Archive for August, 2009

Competitive money

Monday, August 17th, 2009

The dollar is losing, and will continue to lose value because it has no competition. We have made it illegal for anyone but the government to produce “money” so there are no competitive forces. Of course people can’t be allowed to produce counterfeit money, but the law should restrict people from copying US dollars, not from producing their own lines of credit, as it presently does.  Why not have private individuals, or a company, or any private entity, be allowed to provide credit and conduct commerce with that credit? Why can’t someone working for a company be paid with credits from that company and then use those credits to purchase products from that company? If this were allowed then companies would make joint arrangements for credits to be shared between companies and then the workers could purchase products from many companies.

If private creditors produce their own currencies then the value of those currencies will be determined by whether people decided they have real valuer or not. It’s a paradigm shift, but if you think about it you realize that there is no need for the government to be the sole producer and controller of “money”. In fact, the reason why the dollar is losing value is because of the government. The things you own are not changing in value, and your time invested in labor does not become less valuable due to financial conditions… the government is simply driving your dollars towards worthlessness from a lack of competition.

Finance vs. commerce

Monday, August 17th, 2009

A good commercial system is what is important. A system that promotes and encourages efficient production of goods and services will provide us with a high standard of living. The purpose of a financial system is to support the commercial system. Money and finance are just a way to store value and help wealth be passed around in order to allow commerce to occur efficiently. This notion that we can solve our problems by tweaking, messing with, changing or completely overhauling the financial system is a fallacy. Finding a place to keep your money, such as a bank, is easy. The search for an investment is never difficult. The  hard part is producing wealth in the first place.

Figuring out how to make yourself valuable to others so that they will voluntarily reward you is tough. Can you produce a product or service that people want? If not, can you convince a group who is already doing that to let you join them? That is the hard part and that is where the effort should be placed. If we take care of commerce, then finance will take care of itself.

Free speech train leaving now

Thursday, August 13th, 2009

We always knew the 1st amendment would be the last to go. It’s the one most people know about. Obama has now violated it at least three times.

A doctor in DC has posted advertisements in DC subway stations with a picture of a young girl and the caption says: “President Obama’s daughters get healthy lunches, why can’t I?” The doctor is running an organization that wants better lunches in public schools. The White House lawyers contacted him and told him to take the posters down. Fortunately he has refused.

A company making 2 dolls with the same names as Obama’s daughters also got a call from these lawyers and they changed the names of the dolls.

The truly sad part is that most people think the young girls need to be protected, so they see no problem with this. After all, what about the little girls right to privacy? People don’t even know that any right to privacy, like all of the rights guaranteed by the Bill of Rights, are supposed to enforced by restrictions on government, not by refusing to allow citizens to express themselves. The irony is that these citizens are in fact having their right to privacy violated while most other citizens think they are violating someone else’s right to privacy.

Of course when Obama takes the girls out on stage before cheering crowds, he doesn’t care about their privacy. As long as it’s positive, it’s fine for us to talk about Obama’s friends and relatives and he parades them around as if they were little trophies. But say something that might make them upset… Why doesn’t someone point out the opportunity for Obama to talk to his daughters and explain to them that they are in a high profiile position and that has good and bad sides to it? Why doesn’t Obama explain to his daughters about sticks and stones? That’s what you and I have to do if someone is saying things our kids don’t like.

This exercising of special privilege power is disgusting, but virtually no Americans are disgusted.

Of course the White House attacks on conservative talk radio are well known.

America, it was a nice idea while it lasted.

Lynch Madoff

Tuesday, August 4th, 2009

How did we go from having Peter Lynch as the hero of Wall St, to Bernie Madoff? How did a man who was admired and followed for his thorough research of the companies he invested in become replaced by a man who would not even tell his clients what he was doing? We have lost our minds.

Sophistication overuns the basics

Monday, August 3rd, 2009

Some things are simple. Discussing them in a sophisticated way does not make them any less simple. Fancy words and theories do not transform a simple principle into a complicated study. Just because an advanced college degree is available for a certain subject does not mean that the principles governing that subject are involved.

Our standard of living in this country is determined by the products we produce and the services we provide. If we produce lots of nice products that improve our lives and if people are out performing valuable services that make people lives better, we will have a high standard of living. If we don’t… we wont. It’s just that simple.

