Tag Archives: politics

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


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.


The Next Step for Bitcoin

Bitcoin has gone through its second bubble, and it is interesting to see how it survives. Although many people thought that the price would crash to a small fraction of its high of $262, it seems to have stabilized in the $100 to $120 range.

Image courtesy BitcoinCharts.com

Image courtesy BitcoinCharts.com

The popularity of Bitcoin has exploded over the last 6 months, and it was clear that the bubble would burst. However, it seems that Bitcoin has gained enough traction to make it survive through the price crash. The chart looks quite strong at the moment, but only time will tell if Bitcoin continues to rise in value.

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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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Do Conservatives or Liberals Make Better Investors?

Image courtesy Creative Commons

Conservatives, who tend to favor the market, often make the  case that they’re better investors and their policies are better for the economy. Liberals say they’re better investors because they are more globally aware than conservatives. They say they distribute wealth and that’s good for the economy.

So, who is right?


To become the complete investor, you have to shrug off all  ideologies. When you trade or invest, ideologies can cloud your judgment.

Here’s how it works:

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Problems with Social Security

The Social Security system, or more accurately Social Insecurity, is a great example of government mismanagement. Instead of collecting more money than it pays out, and investing the money it has collected, the government is now paying out more money than it collects. And instead of investing to get rich, it simply spent the money to make us poorer. To the tune of $2.5 trillion.

This article on Yahoo has some interesting facts about Social Insecurity. The article neglects to mention one of the biggest problems with the system. And that is the fact that people are living longer. It is estimated that people are living as much as half a year longer with each passing year. That means that in 20 years people could be living 10 years longer. Does the government factor this in to the Social Security payments estimates? No.

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The Politics of Bubble Economics

Pic @ Flickr

We’ve seen tech bubbles.

Commodities bubbles.

Real estate bubbles.

While speculative bubbles tend to be naturally occurring segments of an economic cycle, there’s still some debate on what causes extreme bubbles–and their quick implosion. Some just say it’s the irrationality of people. Others blame the machinations of the free market system.

A recent post in Trader’s Narrative, opens up another possible reason for this rapid bubble-and-bust cycles: politics.

Politics are driving monetary policy.

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Big Props for Obama

After making a few posts about “politicians” and how America’s problems are too big for one president to solve, it’s time to recognize the wonderful steps Obama has taken in the first few days in office. I’ll admit that I was skeptical about Obama being different from most politicians who make promises during their campaign, during their term do little that they promised to do, and then make excuses at the end.

One of America’s greatest challenges besides the economy in the coming years is going to be terrorism. I don’t think it’s possible to achieve peace through killing, and war seemed to be the top agenda item for the W. administration. Now Obama has taken action to clean up the mess.

In this article, Obama is described as going on Arabic television to start to find a common ground between America and the Muslim world. It seems to me that most Americans want peace, and Obama has taken a big step forward to achieve it. It’s only been a few days, but great job so far!

And the same holds true true for the economy. Not everyone may think that Obama is doing the right thing to help the economy, but he sure is doing a great job of following through on his promises. I’m not 100% sure that he’ll be able to turn the economy around in the short-term, but it is great to see that we have a president that is actually honest, tells the truth, and has some sense of integrity.

It’s been said that in politics, the worse of a job you do, the higher up you go. And I think that may be true at times. But it’s also been said that God does not give us a challenge without giving us the skills to overcome it. Is it possible that this country’s challenges are the greatest in the last hundred years, and Obama has the skills to overcome them?


The Rich Get Richer…

The old adage goes, “The rich get richer, and the poor get poorer.” The Democrats accuse the Republicans of protecting the rich. The Republicans accuse the Democrats of giving too much money to the poor. When you think about it, there is some truth in both statements.

I think it’s true. The rich do set up the laws and the system to protect themselves and keep them rich. But every coin has two sides. Anyone in America can become one of those rich people. And they can help as many other people throughout the world as they choose.

The government is in the process of spending hundreds of billions of dollars to protect both rich and poor in the next few months. The challenge is that we don’t have any money at all! The government has already borrowed $10 trillion, and has every intention of borrowing more and more. In fact, they’re planning on borrowing at record pace.

But here’s the problem. In a futile attempt to help everyone, the government is actually helping no one. Through spending and borrowing more and more money, they are actually making all Americans poorer. The reason that most people are unaware of this is that we don’t know or care about paying back the national debt.

So what’s the solution? I think the solution is that instead of spending money by giving people a free lunch, or businesses a tax deduction, there is a much better way. If we could inspire all Americans to succeed financially, to find ways of making money without having it given to them, that would be awesome. It would be a whole new paradigm of stimulus.

And the same could be done for businesses. To inspire all businesses to improve their profitability through innovation. That could make a major change in the economy. If we can educate people on how to launch their own business, then they can make money without depending on the government. If we can teach businesses how to perpetually improve their products, services and value proposition, then we can increase the GDP by double digits. And we can even solve the problem of the national deficit.