Archive for October, 2007

They Picked Inflation

Published October 31, 2007 inflation , money , Ron Paul Leave a Comment
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The Fed is caught between a rock and a hard spot.  The fiscal irresponsibility of our elected officials puts the Fed between recession and inflation, as I said in my previous post.  I guessed right, as far as what they would choose.   I love getting lucky.

One big problem is that oil, gold, and other commodities are on the upswing.  Real Estate also has a huge upswing.  Groceries have edged up.   A lot of these prices will start trickling down to durable goods.  If you look at the overall prices, inflation has been very significant over the last three years.  When Wal-mart says the prices are dropping, it is because they are getting cheaper and cheaper crap from China.

Bruce McCain, head of the investment strategy team for Key Private Bank said, “A rather stingy Fed suggests that they see an economy that is in pretty good shape.”   I think he is crazy.  A really stingy Fed sees massive inflation on the horizon and is walking the tightrope for as long as they can.

The classic hedge against inflation, gold, has topped $800 for the first time since 1980.  This fact becomes even more significant given the price of gold just 5 years ago (a little over $300).

Only fiscal conservatism can stem this tide.  The government can’t keep printing money that is not backed by anything.  We have to try to stop this wreck and, given the fact that the chances of stopping it are slim, insulate ourselves from the effects.  The only fiscal conservative in office I know of is Ron Paul.  I like his message because he walks the walk.  He actually believes in a small government.  I just donated to his campaign because I think he could win.  If not, I want to shock the republicans into following his lead.  I just hope that someone in government becomes responsible.

Who should be able to vote? Heinlein’s opinion

Published October 29, 2007 election , politics 3 Comments
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I just read a book called Starship Troopers.  I had seen snippets of the movie and they were truly terrifying-  The plot was nonexistent, the dialogue transparent, and the creativity absent.  The book was full of great ideas.

You may see these ideas as wrong, but they do show some thought.  They revoke the idea of universal suffrage.

Today as Americans we think it is blasphemous for someone to say that only a portion of the population should have the right to vote.  It is not very far back in our history when women didn’t have the right to vote.  Universal suffrage is a very recent event.  Democracy is the worst form of government, besides all of the others that have been tried (Churchill).  The problem is that people tend to vote themselves a portion of the governments largess.  When we have universal suffrage, we invite all to decide what to do with the resources, regardless of whether we have contributed.  The fact is, whichever group is currently in charge makes laws that are beneficial to them.  The object is to get selfless people in charge.

The founding fathers tried to guard against this tendency by limiting the power of the government.  We have decided against their advice and have made the government very powerful.  When in high school, I thought the government in the US was nearly without corruption.  Now I recognize that their is favoritism everywhere, with contracts made with companies government officials trust (who are generally friends), and  zoning made to match the beliefs of those in charge, generally benefiting them.  The premise of the government in Starship Troopers was that the only ones who could vote or hold office were those who had previously served in the low paying, dangerous military and been honorably discharged.  The idea was that those that were willing to risk themselves for the greater good would also put the greater good ahead of themselves when they voted.  Their military boot camp started with over 2000 recruits, and 187 graduated, with 14 dead.  Our military today is very risk averse, and boot camp for many services is getting less and less vigorous.  The pay is good, and the benefits are fantastic.  People in the military also learn how to thrive in bureaucracy.

The greeks limited voting to landholders.  They wanted the government to be run by people who had a financial stake in  the outcome.  Now only allowing taxpayers to vote has a certain allure to me.  At this point, I would not be able to vote.  I have three children and am in the military, so a significant portion of my pay is sheltered as food and housing allowance.  I do not contribute to the pie, so I should not have a say in how it is divided up.   Anyway, this is always problematic.

Proposing that we should only give the right to vote to certain people is heresy these days, but Starship Troopers shows an interesting viewpoint in a very effective way.  I really liked it both for the ease of reading, the storyline, and the ideas.

Tough Business Decisionss: Inflation or Recesion

Published October 28, 2007 economics , finance , money , politics , real estate 2 Comments

It seems like the news is the same as it was a month ago, only closer.  The dollar is still in horrible shape, the price of a barrel of oil can’t seem to stop going up, and people are still defaulting on their mortgages.

The big problem is that all of these factors seem to be worse now.  First of all, the dollar continues to descend against the Euro.  What that tells me is that people who have large sums of money to move think that the US economy is in for some rough times. When your currency goes from under one dollar per euro to over 1.40 per euro in five years, you are in a bit of trouble.  If the euro is already suffering from inflation in the 2% range, the loss of value in the dollar must be much larger.

