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Archive for November 2012

Only 3 ways out of debt crisis and none are good.. Here are the choices.

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As of November 16 at 12:38:023 a.m. GMT,   the United States debt was   $16,248,670,479,820.44 or $51,767.45 per person, including for each  child. The debt has increased by billions of dollars a day for the last  several years. As your children grow, they become more indebted.

Only one of three outcomes is possible:

  • The debt can be paid through  massive inflation and taxation
  • The interest can continue to be paid through massive inflation and taxation
  • Repudiation of the debt

Even if the payment of principal were possible, what’s left of the US economy would be destroyed for many years to come. Politicians prefer to pay the interest  by placing a ruinous lien upon your children’s future earnings. The least palatable option to politicians is repudiation. Nevertheless, a de facto repudiation of debt may occur on a large scale simply because the money is running out. Indeed, repudiation happens in microcosm each time a city declares bankruptcy. But the process will be slow; government will grab every cent it can to keep its crumbling edifice erect.  What is next?  Nationalizing of retirement accounts.  It is in the works….

Democrats really want to extend Bush Tax custs..Here’s why

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The Left is bluffing about the fiscal cliff and are blaming the GOP for standing in the way of a compromise.  Let’s see, if the Bush Tax cuts expire (which is part of the “fiscal cliff”) then the impact to those who voted for Obama would be:

        • The lower income tax bracket would rise from 10% to 15% (50% jump)
        • The employee share of Social Security payroll tax would rise from 4.2% to 6.2%  (30% jump)
        • Approximately 33M taxpayers (many in blue states) will move to the AMT (alternative minimum tax) bracket.  This up from just 4M today.
        • Child tax credit would be cust from $1,000 to $500

The democrates think they have the upper hand in the negotiations.  I say to the GOP, call their bluff and let’s go over the cliff.

Written by opinionoregon

November 21, 2012 at 4:53 pm

Top Reasons why America will NOT turn around for 20 years.

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Dollar Decline – The continuation of dollar devaluation through inflation, leading to the end of the dollar as the world’s reserve currency. Additional downgrades of America’s credit rating. Probable 30+% inflation, gas prices by 2015 of $ 8 per gal. A National Debt by 2016 of $ 32 trillion.

Continued deficit spending – Massive increases of government spending at a minimum of $1.7 trillion per year. Healthcare costs skyrocketing to $1 trillion per year. Spending carryovers from 2012 of over $ 200 billion. $40 billion monthly (1/2 trillion in 12 months) mandated spending through 2013 just printed money backed by nothing. (Medical costs for 2011 were $ 835 billion they double every 7 years)

Pandering to Middle East – The continued failure of foreign policy through increased violence in the Middle East. Further growth of Islamic fundamentalism and the Muslim Brotherhood. Expanded assassinations with drones, of Obama identified terrorists. Expansion of wars in the Middle East most likely with Syria and Iran.

Internet spying – Massive attacks on the Internet, and free speech. The development of cybersecurity in the fake support of anti-terrorism. The opening of a new NSA managed security operation, which is actually a violation of the 4th and 1st amendments, cataloguing every American. Attacks on free speech through the use of controlling social media by restricting individual and group access to the Internet, something that is already operational. The control of web content. Restriction of Internet IPO’s whose allocation will be turned over to an international body.

Supreme Count moving left – Two more leftist Supreme Court justices turning the Supreme Court into an leftist majority that will internationalize American jurisprudence, destroy what ever little is left of the constitution, and complete America’s journey to socialism.

Excessive regulation – The regulatory juggernaut that began on the first day of the Obama administration will be greatly expanded to destroy American free enterprise of every sort. Any company successful will be relentlessly attacked by over-regulation. This will destroy jobs and foster business nationalizations.

Shutting down Americas Energy – Green energy in the form of solar and wind electric energy production, and electric cars all of which are non-competitive on the marketplace, without huge government subsidies (your paid taxes) will be expanded. These are the very policies that have brought Spain to bankruptcy. They will waste billions more, (six billion of bankruptcy’s in first term) drive fuel prices through the roof, eliminate coal as an energy product, eliminate Alaskan oil production, prevent the Keystone pipeline from Canada forcing Canada to sell their oil to China, drive all costs of energy and food up, and reek havoc with the entire economy.

Illegal Explosion – There will be amnesty for 25 million illegal immigrants. This will almost immediately bankrupt the entire welfare systems including Medicare, Medicaid, Obamacare, and Social Security.

There does not appear any way to turn America around, at least not in the next generation or two.

Predictions for the next 4 years. Scarey!

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Here is a list of ten things that will happen during the next four years.  

