.

[Jan van Eck + 7,558]

5 hours ago, BenFranklin'sSpectacles said:

Assuming that happens, wouldn't it benefit US manufacturing?  I.e. the wealthy bankers might lose money, but wouldn't the heartland benefit? 

THE US Dollar is not influenced by swings in the value of China's Renminbi  (currently at 14 cents).  The Dollar floats, and its relative valuation is largely a function of US  interest rates.  As the rates flow upwards, international deposit capital  (referred to as "hot capital") will flow into the USA and the Dollar, to take advantage of the higher rates of return.  That pushes more money into Dollars and the demand for Dollars pushes the valuation upwards relative to other currencies.  

At the same time, as instability takes hold in the rest of the planet, capital flows to the USA and other safe havens such as Switzerland  (and to a lesser extent, Canada) for the preservation of capital.  It then becomes not "return on capital" but "return of capital."  And again, that global instability causes demand for dollars and in turn pushes up the dollar's relative value on currency exchanges.

The USA has thus coasted along with having to pay little or nothing for its use of borrowed capital to fund the budget deficits, as global instability keeps pumping more global capital into the USA and its perceived relative safety.  But this is an illusion: the nonsense that deficits never have to be paid is pure rubbish, a posture developed by Dick Cheney and other assorted lunatics that have drifted into Washington policy circles.  Eventually, the old debt will not be rolled over because the holders of that debt get tired of having zero returns, and might as well go spend that capital on a nice new hundred-million-dollar yacht and enjoy it before they die.  Then the Fed will have to dramatically have to raise real interest rates to attract lenders/investors and that will crowd out the budget.  Ultimately, the Govt has to spend huge chunks of its taxes on servicing that vast debt.  To give you some idea of where this can go, picture a situation where real interest rates go to 10%.  At that point the current $22 Trillion in federal debt load will accrue an interest payment, before retirement of principal by way of retiring expired bonds, of $2.2 Trillion a year.  And there is no money for that in the current tax scheme.

Think that scenario cannot happen?  I have news for you:  back around 1978 the Government of Quebec had to offer 18% on its new bond issues, which were tax-free income to Quebec investors, in order to attract needed funds to float the Province.  18% would totally bankrupt the USA. For that matter, so would 10%.  Drifting along with a Fed funds rate of 0.0018 on overnight loans is just ridiculously cheap money - basically, it is free.  Anybody who thinks that that is going to continue is living in some Mitch McConnell fantasyland, abetted by aging atrophy of the brain and total senility.  You get that type of addled thinking from these old farts that are hanging around in Washington:  those guys no longer live in the real world.  Instead, they have created this artifice of illusions, which makes them feel good about ignoring reality and voting in tax reductions for a budget that is so bloated it needs an extra trillion a year even before beginning to think about dealing with the debt. 

Is there a solution?  Yes, of course, but it involves psychic pain.  It would require the scrapping of 7/8th of the military, the mothballing of aircraft carriers and submarines, the cancellation of politically favorite arms purchases including the entire output of Newport News shipbuilding, the Bath Iron Works, everything procured from Martin Marietta, and Lockheed Aircraft, and General Dynamics.  Plus it requires cashiering several hundred thousand federal workers, including the entire Homeland Security Department, which so far has produced zero homeland security.  Is this politically feasible?  Of course not. 

Edited August 10, 2019 by Jan van Eck
"which" for "where"

[Roberto.Brazil + 8]

On 8/6/2019 at 4:02 PM, Enthalpic said:

Formula for rich to get richer via messing crap up:

Step 1) move money into gold. (note gold is way up) https://goldprice.org/gold-price-canada.html

Step 2) create chaos in international markets, suppress share prices, devalue currency.

Step 3) Convert gold back into money.

Step 4) Buy devalued shares.

Step 5) Stop all the nonsense you started and watch everything rebound.  No net benefit to country required - you profit.

 

 

VALE iron miner felt almost 20% in a week. BHP and RIO too. Good time to sell gold and buy iron. 

[Roberto.Brazil + 8]

On 8/7/2019 at 4:36 PM, Zhong Lu said:

The real significance of the Yuan move is "we're not going to negotiate with Trump anymore."

I'm wondering how long it will take before this message will sink in to Trump and his supporters.  

No one can win this war. Everybody loses. Gold rises, stocks sink around the world.  China can really make Apple loses 10% of market value. I have no doubt about it.  I am just a brazilian small investor who lost in a week 18% of my money in VALE iron miner stocks.

[SKEP + 229]

On 8/6/2019 at 2:56 PM, Enthalpic said:

Meh,  trade war is now also a currency war.  Watch the USD lose value.

What ? Currency War makes US dollar stronger.

China has to watch it. The DEVALUE of yuan too much will see capital leaving China.

Edited August 11, 2019 by SKEP

[Boat + 1,323]

6 hours ago, Jan van Eck said:

THE US Dollar is not influenced by swings in the value of China's Renminbi  (currently at 14 cents).  The Dollar floats, and its relative valuation is largely a function of US  interest rates.  As the rates flow upwards, international deposit capital  (referred to as "hot capital") will flow into the USA and the Dollar, to take advantage of the higher rates of return.  That pushes more money into Dollars and the demand for Dollars pushes the valuation upwards relative to other currencies.  

At the same time, as instability takes hold in the rest of the planet, capital flows to the USA and other safe havens such as Switzerland  (and to a lesser extent, Canada) for the preservation of capital.  It then becomes not "return on capital" but "return of capital."  And again, that global instability causes demand for dollars and in turn pushes up the dollar's relative value on currency exchanges.

The USA has thus coasted along with having to pay little or nothing for its use of borrowed capital to fund the budget deficits, as global instability keeps pumping more global capital into the USA and its perceived relative safety.  But this is an illusion: the nonsense that deficits never have to be paid is pure rubbish, a posture developed by Dick Cheney and other assorted lunatics that have drifted into Washington policy circles.  Eventually, the old debt will not be rolled over because the holders of that debt get tired of having zero returns, and might as well go spend that capital on a nice new hundred-million-dollar yacht and enjoy it before they die.  Then the Fed will have to dramatically have to raise real interest rates to attract lenders/investors and that will crowd out the budget.  Ultimately, the Govt has to spend huge chunks of its taxes on servicing that vast debt.  To give you some idea of where this can go, picture a situation where real interest rates go to 10%.  At that point the current $22 Trillion in federal debt load will accrue an interest payment, before retirement of principal by way of retiring expired bonds, of $2.2 Trillion a year.  And there is no money for that in the current tax scheme.

