Who is the Brightest Bulb in the Box ?

Here is the latest YouTube audio on the tiny house project. We'll be moving into it in the next 30 days so it will be a little intense for the next couple weeks.

So who is the brightest bulb in the box ? It sure the heck isn't any of the politicians currently in office. There is something wrong with a man that takes pride in fund raising while the world burns, who goes on vacation while our boarders are being attacked (literally), who refuses to do his sworn duty but finds time to play golf more than anything else, who runs his mouth but never backs it up. You know of course he was in Texas a few weeks ago a couple hundred miles from the border without even checking out the border. Does this guy represent the American people or what ?

My last post was about financial literacy. One of the things I can't forget is when our president boasted about how the deficit was going down under his administration. I guess to a dim wit debt and deficit both start with a "D" and that's close enough for him. A man who is running trillion dollar deficits every year and is increasing the debt every year, a debt that is 70% interest expense and raises the debt limit so he can say the deficit is going down in an election year. It's all debt - last years deficit becomes this years debt. I guess to a moron and a moronic population debt and deficit are the same thing. In the history of governments there has never been one that has paid off a government debt. There is no chance, no way, no ability for our debt to be even payed down much less payed off. It is the debt expense that will do us in. A doubling of the debt in the last 6 years even at low interest rates will be the demise of us all when it is rolled over into higher rate debt in the next few years. We won't be able to pay the interest on the debt without raising taxes a lot higher and with the increase in social programs especially to illegal immigrants, amnesty or not, that time will be upon us sooner rather than later. So you think changing the political party in power will make everything all better, you better think again. There is only one outcome regardless of who is running the government.

As to who is the brightest bulb in the box. We are all packed up in a box of bulbs that won't even light.

Financial Literacy

Big words and lofty phrases always impress me because there is an opportunity to learn something new. Unfortunately I am disappointed 80% of the time. By the time I look up the word or find out what the phrase means I also find the words or phrases are used out of context or that the person saying these words doesn’t really understand the meaning. The title of this post is one of those disappointments – FINANCIAL LITERACY. I heard it the other day in a presentation about investing for the future. I don’t remember what the spiel was but I sure do remember the phrase and I remember trying to figure out what they meant because low and behold the phrase was used out of context. I went back to the presentation because I remembered where it came from and here is what an old redneck gleaned from FINANCIAL LITERACY. Literacy means to read and comprehend, Financial means things of monetary value. Now I don’t know about the world you live in but in my world that is a fancy phrase for common sense and common sense tells me that this phrase was used to bait anyone looking to invest their hard earned money into an OXYMORON.

Our entire existence has come to be resting in the laps of sophisticated education, big words and lofty phrases. No one knows what is being said or being done because they hide the truth in the weeds of words and empirical implications all designed to suit the purpose of the one saying it or the interpretation of the one reading or listening to it. When is the last time the Ivy League educated head of the Federal Reserve has done the right thing or even said the right thing – it’s a trick question. NEVER. Volcker got lucky during the Reagan administration but that wasn’t the plan. How about our double talking Secretary of State ( you can take your pick ) or our incoherent President and Representatives – you can take your pick here too. The judicial Branch might as well be part of the Executive branch, even the general population weighs in at 47% totally useless.

Yeah, I am mad, on a rant ….. whatever you want to think but as Israel is fighting for its life, as we are closing embassies’ in the middle east, as our borders are being invaded and as Russia is shooting civilian planes out of the sky, all our government can do is go on vacation without confronting even one of the issues. My family has been involved in every conflict this nation has had since the Spanish American War – the last two (Viet Nam and Iraq/Afghanistan) our country walked away from. I can’t count the number of people I knew that died in Viet Nam and my son could tell you the same thing in Iraq and Afghanistan. We the people have given up our responsibility of keeping our country on the right path and instead entrusted the lyingest, cheatingest, stealingest political system in our history to take us into a depth of despair we have not seen since the Civil War. We have been duped by big words and fancy phrases when common sense is the only solution.

Here We Go.

Pay attention - signs of economic woe are mounting and widely unreported. If you have been reading this blog for a while you are pretty well versed in fundamental economic concepts and financial manipulation so I won't bother with the background information for this opinion piece.

