spending and those “stimulus plans” will be mostly disastrous, really.  But hey, at least we may end a few of these drawn out costly wars and make some friends in the world.  Though Obama appears to be much better on foreign relations, there are still many areas around the world that could spark problems and setbacks for us.  But I can see some positive,  just not on the economic front during the next few years.  :)   Spend our way out of a recession… HAHAHAHA.  They’re just joking… right?  We can put policies in place to help usher in an energy revolution and a technological revolution - but ultimately it is the people and the corporations that must follow through and actually do it - a President can’t do it for us.  

USD

I truly believe the USD will fall in value.  Now I must add something here: Although the USD will fall in value, many other currencies will also be falling!  You must look at the devaluation of the USD in terms of buying power to truly see the effects (and please don’t blindly trust the government inflation statistics).  Yes, there has been asset deflation recently and that may continue a little while longer - but ultimately it is the day to day costs of living that will begin to rise as the dollar falls. Inflation will hit - maybe not this year - but it will hit in a big massive way.  Many are worried about deflation.  One thing is certain: Our system does a good job at causing inflation - especially when the Fed and the Government are trying to do everything in their power to cause inflation!  That is exactly what I expect to happen in the long term.

Price of Oil

I expect the price of oil to go much lower in the short term as the economy shows its true colours.  Then I expect the price of oil to skyrocket due to lower oil production worldwide.  Long term - I’m bullish this commodity.  There will be shortages.  In the super long term I expect the economy to change over to more sustainable methods of energy, like solar, but this is still a long way away thought the shift is now beginning.  But until we have switched, I expect the price of oil to play a huge role.  In fact, a high oil price only helps us change to other energy sources quicker.  I think this may be a good year to find some entry points in some quality oil companies (and solar ones too!).

Gold

I expect gold to soar as the fiat currencies of the world begin to stumble and the economies show signs of worsening.  Honestly, it’s been said by a million people recently so I don’t need to say more.

Economy

Several times through the next several years I expect there to be false signs of a recovery.  Ultimately I don’t think we can have a real recovery until 2012 or later.  I seen a great video last year that I can’t seem to find anymore - the video included a chart showing the sub prime loan debt problem and the commercial debt problem and we are only halfway through.  The economy is just beginning to unwind and the chain reaction of layoffs has only begun.  There are too many loans being reset for the next few years to be completely out of the woods.  Then there are the demographic issues which have yet to be raised and discussed.  Increased social programs under Bush and Obama will only hurt the economy further under the strain of the Boomer’s pending retirement (yes, pending).  I’m not saying we won’t have a recovery - just that it will be difficult with the Boomer’s beginning to retire and the younger Boomer’s will be SAVING aggressively for retirement (and paying down the debts) - especially since their retirement portfolios have been turned from 401k’s into 201k’s or worse.

Bearish Short Term (Next 3 to 5 years), Bullish Long Term

So there you have it.  I’m bearish on the economy overall for the next several years.  It may surprise you but I’m very bullish over the long-term!  Why?  Technology and improving living standards for all!  Even throughout this economic downturn there will be many technological, scientific and medical breakthroughs that will continue to progress mankind forward and opportunities can and will be found.  Ultimately we must not forget that the world is growing (population wise) and so too will the economy.   Some areas that will be good:  Agricultural, Mining, Science and Technology, Energy (sustainable), Medicine, Real Estate and Space Exploration.  Our present world can’t increase the living standards for all by purely relying on oil - look at what the price of oil did as it appeared some countries would be rapidly industrializing!  We just don’t have enough oil capacity at present to allow the entire world to develop rapidly.  But with a shift to sustainable energy methods - the world will develop quicker than you or I can imagine - and there are billions of people around the world that ultimately would love to own a nice home,  vehicle and computer (and the other toys that come with the Western lifestyle).  The American Dream - done in a sustainable way - is quickly becoming the World Dream.  We have a lot of work to do.  When the World begins to industrialize we will finally have some more customers for all our technology - then maybe we won’t be burdened with the “damned if you do, damned if you don’t” conundrum of spending more than we earn to sustain our economy.  Maybe then we can live within our means and still enjoy a comfortable existence.  The future can be very bright.  And here’s to hoping we avoid major conflicts that will only serve as major setbacks.  Cheers.

Instead of expecting politicians and bankers to come up with a solution to a problem they helped create with our complacency, how about we all develop our own plan?  Too many people act like they are victims and have no personal role in the mess we now find ourselves in.  Too many are waiting for government to solve or fix the economy.  Well, I have news for you.  You do matter.  Your actions matter.  What you do with your money each and every day matters.  Collectively we are the economy. Too many of us went along with the bankers idea of a strong economy and borrowed heavily and spent beyond our means.  We bought into the notion of sending our retirement money to Wall Street to buy companies at 30x PE, as if it was the normal thing to do, the right thing to do.  The “experts” told us to make sure we were diversified and that would limit the risk.  We bought into the notion that home prices would forever climb skyward and that it was the “best” investment (is a home an investment?).  We took on too much debt and borrowed against our future earnings despite the majority of our population get nearer the age of retirement. We are part of the problem, and we can be part of the solution.

We know the bankers answer to the current economic woes - get us to borrow more money.  We know the politicians answer - print more and spend more money (our money).  The word bailout is flying around far too much.  Does any of this actually fix our fundamental problems? I don’t think so though you’re entitled to your opinion.

So let’s come up with our own solutions on an individual level. Ask yourself, what can YOU do?  You might not have much say in Washington on an individual basis, but you do have some say over your own finances and actions.  First, come up with a way to get your own financial house in order.  Then we can worry about coming up with a plan that would help get the rest of the country in order.  I’d love to see each of you post your own ideas.  Your ideas are probably much different than mine - that’s fine.  I want to hear them.  Many of you will have better ideas than me.  Discussion is good.  It’s time we start taking responsibility for our own actions and also get more involved in finding real solutions to the problems at the individual level.

My Personal Plan of what I can do:

1. Go through personal household budget line by line and figure out what can be reduced.  The goal is to live within my means and decrease costs as much as possible while still living a comfortable life.
2. With 100% of my savings I am going to pay off all outstanding debts. My goal is to be debt free, for the rest of my life and buy the things I want or need with SAVINGS.
3. After budget is in good shape, I need to decide what to do with any savings I have.  I’ve decided a quarter of all my savings I want to put toward retirement, though this figure may change.  The other three quarters of my savings I want to put toward large future goals like building an emergency fund, buying a small acreage with a nice little house, starting a small business, investing in other local businesses, etc, etc, etc.  It will vary for each person.