Think that scenario cannot happen?  I have news for you:  back around 1978 the Government of Quebec had to offer 18% on its new bond issues, which were tax-free income to Quebec investors, in order to attract needed funds to float the Province.  18% would totally bankrupt the USA. For that matter, so would 10%.  Drifting along with a Fed funds rate of 0.0018 on overnight loans is just ridiculously cheap money - basically, it is free.  Anybody who thinks that that is going to continue is living in some Mitch McConnell fantasyland, abetted by aging atrophy of the brain and total senility.  You get that type of addled thinking from these old farts that are hanging around in Washington:  those guys no longer live in the real world.  Instead, they have created this artifice of illusions, which makes them feel good about ignoring reality and voting in tax reductions for a budget that is so bloated it needs an extra trillion a year even before beginning to think about dealing with the debt. 

Is there a solution?  Yes, of course, but it involves psychic pain.  It would require the scrapping of 7/8th of the military, the mothballing of aircraft carriers and submarines, the cancellation of politically favorite arms purchases including the entire output of Newport News shipbuilding, the Bath Iron Works, everything procured from Martin Marietta, and Lockheed Aircraft, and General Dynamics.  Plus it requires cashiering several hundred thousand federal workers, including the entire Homeland Security Department, which so far has produced zero homeland security.  Is this politically feasible?  Of course not. 

You forgot unpaid taxes that wind up in banks on islands. This runs around 400+ billion per year. Not a small number.

Then there is healthcare which is what $.16 out of every dollar? We need to take education out of delivery of service. Diagnosing requires education/or an algorithm but after that its maintenance. I bet an illegal immigrant woman with small supple fingers could take my blood and send it to a lab with little training. The lab tests could be emailed to the customer. Straight to the Pharmacy for pills with no education required. Doctors are needed for when blood tests show an area out of the zone. This is just one example of a system requiring educated drug pushers to receive medication.

[footeab@yahoo.com + 2,187]

6 hours ago, Jan van Eck said:

THE US Dollar is not j.... SNIP.... dealing with the debt. 

Is there a solution?  Yes, of course, but it involves psychic pain.  It would require the scrapping of 7/8th of the military, the mothballing of aircraft carriers and submarines, the cancellation of politically favorite arms purchases including the entire output of Newport News shipbuilding, the Bath Iron Works, everything procured from Martin Marietta, and Lockheed Aircraft, and General Dynamics.  Plus it requires cashiering several hundred thousand federal workers, including the entire Homeland Security Department, which so far has produced zero homeland security.  Is this politically feasible?  Of course not. 

Uh, DoD is ~750B.  Debt yearly is ~1T  That is not 7/8.  That is 133%   Does not count PAYING DOWN the debt. 

In reality, the amount that must be cut is 1.2Trillion which is 30% of the Federal budget.  Why at least 1.2T?  Because we all know politicians will lie and change the actual paydown of the debt on a whim.  A "balanced" budget is a step in right direction, but ultimately a joke. 

[SKEP + 229]

.

 

[Ward Smith + 6,615]

 

Edited August 11, 2019 by Ward Smith
Repeated

[Ward Smith + 6,615]

Buggy interface

Edited August 11, 2019 by Ward Smith
Repeat

[Ward Smith + 6,615]

11 hours ago, Roberto.Brazil said:

Here in Brazil we are trying to fix 16 years of turbulences caused for a socialist government (Workers Party). Ex president Lula is in jail and we are fighting hard against corruption. Lots of american companies went away cause bribe was necessary.

And it's sad American Investment Funds  had US$ billions in Brazilian stocks for 16 years (when a corrupt comunist party was in power) and now, because of a tweet, they sold (just in a week) more than US$ 10 billions in Brazilian stocks.

Trump's fault your country lovingly reelected known corrupt politicians? Really? 

[Ward Smith + 6,615]

10 hours ago, Roberto.Brazil said:

No one can win this war. Everybody loses. Gold rises, stocks sink around the world.  China can really make Apple loses 10% of market value. I have no doubt about it.  I am just a brazilian small investor who lost in a week 18% of my money in VALE iron miner stocks.

Did you sell all your shares? If not, you should buy more and average cost down. Otherwise it's just a paper loss and if the fundamentals still exist, let it ride. 

[BenFranklin'sSpectacles + 762]

On 8/10/2019 at 10:29 AM, Jan van Eck said:

THE US Dollar is not influenced by swings in the value of China's Renminbi  (currently at 14 cents).  The Dollar floats, and its relative valuation is largely a function of US  interest rates.  As the rates flow upwards, international deposit capital  (referred to as "hot capital") will flow into the USA and the Dollar, to take advantage of the higher rates of return.  That pushes more money into Dollars and the demand for Dollars pushes the valuation upwards relative to other currencies.  

At the same time, as instability takes hold in the rest of the planet, capital flows to the USA and other safe havens such as Switzerland  (and to a lesser extent, Canada) for the preservation of capital.  It then becomes not "return on capital" but "return of capital."  And again, that global instability causes demand for dollars and in turn pushes up the dollar's relative value on currency exchanges.

The USA has thus coasted along with having to pay little or nothing for its use of borrowed capital to fund the budget deficits, as global instability keeps pumping more global capital into the USA and its perceived relative safety.  But this is an illusion: the nonsense that deficits never have to be paid is pure rubbish, a posture developed by Dick Cheney and other assorted lunatics that have drifted into Washington policy circles.  Eventually, the old debt will not be rolled over because the holders of that debt get tired of having zero returns, and might as well go spend that capital on a nice new hundred-million-dollar yacht and enjoy it before they die.  Then the Fed will have to dramatically have to raise real interest rates to attract lenders/investors and that will crowd out the budget.  Ultimately, the Govt has to spend huge chunks of its taxes on servicing that vast debt.  To give you some idea of where this can go, picture a situation where real interest rates go to 10%.  At that point the current $22 Trillion in federal debt load will accrue an interest payment, before retirement of principal by way of retiring expired bonds, of $2.2 Trillion a year.  And there is no money for that in the current tax scheme.

