January 2010

When we last discussed Great Britain, we talked about how Doctors, making house calls in the employ of the government, would inspect the homes of their patients, and report infractions of the law to their political masters. We also discovered that the British government was placing video cameras in the homes of people that the government considered to be troublesome. I called the country a dictatorship.

A commenter, balkanoldhand, said that calling Britain a dictatorship was incorrect. Semantics. Call it totalitarian, if it makes you feel better. Still, the commenter felt that I was incorrect. I wonder how he would feel if he knew that British subjects were now being tried without a jury, in violation of Article 39 of the Magna Carta, which reads:

“No free man shall be captured, and or imprisoned, or disseised of his freehold, and or of his liberties, or of his free customs, or be outlawed, or exiled, or in any way destroyed, nor will we proceed against him by force or proceed against him by arms, but by the lawful judgment of his peers, and or by the law of the land.”

Thus again proving the point that a nation who’s citizens are deprived of arms inevitably slides into dictatorship. We are watching it happen first hand, and the United States is not far behind.

This sounds alot like the nurses at any of the five nursing homes in my first due.

Well. Chavez tried to give everyone in Venezuela free everything. He ‘Nationalized’ nearly every industry in the country to pay for it, and he instituted price controls on industries and goods that he did not simply confiscate, demanding that prices on various items remain at a certain level. Once the people who produced those items realized that they could make no money at that price point, they quit working. After all, who is going to keep working when you can’t make money selling your labor at the government set price?

Inevitably, this causes shortages and the price controls eventually have to be eased. With inflation approaching 25% even WITH price controls, his economy is in big trouble. To control expenses, he has decided to devalue the currency. This is how that works: He has revalued the Bolivar to equal 4.3 to the dollar for oil. For each dollar of oil he sells, he gets 4.6 Bolivars.

The Bolivar for non-oil products is still set at 2.6 to the dollar. Therefore, he hopes to contain inflation by this split exchange rate, and by putting price controls on products. Violators of these price controls will have their business ‘nationalized,’ and given to their employees.
One of the problems with this is that there is no discernible difference between oil and non-oil Bolivars. So, a person could sell oil Bolivars at 4.3, and buy food at 2.6, making a 165% return on their money. Many people who are in a position to do this will. What this will do is make inflation worse. Turning to the printing press to make more money, so you can hand it out to citizens in a vote and popularity buying scheme will not work.

The US is now $12.3 trillion in debt. Our GNP is $14 trillion, making our debt to GDP ration a whopping 88%. Venezuela, with a GDP of $127.8 billion, and a national debt of $15.8 billion, looks thrifty in comparison with their debt being 12.3% of GDP.

We as a nation will never pay that money back. Tell that to our government, to the Republican AND Democratic parties. Comparing this to Germany in the post WWI era:

The German postwar inflation and hyper-inflation of the 1920s had two fundamental causes: a low savings rate, and bad monetary and fiscal policy. One consequence of World War I was an erosion of incomes, and a dramatically reduced savings rate. But at the same time, at least for a while, Germans were able to sustain their living standard, and run large trade deficits.

They had this luxury because investors from around the globe bought German assets: currency, securities, real estate. British and American investors were gambling on a German recovery. Only in the summer of 1922, did foreigners begin to realize that Germany was unlikely to be able to pay all its debts.

The second driving force of the inflation was the policy of the German government and the German central bank. Both were sensitive to political considerations. Both worried that rising unemployment might destabilize the precarious political order. So they were willing to do anything in fiscal and monetary policy to counteract economic slowdown. The government ran large budget deficits as it tried to keep up employment in the state-owned railroad and postal systems, and also to generate more purchasing power. It kept on looking for new ways to administer repeated fiscal stimuli.

Equally significant, the president of the central bank, an elderly Prussian bureaucrat called Rudolf Havenstein, boasted about his success in getting new printing plants, printing plate manufacturers, and paper factories to meet the enormous demand for new money. He found more and more ingenious ways of stimulating bank lending to large businesses on ever more dubious securities. And he kept on saying that keeping the money presses rolling was a patriotic duty. Of course, today we don’t need printing presses. Now we create dollars using computers. A billion dollars is just a few keystrokes away.

There was, in short, what would now be called a “Havenstein put” — in which the central bank would keep its interest rate at levels sufficiently low so that German business could continue to expand. Sound like the Fed 0% prime rate?

Inflation skyrocketed, the German people suffered. Businesses, unable to keep up with the inflation, went under. Unemployment increased tenfold in five years. This set the stage for the National Socialists to step in.

There are obvious similarities between the conditions in post WWI Germany and the present day United States. Are we setting the stage for a dictatorship here? Only time will tell.

My brother owns a business. He makes a large deposit of the day’s receipts each day. Last Friday, the armored car that comes to pick up the money did not show, because the New Years Eve holiday had them overwhelmed, so he loaded the money into his truck and made the 2 mile trip to the bank himself.

When he got there, the new manager of the bank would not let him load the money in the back door of the bank, but instead made him bring it through the front door, and then raised a fuss about the size of the deposit. He also uses a money counting machine to count the bills, and then bands them, and it also counts and bags the coins. She made him stand there while they recounted the money by machine, and then again by hand, saying that she didn’t trust him or her own machines to have counted correctly. Now understand that he makes a million in deposits a month, so this deposit took a bit of time to count by hand. The previous manager knew him, and always accepted his counts, or at least the counts of her own machines.

The new manager was pretty rude. So, being a smartass, he decided to exact his revenge. He held the $1 bills out of the deposits for the week. Then, on Friday just 15 minutes before the bank was due to close, he walked in with $32,000 in one dollar bills. Unbanded. He demanded a receipt, and then stood there while they counted it. He says he will continue to do that until the manager’s attitude improves or he gets a new manager.

