Tag Archives: debt

Can Trump Defuse the US Debt Bomb?

When I wrote about the US Debt Bomb back in August 2009, it was only(!) about $12 trillion. Since then it has grown to $19 trillion. If it’s difficult to comprehend such a large figure, consider it breaks down to $159,000 per taxpayer!

US Debt Keeps Growing

US Debt Keeps Growing

Unfortunately, this is only a small part of the country’s unfunded liabilities. When you add Medicare and Social Security, the total is about $100 trillion. Many people believe that this is too much for the country to pay off, and that we will never be able to pay it.

How did this happen?

As I have mentioned before, most of the politicians that have run this country for the last 50+ years have not been fiscally responsible. They treat budget spending the same way a teenager uses a credit card. Am I saying that they are bad people?

No. I am just saying that they do not have the skills or inclination to fix the budget problem. They don’t know how to manage money or a business. Even if they did promise to fix the problem, they would never be voted into office. They would have to make massive cuts to Social Security, Medicare, military spending and every other area that people are not willing to cut. The people who depend on all this excessive spending would have to vote for the politician, and they would never do it.

Enter Donald Trump. Although there are many things that are not great about Trump’s proposals, I think that he has the potential to fix problems like this. He’s not a politician. He has so much money and power that he doesn’t have to play politics. And, his confrontational personality seems to be the incompatible with the political process of trading favors.


Is this the Start of the next Bitcoin Bubble?

Bitcoin has started to rise again, and it looks like it might be the start of the next Bitcoin bubble. Although many people have known about Bitcoin for years, most people have not purchased any coins and do not understand it.

Image courtesy bitcoincharts.com

Image courtesy bitcoincharts.com

How is this bubble different?

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The Fall and Rise of Bitcoin

It has been quite interesting to watch Bitcoin as it has gone through one bubble, and consistently risen since. Many people thought that Bitcoin was finished after its stratospheric rise in 2011, and it’s subsequent collapse to $3. Can Bitcoin survive such a massive devaluation?

Image courtesy of Bitcoin Charts

Image courtesy Bitcoin Charts

Recently Bitcoin has achieved quite a bit of attention, because of WordPress.com announcing that they will accept payment in Bitcoin. More recently, Reddit has decided to accept Bitcoin. The more interesting (and perhaps) exciting development is that you can now buy pizza with bitcoins.

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Common Horse Sense and Jackass Investing

If you’ve ever visited the department of motor vehicle’s office, or an open bar office Christmas party, you know that the number of jackasses in the world considerably outnumber the rest of humanity.

These are the same people who bought dotcom stocks for thousands of times their net worth and took $700,000 mortgages on homes worth about $200,000 a few years before.

So, that’s bad for investors, right?

Not according to Michael Dever and just some good old common horse sense. You can actually learn how to take advantage of these jackass investors.

Dever, who is Founder, CEO & Director of Research of Brandywine Asset Management, says you can take advantage of jackasses to make money as an investor. In fact, he’s written the book about it. It’s called Jackass Investing: Don’t do it. Profit from it.

The book, which Dever says is the result of a decade of research and three decades of trading experience, teaches some contrarian lessons.

For instance, Dever believes that every decision is a trade–even the decision not to trade. He names that decision the Rush trade, after the rock band.

One difference between investors and jackass investors is whether they know if they’re investing… or gambling.

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Memorial Day Finance Tips for Armed Service Members

Flickr--Creative Commons

We’re all grateful for our armed service members.

But, there’s a group of Americans who are too grateful.

Credit cards, pawn shops, payday loan organizations often treat soldiers, sailors, Marines and Air Force personnel like sheep coming in for the fleecing. If you don’t believe me, look at the strips of pawn shops and shady banking operations that line the streets leading to any major military bases.

These are just the obvious ones–internet and mail-based insurance, investing and banking scams target military members, as well.

Here are a few tips that will help military personnel devise a strategy for personal finance.

