Tag Archives: government

Inflation: The Silent Killer of 2016

With all the attention placed on Trump, Sanders and the other candidates, it amuses me how clueless the vast majority of Americans are. Most people are focused on the wrong thing. They focus on the inflammatory remarks made by Trump, on they believe in the panacea fantasy described by Clinton and Sanders.

Virtually no one is focussed on the real problem. The country is bankrupt. Does it really make sense for Clinton and Sanders to deliver on their promises if they will make the country’s finances even worse? Trump does not provide details or a plausible plan either, probably because he knows that if he did large numbers of people would not like it.

Chart courtesy of ShadowStats

Nobody talks about QE Infinity or the inflation that has been accelerating over the last decades. Nobody cares that the country is bankrupt or that the party is followed immediately by major financial upheaval. Continue reading


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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Is this a good time to buy gold?

Many people think that this is a great time to buy gold. However, the same people who are saying that now were saying it when gold was at $1,800 per oz.

The price of gold has fluctuated over the last 5 years.

The price of gold has fluctuated over the last 5 years.

Personally, I think it is better to hold gold than dollars. The dollar is collapsing, and I think it will continue to collapse over the next decades. However, that does not mean that everyone should go out and buy gold.

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A Brief History of Money

Bitcoin has had an interesting history. Launched in 2009, it was revolutionary in combining cryptography with money. Perhaps the motivation for this idea was to create a system that distributes financial resources to those who have computing power.

Image courtesy of BitcoinCharts.com

Image courtesy of BitcoinCharts.com

We may never know the motivations behing Bitcoin. The mysterious creator, Satoshi Nakamoto, cut off communication in 2011. The name appears to be a pseudonym and he has never been identified. It has been theorized that he is not even a single person, but a group of people who have opted for anonymity. If this is the the case, they have succeeded.

Has Bitcoin revolutionized the way that humans use money?

Consider the following 4 phases of money:

  1. Barter
  2. Money
  3. Fiat Currency
  4. Cryptocurrency

The first phase of human exchange predates the first villages. It was simply the exchange of x amount of one good for y amount of another good. For example, “I’ll give you 3 apples for 2 pears”. Although this worked, it was cumbersome because there was no simple way to value a given good.

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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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Weekend Wisdom: Quantitative Easing, Link-style

Creative Commons -- Tax Credits

So, the Fed is trying to give another bolt to the economy.


It didn’t seem to work before, but if there’s one thing that we have all learned is that if a tactic continually fails, you should keep doing it until it works.

Sort of like smashing your head into a wall repeatedly if you need to make a household repair.

Well, here are some lessons I have found around the internet. Just like the Fed knows they can always print more money, I know people will always publish more posts.

So relax! These do not require you to smash your head into the wall. Just give them a read.

Wall Street JournalManagement Secrets of the NFL

Dumb Little Man13 Warning Signs That What Your Delegated Won’t Get Done

Financial SamuraiA Day Job is Much Easier Than Entrepreneurship

Finance FoxDo You Need a Career Change?

Invest It WiselyYou Don’t Need to be Born an Entrepreneur

UntemplaterWhat is eHealth Insurance?

The Digerati LifeSkip Commercial Banks! How Cash Only Living Can Work



No Business man (or woman) is an Island

President Obama upset some business folks when he basically said… you didn’t build your business.

In fairness, here’s what he said:

“If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen,” he said. “The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”

So, he could be referring to the roads and businesses. In other words, businesses do not build the infrastructure necessary to allow their companies to bring in raw materials and send out completed products, or however else they conduct their operations.

But he’d still be misguided, for a few reasons–and perhaps it’s semantics.

If what the president is saying is that businesses did not build the roads, then he is only partially correct. Money from businesses in the form of taxes did indeed pay for those roads and bridges. Businesses partnered with government to create infrastructure.

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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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Oil Prices and Rental Properties: Financial Quick Bits

Image courtesy H Elise from Creative Commons.

It’s been an interesting week for investors. Usually, when someone says the week has been “interesting,” it means that it’s been scary. That holds true in this instance.

The Fed has moved away from another round of quantitative easing. The government released some oil from its strategic reserve. In the past eight weeks, the Dow has fallen seven times.

How’s that for interesting?

One way an investor (and we’re all investors technically) can prepare for our interesting future, is to get educated. The good thing is there’s always quality content online.

Here are some of the things I’ve been reading:

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WTF Finances: Oil Prices, the Fed and Mental Illness

Image courtesy Creative Commons

So, oil prices shoot up and the government…

Does nothing.

Then, weeks later oil prices plummet. And the government…

Releases oil from the strategic reserve–a tactic to lower prices.

Let’s talk about the Federal Reserve now. The Fed pumped billions of dollars into the economy, hoping it would fire up the economy. A year later, even with a weak economy, they decide…

To do nothing.

Most investors are scratching their heads and wondering WTF is going on?

I have a few deeply insightful, well-thought out reasons conspiratorial guesses for this bizarre financial behavior.

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