  • U.S. credit rating downgrade,  Again.
  • Deflationary shock (market crash)
  • The bursting of the bond bubble (short bonds)
  • Devaluation of the U.S. dollar (can you say gold and silver?)
  • Government defaults (local)
  • Mining stocks bull market that will turn into an epic bubble
  • War with Iran (probably an attempt to distract us from the real reasons the economy is failing)
  • A new normal for unemployment, real unemployment (U-6) will avg. 16%
  • U.S. Depression acknowledged by the media and world
  • The Dow Jones and gold will have a 1 to 1 ratio somewhere around $4,000

Written by opinionoregon

November 8, 2012 at 10:27 pm

Federal Flood Insurance – A Moral Hazard We Can’t Afford by Ron Paul

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Hurricane Sandy was one of the worst natural disasters the east coast has ever seen.  Clean-up and recovery will take months, if not years and estimates run in the tens of billions of dollars.  Parts of New York and New Jersey will never be the same.  Entire seashore communities have been wiped out, but the determination to rebuild has been lauded as courageous and admirable. Yet as with all natural disasters, Sandy raises uncomfortable questions about the extent to which taxpayers should fund the cleanup and the extent to which government programs create moral hazards.

For example, FEMA and the National Flood Insurance Program (NFIP) are expected to pick up the tab for much of the flood damage caused by the hurricane.  Of course this will mean more federal debt and inflation for the rest of us, since the program only has about $4 billion to work with and is already $18 billion in debt from hurricanes Katrina and Rita.  Many think there is a need for the government to provide flood insurance of this kind.  After all, the market would never provide insurance in flood prone areas at an affordable price.  But shouldn’t that tell us something?

Shouldn’t that tell us that it is a losing proposition to insure homes in coastal areas and flood plains often threatened by severe and destructive weather patterns? And if it’s a losing proposition, should taxpayers subsidize the inevitable losses arising from federal flood insurance?

The NFIP disguises the real cost of flood insurance in flood prone areas, which influences homebuilding and sales in such areas.  Recklessly taking unwise risks when risk is underpriced is known as moral hazard.  When politicians decide that private insurance premiums are too high, as with houses built in flood plains, the solution is to under price the risk through federal subsidies.  The obvious and expected outcome is more danger to life and limb when disaster strikes.

Even NFIP has been forced to raise rates significantly in coastal areas, and is now dropping second homes from coverage altogether,

Many assume it is compassionate to entrust government central planners with disaster recovery.  However, the greatest compassion brings results, not just good intentions.  And we’ve seen how bureaucratic organizations like FEMA mismanaged recovery and relief in the wake of hurricanes Katrina and Ike.  Organizations such as the Red Cross and private companies like Home Depot and Duracell have already stepped in admirably to help those in need, and we can only hope FEMA has learned this time not to impede and frustrate private efforts as they have in the past.

Above all, my thoughts and prayers are with the victims of Hurricane Sandy in this tremendously difficult time and hope they can get their lives put back together as quickly and seamlessly as possible.

Written by opinionoregon

November 6, 2012 at 3:20 pm

Costs are surging for farmland for food production.

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Recently there has been a massive surge in both the cost and purchase of farmland; food production is going to be big going forward. China has been stockpiling large amounts of raw materials including aluminum, iron ore, and copper. Being the largest consumer of cotton, they have a six year supply at current levels of consumption. The US Government even recognizes the risks of a possible energy shortage and stockpiles crude oil, the SPR (Strategic Petroleum Reserve) in the event that supply from far off lands is disrupted. Major world powers seem to have the idea that some of these resources might not be so readily available at some point. In addition to the physical world, there is also what has been dubbed “the currency war” as termed by James Rickards that has been heating up for some time now. Even in the US presidential race Romney has not been shy about throwing jabs at China for currency manipulation.

Written by opinionoregon

November 5, 2012 at 5:25 pm

China is cornering the market on rare earth elements

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You may have heard that China has the market cornered on rare earth elements and is holding them hostage to countries like Japan. Japan absolutely requires them to create many of the sophisticated electronics that many of us take for granted. Things like large transformers that support the power grid are manufactured oceans away from where they are needed. If there were ever a large EMP or solar flare the United States would go back to a pre-industrial age overnight and as it sits currently we would have to rely on China to get the lights back on. The rub is that China would struggle to feed it’s 1.3 billion people if it weren’t for US food production. Many countries that depend on staple food importation would see Biblical style famine in the event that the massive legion of cargo ships stopped running. Disruptions in the Middle East oil supply would be devastating to the global economy as we, here in the US, only source about half of our liquid fuel domestically.

Written by opinionoregon

November 5, 2012 at 5:22 pm