Sunday, June 29, 2014

What's next ?

I do these little editorials on this blog ahead of videos or audios about the progress on different projects Barb and I have going on to make our retirement more enjoyable and prosperous. The reason for the editorials is that it is the only warning you are going to get for when things change - not for the better. You will wake up one morning and enough will have changed that it will affect every aspect of your life. No one can tell you what will trigger the events that will unfold but everyone is in agreement that it won't be good. Barb calls it anticipatory dread, I think it is good common sense to be prepared for mid range eventuality, some place between hyper inflation and complete Armageddon. I track a lot of stuff every day, mostly economic data, before I go to work and then again at the end of the day to see what the politicians have messed up during the day. I've done this all my life because it is paying attention that has been the difference between going broke or remaining in business.

We all know our government is grossly mismanaged, that this administration has no clue until it is published in the news, so it makes it kind of easy to figure out what Obama will do next - follow what the Euro Zone or the IMF or the UN are doing. When something happens like Benghazi or the flooding of the Mexican Border he can't follow anybody so he does nothing, pretends he didn't know, makes something up to cover up his lack of action. Well this week there is something happening at the IMF ( International Monetary Fund ) and you can bet the lost puppy will follow the head of the IMF home. Christine LaGarde, the head of the IMF, has released working papers that say when countries have deficit problems to avoid default they should nationalize pension plans as a way to gain capital and call it an investment in government. They should levy a one time wealth tax of 10% and call it the price you pay for being wealthy and to extend the maturity date of government bonds so they don't have to pay the principal. All it takes is one more drop of rain to break the dam - could this be it ?

Tuesday, June 24, 2014

What's a Person to Do ?

Lets see if I have this right.

Bulgarians are running on the banks, Obama wants us to have the same social structure as France, the radical faction of the Sunni sect of Islam is overrunning Iraq, our southern borders are being assaulted by illegals, the problems at the VA are way worse than has been reported and the IRS is way out of control. That's the tip of the iceberg, that's what we've seen this week. There is no question in my mind that things are going to change real fast, real soon.

Here's a short audio file on the progress at the tiny house.

Wednesday, June 18, 2014

Drilling a water well.

Since we are going to move out to the house project property we figured we better get the well in. We scheduled the drilling operation with a recommended well driller about a month ago and yesterday he came to do the work. I don't know how I get so lucky but this guy set up, drilled the well, installed the well casing all by himself. He didn't get started until noon time and was out of there by 6 o'clock, I've never seen anyone drill a well alone - it's at least a two person operation.

Around our area water wells are about 300 to 400 feet deep but we sit pretty close to the top of a mountain so who knows how deep it would be. He could have drilled 300 feet and I wouldn't know any different but it ended up 60 feet into the bedrock and 65 feet of dirt for a total of 125 feet and 8 gallons a minute. What great work this guy does. He had to come out this morning to grout the well casing and have it witnessed by the Health Department. We'll have the pump installed next week. There is no question about who I would recommend  to drill or repair a well around here, I guess I owe the guy who recommended him to me a little sipping liquor.

Sunday, June 15, 2014

Quick Update

A couple of weeks ago the Austrian government declared that 60% of their sovereign debt was illegal laying the ground work for default. Today was the day they started to default. This is the exact same country that started the debt default crisis back in the late 20s and early 30s. Is this the signal for things to come ? It's something to think about. By the way, on the article about tappering by the Fed, I forgot to mention that the Fed isn't really tappering anyway - in the past few months they have bought almost a quarter trillion in U.S. Treasury bonds through I think Belgium, off the books of course, no reporting. The Tapper looks good to the U.S. population but it is clearly more manipulation.

Thursday, June 12, 2014

Why the Federal Reserve has to Tapper.

Why the Federal Reserve has to Tapper

I have been hesitant to post a piece on this subject because I find it difficult to imagine a world with no common sense. Yet I keep hearing relatively reputable economist arguing the case for why the Fed can’t keep tapering the quantitative easing. I've always subscribed to the idea that simpler is better because I personally can’t understand complicated things. The idea that a butterfly flapping its wings in one part of the world will cause a hurricane in another part of the world is plainly beyond my comprehension. The idea that the Fed can continue quantitative easing when it produces no desired results for 4 years would be another of those incomprehensible things. The Federal Reserve is a private business, yes it is owned by the big banks and yes it is up to its eyeballs in politics but it is not part of the Federal Government. There is a profit mandate that governs every business, if you don’t turn a profit or at least break even you go out of business sooner or later. The Fed has no exemption from this business principle although they can’t be audited without an act of congress but you can’t escape the reality of going broke by not reporting the facts or under reporting.