After you have created a REAL plan for how you will get YOUR financial house in order, you can begin to worry about the greater economy and the country in general.  Think of some potential solutions that you can suggest to our politicians.  Here’s my idea.  Please note: It won’t be quick, easy or without pain and it has flaws.  I’d love to hear your ideas!

1. We need to let the banks fail that can’t stand on their own two feet.  Who cares about their derivative positions.  Just let them fail. Period. It was all fake wealth created anyways.  It wasn’t real.
2. We need to let the healthy banks thrive as a result of the bigger banks falling - this will happen naturally.
3. We need to abolish the Federal Reserve.  If you want a Central Bank - then make one that is owned and controlled by government and fully audited, not a private corporation that has NEVER been audited like the current system. I’m tired of Federal Reserve bankers getting all the bailouts and having the power to print money and affect interest rates and being promoted into high government posts after having made such a mess.
4. Government needs to get out of all special interest programs and slash expenditures.  There are trillions of dollars being wasted on programs that aren’t necessary and are outside the spectrum of what government should do.
5. Issue a new currency that is NOT debt.  Right now every dollar is debt.  Dollar = Debt.
6. Abolish fractional reserve banking.  Every dollar should be a real dollar. Period. No printing “fake” money on a fractional basis.
7. Tax reform is needed badly.  Get rid of death taxes, property taxes, income taxes, and corporate taxes.  If we didn’t have government so large, we wouldn’t need these taxes.  A sales tax based on consumption would be more fair and would reward savers and wealth building within the nation.  We could also use service fees and tariffs to help balance the budget.  We didn’t have income taxes until just recently!! Remember, we must get rid of MOST government departments that aren’t vital and so we can afford to reform the taxes.
8. Companies like GM, Ford and Chrysler need to get a bank to loan them money or file Chapter 11 and reorganize until they are healthy and once again competitive and financially sustainable.

Would the plan above be painful? Of course! Once we fix the underlying problems it would be much better for our society in the long run.  Our fiat dollar controlled by the Federal Reserve DOES NOT award savers but encourages debt.  The current tax system DOES NOT AWARD savers.

So, what are you waiting for? Develop your own plan for what you can personally do to better your situation.  After you have your own financial house in order or on the right track, then try and come up with some solutions for the country.  My above plan is probably not the best plan.  If you have a better plan, I’d love to hear it.  I’d love to get that discussion going.  I’d also love to get people thinking about what they can do and for people to start taking action on an individual level.  It’s not good enough to sit around and wait for government to “save us”.  We can do things to help ourselves!  Better late than never.  Now go help yourself and stop waiting for government to do it for you. And please, please, please write up a plan of what you think Washington should do.  I’d love to hear some of your ideas for what you think needs to occur in Washington to really fix this mess. If you were President, what would you do to fix the mess?

“The brutal truth that no one in Washington dares acknowledge is that our systemic economic problems can only be solved by a reduction in consumer borrowing and an increase in savings. We must repair our national balance sheet and a painful recession is the only path to achieve this. By interfering with the market’s attempts to bring this necessary change about, all the proposals currently coming from Washington or bubbling up from think tanks and Nobel prize-winning economists, will only exacerbate the imbalances and lay the foundation for even greater losses and a larger crisis.

A short-run reduction in GDP is a sacrifice we must be willing to accept. If we swallow this medicine now, in the long run we will have a sustainable rise in GDP as higher savings leads to increased capital investment, greater productivity, and eventually a lasting increase in consumption.” - Peter Schiff

I couldn’t have said it better myself, though I’ve tried many times.  Failure is part of our system.  We should embrace the fact that fools eventually fail and that success is a reward, not a right.  Success can’t exist without failure.  Think about that.  If failure does not exist for the big banks because government won’t “let” them fail, then what incentive do they have to fix the problems quickly - especially when they know the government will give them MORE money and reward further incompetence?  We should not undermine our entire system to save a few “too big to fail” companies that have failed.  If they were to big to fail, why did they fail?  There is no such thing as too big to fail.  The government is stepping beyond its boundaries.  We are propping up the economy and certain businesses in a time when the excesses need to be flushed out so we can start fresh and have healthy sustainable growth.  If we got rid of these banks perhaps we would also get rid of the derivative problem they have created.  Much of our growth in the past several decades has not been healthy nor has TRUE sustainable economic wealth been created- it is fake growth funded by insane debt levels that need to be paid back!  The way we structure the economy on debt at the moment requires the debt to expand constantly just to stay afloat.  The system is poorly designed - all going back to the money supply.

The government has now decided it has the power to alter economics and choose winners and losers.  The winners so far have been the big banks, primarily ones connected with the Federal Reserve…  Conducting all these “bailouts” will not correct the economy - it will merely delay it from being restored and exaggerate the problems by making them worse.  Yup, government is making the problems worse!  We need to allow a recession to occur without bailing these companies out.  Yes, it will be painful - but less painful than the alternative.

One of the fundamental flaws with bailouts is that the government gets to pick and choose the winners and losers.  Times like these the conservative and “good” banks that didn’t get crazy will survive and thrive - while the ones that took on too much risk should fall.  The good banks aren’t being rewarded for competence in today’s environment.

Here is an excellent comments on Peter Schiff’s article:

“The sentence “the decision to let [Citigroup] fail” gives away the game.

It isn’t simply semantics or logic to point of that when any business can be saved (bailed out) or condemned to failure (allowed to fail) by “unseen powers behind the throne” then we don’t have a capitalist economy but something that is closer to socialism.

Business failure is an essential part of capitalism. When there are “eminences grises” behind the scenes with the power to save (or “allow” to fail) any business they deem worthy or unworthy, then we have one of the many forms of socialism.

For years economists have pointed out that socialism has crept into America under the radar of anti-communist rhetoric, as oligopoly capitalism, but as long as the system created prosperity and jobs, no one payed any attention to them. Even so, most Americans call this system “socialism for the rich.”

It is only a short step from socialism for the rich to “socialism for the rest of us.”

“I have seen the enemy and he is us.” Pogo” - carey_jim

He is absolutely correct.  Success can’t exist if failure doesn’t also exist as a possibility.  We don’t live in a capitalist society anymore - we live in mixed economy that contains many socialistic elements. It’s been this way for a long time regardless of what party has been in power. 