We have missed the last 6 equity market corrections because of Fed currency printing. They never happened, artificially postponed by all the Q.E's. Last week I said watch the markets, I know the market will react to our political lack of leadership while the world falls apart but more importantly I expect Wall Street will start to see reality and the bulls will turn bears after the next full moon. I am kidding about the full moon but you can see how timid the market has become in the last few days and in the coming weeks the volatility will start to swing. Like a cat slowly creeping in on it's pray, someday soon the traders will see that they have been stalking a mirage. The really smart guys are starting to say the same things, they can back it up with research and financial models while an old redneck like me comes at it from common sense. Like a female member of the Clinton family once said " what difference does it make at this point ". I think we are getting a pretty good idea of how this will play out.

The Swiss and the Chinese have made a deal to trade in their own currencies adding to the list of other countries circumventing the Dollar. The Euro Zone countries have been playing with negative interest rates while our Central Bank has been experimenting with reverse repo rates to raise interest rates in a unconventional way ( that's a nice way of saying unreported ) and New Zealand has raised it's interest rates by 25 basis points. The Queen of negative interest rates is trying to raise interest rates, what's up with that ? Could she have figured out that printing currency and lowering interest rates at the same time are counter productive or is there an underlying weakness in the dollar from 4 trillion in funny money in addition to another trillion in unreported treasury purchases through Belgium ( that's what I call the tapper that wasn't ). How does the Feds balance sheet look now ?

Bottom line is consumer confidence is a big deal in a market driven economy and after 6 years of a president that didn't exist until he was elected the world has figured it out and him out. He will never do the right thing, he will never lead and anything he says is subject to change with no prior notice. No backbone leads to lack of confidence and no confidence in the Greatest Nation on Earth means the whole world falls apart and the U.S. takes an economic bath. I really hope you are paying attention because the warning signs are flashing, the train is leaving the station and I hope you are on board. The next train isn't scheduled until 2020.

I Think I've Figured It Out.

In the last post I said something didn't feel right about our economic outlook and I'd get back to you when I figured it out. Well I think I've got it.

I am constantly watching the water level in our economic dam and over the last 6 years there has always been one thing or another that threatened to overflow that economic dam. How we have managed to not suffer more economic damage than we have to this point has been very successfully hidden. There has recently been a lot of rain in the mountains ( trouble in the world ) and nothing is being done to keep all that water from not only flooding our economic dam but breaking it.

Our southern border in being overrun and nothing is being done.

Israel is fighting for it's life and our president is blaming them for starting the fight.

We armed and trained the terrorist that are taking over Iraq and nothing is being done.

Putin has murdered 298 people by shooting down an airliner and nothing is being done.

Obama said if Iran didn't meet the dead line for shutting down nuclear enrichment he would be the first one to put more sanctions on Iran and now he wants to give them a 4 month extension.

Our economy still sucks and nothing is being done.

Eric Holder has expanded Operation Choke Point to unimagined levels and no one says anything.

The Fed chair woman is experimenting with reverse repo re-discount rates and no one cares.

Europe has become so timid they can't get out of their own way.

And the U.S. population is too stupid to see the warning signs.

This is all coming to an end real soon - watch the stock market next week and maybe you will get some sense of the urgency you should have right now.

Is the World Falling Apart Or Is It Just Me ?

A little progress on the tiny house on a trailer.

Doesn't it feel like every day something major happens around the world that will affect us. Here in the U.S. it seems like every day there is something negative. I know when I go somewhere or do something that isn't right I can feel it, a kind of feeling that I should pay attention. That's the feeling I have been getting for the last few months - a lot more pronounced than the last few years. Maybe I have fallen down the rabbit hole but I don't think so, something is about to happen   and it won't be good. I'm going to try and get a handle on this inclination and I'll get back to you when I figure it out.

Paint on the Tiny House

You folks seem to like the video at the beginning of the blog posts - so here we go.

Now on to more serious matters, namely indications of economic conditions. There has been a lot of bad news in Europe and the Middle East and of course we have our own domestic problems but on a more fundamental level we are seeing an economic trend worldwide toward more financial manipulation. We of course know we are the trend setters in manipulation of every kind and now we have France wanting to debase their monetary supply by printing more currency to be more competitive in the world market place. The same country that proclaimed last month that 60% of their debt was illegal. Doesn't it seem a little coincidental that the head of the IMF is French. How about Germany - the driving force of the EU - looking for more bail outs because half of their country is bankrupt. Here in the U.S. we have the president asking for 4.2 billion to deal with the illegal children coming over the Mexican border when it would only cost 100 million to fly them back home - could that money be for funding a bunch of other things ? He won't say.