The price of oil continues to move up.  The simplest  solution is to nuke China to reduce their demand for foreign resources.  The problem is the side effects-  Billions of humans dead.  The economic growth in China continues to be staggering.  The Chinese tend to have an interesting business strategy.  Work your butt of and save.  Even in a country that uses a poor primary business model (communism), the work hard and save strategy seems to work.  They are getting sick of saving and want to buy a piece of the good life.  That includes things that require oil either as a fuel or a feedstock.  Oil hit $92.22 during trading last weak.  The extra production capabilities of OPEC and other such countries seem to have nearly run out.

Last of all, more and more people are defaulting on their mortgages.  The companies involved in real estate are getting clobbered, according to a recent story.  These companies represented a huge part of the boom that helped us recover from 9/11.   Their support in the economy will be missed.

It’s time to tighten our belts.  In a world of ups and downs, the economy is due for a down.  People that have planned a little will do just fine, just like they have always done.  You just have to ask yourself where you are.  If there is a coming depression, how will that work out for you?  If there is high inflation?  I feel like stocks offer some nice benefits.  They go up with inflation over the long term.  If you buy boring high quality stocks, they will weather a recession.  Real estate can have the same benefits.  It holds its value, and you get a good deal on a rentable property, it can also provide some benefits.  Cash does well in one and gets slaughtered in the other, and debt does the opposite.  There is also a chance we could have both.  I hope that things go along well for the next while at least.  Hopefully till I and all my descendants are  dead.  But I am not counting on it.

The question is will the Fed choosing inflation over recession.  One kind of sucks and reduces what the true government debt is, the other one sucks worse and reduces the governments ability to pay off debt.  Tricky.

The Power of Preconception

Published October 25, 2007 thrift 1 Comment
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I have been looking into a lot of theology lately.  I am amazed by the power of previously held ideas in deciding which beliefs one will embrace.

I am convinced that if Bush came out of the white house tomorrow and said that he he has been preoccupied lately, but he was busy curing cancer, many democrats would still hate him (if he wasn’t such a gay and black hater, he would have cured aids) .  If an angel came down from heaven and and said vote for  a democratic canditate, many conservative Christians would still vote republican. (It was a misled angels, and the media edited out the word “don’t”).

Global warming is just as interesting.  People close their ears to evidence that is against their personal beliefs.  Some Republicans seem to be trying to convince themselves that the more miles we put on overly large vehicles, the better.  On the other hand, some green democrats are convinced we should stop people from having children, outlaw cars, move into tents woven of organic grasses, and stop pooping (it pollutes).

The issue gets even more pronounced with religion.  People have so many beliefs that from the side look utterly ridiculous.  The catch is that almost every believer has evidence that no one else has.  Their personal spiritual experience.  Someones own spiritual experience can make them look at evidence in a different way, because they have felt the evidence.  I have been looking at Noah and the flood lately.  All the species alive today did not fit on that ark.  I googled it just out of curiosity.  Sure enough, there were several explanations.  Basically, they assumed that not all species were required, just all major species.  Like a horse counting for a zebra, donkey, and ass, etc.  They just underwent a little evolution when they got off (God directed).  The explanations move pretty quickly.  The big catch is, for believers, you have God.  If God wanted the animals to be calm and relax in the ark, taking up little space and relaxing, he could have.  He is God after all.   There isn’t enough water in the atmosphere to cover the earth?  Umm.  We are dealing with God here.  He eats earths for breakfast.  He could make the water.  It’s called omnipotence.

Meanwhile scientist are pulling their hair out.  Animals can’t evolve that fast, what about the fossils, how did the animals get from the old world to the new world?  What about carbon dating?   How did all the penguins get to Antarctica?  You bible-ists can’t prove anything.

Islamic people reference the Koran to find truth.  They go straight to the indisputable authority to answer the infidel’s question.  The infidel ends up going,”No, seriously, how do you know.”

Mormon books about Joseph Smith read as the story of a driven Prophet of God walked on water when stringing together the events of his life, although he had a few frailties.  Not so Mormon books point to a con artist, who would stop at nothing to enlarge his delusions of grandeur, who accidentally did some nice things.

People come to the table with such different assumptions that it is hard to even discuss a lot of these questions.  We don’t even know what can be admitted as evidence.  Anyway, I am sure other people have seen this in discussion with others.  I guess I am starting to recognize the bias in myself, and trying to reduce it.

Oil Just Topped $90

Published October 18, 2007 thrift 1 Comment
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Oil has been skyrocketing. There are a couple of ways to look at this. Presidential candidate Steven Colbert would be quick to point out that this is simply big oil trying ot gouge the good people of South Carolina. They are unfairly raising the prices on something that we require to live. They must be stopped and the price must be set by the government. It worked great for Russia, after all.