There are several things that need to occur.  It won’t be quick, easy or painless.

1. We need to let the banks fail that can’t stand on their own two feet.  Who cares about their derivative positions.  Just let them fail. Period. It was all fake wealth created anyways.  It wasn’t real.
2. We need to let the healthy banks thrive as a result of the bigger banks falling - this will happen naturally.
3. We need to abolish the Federal Reserve.  If you want a Central Bank - then make one that is owned and controlled by government and fully audited, not a private corporation that has NEVER been audited like the current system. I’m tired of Federal Reserve bankers getting all the bailouts and having the power to print money and affect interest rates and being promoted into high government posts after having made such a mess.
4. Government needs to get out of all special interest programs and slash expenditures.  There are trillions of dollars being wasted on programs that aren’t necessary and are outside the spectrum of what government should do.
5. Issue a new currency that is NOT debt.  Right now every dollar is debt.  Dollar = Debt.
6. Abolish fractional reserve banking.  Every dollar should be a real dollar. Period. No printing “fake” money on a fractional basis.
7. Tax reform is needed badly.  Get rid of death taxes, property taxes, income taxes, and corporate taxes.  If we didn’t have government so large, we wouldn’t need these taxes.  A sales tax based on consumption would be more fair and would reward savers and wealth building within the nation.  We could also use service fees and tariffs to help balance the budget.  We didn’t have income taxes until just recently!! Remember, we must get rid of MOST government departments that aren’t vital and so we can afford to reform the taxes.
8. Companies like GM, Ford and Chrysler need to get a bank to loan them money or file Chapter 11 and reorganize until they are healthy and once again competitive and financially sustainable.

Would the plan above be painful? Of course! Once we fix the underlying problems it would be much better for our society in the long run.  Our fiat dollar controlled by the Federal Reserve DOES NOT award savers but encourages debt.  The current tax system DOES NOT AWARD savers.

I realize our government and those in power won’t do any of the above. They won’t let go of the current system without kicking and screaming because it has centralized power in their hands and the hands of a few private banks.  I guess we’ll just play “bailout the banker” for a while longer (we’ve only promised them about ~$70,000 per US household in the last six weeks).  Poor bankers.  I heard a neat quote that would make a great bumper sticker, “No Banker Left Behind”.  I’m disgusted we’ve started down the bailout path.  It completely undermines our economy.  I don’t want ANY bailout for ANYONE. Period.  This $7.7 trillion was not a banker bailout, it was a banker take-over.  It didn’t bail anyone out but the biggest of banks - those of us on the ground are still up to our necks drowning in debt and losing our jobs - and their solution is to give the biggest banks (that over-leveraged themselves to the point of insolvency) OUR money so they can lend MORE to us?  What?  We don’t need more loans! Ask yourself, why does government give a few select banks the money? The answer, the truth, will set you free.

“None are more hopelessly enslaved than those who falsely believe they are free.” - Johann Wolfgang von Goethe

So, over the weekend, the Conservative Party decided if the other parties wouldn’t support that proposal, they would get rid of it.  Problem solved, right?  Nope.  It turns out the other parties want to unite and form a coalition government and overthrow the Conservative Party, just weeks after having been elected.  The Coalition says a lack of economic stimulus in the budget is the reason.  Not true.  The Conservative Party wants to wait until they hear more of Obama’s plans before throwing out some arbitrary dollar sum to fix this mess.  You must realize, 80% of Canada’s exports are destined for the USA.  Canada has largely avoided the underlying problems that seem to be devastating the rest of the world, but Canada is still going to feel the economic pain - especially in manufacturing.  The Conservatives were going to wait a couple months until Obama’s plan has been revealed before they can decide on the best course of action and how best to help our economy.  Throwing money at logging or auto-manufacturing companies in Canada won’t fix the problem… Home builders in the USA are not building, so they aren’t buying our lumber, and auto sales are down in the USA, though auto sales are up here, and our auto industry is in peril as a result of the US economic crisis.

It’s just common sense to wait two months and make a plan in conjunction with Obama to best help the economy.  Partisan politics will get in the way and the leftist parties will “do something” so they can tell their voters they are doing something to fix things and they will look busy.  They fail to realize that the government can’t save them from economic situations occurring in other countries and around the globe and that the economics here at home are as healthy as they could possibly be considering the worldwide scenario!  They are opportunists - all politicians are.

It turns out that one of the leaders of the Coalition government, Jack Layton (NDP), was recorded and said that they had been planning something for a little while, this was just an opportunity to speed things up.  Great.  Just what we need.  Layton running the economy!  He is basically a socialist, and that isn’t taking it too far… seriously… For those of you scared about how leftist Obama might be, feel comfort in knowing that if Layton has his way, we will go MUCH farther left than Obama ever could or would in America.

Now, what is it the Coalition government plans on doing to stimulate the economy and “save” Canada from the Conservatives?  A figure of $30 B is being thrown around as a stimulus plan (though that’s just to start, god, how much will they put our children into debt?).  What they don’t tell you is that they plan on getting rid of the $50 B in tax cuts to the Middle Class that the Conservatives have planned and budgeted for - something that would help Middle Class families by leaving more money in their pockets for things like cars, homes, retirement and other discretionary spending - all of which helps the entire economy.  If you do the math, the Coalition is going to give the economy $20 B less in stimulus, not more!  SO THE VERY REASON THEY PLAN ON TAKING OVER THE GOVERNMENT IS FALSE!  Also note that the stimulus won’t be felt everywhere in Canada - Alberta for instance will get NOTHING, zip, zero - and many other provinces won’t see a dime either.

In fact, Alberta might be the target of the coalition and end up in a recession which they have so far managed to avoid altogether!  During the recent election, the Liberal leader Stephen Dion, who will be the Prime Minister if the Coalition forms government, ran on a platform of increasing taxes on Alberta and the oil companies to “spread the wealth” to people in an area over 3,000 miles away, without fully admitting that jobs will be lost in Alberta or mentioning that almost every dime of profits from oil companies either goes to their shareholders in the form of dividends or goes back into the economy in the form of drilling and expansion AND jobs.  This resembles the Trudeau New Energy Policy that the Liberals introduced in the 70’s.  It nearly bankrupted many in Western Canada to help those in the East.  Great.

