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A Rude Awakening

by Donald E. Hester on Tuesday, 30 October 2012 Government 0 Comments

Debt Chart

Have you see the National Debt lately? Over $16 trillion (16,000,000,000,000). By the way the problem is far worse for us tax payers because this $16 trillion does not include the State and Local government debt. Local governments have already started filing bankruptcy.

“We are rapidly approaching the tipping point. Our greatest threat to our future is our own fiscal irresponsibility. We are not exempt from the laws of prudent finance. If we don’t put our finances in order, then the opportunities for our children and grandchildren will be less and their standard of living we be less.” - David Walker United States Comptroller General 1998-2008

The Comptroller Generals is the Auditor General for the United States. Walker says we are two years from being at the point that Greece was when it collapsed. He says because the US dollar is still the favored reserve currency, we will last a bit longer but not indefinitely. He says that the national debt has been increasing at an increasing rate since William Jefferson Clinton was in the White House.

Seriously, if the chief auditor of the United States tells you that we are going fail and it is going to be big and felt around the world, and that there will be nowhere to hide, you should probably listen. Why is it that no one listens to auditors when the sound the alarm?

Another question is why voters don’t do their due diligence. Our government is a participatory form of government that each citizen has the right to decide the direction of the nation. Seems like people should be better informed and look at what the media is telling you with a critical eye. Just because you have the right for something does not mean that you should exercise your right irresponsibly.

Hope and Change? Seriously? We are in for a big change and we are about to get a lesson in failed expectations.

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Tax Day!

by Donald E. Hester on Wednesday, 15 April 2009 Current Events 0 Comments

alt

Taxes the most despised and shady business there is. I gathered a few quotes on taxes for your pleasure. There are always crooks involved with taxes whether it be congress taking more than is needed or the individual who cooks his/her books so that he can pay as little as possible. Enjoy these gems as you send your money away to Uncle Sam. By the way, do you know what they spend that money on?

Here a sample of what they spend the money on:

http://www.cagw.org/site/PageServer?pagename=reports_pigbook2009

Quotes:

“The only difference between a taxman and a taxidermist is that the taxidermist leaves the skin.” - Mark Twain

“It is a good thing that we do not get as much government as we pay for.” - Will Rogers

“There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him.” - Robert A. Heinlein

“When there is an income tax, the just man will pay more and the unjust less on the same amount of income.” – Plato

“The point to remember is that what the government gives it must first take away.” - John S. Coleman

“A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money.” - G. Gordon Liddy

“Therefore because you trample on the poor and you exact taxes of grain from him, you have built houses of hewn stone, but you shall not dwell in them; you have planted pleasant vineyards, but you shall not drink their wine.” – Amos 5:11 ESV

“Render to all what is due them: tax to whom tax is due; custom to whom custom; fear to whom fear; honor to whom honor.” Romans 13:7 NASB

“And the scribes of the Pharisees, when they saw that he was eating with sinners and tax collectors, said to his disciples, “Why does he eat with tax collectors and sinners?” Mark 2:16 ESV

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The FDIC has you covered, right?

by Donald E. Hester on Wednesday, 18 February 2009 Current Events 0 Comments

Money, coins, bills

I had a few people ask me if they should take their money out of the bank for fear that if a bank collapses they would lose all their money. I was not worried because the FDIC insures our money, right?

The Federal deposit insurance protects the first $100,000 of deposits that are payable in the United States in 8,451 US banks. Of those banks $13.3 trillion in deposits are insured. This is the money that we have in the banks. How much does the FDIC have to pay out if a bank fails? The FDIC has, as of 3rd quarter 2008, $38 billion to pay out.

When people start saying millions, billions and trillions people go glassy eyed and I don't think they have a proper perspective. Lets look at all the zeros.

$100,000.00	deposit amount individually that is insured
$13,300,000,000,000.00	total amount of all accounts insured
$38,000,000,000.00	total amount of money FDIC has to pay out
$0.76	amount you would receive per $100 deposited, if the FDIC had to pay out on all accounts

It is true that not every bank would fail at the same time or ever. Only a percentage of them would fail, right? Who knows. The numbers tell me that if there is a run on the banks we are all screwed.