Think that scenario cannot happen?  I have news for you:  back around 1978 the Government of Quebec had to offer 18% on its new bond issues, which were tax-free income to Quebec investors, in order to attract needed funds to float the Province.  18% would totally bankrupt the USA. For that matter, so would 10%.  Drifting along with a Fed funds rate of 0.0018 on overnight loans is just ridiculously cheap money - basically, it is free.  Anybody who thinks that that is going to continue is living in some Mitch McConnell fantasyland, abetted by aging atrophy of the brain and total senility.  You get that type of addled thinking from these old farts that are hanging around in Washington:  those guys no longer live in the real world.  Instead, they have created this artifice of illusions, which makes them feel good about ignoring reality and voting in tax reductions for a budget that is so bloated it needs an extra trillion a year even before beginning to think about dealing with the debt. 

Is there a solution?  Yes, of course, but it involves psychic pain.  It would require the scrapping of 7/8th of the military, the mothballing of aircraft carriers and submarines, the cancellation of politically favorite arms purchases including the entire output of Newport News shipbuilding, the Bath Iron Works, everything procured from Martin Marietta, and Lockheed Aircraft, and General Dynamics.  Plus it requires cashiering several hundred thousand federal workers, including the entire Homeland Security Department, which so far has produced zero homeland security.  Is this politically feasible?  Of course not. 

That sounds about right.

IIRC, you previously commented that inflation is the only way out of this mess.  Economic growth might help a little, but there will be inflation. What can an individual citizen do to beat inflation? 

[Otis11 + 551]

On 8/10/2019 at 10:29 AM, Jan van Eck said:

THE US Dollar is not influenced by swings in the value of China's Renminbi  (currently at 14 cents).  The Dollar floats, and its relative valuation is largely a function of US  interest rates.  As the rates flow upwards, international deposit capital  (referred to as "hot capital") will flow into the USA and the Dollar, to take advantage of the higher rates of return.  That pushes more money into Dollars and the demand for Dollars pushes the valuation upwards relative to other currencies.  

At the same time, as instability takes hold in the rest of the planet, capital flows to the USA and other safe havens such as Switzerland  (and to a lesser extent, Canada) for the preservation of capital.  It then becomes not "return on capital" but "return of capital."  And again, that global instability causes demand for dollars and in turn pushes up the dollar's relative value on currency exchanges.

The USA has thus coasted along with having to pay little or nothing for its use of borrowed capital to fund the budget deficits, as global instability keeps pumping more global capital into the USA and its perceived relative safety.  But this is an illusion: the nonsense that deficits never have to be paid is pure rubbish, a posture developed by Dick Cheney and other assorted lunatics that have drifted into Washington policy circles.  Eventually, the old debt will not be rolled over because the holders of that debt get tired of having zero returns, and might as well go spend that capital on a nice new hundred-million-dollar yacht and enjoy it before they die.  Then the Fed will have to dramatically have to raise real interest rates to attract lenders/investors and that will crowd out the budget.  Ultimately, the Govt has to spend huge chunks of its taxes on servicing that vast debt.  To give you some idea of where this can go, picture a situation where real interest rates go to 10%.  At that point the current $22 Trillion in federal debt load will accrue an interest payment, before retirement of principal by way of retiring expired bonds, of $2.2 Trillion a year.  And there is no money for that in the current tax scheme.

Think that scenario cannot happen?  I have news for you:  back around 1978 the Government of Quebec had to offer 18% on its new bond issues, which were tax-free income to Quebec investors, in order to attract needed funds to float the Province.  18% would totally bankrupt the USA. For that matter, so would 10%.  Drifting along with a Fed funds rate of 0.0018 on overnight loans is just ridiculously cheap money - basically, it is free.  Anybody who thinks that that is going to continue is living in some Mitch McConnell fantasyland, abetted by aging atrophy of the brain and total senility.  You get that type of addled thinking from these old farts that are hanging around in Washington:  those guys no longer live in the real world.  Instead, they have created this artifice of illusions, which makes them feel good about ignoring reality and voting in tax reductions for a budget that is so bloated it needs an extra trillion a year even before beginning to think about dealing with the debt. 

Is there a solution?  Yes, of course, but it involves psychic pain.  It would require the scrapping of 7/8th of the military, the mothballing of aircraft carriers and submarines, the cancellation of politically favorite arms purchases including the entire output of Newport News shipbuilding, the Bath Iron Works, everything procured from Martin Marietta, and Lockheed Aircraft, and General Dynamics.  Plus it requires cashiering several hundred thousand federal workers, including the entire Homeland Security Department, which so far has produced zero homeland security.  Is this politically feasible?  Of course not. 

Jan, unfortunately cutting the military budget to Zero won't nearly do it, and that's just to cover deficit, not even pay down the debt. I'd be really interested in your thoughts on this if you have the time: https://www.washingtonexaminer.com/opinion/only-cutting-entitlements-can-halt-our-impending-debt-crisis

On 8/11/2019 at 1:39 PM, BenFranklin'sSpectacles said:

That sounds about right.

IIRC, you previously commented that inflation is the only way out of this mess.  Economic growth might help a little, but there will be inflation. What can an individual citizen do to beat inflation? 