I’d advise against you investing in Canada for the time being.  It is a great resource rich country, but it is going to see a time of increased taxes and the first DEFICITS in a LONG time, but deficits that will never end once the left parties have their turn at increasing entitlements and the debt.  I’d be especially cautious if you are investing in the Oil Sands.  Stephen Dion may still try and push his Green Shift Plan into power.  It is basically a wealth distribution scheme, taking it from Conservative Western Canada and oil producers and putting all that money into the hands of Ontario and Quebec’s manufacturing sector (and to a lesser extent the logging industry in BC and the East Coast).  The coalition is already discussing Kyoto part II.  Let’s see how many ways we can get rid of dirty jobs here and ship them to the third world where there are zero environmental standards.

I’d say this is the best thing for the BQ Party!  They will now be dictating how Canada runs, even though they are a separatist party!  Oh, and with enough anti-western policies from the coalition government, they know it will spark separatist discussions in the West… The West won’t separate (too many people from the East had to come here for jobs since they screwed up their economies in the East) - but this will strain relations and only help further the BQ’s movement of a separate Quebec. It’s actually brilliant for the BQ and Quebec will only receive more money.  Quebec, as a standalone nation, would be a financial disaster in the making since they are unable to financially pay for anything without handouts from the rest of Canada.  The West could actually thrive financially if it was an independent nation, but that won’t happen - have no fear - we are still here to pillage; That is the attitude politicians from the East have!

Personally, I’ve had enough with all the Partisan politics and “wealth redistribution”.  In Canada, they don’t just do wealth distribution from rich to poor… they take it from one region and give to another region thousands of miles away - which hurts the job prospects where I am - even for the poor here.  My region will see nothing and will actually feel pain due to this.  I’ve had enough partisan politics.  I’m not a western separatist supporter - but when the price to remain in Confederation is robbing my region of any wealth at all, it crosses a line.  I  don’t want to remain in a Confederation where my area of the country is all but forgotten until budget time when they decide to pillage it.  Enough is enough.  If we left Canada, they could not pillage anymore, and they (those in the East) would have no where to steal the wealth from but themselves - though they don’t have any since they decided to spend beyond their means and have massive debts.  Voting Liberal and NDP and BQ is a good idea if you live in the East, as you know they will steal wealth from a region thousands of miles away and spread it around your locale, but for those in the West who work 80+ hours a week to keep the economy chugging along, this doesn’t bode well for our us, our economy or our jobs.  If things were reversed, perhaps they would finally understand what it’s like and why centralization of power and wealth being “redistributed” arbitrarily is not sustainable if you want Confederation to continue and strengthen.  Stealing from us didn’t help under Trudeau and it won’t work now.  It will only make an ugly mess uglier for everyone and the Confederation shakier.

I just read a MUST read article on Bloomberg! Every reader must check out. If you thought the $700 billion bailout was big news…

The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago

The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program.

A lot of people are talking about the $700 billion bailout, but few have been talking about this. I’m astounded. Speechless. Oh, right, the Federal Reserve is in charge. It actually doesn’t surprise me.

The article goes on to say:

Most of the spending programs are run out of the New York Fed, whose president, Timothy Geithner, is said to be President- elect Barack Obama’s choice to be Treasury Secretary.

‘They Got Snookered’

The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.

“It’s unprecedented,” said Bob Eisenbeis, chief monetary economist at Vineland, New Jersey-based Cumberland Advisors Inc. and an economist for the Atlanta Fed for 10 years until January. “The backlash has begun already. Congress is taking a lot of hits from their constituents because they got snookered on the TARP big time. There’s a lot of supposedly smart people who look to be totally incompetent and it’s all going to fall on the taxpayer.”

My, oh my. It’s funny how they use that money to help the big corporations on Wall Street. I wonder what would have happened if they just paid off half the mortgages in the United States instead? I’m no proponent of any of these activities, but wouldn’t it have been smarter? The consumers would pay off their mortgages, the people holding the mortgages would get their money back (so the banks would get money), and the consumer could start spending again with a fresh start… I don’t like it, but wouldn’t that have made as much sense? Instead what they have done is given money to the banks so they can lend to people - but the people are already maxed out and up to their eyelids in loans. If anything, the people will have to declare bankruptcy in order to see their share of this government bailout. In terms of the entire economy, if the consumer isn’t spending money or is forced to go bankrupt, then the economy won’t recover as planned anyways. In fact, if many consumers must declare bankruptcy, they will also be black listed for a few years. Either way, these “bailouts” seem flawed and the only winners are the largest banks and the Federal Reserve.

I certainly wish none of this occurred at all. We are handing over so much power to Wall Street, the big banks and the Federal Reserve, that it is down-right scary. My guess is the big banks will be buying smaller conservative banks that aren’t in trouble. Government funded consolidation! Even if they don’t go on a consolidation binge, why is it that government bails out the bankers but not its own citizens that owe the debt? We shouldn’t have to sue to get information about our own tax payer funds either… talk about power transfer. When we, the people, have no say over the government funds, there is something fundamentally wrong. Transparency anyone?

Bloomberg has requested details of Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit against the central bank Nov. 7 seeking to force disclosure of borrower banks and their collateral.

Thank you Bloomberg! How much of this information would be public (in the main stream media) if it weren’t for Bloomberg? Why does Bloomberg have to sue in the first place?

I’ve been reading a lot on Seeking Alpha recently. One of the authors, Kathy Lien, keeps getting my attention with her articles. They stand out as very Pro-Obama with little independent critical thinking. It doesn’t seem to matter what the man does, his choice is always good. In fact, Kathy writes that Obama has “restored confidence in the financial markets through the appointment of a Cabinet members that the market trusts and a clearer plan of action for tackling the economic crisis.” Intrigued about this clear plan, I headed over to see what Obama wrote. It seemed to me that the details were still in the making when he wrote, “[w]e’ll be working out the details in the weeks ahead.” But to Kathy, he’s done such a good job that, “the sun is shining on New York City and on Wall Street.” Hooray!

More manipulation to “save” Wall Street isn’t necessarily good in the long run. I guess most on Wall Street don’t worry about long-term goals. I agree with Kathy, the sun is shining on Wall Street… All the big banks are getting government funds that will enable them to gobble up the smaller more conservatively sound banks around the country that aren’t in trouble. Government funded consolidation and more power shifting toward Wall Street is going to make Wall Street happy!