Another way to look at it is to say we use a ton of it and there is just more supply than demand at this point. The problem with this theory is that on hand supplies are actually increasing, according to reports. A big factor that they do bring up in this story is loss of faith in the American dollar.

To clarify, I am not preaching any dooms day scenario. Well maybe kind of. People will have to start working for a living again, and the government will have to tighten it’s belt. But for the average American that does a little saving and tries to live within their means, things will not be too bad. First of all, inflation (which will cause the fall of the dollar versus other currencies) will make things produced in foreign countries more expensive here. At this point, that is pretty much everything except drugs and defense. On the bright side, our good will cost less in other countries. This will be a massive boon for American manufacturers. As long as they can keep unions from getting unrealistic, we could gain some advantages. Also, if someone has stayed relatively debt free, they can take a few waves. It is the ships that have been sailing nearly sunk that will be capsized. I guess we all need to look at where our individual ships are in terms of earnings, spending, and savings. If you make a million a year, spend a million, have 10k in savings, and have100k invested, you are in a lot worse shape than the guy who makes 50k, spends 35k, has 8k in savings, and 50k invested. Americans have been taught that they deserve to live with everything they make spent (plus a bit more, especially if you are spending it on my products.) Some of the weaker ships are going to have to scramble a bit. One thing that is scary to me is that in the 1920’s, people believed they were in a new economy, that they were beyond the depressions. We seem to think that way about ourselves also.

Parts of me don’t like investing in stocks, seeing that a panic could cause rapid drops across the board. Although historically, things should come back, I don’t really want to take the ride down. I think it would hurt watching thousands of dollars evaporate in an instant. When I invest, I try to pick companies that will make decent money, and I love a dividend. I also like the policy of Buffet, where he never invests in a company that he doesn’t understand. I am not saying that I understand these companies extremely well, but I get how they make money. One company I love is a miner, FCX. If the US economy does well, it will continue to drive the world economy, including China, resulting is a lot of use of metals. If the US does poorly, the commodities (copper, gold, and molybdenum) will retain their value better in an inflationary period. The energy giants have the same situation. Unless you think Americans are going to quit driving, you want a piece of the energy giants. Their biggest danger is demagogues like Hillary Clinton. They give these speeches about how much money the energy giants make. They do not say that almost every American owns a piece of these energy giants through mutual funds. The returns of these oil companies are historically pretty average. The thing I like is they don’t look like they will be going down from here.

Anyway, I still see inflation as being a risk. Deflation is a problem given the shortage of dollars that Americans have. The government can cure that problem with the presses. If inflation starts to pick up, foreign countries will start dumping their dollars in the US and exacerbate the problem. I like being invested in international companies with headquarters in the US. You gain the advantages of the falling dollar and international growth with the benefits of the low risk US environment.

Anyway, those are my thoughts

Men, you suck and here is why!!

Published October 10, 2007 thrift 1 Comment
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I am sick of sucking because I was born a man.  Modern day society makes it clear that men are less than women in all sectors except physical strength.

Men are not sensitive.  It is a well known fact that if someone needs comforting, it isn’t a man’s role to do it.  He is too daft.

Men lack common sense, and aren’t really decisions makers.  You here those Lowe’s commercials with a financially savvy women dragging convincing her husband to go to shop for new appliances.  He is apparently to stupid to read the paper so she has to let him know about the great offers. (This also gets into financing on commercials, which drives me absolutely nutty, as it gives the image you will never have to pay.) The only reason he likes to go is so his wife can show him up at Lowe’s on how to build things.

Men are tasteless (unless gay).  The guys are the ones that go around dressed like idiots, unless their wives help them out.

Men are clueless about what is important.  Just watch pretty woman, wedding planner, or any of the other movies in that line.  Basic idea is man has no clue about how to live his life, hot woman of low social status teaches him about what is important.  They then have fantabulous sex, and he does just what she said he should do.  Good thing these women are around to teach men about what is important.  I would like to note that movies like While you were Sleeping do very well.  They more accurately reflect reality.  A guy and a girl who both are clueless in some aspects get together, help teach each other something, and  (less realistic, but better movie material) fall in love.

Men completely lack the ability to manage things around home.  If they are left to their own devices, the vacuum ends up consuming the drapes, and one of the small children.  The meal consists of corn dogs, something you can microwave, and whatever was in the blender spread all over the ceiling.

Men are dumb.  Everyone knows that girls are quicker learners.