Individual citizen to beat inflation - invest. Invest in wealth generating assets:

• Rental properties - generate revenue each month, rent tends to rise with inflation, property value tends to rise slightly faster than inflation, and leverage allows for a multiplier effect on invested capital
• Stocks - Individual stocks might go up and down, but the market as a whole has a strong history of trending upward long term. Dividend stocks are typically more stable but have lower total returns (may be worth the trade off depending on goals). Premise is that the stockholders own the underlying assets - inflation just increases the cost of both inputs and outputs. Margins/returns are unaffected in the long run. (assumes underlying fundamentals stay the same - which may or may not hold depending on cause of inflation) 
• REITs (Real Estate Investment Trusts) - similarly to stocks above, just specific stocks in Trusts that hold and manage rental properties. (Some differences, but that's the idea)
• Businesses (Similar idea)
  • Farmland
  • Timberland
  • Car wash
  • Arcades
  • Laundromat
• Royalties (make sure these are indexed to inflation or as a percent of revenue)
• Or just good-ol-fashion diversification. 'Flee' to currency alternatives (Precious metals, cryptocurrencies, foreign currencies, etc. I probably wouldn't recommend this one unless you really know what you're doing. Pretty easy to lose money and definitely miss out on market gains the other options incorporate)

 

 

[Enthalpic + 1,496]

57 minutes ago, Otis11 said:

Individual citizen to beat inflation - invest. Invest in wealth generating assets:

• Rental properties - generate revenue each month, rent tends to rise with inflation, property value tends to rise slightly faster than inflation, and leverage allows for a multiplier effect on invested capital
• Stocks - Individual stocks might go up and down, but the market as a whole has a strong history of trending upward long term. Dividend stocks are typically more stable but have lower total returns (may be worth the trade off depending on goals). Premise is that the stockholders own the underlying assets - inflation just increases the cost of both inputs and outputs. Margins/returns are unaffected in the long run. (assumes underlying fundamentals stay the same - which may or may not hold depending on cause of inflation) 
• REITs (Real Estate Investment Trusts) - similarly to stocks above, just specific stocks in Trusts that hold and manage rental properties. (Some differences, but that's the idea)
• Businesses (Similar idea)
  • Farmland
  • Timberland
  • Car wash
  • Arcades
  • Laundromat
• Royalties (make sure these are indexed to inflation or as a percent of revenue)
• Or just good-ol-fashion diversification. 'Flee' to currency alternatives (Precious metals, cryptocurrencies, foreign currencies, etc. I probably wouldn't recommend this one unless you really know what you're doing. Pretty easy to lose money and definitely miss out on market gains the other options incorporate)

 

 

Short version - already have money working for you.

Not sure If I would list car washes and arcades as recession resistant industries.

Maybe a funeral home, no matter how broke you are the dead still need to be dealt with.  Plus there will probably be a further uptick in gun violence. LOL 

[James Regan + 1,776]

On 8/7/2019 at 12:47 PM, SKEP said:

US doesn't expect popular support for their sacrifice they make while trying to level the trading playing field. 

Most countries are too caught up in themselves to realize the benefit of working for a common cause for the good of all. 

Plus their is some "schadenfreude" out their.

I do think their are a lot of countries quietly rooting for Trump's success re China. It's in their best interest.

Countries like Germany probably  want some guarentees re no cars/carparts tariffs for public support.

Germany assembles BMW and Mercedes in US.  The car parts are mfg in Germany.  Parts are sold to US entity at full retail so NO US Income Tax paid. 

Brilliant have you ever driven a US made BMW, Mercedes or Jaguar guess what there full of, Chinese plastic components and they are nothing like a European made version.

In short Suck

Edited August 15, 2019 by James Regan

[James Regan + 1,776]

On 8/5/2019 at 5:31 PM, SKEP said:

Tariffs working. 

Just relax . Nothing to get worked up about .  .  .  .  .  unless you are China.

TPP countries have to be loving this. 

Nice if U.S. "allies" joined in . . . but don't count on it. 

Hopefully, others will join publicly or quietly to resist China's Hegemony.

As usual, others expect U.S. to do all the heavy lifting. 

Most do not understand how important this is. It's important on many fronts. In addition to economic power, China has substantialy grown there military and use it to bully small neighbors. Even building bases on previously designated international waters. What's next. 

Winning is not bringing the manufacturing back to US.

Winning is moving manufacturing to anywhere . . .  but China.

Hopefully countries will realize what China's belt and road initiative is all about and resist taking the bait. 

So you did watch the video on Steve Bannon in Japan.

👊🏻

[James Regan + 1,776]

On 8/10/2019 at 12:27 PM, Roberto.Brazil said:

Here in Brazil we are trying to fix 16 years of turbulences caused for a socialist government (Workers Party). Ex president Lula is in jail and we are fighting hard against corruption. Lots of american companies went away cause bribe was necessary.

And it's sad American Investment Funds  had US$ billions in Brazilian stocks for 16 years (when a corrupt comunist party was in power) and now, because of a tweet, they sold (just in a week) more than US$ 10 billions in Brazilian stocks.

I’m here with you Roberto , let’s hope Bolsonaro listens to Steve Bannon and turns right quickly 👊🏻

[Jan van Eck + 7,558]

4 hours ago, Otis11 said:

Jan, unfortunately cutting the military budget to Zero won't nearly do it, and that's just to cover deficit, not even pay down the debt. I'd be really interested in your thoughts on this if you have the time: https://www.washingtonexaminer.com/opinion/only-cutting-entitlements-can-halt-our-impending-debt-crisis

Well, let's remember the "Grand Republican Battle Plan" as envisaged two decades ago.  It was to "starve the Beast," meaning Washington and the US Congress spending, by continuing to pass tax cuts until the Fed ran out of money.  Then Republicans would refuse to raise the debt ceiling and finally Washington would be "starved" of cash and forced to cut, cut, cut.   The Republicans of yesteryear literally had wet dreams over that concept. 

The reality turns out to be less pleasant.  The Republicans were fast on the draw to pass the tax cuts, which they did with abandon, and to lie to themselves and to the People that it was for the benefit of Mr. and Mrs. Workingman, when in fact they were designed to cut the taxes levied on "the rich," or the one-percenters  (their own crowd).  That by itself is not surprising; cliques or groups in Washington have historically designed legislation to primarily benefit their group.  Your referenced Washington Examiner article relates how Republicans passed Medicare Part D  (the prescription drug benefit, effectively free medications for old people), which actually happened specifically because George (W) Bush '43 needed to capture the Florida vote for re-election, and Florida is crammed full of old wrecks waiting their turn to die.  By handing those voters the promise of free stuff  (the drugs), he captured their votes.  Traditionalist Republicans are and were aghast at this unorthodoxy, it was a straight Democrat-Playbook move, but George saw the potential and really needed that Florida vote, so in it went. 