While Wall Street rejoiced under the Sun, many other’s weren’t. The USD Index had it’s 5th biggest decline EVER. In addition, “the sharply increased volume of editorials in the Wall Street Journal calling for a new monetary order [the gold standard],” writes Tim Iacono, “is a hopeful sign that the message is getting out.“ While I hope the message is getting out, I have my doubts about Americans instituting any dramatic change in the USD. I tend to agree with Tim that, “[t]he flight to gold appears to already be underway with the some of the largest international dollar holders - the Saudis and the Chinese - either talking about buying lots more gold or already doing so.”

I truly believe “change” of the monetary system will be forced to come about by outside forces, not from any politician within America. I have little faith in the present system or the people to enact any real change. In many instances people do not want to enact any such change. Some of the first comments to Tim’s article on Seeking Alpha show this very clearly:

Bricki: “ Right - let’s jump onto the gold standard just at the time we are facing a deflationary crisis as banks deleverage. I could not imagine a surer way to bring about a long and severe depression.

Not to mention rising costs for gold production that insure that the world’s money supply needs will far outstrip the availability of gold.

If you want something that will do some good, let’s start talking about limits to leverage and budgetary deficits. “

Bricki does have a point. It would be painful to change now. But is it going to be painless to stay the course? I doubt it.

Nabloid: “I’m in 100% agreement with the author of this article.

The switch to gold must come from others outside the US first - Those in power in the US are fighting tooth and nail to prevent this flawed fiat currency and the entire system from collapsing. Their magic tool is inflation - the very same thing the Federal Reserve was created to prevent, they are now openly admitting they would love to cause while they point to the evil deflation threatening us… Deflation is almost fiction in that it would never happen (for long) in our current system because they will make sure of it…

Perth Mint already announced they will no longer be taking orders… They were too far behind. Most gold/silver dealers are out of stock. Demand isn’t being completely met for smaller items…

Bricki - Trust me, the short-term deflation they warn of is nothing compared to the long-term inflation that will happen… “I could not imagine a surer way to bring about a long and severe depression.”

I could… manipulation over decades with a fiat currency and a system that requires a continual and seemingly infinite growth while we ship our jobs elsewhere with unfair trade agreements that are not “free” or reciprocated while we lower the interest rates so people take on more debt in order to borrow against our future to prevent any contraction today! We can borrow our way out of this!?!?! For how long. What caused the great debt expansion in the first place? And while we encourage people to take on more leverage with low interest rates, we’ll open up our economy to other nations to do trade freely, even if they don’t give us free access to theirs - and even if we don’t require them to follow the same regulations and standards we make our domestic companies follow. Now we compete with our hands tied with unfair trade agreements and weighed down by the debt we must take on to stay afloat.

You know, the biggest export the United States has today? Money. If the world ever decides to stop buying USD, you’ll be begging for a new system - like the gold standard. Not that it will help now that we have almost no real economy. That’s another issue we haven’t addressed and merely reverting back to the gold standard or continuing to use the flawed fiat currency will not address it immediately. Pain will be felt.

The very system you would like to protect against a gold standard is the same system that got us into these problems… The manipulation that has occurred has got us into an unsustainable economic predicament. A major recession (or depression) is actually required to correct things and bring the system back to real life. Could they manipulate their way out of this for now? Yup. If the entire world gets together to prevent this flawed system from falling they can prevent it from happening now. It will happen - eventually… Fiat currency may survive for now, but time is on the gold standards side.”

Another commentator wrote:

Chris B: “ The gold standard crowd seems to believe that by pegging our currency to the trading value of a mineral, all our financial problems will be solved, including deflation, inflation, and perhaps even deficits!

Read your history folks. Why did William Jennings Bryan give his cross of gold speech? Out of control deflation that was wrecking the economy, crushing agriculture and railroads, that’s why.

Why did the US go off the gold standard? Having no control over interest rates or the value of its own currency, that’s why.

When the US was on the gold standard, it was what we now call a third-world-country with chronic currency instability that periodically crushed industry and investment. Subsistence farming was considered employment. Houses, if you can call them that, were built by hand, because there was no financing. Bank runs were common, as was malnutrition. 99% of people couldn’t afford college, and most never graduated primary school because of the need for them to work to feed their families. Think long and hard before you advocate going back to those times.

Since the gold standard was dropped, on the other hand, the economic performance of the US and the stability of the currency have been amazing. In 2 generations, we went from outhouses to mcmansions. A currency that can be managed for stability will do that for you. Pegging a currency to volatile mineral prices has proven results.”

I agree with Chris B, to a point. Pegging the dollar to gold alone won’t fix the economy. But it will put us on a better road and then maybe we will stop pretending that we can export USD’s instead of real products or services. My reply to him was:

Nabloid: “Chris B wrote: “Since the gold standard was dropped, on the other hand, the economic performance of the US and the stability of the currency have been amazing. In 2 generations, we went from outhouses to mcmansions. A currency that can be managed for stability will do that for you. Pegging a currency to volatile mineral prices has proven results.”

I think you are confusing the real economy and the tool (or instrument) that we use to conduct trade - as being the same thing. The real economy is the production of goods and services. Fiat currency was merely used to price and conduct trade of items from the real economy. Later on we began exporting our money as if it is a real good, but it isn’t. The USD is treated like it’s vital by pricing goods around the world in USD’s. Items can be priced in other currencies or in gold/silver as well.

We boomed after WWII because the population was expanding and America was the industrial powerhouse left standing intact. America didn’t solely get rich and boom because it was using a fiat currency, there were a few other factors you aren’t talking about while you give all the credit to the fiat currency for the boom. Even if you don’t believe a word I say, you must admit the economic boom had more to do with the industrial industry that was developed and a population boom, than any form of currency, gold or fiat.

But yes, fiat currency did get manipulated and helped carry the US farther and longer into a seemingly positive direction of increased debt and continual inflation. Was it well managed? No. It hasn’t been without bumps or stable at all times either.

We went from outhouses to a decent standard of living because we had a real economy while the rest of the world was left rebuilding. We then went from a decent standard of living to the McMansions today on a false growth and increased debt. Fiat currency carried us TOO far and in an unsustainable fashion.