Men are immature.  Everyone also knows that girls mature faster then guys.  That is why you have 22 year old girls marrying 40 year old guys.  I swear it isn’t because she is smoking hot and he is loaded.

Guys are complete jerks who love to put women down.  That is the only explanation for inequalities. (I recognize these complete jerks do exist, but there might be some non jerks out there also.)

Guys are uglier than girls.  (I have to agree here.  I love that nice smooth skin and other … . attributes.  Let’s face it, girls are better looking)

I could go on for all day, but I am just frustrated by this.  I recognize that some of these things are, in fact true.  I just wish that guys could be better at things every once in a while.  I wish someone would consider that after pushing math and science on girls, engineers are still predominantly male.   Can it please be because guys don’t inherently suck at everything?

Anyway, just thought I would put out my frustrations, and hopefully get some feedback about what a sexist pig I am and actually start an honest conversation about if each of the sexes tend towards jobs that, as a population, they are better at.  Before people say that I think women should stay at home and pop out babies, I know some darn fine female engineers, lawyers, pharmacists, (insert your favorite profession here) etc.  I just wonder about things like this, and wish I didn’t have to suck.

Interesting fact-  If a smart than average man and woman get married, chances are he is smarter than her.  On the other hand, if a dumber than average man and woman get married, chances are she is smarter than him.  Men are spread more out on the IQ scales, with higher highs and lower lows.  Woman statistically don’t deviate as far from the median.

Expensive crappy schools

Published October 4, 2007 thrift Leave a Comment
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There is some irony to the fact that inner city schools are incredibly expensive, but generally the product they turn out is poor product. As we have thrown more and more money at it, the problem has not improved, just gotten more expensive. In places like California and New York you are lucky if 50% of the funding reaches the classroom. The rest goes to expand the bureaucracy. More and more education phd’s that are producing no tangible results. So why are we expanding the bureaucracy?

The bureaucracy is expanding to meet the needs of the expanding bureaurocracy, as Oscar Wilde astutely said.

School is now expanding financially and politically. The Pew Charitable Trust (aka money pot for socialist causes) is irate that some states don’t have government sponsored preschool. I guess this is paranoia coming out, but get away from my kid. I don’t want him to turn out like everyone else. Have you met them? They seem unable to turn out a spontaneous thought. They all think they are unique little flowers but they blend together becuase they have been molded by well meaning but often wrong teachers. My other question is where are we going to get these teachers? I heard on a commercial and advertisement for “preschool professionals”. What in the heck are those? They now have people with masters degrees changing all the dirty diapers? You do not attract the most qualified people on the planet for $8.26 an hour. Those are not the people I want indoctrinating my children for another year. I don’t have anything against them and I am sure that many of them are very nice people, but no thanks. I would feel the same way about another government bureaucracy teaching my kids. Can you imagine DMV employees teaching your children? They would come home at five years old and would have lost all capacity to do anything useful. With preschool, I think they will have come home and lost the ability to think.

I am leery of sending my kids to public school. The quality of teachers is dropping rapidly, as does the quality of nearly every employee as the size of government grows (see what the TSA does). The only reason that the quality has not sunk through the floor is professional pride, and that is on the down slide. I had some fantastic teachers in high school that taught and commanded respect in their class. I was not known for my superior attendance during school, always missing the maximum days allowed before automatic failure(still got A’s, so my parents didn’t care), but I never sloughed the classes with the good (and tough) teachers . They were actually worth going to, and they made up about 40-60% of my day, depending on the time of year. I know one of the teachers that was fantastic was asked to leave because of an incident disciplining a student. I am afraid all that will be left when my children come around are PC bureaucrats.

The way I see out of this is either school vouchers or an abolishment of public schooling all together. I think everyone would agree that the Unions, with their fear of change, have taken a heavy toll on the auto industry. I am seeing the same thing take place slowly with the school systems. The teaching unions are trying to keep all of the work “in house”, both to preserve jobs and from a sincere belief that they provide the best quality of education. If that were really true, why would people send their children to private schools? Competition will do two things. First, it will allow change to occur. Some will be good and some will be bad. The good will be adopted, the bad will be discarded. Secondly, people will be given the choice of bypassing poor quality schools. Vouchers are a possible way to do this (and we should keep it at the state level to prevent more unconstitutional federal government control). They allow the poor to select out of low quality schools if they desire. The parents are the ones that will make the choice of whether they want 50% of funding to go to bureaucracy or if 5-15% sounds better. They save the taxpayer money, to boot.

Now here is a tough truth. There are those kids whose parents don’t care about them enough to try to improve their educational situation, and they will be stuck in the shell of the public school system. Their will be (and should be) greater equality, due to the fact that some education will go up in quality while other education lingers in the dust. These kids will have a rough time, but until their parents care, what can we do about it? There is no reason to hold the rest of the kids down.