And you get this out of Washington politicians.  Presidents typically have a difficult time attracting and keeping talent in the Administration (and particularly the Cabinet and the White House), so the people that do arrive tend to be morally corrupt, or at least dubious.  You might remember the scene with Bill Clinton out on some golf course walking along with Tiger Woods, the two chuckling over their private tales.  When asked later what they were laughing about, Clinton replied:  "Pussy."  So here you have these guys whose lives in large part fixated on their genitalia talking about the women they have had their one-night stands with.  You will recall that Hillary Clinton was considerably more tolerant of this behavior than was Elin Nordegren, who flailed on his car with a golf club, denting up the roof, and then kicked him out of the marital bed and divorced him.  But that is classically American, a population obsessed with genitalia. 

When you take these people and make them "advisers,"  you end up with the pigs and bums from Goldman Sachs on Wall Street coming in and leeching from the public purse, so you have Hank Paulsen demanding a quick trillion to bail out Wall Street.  That bill is now up around ten trillion, nobody really knows, while Wall Street continues to steal residential homes by corrupt Court processes from very ordinary Americans.  Some 22 million homes have been literately stolen by Wall Street with forged and "re-created" paperwork, effectively lies (known legally as Fraud upon the Court), all financed by the Federal Government and nobody goes to jail for the crimes.  This concept is known as "privatizing the profits and socializing the losses" and is a game played by politicians all over in America, both the Dems and the Repubs.  So there is a lot of blame to go around. 

The old Republicans genuinely hope for a societal collapse from their "starve the beast" concept.  They want that because then, so the idea goes, their wealth position will be cemented, and the population will be so starved that they will sullenly accept economic penury in exchange for enough food to stay alive. There is merit in that idea.  It effectively re-creates medieval feudalism, with the landed class, now including Wall Street and the stolen houses, in charge and everyone else a serf working effectively as a plantation slave.  This is classic Depression Economics:  economic depressions can be very pleasant for the landed class, as you can have cooks, and valets, and groundkeepers, and chauffeurs, and all the servants you want, a bit like Downton Abbey with its Edwardian Estate as played out on the British Masterpiece Theatre, and shown to the Americans on PBS. Those workers are cheap, you pay them effectively room and board and a little cigarette money.  They work for you because there is no alternative.

What Republicans forget is that this approach will result in a violent outburst, and you saw that in Colombia, where the idea was promoted that the "rebels" were country criminals involved in the drug trade; in reality, the gangs were the result of economic class warfare, with the oppressed going after their oppressors, typically by kidnapping and demands for large ransoms, and also the violent takings of land and plantation stores. In America, there are so many guns around that some analogous uprising will likely occur, and the rich will see their estates invaded and their families murdered.  These are very unpleasant prospects, yet I view them as inevitable.  In my view, house purchases in Eastern Long Island, an area known as the Hamptons, is a loser.  Those estates will suffer home invasions, lootings, arsons, and murders in the coming unrest. There are simply not enough policemen to keep the lid on.  The Chinese see the same possibility and have invested in facial-recognition software and obligatory papers, the hated "Passbook" system that led to violent overthrow in South Africa, which the Chinese actually think they can nip in the bud with their Gulag prison system  (as does the USA with their own Gulag prison system, although that is in the main designed to imprison black males, and will be unable to cope with the violence of whites in class warfare, but I digress). 

The financial turmoil from the tax cuts will wreck the US economy, simply because at some point, assuming interest rates ever rise, the interest on the debt becomes unpayable at current Federal revenue rates.  The old-line Republicans with their starve-the-beast ideas actually think that, at that point, the entitlement programs will be abolished.  That is political orthodoxy, but it ignores reality.  If the entitlements disappear, then what they now support, the millions of the impoverished living paycheck to paycheck, will massively default on their debts, and the social mechanism that valves that debt off, the bankruptcy courts, cannot handle that load.  Violence will ensue. The last time the USA had that scene was in the riots following Rodney King, and at one point at least 50 cities were ablaze. As the poorer populations expand rapidly, and society has become more extreme in the distribution of wealth, the violence will be uncontrollable.   You can hand out MRAPs and armored vehicles to police departments like so much candy, it is not going to do anything to stem what comes. 

You can only get a handle on the Federal Debt (and deficit) by massive restructuring.  One aspect of that would be the discharge of vast numbers of Federal Bureaucrats, those people who commute into and out of Washington each day in droves of millions, and spend their time holding meetings and accomplishing effectively nothing. For example, "Homeland Security" has some 165,000 employees and arguably accomplishes nothing, other than to dream up airport patting of Xerox salesmen and gawking at the genitalia of passengers with those fully-body x-ray scanning machines, that so graphically reveal dangling testicles, penis length and girth, and women's breasts.  And again, they design these machines to titillate, not to improve aircraft security, all that is a colossal gong show.  No thinking person today takes the Federal Government bureaucrats seriously. 

Politicians of both parties are aghast at the idea of firing even one Federal employee, as they are the single most vocal voting bloc and have the largest voter turnout of all groups, and large numbers live in Virginia.  Virginia is a critical "swing State" in Presidential elections, and is a "purple" State, can be swung either way, so nobody gets fired.  But you do need to discharge that million bureaucrats because the consume vast salaries, but also do a lot of damage by dreaming up ever more crazy Regulations, which end up codified into law at the books of "Consolidated Federal Regulations," known as the "CFR."  If you are not attuned to this, or run against it in your work, I can assure you that you have no concept, zero, of just how bad and how totally ridiculous those Regulations are and have accumulated, as each succeeding generation of bureaucrats add to the stock of ever increasing CFR's. 