Poor customer service on the bank’s part.

This is the weather forecast for Orlando, Florida, straight from the National Weather Service:

Saturday: A chance of rain showers, snow showers, and sleet before 11am, then a slight chance of rain showers between 11am and 4pm. Mostly cloudy, with a high near 43. Wind chill values as low as 25. North northwest wind between 10 and 15 mph, with gusts as high as 25 mph. Chance of precipitation is 30%. Little or no snow accumulation expected.

Google is playing the censorship game.

They do it again here, for China.

When there is blood in the streets, buy. Thanks for proving that some will collaborate with evil to make a buck.

Maybe it is time to switch to Bing.

It appears like certain people have their panties in a wad because the census is asking people their race, and one of the choices is “Black/African American/Negro.”

“The fact that it’s 2010 and they’re still putting ‘negro,’ I am a little offended,” said Secaucus resident Dawud Ingram.

Question #9 on the this year’s census asks about your race. One of the boxes you can choose is “black,” “African American,” or “negro,” all placed next to the same box. Ingram said it’s not a word he uses to identify neither himself nor anybody else.

“African Americans haven’t been going by the term ‘negro’ for decades now. It’s really confusing,” he said.

I bet the United Negro College Fund would be surprised to hear that. Of course, we could follow the example of rappers, and change the question to reflect today’s vernacular. What they call each other would get me labeled a racist, however, and would certainly result in howls of indignation.

I think the real issue here is that no matter how the issue is dealt with, even if race is ignored, someone, somewhere will find a reason to be offended. As I have noted in the past, “those who look for a reason to be offended will have no trouble finding one.”

Now if you will excuse me, I think I will grab my reading glasses and try to find the clause in the Constitution that protects your right to not be offended.

Linoge posts a story about the way dealers sell cars, and it reminds me…

About 7 years ago, I bought a Nissan truck from Universal Nissan in Orlando. After the deal was done, imagine my surprise that they tacked on a $400 “dealer prep” fee. I objected, and they told me that “everyone pays this. I work here, and even I have to pay this.”

I told him, “That’s your problem. I am not paying this.”

He got the manager, and the manager asked me if I was the sort of man who would let $400 ruin a good deal. I responded, “No, you are. We negotiated a price, and slapping extra charges on there after we agreed on a price is dishonest.”

He responded by telling me that the reason the fee is preprinted on the forms is that everyone must pay them, because this is what paid the dealer to get the car ready for sale, you know, inspecting, washing, etcetera. I told the manager that as far as I was concerned, that was a part of the cost of doing business, and that those costs should be factored into the deal.

We finally came to an agreement whereupon I agreed to pay the fee in exchange for them taking another $600 off of the price of the vehicle. Even though I paid $200 less this way than if they had just waived the fee, I just know that I somehow got screwed on the deal.

Everything that car dealers do is shady and dishonest, from sign and drive scams, to $200 floor mats, to the hidden fees and charges- all car dealers want to do is rip you off. Even the so-called “no haggle” dealers do it- just in their case, the deal is “take it or leave it.” Universal Nissan is not unique- nearly every dealer does this.

I, for one, am not sorry to see them in financial trouble. Why can’t people just do honest business at an honest price?

The Wall Street Journal reports that bankruptcy filings are up 32% from 2008.

Mr. Mann (a law Professor at Columbia University) said he believes bankruptcies reached their peak sometime last year, but bankruptcy attorneys from across the country said there was no sign that business was slowing. The 113,274 filings in December alone were a third higher than the same month a year earlier.

As I reported before, we have been hearing that we are in a recovery phase for over a year now, but the news just keeps getting worse. The unemployment figures for December will be released this friday, I believe. Will those figures show an increase in the ranks of the nearly 15.5 million unemployed?

My favorite attempt at spin is this story. The math is intended to confuse you, so let me see if we can work it out:

Retail sales rose 3.6% from Nov. 1 through Dec. 24, compared with a 2.3% drop in the same period a year ago, according to figures from SpendingPulse, which tracks all forms of payments, including cash. Adjusting for an extra shopping day between Thanksgiving and Christmas, the number was closer to a 1% gain. Last year, the economy was in “critical condition,” said Michael Macnamara, vice president at MasterCard Advisors’ SpendingPulse. “This year, it’s in stable condition.”

So lets start by setting sales in the Christmas season of 2007 as “normal,” or $1000. Now 2009 saw a 2.3% drop, meaning sales dropped during that period to $977. Now adjusting sales figures to account for the fact that the 2009 season has one fewer shopping day increases our sales by 1% to 987. That figure is still 1.3% lower that 2007. In fact, if those figures are adjusted for the inflation we saw in 2008, the sales figure would be closer to $946.

In other words, the increase in sales over the normal of two years ago is less than the rate of inflation. Sales figures for this Christmas season are more than 5% lower than pre-financial crisis levels. I am tired of being told that things are better, I am tired of being lied to. When all of this started, I listened to the talking heads who told me to keep my money invested where it was and take the “long view.” They said the smart thing to do was wait it out, and that we would improve.

I lost over half of my life savings. My home value dropped to less than half of what I owed on it. My mother has had to come out of retirement, as the nest egg she built with my late father becomes depleted. I am sitting on my money. I am buying the one thing that has not lost real buying power- gold and silver. I am getting rid of this boat anchor of a house. I will buy another at half price, and hope for the best.

Above all, I am no longer listening to the supposed experts that got us all into this mess in the first place.