Every parent confesses endless love for their child. Some just aren’t telling the truth. If you are too busy going out with the gals to ever take your child to the library or children’s museum, you evidently don’t really care. If you watch two shows a night, but don’t have the energy to read to your kid, you don’t care. If you make sure you always have your guys or girls night out every week, but don’t have time to take your children to the park, you care about yourself, not your child. If you read and write blogs, and don’t have time to play games with your kid, you don’t care (that is kinda a weak spot for me). Everyone has to take time to take care of themselves, but we should try to squeeze that time away from non necessary activities, not from our kids. The fact remains that people who have kids that they don’t take care of end up0 populating the schools with problems. I want my kids away from those problems where they can learn. I am a fan of my children interacting with children of all backgrounds except induced idiocy. I’m sure most parents feel the same. Good luck

TSA Amazes Again

Published October 3, 2007 thrift Leave a Comment
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I would like to state that while I think that many government employees are extremely helpful, the larger the bureaucracy, the less the chance of help. To borrow an idea from Dave Barry, it seems as you add employees, the ability to think and assist drops rapidly, while the ability to obstruct goes up exponentially. Most government agencies seem to have the blocking skills of the Great Wall of China, with the common sense of Brittney Spears. The only way to get things done is to find some employee who has resisted the conversion to idiocy. There don’t seem to be to many of those at the TSA and their new position on remote control cars.

Let’s think about this on an airplane. “Hey Mohammed and Achmed! Get back near the bathrooms. I am about to detonate a bomb above where the wings are and I don’t want any of us to get hurt.” Yeah, that will happen. I am also sure that passengers also will not react to some guy pulling out a car with a little brick of modeling clay stuck on it with a few wires hanging around it (“Allah Ackbar! Allah Ackbar”). He whips out his handy remote, pulling up the remote antenna for maximum range, all the while chanting death to the infidels, and drives the car up to the cockpit and then detonates it! Yes siree! Good thing we don’t have those remote control cars. If you checked in with a bag that has an explosive on it do you really need a remote control? Just reach in, flip a switch, and kaboom!

They have now recommended that remote control cars should not be allowed on planes. When I heard this on the radio I thought about the two possible terrorists that were stopped in Goose Creek with the “fireworks” (within a mile of my home). One piece of pretty damning evidence in the trial is a video that these two put out on youtube on how to make detonators out of remote control cars. I hate to say it, but anything that operates on radio waves can be made to do the same. Cell phones and remote control vehicles are very useful because they sit idly and then produce a burst of energy when activated. The remote control cars are limited by the range of remote which are usually fairly small.

I recognize that remote control cars would be useful on the ground as bomb detonators. There, you can be out of the range of the bomb and detonate it with the inexpensive remote. The fact that these students put this on the web makes the CAIR cringe, especially after they came out against the reactionary police detaining some very well behaved students. Well done for those people involved.

On the other hand, this seems like an attempt by the Homeland Security people to CYA. Anytime anything looks the least bit dangerous, they make it illegal. There has got to be some bottled water company giving kickbacks to the head of the TSA. On the other hand, if a bunch of people are chanting Allah Ackbar, you are not allowed to give them special scrutiny. Especially if you are short manned right now because you are busy confiscating the Congressional Medal of Honor from a 86 year old former governer of South Dakota because the edges look sharp. And because you are also making sure that military officers don’t carry pens to Iraq when redeployed, and doing cavity searches of 75 year old women. I think that I have found my personal favorite. They are also telling women not to wear gel bras. How do they check for that? The 16 year old in me would love that job. “Yes, Miss Alba, I am sorry but I am going to have to check to see if those are real. No Jessica, this is not a joke, it is for the security of our nation. I am from the government and I am here to help.” (Happily, I might add) “Miss Electra, please get back in line”. (I had to look up a second hot name. How sad is that.)

I guess I get carried away with the stupidity of large government bodies that have been put in places of authority over me. They have not shown excessive competence in the past, and I don’t think I can expect it in the future. The available solution is to reduce the size of government. The collective IQ will actually go up, and it will have less of an ability to make dumb decisions. So find someone that is running for office that has a proven record of reducing the size of government. Someone is coming to mind. Trying to remember, the name rhymes with Ron Paul. Let’s get the government out of the hands of the bureaucrats and back in the hands of people who have to serve the customer to survive.

By the way, here is the link to one of the stories about RC cars that I read while I was looking up other TSA atrociousness.  Have fun paying taxes!

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