Trump purists have the idea that he, and only he, would have the big brass balls to actually do it, to go fire a million bureaucrats, but unfortunately he has also become obsessed with the Washington siren song of re-election, and has succumbed to the political reality that he needs that voting bloc and the electoral votes of Virginia to gain re-election - so he will not.  And if Trump is not the man to do it, then in my view it cannot be done, ever. Playing at "President" is totally seductive, you have 400 men as your Praetorian Guard, your fleet of aircraft that would make a Sheik or Sultan blush, your limousines, your grand State Dinners and meeting the Queen (and your family having dinner with her, and Princes and Presidents), you ability to go order the entire world around,  and Trump is not a Ralph Naderite figure of asceticism, so Trump, that lover of granite marble tops and gaudy curtains and bathroom fixtures and hanging with Epstein figures, also will not do the firing.  Conclusion: it is not going to happen. 

Moving on to the issue of the military:  let's remember that, at the onset of WWII, the US Navy was a "small boat Navy."  Yes, it had some battleships from WWI and the inter-war years, which mostly got sunk at Pearl Harbor, but mostly it was stuff the size of corvettes and frigates.  The USA has these two very wide oceans that separate it from the world, and aside from Russian submarines there is really nothing out there to do serious damage. Notwithstanding, Newport News Shipyard has these contracts to just keep building this vast fleet of very expensive aircraft carriers, each of which costs around $13 billion, and needs some 5,000-man crew to keep operational. What do you get for that?  You get the ability to project power on the world stage - but you need none of that for actual coastal defense, let's get real here. And it is the same story with the other very expensive military hardware.  Can you scrap it all, demobilize that huge army, and go hunker down behind the borders?  Well, you don't need an army for the Canada border, and you need very little for the Mexico border, so the answer is Yes.  Armies are expensive because you incorporate all these future obligations, health-care and retirement pensions as well as the hardware costs.  So it can be dispensed with, but that requires a change of mindset. 

The current mess of expanding deficits and debt is largely the result of one man:  Dick Cheney.  But that paranoid wreck is long gone, so forget about him, and start to unwind the huge net he has cast, fire the bureaucrats, fire the military contractors, get rid of it all, and start fresh.  I actually thought Trump could pull it off.  Nope, he too has succumbed to the siren song.  Oh, well. 

 

Edited August 15, 2019 by Jan van Eck

[ronwagn + 6,290]

1 hour ago, Jan van Eck said:

Well, let's remember the "Grand Republican Battle Plan" as envisaged two decades ago.  It was to "starve the Beast," meaning Washington and the US Congress spending, by continuing to pass tax cuts until the Fed ran out of money.  Then Republicans would refuse to raise the debt ceiling and finally Washington would be "starved" of cash and forced to cut, cut, cut.   The Republicans of yesteryear literally had wet dreams over that concept. 

The reality turns out to be less pleasant.  The Republicans were fast on the draw to pass the tax cuts, which they did with abandon, and to lie to themselves and to the People that it was for the benefit of Mr. and Mrs. Workingman, when in fact they were designed to cut the taxes levied on "the rich," or the one-percenters  (their own crowd).  That by itself is not surprising; cliques or groups in Washington have historically designed legislation to primarily benefit their group.  Your referenced Washington Examiner article relates how Republicans passed Medicare Part D  (the prescription drug benefit, effectively free medications for old people), which actually happened specifically because George (W) Bush '43 needed to capture the Florida vote for re-election, and Florida is crammed full of old wrecks waiting their turn to die.  By handing those voters the promise of free stuff  (the drugs), he captured their votes.  Traditionalist Republicans are and were aghast at this unorthodoxy, it was a straight Democrat-Playbook move, but George saw the potential and really needed that Florida vote, so in it went. 

And you get this out of Washington politicians.  Presidents typically have a difficult time attracting and keeping talent in the Administration (and particularly the Cabinet and the White House), so the people that do arrive tend to be morally corrupt, or at least dubious.  You might remember the scene with Bill Clinton out on some golf course walking along with Tiger Woods, the two chuckling over their private tales.  When asked later what they were laughing about, Clinton replied:  "Pussy."  So here you have these guys whose lives in large part fixated on their genitalia talking about the women they have had their one-night stands with.  You will recall that Hillary Clinton was considerably more tolerant of this behavior than was Elin Nordegren, who flailed on his car with a golf club, denting up the roof, and then kicked him out of the marital bed and divorced him.  But that is classically American, a population obsessed with genitalia. 

When you take these people and make them "advisers,"  you end up with the pigs and bums from Goldman Sachs on Wall Street coming in and leeching from the public purse, so you have Hank Paulsen demanding a quick trillion to bail out Wall Street.  That bill is now up around ten trillion, nobody really knows, while Wall Street continues to steal residential homes by corrupt Court processes from very ordinary Americans.  Some 22 million homes have been literately stolen by Wall Street with forged and "re-created" paperwork, effectively lies (known legally as Fraud upon the Court), all financed by the Federal Government and nobody goes to jail for the crimes.  This concept is known as "privatizing the profits and socializing the losses" and is a game played by politicians all over in America, both the Dems and the Repubs.  So there is a lot of blame to go around. 

The old Republicans genuinely hope for a societal collapse from their "starve the beast" concept.  They want that because then, so the idea goes, their wealth position will be cemented, and the population will be so starved that they will sullenly accept economic penury in exchange for enough food to stay alive. There is merit in that idea.  It effectively re-creates medieval feudalism, with the landed class, now including Wall Street and the stolen houses, in charge and everyone else a serf working effectively as a plantation slave.  This is classic Depression Economics:  economic depressions can be very pleasant for the landed class, as you can have cooks, and valets, and groundkeepers, and chauffeurs, and all the servants you want, a bit like Downton Abbey with its Edwardian Estate as played out on the British Masterpiece Theatre, and shown to the Americans on PBS. Those workers are cheap, you pay them effectively room and board and a little cigarette money.  They work for you because there is no alternative.