Now what happens when fiat currency causes people to lose the very McManions they just bought with unearned dollars? Does it get the blame? You gave it the credit for people getting McMansions - so it must also be blamed for losing them…

What I’m trying to say is this: Not everyone else in the world is able to buy a McMansion with fiat debt - so what makes you think it’s sustainable? What enables America and Americans to continue to buy McMansions when they have lost most of their real economy by outsourcing to wage slaves in foreign nations? Fiat currency and increased debt combined with overly zealous consumerism. America forgot that an actual economy is also vital to the picture.

Going back to the gold standard won’t fix the fact that America no longer has a real economy, but it might at least get America back on the right track.

Chris B said: “In 2 generations, we went from outhouses to mcmansions.”

America went from the richest country on Earth to the most indebted one in 2 generations as well. Forgot to mention that part?”

Okay, I might have been a bit harsh and some of my arguments weren’t very clear or concise… But too much praise was being lavished on a system which is clearly not working out. I couldn’t help myself. I like discussions and while I may be very opinionated, I love debates. I have plenty left to learn and that is why I continue to read and write. You may agree with me or you may not, but I think we can all agree that these debates need to be taking place. I’m certainly glad they are.

I recently stumbled upon a site called The Coming Depression. On the site there was a recent article about Peter Schiff that also contained a video you must see. In the video, Peter Schiff is on the show Fast Money and is dubbed, “The Man Who Called the Recession.” He was publicly calling the recession in 2006 & 2007. I love what he has to say! It is so on target.

He explains that this isn’t just a financial crisis, it’s an economic collapse (yup!). The entire phony economy is collapsing. There is nothing the government can do to stop it, they should get out of the way and let it happen. AMEN!!! Finally… An expert that is in the industry and gets it! He goes on to explain that the world thought we had an economy, but for the last few years all we had was a bubble where we borrowed trillions from around the world, and that isn’t a real economy. Now we can’t pay the bills and the assets that we used to secure the loans are going down. We now have to build a real economy and it won’t be easy… a lot of companies will go under and jobs will be lost. It has to happen because we have to go back to a sane economy. A economy where we save money and make stuff.

Perhaps the best part is that he isn’t a short term person - he think for the long term. He sees the current commodity prices declining because everyone is selling everything to settle up their margin debt, it is asset deleveraging - but these are short term pressures. Long term he sees the commodities coming back and thinks this is a time to be a buyer, just don’t use leverage. Amen! He is bearish the USD and thinks it will fall like a stone. The next step is a major run on the dollar.

We have manufactured our way into becoming the wealthiest nation in the world and now we have consumed our way into bankruptcy. I think Peter Schiff is an older version of me! WATCH THE VIDEO! The other pundits are absolutely clueless!

I decided to go check and see if I could find out if he has a blog or website. On his Company site (he is President of Euro Pacific Capital) he posts an commentary every Friday. The latest one is titled, “The Truth About Bailouts“.

This article is not intended to be published on Seeking Alpha.

America was a great nation. The concept of America is great. America can be great. America is not currently great. America is no longer the world’s richest nation, nor the most successful economy; It is the poorest country and it’s economy is the biggest liar, masquerading debt as capital. America has been living a lie, forced to take on increasing amounts of debt (selling future) to hide her true problems. This is unsustainable.

What, for most Americans, is the difference between America and many other nations? The Middle Class and its standard of living. What continues to enable the Middle Class to exist? Their access to debt - selling their future to others (a modern form of slavery). PERIOD. Most Americans are but one paycheck away from being in serious trouble. Many Americans are worth LESS than most citizens in other nations that they look down upon. America is not rich… America is now the poorest nation on Earth. The access to cheap debt is drying up and the house of cards is falling down. Capitalism without capital is not capitalism.

Capitalism can’t be solely funded on debt, that is slavery (owing your future to someone else!). America doesn’t practise true capitalism. That is the problem we are witnessing. What is most people’s (including politicians) answer? Bailouts and other socialistic policies. Socialism got us into this mess, but we pretended it was capitalism and blamed capitalism while looking toward socialism for answers. That is a joke. Capitalism was the answer - it was what brought wealth to America to begin with. We changed the system and now look at where we stand.

The system was changed so that others’ (the private banks that control the Federal Reserve and the politicians that control government) would control the money supply and our wealth. When others control the money they can control the people and funnel the wealth to themselves with increased taxation. This keeps the common man down. Taxation comes in many forms. You have taxes on earnings, taxes on purchases, taxes on payroll, property taxes, hidden taxes built into products (oil - the main energy source for this economy), taxes on investments, capital gains, and death taxes. Now they are talking about taxes on air. They tax money that has already been taxed. This level of taxation only further keeps us enslaved and asking for help from the government - The very same government that took our money and wealth away to begin with. Inflation is another tax that is largely hidden. This all allows the government and those that control it to have control over us! This was not always the case. At one time we had a real currency. Wealth, was at one time, real! They couldn’t track it very well, nor tax it efficiently. They changed the system, the currency, and the rules. After they created a fiat currency they could completely control (they did it over time), they went on to slowly create new taxes (hundreds of taxes now exist). They then slowly increased the taxes. Inflation was largely hidden from us without including the cost of energy, food, or housing. Our wealth was dwindled away to nothing. How else do you explain 4th and 5th generation Americans still not owning anything, especially when they should own some of the wealth that their forefathers earned during their lifetimes? Inflation and taxes ate away my forefathers lifetime earnings - and they did have some wealth and lived very frugally. What is to show for their savings? After inflation and taxes, not a whole lot.  A viable currency should also be a good store of wealth, which fiat currencies are NOT!

I have concluded that those who own the Federal Reserve (it’s not federal!) now also have a huge influence on politicians. They help get them elected with large donations and contacts. We call America a Democracy, but it’s an oligarchy. There are two parties! You get to choose A or B! The big media companies polarize America on smaller issues and help the parties stay in power by not allowing another party to emerge and be competitive. Both parties have been promoting socialist policies. Neither party is much different. Both parties have implemented FREE trade agreements with foreign nations that have not allowed us free access to their markets. Yup, both parties have made it so we must unfairly compete with foreigner’s who play by a different set of rules/laws (while we have our hands tied!). Both parties wanted the bailout! McCain and Obama were both in favour of giving taxpayer money (not yet earned money, further enslaving America’s future with increased debt) to private banks - and only the really big ones - not the local community banks or regular citizens. It is suspicious that the bill gave power over the currency to an external person who could not be audited or investigated. If it was “our” money (we the people), then why was it not done in an open fashion for all to see? But we can’t ever know what happened with that money.

