Saturday, January 19, 2013
Our New God = Gold
http://articles.economictimes.indiatimes.com/2013-01-16/news/36374211_1_jewellery-demand-tonnes-philip-klapwijk
This was an interesting link posted in the American Institute for Steel Construction group on LinkedIn, considering that it lauds or gives a rosy forecast for a luxury metal in a forum that should be dedicated, if not to the promotion of, at least to the improved usage of a much baser yet far more essential metal (which, if I'm not mistaken, is far better, esp. in concert w/ other materials, at sheltering us from the elements).
But I digress from my main point about gold and the world. The writer of the article seems confident economic troubles will continue to push gold higher despite it being at a 12-year high. I will agree with them that it may go higher in the first half of the year, but at least starting sometime in spring I begin to be skeptical how high gold can go, esp. in view of its mechanics surrounding times of turmoil.
A few years back I began to wonder how the plenteous gold hawkers on the radio could be wrong & came up w/ a scenario: if things get extremely bad (apocalyptic conditions usu. used as justification for gold hoarding) most people will be struggling to get food & keep roofs over their heads. In such a case, the vast majority will be trying to sell any gold they have while few are buying. In a case where the need to pay bills, &c. suddenly drops the demand curve & pushes the supply curve dramatically higher, the price drops precipitously (or at least severely).
This was actually seen in 2008, when gold's price dropped from $990 on 17 Mar. to $700 on 12 Nov.: (price of gold = GLD x $10/oz)
(Try the following MSN Money link to verify this info: http://investing.money.msn.com/investments/etf-charts/?symbol=US%3aGLD&Intraday=1&)
Given this background, I also believe there are too many indicators in the world pointing toward a severe enough 2nd dip in this global recession to precipitate another round of financial problems which will force people to sell gold at a loss, most likely sometime in early 2014 (particularly since too many seem to think the mutual can-kicking in DC is accomplishing something significant toward a resolution to the recession).
Thursday, May 31, 2012
Prayer for Our Nation
I am concerned that by having elected a liberal, anti-conservative secularist African American president in the midst of a recession where 70% of layoffs were of men & many government funds go toward retraining minorities for work & toward giving government contracts to minority-owned businesses, we will encourage bitterness & racism among unemployed white men if we leave things as they stand. While I believe the political & media & educational systems will not allow election of a conservative minority to the highest office, they cannot stop God from saving a liberal minority already holding office. Therefore I propose that we pray for God to redeem Barack Hussein Obama. Moreover I think perhaps we should also pray for Him to instill remorse in our entire populace for the 50 million we have murdered. Though we desire economic recovery, I don't believe He'll give it to us until we repent of this & our other sins (chief among them seeking to enthrone ourselves above Him) & return to Him. I desire something of eternal value in lieu of temporary economic recovery: that He redeem our nation.
Saturday, September 10, 2011
Frying Pan Pouring into the Fire
Today's Repugnant describes the Chinese brain drain -- or rather drainage of the upper class -- to America, Canada, & Australia: Top of Chinese wealthy's wish list? To leave China
Let me get one incidental out of the way: if we had our act together (like we once did), we would be the only destination for these elites & Canada & Australia wouldn't even place.
Now for the more important stuff: firstly, despite that last point, we can have some reason to expect recovery as these wealthy Chinese bring their money and more importantly their skills and their drive as well as that of their children to succeed to America's shores to counterbalance the slacker culture that has overtaken America since the hippy days. (I mean the mentality that views the school years all through college as goof-off time & then seeks more goof-off time after retirement.) But another point that might be easily overlooked in the article is that these people are trying to get a better education for their children & a better health-care system. They obviously don't know enough about America -- they don't see that our educational system is far worse than theirs & we're aspiring to make our health-care system just as bad as theirs. Hopefully they don't catch on too soon. If enough of them come here & tell us why a socialized medical system is evil & how our educational system is bad like theirs -- essentially how we already have a socialist society, to wake us up to the fact that we buried our Constitution long ago & have fully embraced socialism, humanism, & antiChristianism/atheism -- perhaps we have a chance to make a U-turn. Of course that depends more on God than on these successful Chinese, so keep praying.
Another article (same section, same page) misses the current trend in China by focusing on the current state of things (much like people who looked at the US economy in '06 or '00 & saw things continuing upward infinitely): Heavy equipment tycoon tops China rich list
The article belabors a superficial appraisal of the redlining Chinese construction industry by showing this one company's booming profits as a result while conveniently ignoring all the empty new housing in China.