I read an article recently by Dr. Rickards about how important the next policy statement of the Fed is to the direction of our economy. If they continue the tapper on QE 3 it will drive us further into recession and if they pause on the tapper or reverse the tapper it will cause international loss of confidence in the our financial system. I don't know but it sounds like there is no way out that isn't going to cause us pain. Exactly how sure are you that our government will do the right thing ?

The Bottom Line on Our Economy

There is a thing called the 3rd generation paradigm in business and you have all seen it happen to successful businesses throughout time. The first generation builds the business through hard work and sacrifice, the second generation expands and improves the business, then the third generation milks the business into non existence. There are a lot of different variations on the theme but the bottom line is at some point most businesses are sold out, go into bankruptcy or are leveraged to become unrecognizable to what the founders had in mind when they started the business.

The same thing happens with government. Do you think your grand parents see our current Federal Government as the same one they had when they were growing up ? In the business paradigm there is always a generation that is aloof and could care less about the business - except the money and power which in turn leads to the eventual downfall of the business. FDR (Franklin Delano Roosevelt) was one of those and here we are 3 generations later with another one. This administration could care less about our founding principles, he has never fought for or sacrificed anything and certainly has no experience in the business of our government. The end result will be unrecognizable to what the founders had in mind and we the people will either be sold out to another form of government or have to pick up the pieces and shore up the foundation through sacrifice and hard work.

Building a tiny house 4

Conformity

I've borrowed a passage from Barbs new book for my blog post this week - I hope she doesn't sue me.

"I am overwhelmed by all the things that are going on around us, and I bet you are, too. What 

can you do about it? Hang on and hope for the best? The U.S. has changed so much that it can never go 

back to the "good old days" – and were they so good anyway? But the encroachment of bigger and 

bigger government in this country means that many of our personal freedoms have been curtailed or, in 

some cases, eliminated completely. 

 

So what do we do when we don't know what to do? We look at what other people are doing 

and take our cues from them. In 1951, Solomon Asch, a pioneer in the field of social psychology, wanted 

to see how far people would conform to the opinions of others. Previous research had shown that, 

when a situation is ambiguous, in that there is no right or wrong answer, people tend to go along with 

what others do. Asch set up a situation in which the answers were completely unambiguous. He had 

research participants judge the lengths of lines, showing them a line to compare to three other lines. 

The question was very simple: Which of the three lines is this one most like? The answer was always 

very clear. If I were to show you those comparisons, you'd think I was crazy to ask you. But what Asch 

did was have each research participant sitting at a table with other people. The participant believed 

that the others at the table were also participants but, in fact, they were confederates who had been 

told how to respond on certain critical trials. On the first few trials the confederates gave the obvious, 

correct answer, as did the real participant. But on the critical trials, the confederates gave an incorrect 

answer; in the original experiment, all the confederates gave the same incorrect answer. When the 

participant's turn to respond came, he (the participants were all male) faced a dilemma. It was clear 

what the answer was, but all these other guys gave the incorrect answer. What did the real participant 

do? 

 

Asch believed that, because the answer was so clear, participants would ignore what the others 

said and give the correct answer. However, what he found was that, averaging across all participants, 

one-third of the responses on critical trials were incorrect. Overall, 75% of the participants gave at least 

one incorrect answer. In a control condition, with no confederates, the error rate was less than 1%. 

 I should point out that the conforming responses of the real participants decreased if one of the 

confederates gave an answer different from the rest of the group, especially if he gave the correct 

answer. 

Social psychologists have studied conformity ever since and have concluded that the tendency 

to conform is strong. 

 

The reason I brought this up is that we look at others to find out what to do. If it seems that no 

one is doing anything to alleviate the problems, we think that doing nothing is the thing to do. The 

problem is that we have very little information about what others might be doing. I doubt anyone who 

sees me in the grocery store thinks that Ray and I are preparing the best we can for what might be 

coming. 

 

We are accumulating three-month's-worth of food. There are a number of firms who will sell 

you what I call "apocalypse" supplies; they are expensive and I see no need to buy that stuff. We will 

soon have enough canned vegetables and meat, dried beans, rice, and other relatively nonperishable 

staples to last us three months. Don't buy it all at once, at the same place; Ray says it's like making 

moonshine. You don't buy 200 pounds of sugar at one store. Someone will know that you are up to 

something. And it is relatively inexpensive to do it a little bit at a time by buying a small package of beans or rice or a couple of extra cans of tuna each week. Unless you have a big family, you don't need 

to buy the biggest packages; the food could spoil and go to waste before you use it all. You don't want 

to have 50-pound bags of flour around to get weevil-ridden."