Furthermore, what do you expect politicians to do as the house of cards continues to tumble down? More bailouts - to the large corporations - and yet no help at all for the small guy… In fact, they will tax the small/mid size businesses and the Middle Class to pay for the bailouts. Then, of course, they will give some handouts to the poor to appease them and keep the system from chaos and rebellion. That is what socialism is - it is handing money to the very poorest to stop a rebellion, while putting control of the masses in the hands of the few.

There is a serious flaw with the current system. It’s called debt (and fiat currency). Debt is not capital, currency or wealth. Most Americans have been lied to, told to go out and take a 30 year mortgage on a home - that it is a good investment. As interest rates got lowered, more Americans rushed out to buy homes - and they bid each other up in the process. A home that once cost $80,000 then climbs to $100,000+ in a matter of months, not because of inflation (though that also hurts!), but because people bid the homes up against each other with debt dollars - not even money they have, but tomorrows earnings. The manipulation of interest rates and of the currency have created the big bubbles and busts. Manipulation is not capitalism.

America would be free if she and her citizens were free of debt, taxes and inflation. Debt is the master, the owner - Americans are free to work where they want (as long as they can find or create a job that makes money). But Americans are not free to decide if they want to work. Most Americans must. They are not free. They are wage slaves. Someone else owns their future. They are slaves to the system. Even a portion of the money they earn is taken. When they die another portion of their life’s work is taken. Inflation eats the rest. This keeps our future generations down.

The system is designed wrong. Using debt as a currency is an evil of sorts. While the banks get bailed out (those that issue debt to others) - The people in debt see no bailout. Truth is, neither should have to be bailed out. The socialist system got us here. A system of fiat currency and the Federal Reserve (that is not federally owned - but a private corporation!) that controls our debt and what interest rates we must pay. Socialistic policies only delay the inevitable with bailouts and spreading the wealth around artificially and unsustainably. For how long will they delay the inevitable? We don’t know. Fiat currencies have always failed in history - and this one is set to fail as well. They won’t let it fail without a fight - but the longer they delay it, the worse the consequences will be. Remember, their solution is socialism and we know how well that has worked for others and ourselves.

After nearly a century with fiat currency and the Federal Reserve, America’s wealth has diminished to nothing. A century of hardworking individuals and what is left to show for it all? We still have no money and owe more than ever to others. The fiat currency and the Federal Reserve, combined with socialism promoted by both political parties has bankrupted America with an illusion of wealth and prosperity that promoted a level of unsustainable consumerism and a culture that was eager to take on more debt (remember, our culture used to despise debt!).

A rich country doesn’t have to take on debt. A rich country’s citizens don’t have to take on debt. A rich people don’t owe their future to others. America is not free. America, indebted to others. America, The Broke.

Ask yourself. How did America go from the most successful, prosperous and rich country on Earth - to this? America abandoned the system which brought us our initial success.

I recently read a book titled, Alcohol Can Be a Gas! It is an excellent 600 page book. A lot of time and research went into it. The book teaches almost everything you’d need to know to produce ethanol. I highly suggest you read the book if you’re at all interested in learning more about the ethanol industry, especially if you’re interested in investing in the industry. It might teach you something that could help you decide which ethanol companies are on the right track. I for one, won’t invest in producers using corn as their primary feedstock. There are many other efficient crops that make economical sense and don’t depend on government subsidies.

There are a lot of myths circulating about ethanol, so I thought I’d briefly show how the book debunks some of them.

Myth: It takes more energy to produce alcohol than it’s worth.

This myth is false, perpetuated by people that believe corn is the only crop that can create ethanol. Corn isn’t a very efficient crop, but luckily there are crops out there that are MANY times more efficient than corn. Brazil uses sugarcane to produce energy in a very efficient manner and is one of the most energy self-sustainable countries on the planet. The biomass parts of the plant that can’t be turned into ethanol are used to help distillation. It’s a very efficient method. There are other crops that are even more efficient than sugarcane, as alcohol can be made from anything with sugar or starch. There are also many companies and researchers working on creating cellulosic ethanol which will allow an even greater variety of plants to create ethanol. Regardless, some ethanol crops can be made very efficiently and produce MORE energy than consumed. It all depends on what crop, how it’s being grown, etc.

The people that cite this myth also often discount, or completely forget, the byproducts that result from manufacturing ethanol. Even corn ethanol results in a byproduct called DDGS. This ‘dried distillers grains with soluble’ still contain all of the protein and fat, and much of the cellulose, vitamins and minerals. The only thing that has been removed is the starch. This byproduct can still be used as an animal feed, and has been proven to be better than corn when fed to cattle (quicker cattle growth!). The removal of the starch, which goes through cattle undigested, allows quicker digestion and growth of the animal when DDGS is used.

Myth: Not enough land for food and fuel.

In terms of corn growth, corn only utilized ~8% of arable farmland, about 17% of the prime land, in the US. However, the reason so much corn is grown is to support the cattle industry and now the food industry in general (sugar from corn is now used in many of our soft drinks and other food products). In fact, the reason the US ethanol industry uses corn is because for years, due to government subsidies, farmers have been growing more corn than we know what to do with. Yes, ethanol production in the United States began using corn as an answer for the overproduction. Otherwise, much of the US ethanol would be grown using much more efficient crops and crops that don’t have subsidies.

You can’t forget that the byproduct of producing ethanol still leaves us with DDGS, which can effectively feed many animals. Also, if it were necessary, we could grow fish. Cattle take about ten pounds of feed to produce 1 pound of meat. That isn’t very efficient. We can improve the situation, if you’re truly worried about starving, by switching to fish. Fish only require 1.5 pounds of feed to produce 1 pound of meat. We could also use natural desert plants, on government land, for ethanol purposes, without any additional water or using up valuable farmland - Mesquite! The ocean can also be used to produce marine algae. What I’m trying to say is, many plants can be used on a variety of lands (and even sometimes on the ocean).

Myth: Ethanol dirtier than gasoline.

Ethanol actually burns a lot cleaner than gasoline! Alcohol doesn’t have many of the harmful chemicals that gasoline does. Just go get your emissions checked while you’re running on 100% ethanol… They will assume their machine isn’t working because almost none of the normal pollutants from gasoline are present.

One part of the equation often forgotten is that during the growth of the plant, a lot of carbon dioxide is converted to oxygen, and a lot of carbon dioxide is sequestered in the cellulose tissue. Growing plants is good for the environment!