What Republicans forget is that this approach will result in a violent outburst, and you saw that in Colombia, where the idea was promoted that the "rebels" were country criminals involved in the drug trade; in reality, the gangs were the result of economic class warfare, with the oppressed going after their oppressors, typically by kidnapping and demands for large ransoms, and also the violent takings of land and plantation stores. In America, there are so many guns around that some analogous uprising will likely occur, and the rich will see their estates invaded and their families murdered.  These are very unpleasant prospects, yet I view them as inevitable.  In my view, house purchases in Eastern Long Island, an area known as the Hamptons, is a loser.  Those estates will suffer home invasions, lootings, arsons, and murders in the coming unrest. There are simply not enough policemen to keep the lid on.  The Chinese see the same possibility and have invested in facial-recognition software and obligatory papers, the hated "Passbook" system that led to violent overthrow in South Africa, which the Chinese actually think they can nip in the bud with their Gulag prison system  (as does the USA with their own Gulag prison system, although that is in the main designed to imprison black males, and will be unable to cope with the violence of whites in class warfare, but I digress). 

The financial turmoil from the tax cuts will wreck the US economy, simply because at some point, assuming interest rates ever rise, the interest on the debt becomes unpayable at current Federal revenue rates.  The old-line Republicans with their starve-the-beast ideas actually think that, at that point, the entitlement programs will be abolished.  That is political orthodoxy, but it ignores reality.  If the entitlements disappear, then what they now support, the millions of the impoverished living paycheck to paycheck, will massively default on their debts, and the social mechanism that valves that debt off, the bankruptcy courts, cannot handle that load.  Violence will ensue. The last time the USA had that scene was in the riots following Rodney King, and at one point at least 50 cities were ablaze. As the poorer populations expand rapidly, and society has become more extreme in the distribution of wealth, the violence will be uncontrollable.   You can hand out MRAPs and armored vehicles to police departments like so much candy, it is not going to do anything to stem what comes. 

You can only get a handle on the Federal Debt (and deficit) by massive restructuring.  One aspect of that would be the discharge of vast numbers of Federal Bureaucrats, those people who commute into and out of Washington each day in droves of millions, and spend their time holding meetings and accomplishing effectively nothing. For example, "Homeland Security" has some 165,000 employees and arguably accomplishes nothing, other than to dream up airport patting of Xerox salesmen and gawking at the genitalia of passengers with those fully-body x-ray scanning machines, that so graphically reveal dangling testicles, penis length and girth, and women's breasts.  And again, they design these machines to titillate, not to improve aircraft security, all that is a colossal gong show.  No thinking person today takes the Federal Government bureaucrats seriously. 

Politicians of both parties are aghast at the idea of firing even one Federal employee, as they are the single most vocal voting bloc and have the largest voter turnout of all groups, and large numbers live in Virginia.  Virginia is a critical "swing State" in Presidential elections, and is a "purple" State, can be swung either way, so nobody gets fired.  But you do need to discharge that million bureaucrats because the consume vast salaries, but also do a lot of damage by dreaming up ever more crazy Regulations, which end up codified into law at the books of "Consolidated Federal Regulations," known as the "CFR."  If you are not attuned to this, or run against it in your work, I can assure you that you have no concept, zero, of just how bad and how totally ridiculous those Regulations are and have accumulated, as each succeeding generation of bureaucrats add to the stock of ever increasing CFR's. 

Trump purists have the idea that he, and only he, would have the big brass balls to actually do it, to go fire a million bureaucrats, but unfortunately he has also become obsessed with the Washington siren song of re-election, and has succumbed to the political reality that he needs that voting bloc and the electoral votes of Virginia to gain re-election - so he will not.  And if Trump is not the man to do it, then in my view it cannot be done, ever. Playing at "President" is totally seductive, you have 400 men as your Praetorian Guard, your fleet of aircraft that would make a Sheik or Sultan blush, your limousines, your grand State Dinners and meeting the Queen (and your family having dinner with her, and Princes and Presidents), you ability to go order the entire world around,  and Trump is not a Ralph Naderite figure of asceticism, so Trump, that lover of granite marble tops and gaudy curtains and bathroom fixtures and hanging with Epstein figures, also will not do the firing.  Conclusion: it is not going to happen. 

Moving on to the issue of the military:  let's remember that, at the onset of WWII, the US Navy was a "small boat Navy."  Yes, it had some battleships from WWI and the inter-war years, which mostly got sunk at Pearl Harbor, but mostly it was stuff the size of corvettes and frigates.  The USA has these two very wide oceans that separate it from the world, and aside from Russian submarines there is really nothing out there to do serious damage. Notwithstanding, Newport News Shipyard has these contracts to just keep building this vast fleet of very expensive aircraft carriers, each of which costs around $13 billion, and needs some 5,000-man crew to keep operational. What do you get for that?  You get the ability to project power on the world stage - but you need none of that for actual coastal defense, let's get real here. And it is the same story with the other very expensive military hardware.  Can you scrap it all, demobilize that huge army, and go hunker down behind the borders?  Well, you don't need an army for the Canada border, and you need very little for the Mexico border, so the answer is Yes.  Armies are expensive because you incorporate all these future obligations, health-care and retirement pensions as well as the hardware costs.  So it can be dispensed with, but that requires a change of mindset. 

The current mess of expanding deficits and debt is largely the result of one man:  Dick Cheney.  But that paranoid wreck is long gone, so forget about him, and start to unwind the huge net he has cast, fire the bureaucrats, fire the military contractors, get rid of it all, and start fresh.  I actually thought Trump could pull it off.  Nope, he too has succumbed to the siren song.  Oh, well. 

 

You cannot expect one man (President Trump) to turn around the mistakes that have involved thousands of bureaucrats and politicians for decades. You certainly know that Jan. I know you do. A second term would certainly give Trump a chance to try to decrease our deficit and build our economy. If he does not get a second term we are probably screwed in the long run. We are at the brink of insolvency. It is because too many Americans, and citizens of other nations think they are entitled to free everything. Socialism is the most dangerous disease in the world, bar none. It is straight from satan. 

Edited August 15, 2019 by ronwagn

[Jan van Eck + 7,558]

13 minutes ago, ronwagn said:

You cannot expect one man (President Trump) to turn around the mistakes that have involved thousands of bureaucrats and politicians for decades. You certainly know that Jan. I know you do.