Essentially the Fed is the governments’ bank, they buy Treasury Bonds from the government – loans that have to be paid back with interest – bonds are the collateral.  They are stewards of the dollar, controlling the physical amount and value of dollars in circulation by regulating deposit requirements and interest rates on “participating banks” in the private banking system. In the last few years the Fed has been buying a whole bunch of government low yield bonds and a whole bunch of debt (sub-prime mortgages) from the very banks that own them the “participating banks”   $4,000,000,000,000.00 worth.  These sub primes the Fed has bought will be a very big loss and as the Treasury Bonds mature they will be replaced with an even lower yield bonds as the government can’t survive without borrowing money and no one else will buy the bonds. This is not a balance sheet or income statement I would want to try to defend and somebody is going to have to try to do exactly that to the Federal Reserve Board of Governors. To add insult to injury the Fed has been doing some “off balance sheet” swaps with the ECB to bail out the Euro but because the transactions are unreported the amounts are unknown. Best guess – since 2009, 10 trillion dollars swapped for Euros, SDRs and other foreign currencies.

The Fed has to make an effort to cut their losses and tapering is the very least they can do.

Monday, June 9, 2014

Slow Week

For the last couple of weeks we have been working on a lot of change - getting a well driller scheduled, fiber optic cable scheduled, getting our vehicles squared away for another year, Barb got in a little practice with her new gun and a little work on the tiny house project. Still have to deal with the postal service though.

\\\\\loooooooo this is what the cat writes when she pounces on my laptop while I try to write.

A lot of lag time waiting on engineers, dealing with the health department, paperwork, driving up and down the road. I think we are all done with the peripheral stuff for the move out to the property where we are building the house. Barb has started writing a new book and is practicing card counting for when the new casino opens here in town and I am looking at a couple of commodity trades and getting up to speed on the bad old days of option trading of equities - there is a lot more regulation than there used to be. You know you can make money when the stock market corrects - right ? 

There isn't a day that doesn't go by without some scandal or other signal that we're not in Kansas anymore, it is time for us to take the offensive and exert some control over what happens in our lives. Everyone has different levels of tolerance, we  have reached the end of ours. Barb had her personal checking account hacked and the bank caught it so she didn't lose anything but she has to leave the account open because social security takes 2 months to re-direct her retirement payments to a new account. For 2 months it will be a race to the bank to see who gets those 2 checks, the hackers or Barb. I guess we can pay the bank to hold those deposits but that isn't right. I keep meaning to write a piece on why the Federal Reserve has to keep the taper of quantitative easing, maybe next time.

Friday, June 6, 2014

Keeping Up to Date.

A Gentle Nudge in the Right Direction

Since I have warned you folks of what I think will be the results of 5 years of a very inept government administration, I feel I should keep you up to speed on the bread and butter issues as we approach the unknown. I would really like to tell you why the Fed has to taper their quantitative easing but I will have to defer that conversation to a later date because of new information about your retirement accounts.

We all know what has happened in Greece, they have leveraged retirement accounts with the EU for bailout funds, that’s old news. They need another bailout, no surprise there. Here’s the deal, they don’t have any collateral, so the EU (European Union) has hatched a new plan to take the public road system and public buildings as collateral against the new loan. So now not only will the Greeks only get pennies on the dollar of their retirement accounts but their roadways and buildings will be sold to the highest bidder when they default once again – anyone looking to buy a country at a liquidation sale ? On another front Ecuador has delivered 466 thousand ounces of gold to Goldman Sachs as collateral for a 3 year lease deal to pay its bonds to the Chinese for the money they borrowed from them. I think the total Ecuadorian indebtedness to the Chinese is around 11 billion dollars so a quick 20 million won’t keep them off the hook for long. Lastly the ECB (European Central Bank) has for the first time in history lowered interest rates to negative, a very dangerous precedence and something our own Fed has hinted at recently. Let’s see what the implications are for the US.

The president is at the G7 today and he warned the UK to stay in the EU. This administration has no idea what to do in the US and he is giving advice to the UK, that can only mean one thing, he is planning to take your retirement accounts in the same way the EU does it in Europe. It will be to protect you from consumer fraud, he will take your IRAs, 401Ks and Annuity Accounts and give you government bonds – low yield government bonds and tie them to the economy. Remember he set up MYRA bonds at the beginning of the year, that’s where your retirement account will go and you lose all control of your own money.  Well why not he got away with government controlled health care – a 10% tax on every person that pays taxes – doesn't it follow that he would take your retirement and promise future payments while spending your money giving freebies to the illegal aliens and the undeserving.