Summary

I didn’t include all the facts. The book, Alcohol Can Be a Gas! is an excellent one that has been well researched and contains a plethora of information. I’m 100% in favour of solar technology, but I think we often forget that plants are natures’ sustainable solar technology. We can use plants for fuel and food in a sustainable manner.

Often times the ethanol is just one piece of the puzzle. If you want to increase food production of both protein and plants, while solving our energy needs, it can be done. You take the DDGS byproduct from the crop (whatever crop you decide to use) during the production of ethanol. This byproduct is very valuable. You can either sell it to farmers/feedlots or you can grow your own protein. Cattle will grow faster with it! Even better, you can grow fish extremely efficiently. The fish create their own effluent (waste) that is just like a liquid fertilizer. The fish waste can be pumped into a greenhouse that is growing highly valuable vegetables/herbs/flowers/fruit/etc. You just got free fertilizer to grow a high quality crop! The plants take the effluent out of the water and the water can then by recycled back into the aquaculture system and is now safe. Yup, the fish feed the plants and the plants clean the water for the fish, which reduces the amount of water needed to grow fish. Now you can sell ethanol, high quality greenhouse crops, and valuable fish. Talk about efficiency and making economical sense! We can feed more people, make more money, and solve our energy problems. Not bad, eh? Alcohol Can Be a Gas! is a must read.

There should be a wider debate on economic principles and what the role of government is. We’ve become confused about the role of government in the economy - and the role of individuals and corporations. This is a big debate that isn’t taking place at the forefront of the media. Instead, the media is too busy talking about what the government can do to fix these economic problems - but they usually focus on “fixing” the symptoms, instead of focusing on the real problem; An economy financed on debt is unsustainable and only masks the true problems of competitiveness and sustainability. We should not be relying on consumers’ spending of debt dollars in order to be economically prosperous! No amount of government bailouts, stimulus packages, or increased taxation to allow more government “spread the wealth” programs, will ultimately deal with the underlying economic issues.  They only mask the issues and lead to greater problems in the long haul by delaying the economy from answering them. We need to become competitive again through innovation, invention, progressing technology forward, increasing efficiencies, etc, etc, if we are to solve our economic problems. Debt can now be added to a long list of our economic problems. This process will not be short neither will it be painless, but it is necessary.  In the fight of ‘Government vs. Economics’ - I pick Economics as the ultimate winner.  Yes, the government may appear, at times, to be winning - But it can’t fight the Economics forever, in the battle of attrition, we know who will win.  Fundamental economics has a greater endurance (forever, infinite) than a political agenda (set by politicians and governments of the day).

• Jeffrey Christian on why Gold and Silver could spike up.
• Bailouts Must Be Odious.
• 10 reasons to be positive about the stock market!
• More on the Deflation versus Inflation debate…
• Jason Hamlin on China Shifting Reserves to Gold and Hyperinflation.
• Should we bail-out the big three automakers? There are 300+ comments already!
  

  My Take: Tesla Motors has created the Tesla Roadster - 100% electric, 244 miles per charge, 0 to 60 in 3.9 seconds, costs only pennies per mile, all for $100,000 (and that could come down if they were mass producing - they only build 1,000 a year!). Why can’t the big three compete? Innovate!!!

• I hope we have seen the last of the stimulus and bail-outs, but I have my doubts due what people believe (government, please save us! hahahahahaha). Yuck!
  

  My Take: We don’t need government stimulus. Things will turn around, they always do. The problem is we, as consumers, are too leveraged and have too much debt at the moment. We’ve spent money we have not yet earned - and now we are beginning to realize we’ve taken on too much debt, and we are going to spend less until we have paid for what we already spent!!! Debt hid our problems during the “good” times (where we were taking on more of it!) and will make the bad times look worse (while we pay down some of it). Ultimately, things will turn around, but it will take time (perhaps a decade - as that is about how long it took us to get into this mess) and it won’t be painless.

  This debt burden that we now have at one time helped mask the true problem: America is no longer economically competitive. The taking on more and more debt was unsustainable. America is no longer competitive nor was this debt accumulation sustainable. Now we have to face reality and get back to competing and using our brains instead of other people’s money. How is burdening the Federal Government (and every citizen) with more debt going to help the sustainability and competitiveness of this economy??

• What do U.S. Policy Makers Know?
  

  My Take: The “policy makers” are the problem. Of course they make it up as they go! People now cry to the government when they lose their job! So they want the government to do something, so the government does something - not that it works or makes any economic sense…

  Perhaps debt and interest rates shouldn’t be core objective - An economy financed on debt will ultimately fail. It is unsustainable. So anything to do with interest rates is just a futile effort to get people to take on extra debt to mask the true problem with the economy, competitiveness.

• Tony D’Altorio on Great Expectations of Obama, but not the Economy.
  

  My Take: Society has went toward one that begs government to solve it’s problems as if government has all the answers. So government politicians are pressured to “do something”. With Obama entering the Whitehouse, it’s no wonder corporations are lining up for cash… they can smell some free money - and if enough of them cry loud enough - they might just get some. I hope it doesn’t happen - but Obama was in favour of the bail-out… so why wouldn’t he be in favour of more? That’s the answer government has - bailouts… so we just need more bailouts if they are correct, pepper in some stimulus packages and some tax increases to give the government more money to spread around to solve all these pesty economy problems. It’s so wrong!! Bailouts don’t solve the underlying problems.

  Bail-outs, Stimulus packages, reduced interest rates, etc, etc… All of these proposals only deal with masking the symptom - that spending in the economy is declining - but fail to address the underlying problem that has created the symptom - The economy isn’t competitive and is unsustainable. We’ve taken on too much debt! We hid our problems for decades by taking on debt and spending it, as if it was already earned - but consumers have realized they need to pay some of these debts off…

  No politician that promotes bailouts or picking and choosing winners with unearned money, will solve the problem. The economy is not sustainable nor is it competitive. Unless these issues are addressed (and I don’t expect them to be), I really can’t see what it is people hope can be accomplished by “spreading the wealth” through more stimulus packages and increased taxes. Those only further mask the true problems. But I have no fear - in the fight of Government Vs. Economics - Economics will win in the end. We will, eventually (might take decades), realize that we need to be more competitive (and innovative/inventive) and less reliant on consumers spending debt dollars if we want to be sustainable.