Credit attention
Most people entering the military are young and have little credit history. They also have little idea of how debt can impact not just their current bottom line, but their future financial lives, as well. And don’t the credit sharks just know it? They spread tantalizing offers for easy money in front of our military men and women, like landmines. You don’t see the harmful effects until it’s too late. Your best bet, then, is to avoid them entirely. Do you need emergency money? It happens. But there are other sources. Can your buddy spot you a few bucks? How about the folks back home? Another thing. Make sure it’s actually an emergency.

Flanking Budget Problems
For service members, money seems to be pre-budgeted. Meal allowance. Housing allowances. Clothing allowances. Extra money for hazardous duty. And so on. This arrangement may lead some service members to forego creating their own budgets and that can lead to lazy personal finance. They treat it like a lottery win or a bonus. A big payout.

One suggestion is to actually use the money allotted for the actual purpose. In this case, you would pull out the clothing allowance, for example, and use it for only clothing. Saving what’s left.
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Weekly Wisdom: Idea Easter Eggs

Flickr Creative Commons

There are the Easter eggs that you’ll find dyed and hidden.

Then there are idea Easter eggs.

These are colorful ideas that you find unexpectedly. They can range from unconventional breakthroughs to good, old, common sense wisdom that serve as reminders. Easter egg ideas can challenge your conventional wisdom, or reinforce your views.

They can change your life.

Here are idea Easter eggs that I found this week.

Pick the BrainHow to Breathe — Literally

Immortal HumansThe Health Benefits of Red Wine

Dumb Little ManYou Have to Work for Your Happiness

Financial SamuraiShit is Fucked up and Bullshit and The Psychology of Wealth Giveaway

UntemplaterHow Much Severance Pay Would You Need to Leave Your Job?

Money ReasonsAre You Trying to be Financially Independent?

Fast CompanyIBM’s Quantum Computers Could Change the World

BBC NewsPrint Your Own Robot

The Digerati LifeUsing Debt Leverage: Should You Use Debt to Get Ahead



QE 3 and the Coming Super Bubble

Federal Reserve Building--Creative Commons

After two record-breaking attempts to jump start the economy through with no signs of success, the Federal Reserve is now debating a third round of quantitative easing.

QE 3, as it will be called, won’t work. But, beyond that, this is a reckless and unethical way to subvert the traditional role of the board. This continual monetization of debt and debasement of the currency could lead to a super bubble–and a resulting pop that will make 2008 look like a slight recession.

Let’s look at why the Fed is considering a third round of easing. It’s simple: the election year is coming up. A sitting president who is facing high unemployment and a weak economy will not get re-elected. Like a giant campaign kitty, the Fed is going to kick in hundreds of billions to make sure the president gets reelected. This isn’t a Democrat or Republican thing either, folks. Both sides do it.

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The Story of the Porsche GT3

About two years ago, I saw a Porsche GT3 parked in the garage of my apartment building. The GT3 is one of my favorite cars, and I can’t wait to get one. When I saw it parked it reminded me of all the dreams that are associated with it. And this was a beautiful example. There was no damage to it, and it looked like it just came off the showroom floor.

Image courtesy of Ryan Holst

It’s easy to remember the TV commercials about the wonderful German engineering and images of beautiful people speeding down the deserted autobahn at 150 mph. (Top speed is approximates 190 mph.) No wonder it has a place on the list of dream cars of so many people.

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The End of the Dollar

Last week’s tax and unemployment package was just one of a long series of events that will destroy the dollar. While most people are blissfully unaware, the government is working to undermine the U.S. dollar. I have written about this massive change that will affect all of our lives many times before.

Photo by dcJohn

This latest act of congress makes it clear why the dollar has no hope for survival: our government has no desire to be financially responsible. America is a country of debtors. We have the lowest saving rate of any developed country. Why would our elected representatives be any more responsible than we are?

How did this happen?

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The Truth about Education

As America’s unemployment “problem” continues, we keep hearing about the importance of education. The mantra has not changed: “Go to college so you can get a good job.”

Photo by Ian Lord

The question nobody bothers to ask is, “Who wants a job?” Now, more than ever before, more people are finding it harder to survive depending on a job. If they have not lost their job already, they are afraid of losing it. Call me crazy, but it doesn’t sound like a good solution to me.

Why do people keep repeating the Mantra of Education?

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