We can pretend that things such as “sophisticated” tax policies, adjustments to interest rates, “stimulating” the economy, creating more money, creating less money, voting for certain people or whatever else we want to believe will improve our standard of living but the single most important thing is to have policies which give each person an incentive to build products or provide services that improve our standard of living. Contrary to current popular belief, the free market is the best way to achieve this incentive.

You lose some… you lose some

Saturday, August 1st, 2009

Imagine a man who moves into your neighborhood and he lives on $10,000 per day. Every single day this guy goes out and spends $10,000. He is living the high life and we all envy him. How wonderful to be like that. Everyday it’s new cars, trips all over the world with big groups of friends, huge fancy parties… we all want that life. Now imagine that you take a look just one level deeper behind the scenes. You discover that this man had one million dollars when he moved into the neighborhood and he has no income whatsoever. You do a little analysis and you realize something that no one else realizes. This man is soon going to run out of money and everything will change. His $1,000,000 will run out in exactly 100 days at the rate he is spending.

There are 2 courses of action this man can take. He could realize that he will run out of money in 100 days and cut back on his spending. He could take steps to ensure his future and preserve his wealth. Or he could just continue spending $10,000 per day.

If he continues to spend $10,000 per day he will run out of money on a particular instant. On day 100 he will be spending $10,000 and everything will appear wonderful when he goes to bed that night. When he wakes up the next morning he will have nothing and his good life will be over. A gradual loss of wealth and resources does not cause a corresponding decline in the rate of spending. A self correction can only be the result of an analysis and a conscious effort. The correction requires self control and a willingness to “do without” today in order to preserve the future.

America is analogous to the man spending $10,000 per day. Our situation is even worse because we have blown all of our resources and built up excessive debt. When the time comes that our access to resources runs out it will be sudden and dramatic. It is probably too late to prevent it but that is a mute point anyway. Perhaps we could change it by forcing our government to stop taxing us to death and stop wasting resources, but that is not going to happen. All you can do now as an individual is try to prepare yourself as best you can for the inevitable.

We like to fool ourselves into thinking that it won’t, or at least may not, happen. We tell ourselves that the government and its’ finances are too complicated for us to understand… the experts in government are aware and keeping things in check… or it’s different when you’re talking about an entire nation or a government. But tangible reality always takes over as the controlling factor. When the resources are gone they will be gone. From where and from whom will you get the products and services that are required to support a decent life style?

Would you buy a used car from your government?

Saturday, August 1st, 2009

This country put a man on the moon in about ten years.  JFK declared it in 1960, and Armstrong put footprints in the Lunar dust in ‘69. If we were just starting now, it’d take ten years before they even broke ground on the launching pad, with the environmentalists fighting to block it, and Congressmen fighting to get it built in their home district.

Our government is incompetent.  They don’t seem to be able to do anything well any more.  The Federal government are the folks who bring you the IRS, the Postal Service, the Katrina rescue, and the war in Iraq.  Have they done such a great job with those that you think they’re ready to take on bigger projects?

Before you vote to put the government in charge of your health care, you might want to look at some of the health care operations that they already run:  Medicare, Medicaid, and all medical care for military veterans.  Are all of those in great shape?  Has the government demonstrated such mastery of these health care agencies that you want them to take over all the rest?  Do you also want them to be in charge of the car companies, the oil companies, the banks, Wall Street, and home mortgages?

Rich or poor Ted?

Saturday, August 1st, 2009

Last weeks Newsweek magazine featured Ted Kennedy being worshiped for his tireless promotion of government run health care. (’The Cause of My Life’, July 27, 2009) In that article Kennedy refers to the US as “the richest country in the world”. Yet he voted for the bailout packages because the country is in serious financial trouble. Which is it?… actually it is both. The people are going poor but the government has more and more of our resources. It’s sad and dangerous.

The power to keep the power

Saturday, August 1st, 2009

The goal of the US Constitution was NOT to keep “the people” in power over the government. The goal of the Constitution and the individual liberties that used to be guaranteed by the Bill of Rights was to make sure the people always had the power to maintain power over the government. US citizens have not yet lost power over the government but they have lost the power to hold on to power over the government. Thus it is only a matter of time before the government exercises its’ power over US citizens and US citizens are powerless to stop it. One group is large, well organized and well armed. The other is not, but has a “right to vote”. Who are you betting on?