James Chanos, President of Kynikos Associates (who predicted Enron's demise), last year foresaw China's construction of a real estate bubble similar to the one in the US (which was also built through a command economy via Fraudy Mae & Clinton's strengthening of Carter's Community Reinvestment Act method of arm-twisting banks into making the stupid investments for which Obama's now scolding them while simultaneously blaming them for slowing the recovery by refusing to resume making those same stupid investments). Because their bubble hasn't burst yet -- i.e., their economy seems now just as sound as ours did to myopic analysis in '06 & '00, he's being called Chicken Little. Yet the above discussion of the Chinese elites emigrating to America, Canada, & Australia makes it very clear that the Chinese government is wasting tax dollars building new housing for those who are moving here & elsewhere. They must draw those revenues from their growing middle class by overtaxing them, which just further encourages them to move here to protect their money -- worsening the bubble. Plus the construction-related jobs in China will disappear when the government runs out of people to tax; however, they may be able to prop up the bubble with government debt, which will soon appear a safe haven for investors who don't trust US Treasurys or the German bund & see gold as overbought. So the Chinese bubble may remain inflated for a decade or two, depending on global perception of Chinese government bonds. The outcome may also depend on how global investors view UAE debt & Singapore debt relative to Chinese debt and gold. The ultimate wild card is the strength of the IMF, World Bank, G7, WTO, & similar international financial institutions, which may eventually call for a multilateral spreading of the pain (or in other terms, a rescue of irresponsible national economies by the more responsible ones, similar to the various bailouts which have plagued American history since the '80s).
Let me get one incidental out of the way: if we had our act together (like we once did), we would be the only destination for these elites & Canada & Australia wouldn't even place.
Now for the more important stuff: firstly, despite that last point, we can have some reason to expect recovery as these wealthy Chinese bring their money and more importantly their skills and their drive as well as that of their children to succeed to America's shores to counterbalance the slacker culture that has overtaken America since the hippy days. (I mean the mentality that views the school years all through college as goof-off time & then seeks more goof-off time after retirement.) But another point that might be easily overlooked in the article is that these people are trying to get a better education for their children & a better health-care system. They obviously don't know enough about America -- they don't see that our educational system is far worse than theirs & we're aspiring to make our health-care system just as bad as theirs. Hopefully they don't catch on too soon. If enough of them come here & tell us why a socialized medical system is evil & how our educational system is bad like theirs -- essentially how we already have a socialist society, to wake us up to the fact that we buried our Constitution long ago & have fully embraced socialism, humanism, & antiChristianism/atheism -- perhaps we have a chance to make a U-turn. Of course that depends more on God than on these successful Chinese, so keep praying.
Another article (same section, same page) misses the current trend in China by focusing on the current state of things (much like people who looked at the US economy in '06 or '00 & saw things continuing upward infinitely): Heavy equipment tycoon tops China rich list
The article belabors a superficial appraisal of the redlining Chinese construction industry by showing this one company's booming profits as a result while conveniently ignoring all the empty new housing in China.
James Chanos, President of Kynikos Associates (who predicted Enron's demise), last year foresaw China's construction of a real estate bubble similar to the one in the US (which was also built through a command economy via Fraudy Mae & Clinton's strengthening of Carter's Community Reinvestment Act method of arm-twisting banks into making the stupid investments for which Obama's now scolding them while simultaneously blaming them for slowing the recovery by refusing to resume making those same stupid investments). Because their bubble hasn't burst yet -- i.e., their economy seems now just as sound as ours did to myopic analysis in '06 & '00, he's being called Chicken Little. Yet the above discussion of the Chinese elites emigrating to America, Canada, & Australia makes it very clear that the Chinese government is wasting tax dollars building new housing for those who are moving here & elsewhere. They must draw those revenues from their growing middle class by overtaxing them, which just further encourages them to move here to protect their money -- worsening the bubble. Plus the construction-related jobs in China will disappear when the government runs out of people to tax; however, they may be able to prop up the bubble with government debt, which will soon appear a safe haven for investors who don't trust US Treasurys or the German bund & see gold as overbought. So the Chinese bubble may remain inflated for a decade or two, depending on global perception of Chinese government bonds. The outcome may also depend on how global investors view UAE debt & Singapore debt relative to Chinese debt and gold. The ultimate wild card is the strength of the IMF, World Bank, G7, WTO, & similar international financial institutions, which may eventually call for a multilateral spreading of the pain (or in other terms, a rescue of irresponsible national economies by the more responsible ones, similar to the various bailouts which have plagued American history since the '80s).