I hesitate to mention that the Banks have exposure in derivatives (SIV, CDOs, CLOs, CBOs, CIOs, and CDOs of CDOs) of over $700 trillion. Lets see the zeros again: $700,000,000,000,000.00. Of that how much equity to the banks have? Less than 1%. Precarious hardly describes it.

Will this lead to a World Bank like the Federal Reserve on a global level? Who knows.

Check out Michael Lewis and David Einhorn, "The end of the Financial World as we Know it," New York Times January 4, 2009 and FDIC/IRA Bank Monitor, Q1 2008

Also

http://en.wikipedia.org/wiki/Collateralized_loan_obligation

http://en.wikipedia.org/wiki/Life_Insurance_Securitization

http://en.wikipedia.org/wiki/Derivative_(finance)

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Wounded Dragon

by Donald E. Hester on Tuesday, 23 December 2008 Book Reviews 0 Comments

China Town Have you ever seen a small wounded animal caught in a corner? It has nothing to lose and everything to gain. It will unload with all it fury and adrenaline to fight ferociously to survive. Now imagine a huge dragon that is wounded and caught between a rock and a hard place. Razor sharp teeth and claws ferociously searching out flesh, grasping at survival in a life a death situation. China is that wounded dragon.

In his book “The Coming China Wars”, Peter Navarro goes over how China has become everything communism was against in the first place, mainly the exploitation of the peasant or working class. There are eight different ‘wars’ discussed in the book. All of the wars are related to China's unsustainable economy, which will require 10% growth per year. This has turned China into the new Imperialist China where China rapes the rest of the world for its own benefit.

The eight wars are:

1. Piracy, China uses piracy to copy just about everything such as DVDs, pharmaceuticals, cars and electronics. This will not change because communism and Taoist philosophies claim that no one owns the rights to anything and that people as a whole own everything. This is tied to China's ability to mass-produce anything as the World's factory floor. Navarro calls it China's weapons of mass production. China can out-produce any nation in the world.

2. Drugs, China is the world’s largest producer of illegal drugs and precursor chemicals. Triad gangs protect the trade and corrupt politicians turning a blind eye, for money or for fear of their lives. China becomes the supplier and has a stranglehold on addicts.

3. Environmental destruction, China will lead the world in pollution within the next decade. Currently, China lack clean water for its own population. Upstream factories pollute the water going to population centers. Those same factories pollute the air in jet stream bring that pollution to the west coast of North America. Where will China’s population go to get away from their own pollution?

4. Blood for Oil, China's support of Iran for access to Iranian oil fields. While China suppresses, out numbers and kills Muslims in western China they support terrorist nations like Iran. China continues to use it power of veto to stop the UN from taking any action against Iran.

5. Imperialism at its best, China supports any country and any government without any ethical constraints for access to natural resources. ‘Business only’, being China's motto they will go into any 3rd world country give the governing officials money, build infrastructure and use their UN veto power to stop any sanctions against these countries, all for access to the natural resources. Once the natural resources have been depleted China will leave them high and dry.

6. Dam happy attitude, China likes to make mega dams even on fault lines with no consideration of environmental impacts, inhabitants or downstream countries. China has no consideration of life safety or environmental concerns.

7. Internal Wars, China's human rights violations are turning into a grave internal problem. With over 100,000 protests a year, the citizens of China are continuing to grow tired of corrupt government. Safety in factories is often overlooked and millions are injured annually, while worker's anger grows.

8. The pension ticking time bomb, China has a larger problem than the US and Europe when it comes to retirement of baby boomer age adults prepare for retirement. Many of China's citizens relay on the Iron Rice Bowl, social security, which is now gone with nothing to replace it.

What will Chine do as it has a population that is restless, hungry, jobless, tormented by a corrupt government and living in pollution? Meanwhile their need for natural resources like oil continues to grow exponentially coupled with a lack of ethical restraints.

With these eight factors, are we entering a perfect storm on the world stage?
Given the world’s current economic crisis what do you think will happen with China?

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Recommended Reading

A Rude Awakening

Tax Day!

The FDIC has you covered, right?

Wounded Dragon