What I did expect was fresh thinking and decisive action.  Let me give you an example:

Back perhaps two decades ago, New York City  ("NYC") had this ice-skating rink I think it was in Central Park.  Probably still there.  In the winter, it would be artificially frozen up by the use of a set of pipes or tubing in the ground through which some anti-freeze type of fluid was pumped, which was cooled by a freon-type heat exchanger chiller machine set in a shed adjacent.  Water was poured over the top and the water frozen by extracting the heat via the underground piping. 

Now the story goes that the pipes were springing all these leaks.  The City hired these contractors to find and plug the leaks and it was never-ending, it was a maddening and frustrating exercise, and the skating rink was unusable .  So finally Donald Trump offered to fix it for free, and he would have it done in three weeks flat.  That was a bravado claim, and it made a big publicity splash. So NYC said, go for it.

The Donald had his men lay a fresh set of piping, set above ground.  Once it was nice and tight, he poured a fresh concrete layer over it all to seal it in.  Now the water was flushed on top of the concrete, which was made nice and cold by the chiller machinery, and presto!  instant skating rink.  And he did it perfectly in three weeks. 

See, that is the thing about Trump, that the Democrats and other assorted detractors do not understand.  He thinks differently.   He know that those pipes would never get fixed, that it was a hopeless mess of leaks, so he simply disconnected them, buried them in concrete, laid a fresh set, and started over.  Fast, cheap, simple.  He has that ability.  Now, you don't have to like the guy to understand that he has talent.  He has talents that the other do not have. That is what makes him special.  If all you do is focus on his faults, his sleeping with disreputable women, his lack of taste or class in his gaudy buildings, his boorishness with the Queen, whatever you want to go criticize, then you ignore and fail to see that quality of his in looking at the problems with a different eye.  Trump looks at what others have done, he does it differently, he is right and the others are wrong, and he got rich.  Knock it if you like, but in the end, he was right. 

If you take that skill set and put it in Washington, and if - big if - he can manage his people and can not be seduced by "the bubble," being in the White House with that army of retainers and secret service men and all the rest of the entourage, then yes, he was the man to pull the plug on the bureaucracy, to cancel the grotesque military contracts, to put Lockheed out of business, to close down Martin Marietta and all the rest of the corporate welfare bums - but he failed.  He got seduced, same as George Bush. 

Could I have done it, if I were President?  Of course I could. For starters, I would refuse to live in that white House, I would go buy or rent a place in town, I would commute to work on the bus same as anybody else, and I would stay humble.  That way I can and could fire everyone.  And that is what I would have done.  I would have scrapped most of official Washington.  Unless you can do that, you accomplish nothing.  Could Ralph Nader have pulled it off?  Possibly.  Warren Buffett?  Possibly.  The Donald?  For sure, he could have - but he got seduced by the Dark Side of the Force.  Hey, it happens.  Air Force One is very seductive. 

If the Democrats run anybody plausible, even the town Clerk of Hackensack, New Jersey, they will take the next election.  But the Democrats will, once again, screw it up, because they now live in this alternate universe that only radicals understand. Trump will get a second term, and again he will fail. He will continue to expand the deficit, and thus the total debt.  Eventually it caves in, and will be dealt with by inflation of the currency.  Will that hurt?  But of course.  Such is life.  Understand this clearly:  you will be a lot poorer in times to come, and so will everybody else. 

[Zhong Lu + 845]

Trump's not the person for fiscal responsibility.  You know that, I know that, we all know that.  

That the deficit is booming under Trump and the Republicans is no surprise.  Personally I wish Trump would get a heart attack and have Pence be president.  If there's one dude in the Republican party who might be able to shrink the government and reduce deficits it's Pence.  

Edited August 15, 2019 by Zhong Lu

[Zhong Lu + 845]

There's also the minor point that as things get more and more automated, the only solution is "socialism" or some sort of universal basic income.  

The average person isn't smart enough to compete with the AI that we will have in the future.  How else are you going to keep society from exploding if there isn't some form of wealth distribution from the top (the ones who control the AI) to everyone else? 

[Enthalpic + 1,496]

1 hour ago, Jan van Eck said:

So finally Donald Trump offered to fix it for free, and he would have it done in three weeks flat.  That was a bravado claim, and it made a big publicity splash. So NYC said, go for it.

The Donald had his men lay a fresh set of piping, set above ground.  Once it was nice and tight, he poured a fresh concrete layer over it all to seal it in.  Now the water was flushed on top of the concrete, which was made nice and cold by the chiller machinery, and presto!  instant skating rink.  And he did it perfectly in three weeks. 

See, that is the thing about Trump, that the Democrats and other assorted detractors do not understand.  He thinks differently.   He know that those pipes would never get fixed, that it was a hopeless mess of leaks, so he simply disconnected them, buried them in concrete, laid a fresh set, and started over. 

I highly doubt trump had much of anything to do with that construction planning.  His role was almost certainly just PR and dealing with city counsel (perhaps ethically and non-ethically, I'll fix this if you approve that).  

Pipes in concrete is standard indoor hockey rink design... not visionary.

[Jan van Eck + 7,558]

14 minutes ago, Enthalpic said:

His role was almost certainly just PR and dealing with city counsel (perhaps ethically and non-ethically, I'll fix this if you approve that). 

I do hope you realize you are being a real jackass to opine that from the comforts of Alberta.  You have precisely Nothing to base that claim on. Just because you intensely dislike someone you have never met, does not grant you the privilege of making denigrating remarks on a forum just so you can feel better about it.  You are an educated Canadian; you know better.  And I expect better of you. 

[Enthalpic + 1,496]

25 minutes ago, Jan van Eck said:

I do hope you realize you are being a real jackass to opine that from the comforts of Alberta.  You have precisely Nothing to base that claim on. Just because you intensely dislike someone you have never met, does not grant you the privilege of making denigrating remarks on a forum just so you can feel better about it.  You are an educated Canadian; you know better.  And I expect better of you. 

Those are often standard agreements and I added a "perhaps."  It was clearly speculation not slander, chill.

Trump gets so much unnecessary praise I care not if it offends you are anyone else if I balance it out a tiny bit.

 

 

 

Edited August 15, 2019 by Enthalpic