Tuesday, August 3, 2010
Tighten Your Belts, Americans
Japan's Lost Decade:
http://en.wikipedia.org/wiki/Lost_Decade_%28Japan%29
Note the 2nd-to-last paragraph of the introduction, stating that 1/3 of Japan's workforce are temporary workers. This is a trend similar to America, where some estimates put freelancers, contractors, & temporary workers at 20% of our workforce (& we've only just begun down Japan's path).
The Wall Street Journal had a telling article on how Japan's government destroyed their booming economy in 1997 by raising the national sales tax (they still haven't recovered from that mistake):
"Japan's Economic Miscues Offer Lessons on Policy"
http://topics.wsj.com/article/SB10001424052748703940904575395550091383166.html?mod=WSJ_comments_MoreIn_Asia
This is relevant to the Democrats in Washington, DC, who think they can continue their spending spree & pay for it w/ higher taxes. I believe that if they succeed in raising taxes on the rich & effectively on others through such measures as forced health insurance coverage, we are in for not merely a double dip, but a deflated decade or more. Strap in & get ready for a bumpy ride.
http://en.wikipedia.org/wiki/Lost_Decade_%28Japan%29
Note the 2nd-to-last paragraph of the introduction, stating that 1/3 of Japan's workforce are temporary workers. This is a trend similar to America, where some estimates put freelancers, contractors, & temporary workers at 20% of our workforce (& we've only just begun down Japan's path).
The Wall Street Journal had a telling article on how Japan's government destroyed their booming economy in 1997 by raising the national sales tax (they still haven't recovered from that mistake):
"Japan's Economic Miscues Offer Lessons on Policy"
http://topics.wsj.com/article/SB10001424052748703940904575395550091383166.html?mod=WSJ_comments_MoreIn_Asia
This is relevant to the Democrats in Washington, DC, who think they can continue their spending spree & pay for it w/ higher taxes. I believe that if they succeed in raising taxes on the rich & effectively on others through such measures as forced health insurance coverage, we are in for not merely a double dip, but a deflated decade or more. Strap in & get ready for a bumpy ride.
Saturday, July 3, 2010
Waiting for Less Suicidal Tendencies
Key phrase in the following Ahead of the Tape (Kelly Evans, WSJ 7.2.10) is "another month of anemic gains":
http://online.wsj.com/article/SB10001424052748704525704575341313711100000.html
(We've had several anemic months of "recovery" after losing 8 million jobs.)
I think private-sector employers are just waiting for the governments (fed, state, & local) to stop plans to spend & tax & regulate them into oblivion before taking the risk of buying new equipment, expanding production capacity, & expanding their human resources. I eagerly await that day, too (having just exited a Census job myself).
http://online.wsj.com/article/SB10001424052748704525704575341313711100000.html
(We've had several anemic months of "recovery" after losing 8 million jobs.)
I think private-sector employers are just waiting for the governments (fed, state, & local) to stop plans to spend & tax & regulate them into oblivion before taking the risk of buying new equipment, expanding production capacity, & expanding their human resources. I eagerly await that day, too (having just exited a Census job myself).
Sunday, August 16, 2009
Red Tape, Red Ink, Red State
http://www.taxfoundation.org/news/show/24980.html
The watermelons & unions continue the reddening of America, following the failed models of the Soviets & China (ironically just as China has smartly moved closer to a free market). By keeping corporate tax rates at the 2nd highest in the world (39% fed+state) while Canada, Czech Rep., Korea, & Sweden lower their corp. tax rates, the fed. gov't opts to kick the economy while it's down. This will certainly drive more businesses into bankruptcy, but that's just so the Dems can take them over anyway (just as planned).
The watermelons & unions continue the reddening of America, following the failed models of the Soviets & China (ironically just as China has smartly moved closer to a free market). By keeping corporate tax rates at the 2nd highest in the world (39% fed+state) while Canada, Czech Rep., Korea, & Sweden lower their corp. tax rates, the fed. gov't opts to kick the economy while it's down. This will certainly drive more businesses into bankruptcy, but that's just so the Dems can take them over anyway (just as planned).
Tuesday, August 11, 2009
Structural Downturns
AP Wire excerpted: http://hosted.ap.org/dynamic/stories/U/US_MELTDOWN_101_JOBLESS_RECOVERY?SITE=WIMAR&SECTION=HOME&TEMPLATE=DEFAULT
My notes will be prefaced by "My notes"
Q: How long does job growth typically lag behind the end of a recession?
A: The lag time has been growing. After almost every recession since 1960, unemployment started to drop only one or two months after the recovery started. But that changed after the recession ending in 1991, after which there was a 15-month lag. After the recession of 2001, the lag was 19 months. This time around, most economists aren't expecting the lag time to be that long, but it will be years before the unemployment rate hits pre-recession levels.
Q: Why is the lag time for job creation getting longer?
A: One big reason is the changing nature of U.S. recessions.
Downturns used to be cyclical, meaning demand dropped for whatever reason, and companies responded by cutting production and laying off workers. When demand picked up, companies simply rehired employees and got back to business.
That's not the case anymore. A 2003 study by the Federal Reserve Bank of New York found that downturns are increasingly "structural," meaning the economy itself changes and jobs disappear for good.
Many U.S. manufacturing jobs lost in 1991, for example, never came back, but instead were shipped overseas. Internet firms disappeared altogether during the recession of 2001. After this recession, millions of jobs will likely disappear in the construction, finance and automaking sectors.
This increases the period needed for new jobs to be created, and for workers to get trained to fill them.
My notes: I don't know what these new jobs are or whether our economy is really equipped to regain the competitiveness we had in the 20th century. When jobs are being outsourced & never brought back on US soil, it shows that we are establishing a regulatory & tax structure that punishes businesses for holding jobs locally. There are costs associated w/ outsourcing, but clearly these are now too often lower than those associated w/ meeting minimum wages, satisfying union requirements, meeting various OSHA & other government regulations associated w/ domestic hiring, etc. I'm not suggesting we undo all these regulations, but it's hypocritical for the gov't to build such a regulatory structure hostile to local hiring & then accuse businesses of being evil for trying to cut costs by hiring overseas. Why can't we reexamine some of the environmental restrictions associated w/ environmental impact statements & LEED certification or temporarily stop raising the minimum wage? Why can't we loosen labor unions' stranglehold on various industries? This is critical: if we don't act soon, China & India will relegate us to 3rd world status & all these well-meaning regulations that are supposed to protect workers will be meaningless when our unemployment skyrockets after we destroy all our industries through overregulation. (We have already destroyed our manufacturing base; must we do the same to the service sector next?)
My notes will be prefaced by "My notes"
Q: How long does job growth typically lag behind the end of a recession?
A: The lag time has been growing. After almost every recession since 1960, unemployment started to drop only one or two months after the recovery started. But that changed after the recession ending in 1991, after which there was a 15-month lag. After the recession of 2001, the lag was 19 months. This time around, most economists aren't expecting the lag time to be that long, but it will be years before the unemployment rate hits pre-recession levels.
Q: Why is the lag time for job creation getting longer?
A: One big reason is the changing nature of U.S. recessions.
Downturns used to be cyclical, meaning demand dropped for whatever reason, and companies responded by cutting production and laying off workers. When demand picked up, companies simply rehired employees and got back to business.
That's not the case anymore. A 2003 study by the Federal Reserve Bank of New York found that downturns are increasingly "structural," meaning the economy itself changes and jobs disappear for good.
Many U.S. manufacturing jobs lost in 1991, for example, never came back, but instead were shipped overseas. Internet firms disappeared altogether during the recession of 2001. After this recession, millions of jobs will likely disappear in the construction, finance and automaking sectors.
This increases the period needed for new jobs to be created, and for workers to get trained to fill them.
My notes: I don't know what these new jobs are or whether our economy is really equipped to regain the competitiveness we had in the 20th century. When jobs are being outsourced & never brought back on US soil, it shows that we are establishing a regulatory & tax structure that punishes businesses for holding jobs locally. There are costs associated w/ outsourcing, but clearly these are now too often lower than those associated w/ meeting minimum wages, satisfying union requirements, meeting various OSHA & other government regulations associated w/ domestic hiring, etc. I'm not suggesting we undo all these regulations, but it's hypocritical for the gov't to build such a regulatory structure hostile to local hiring & then accuse businesses of being evil for trying to cut costs by hiring overseas. Why can't we reexamine some of the environmental restrictions associated w/ environmental impact statements & LEED certification or temporarily stop raising the minimum wage? Why can't we loosen labor unions' stranglehold on various industries? This is critical: if we don't act soon, China & India will relegate us to 3rd world status & all these well-meaning regulations that are supposed to protect workers will be meaningless when our unemployment skyrockets after we destroy all our industries through overregulation. (We have already destroyed our manufacturing base; must we do the same to the service sector next?)
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