economics

Another Country Abandons the Dollar

Argentina is no longer buying foreign goods using US Petrodollars. They will be using the Chinese reminabi. The US Dollar is losing its position as the world’s reserve currency. The US economy is built on the Dollar being the world’s reserve currency. Our way of life, our nation, is in very serious trouble.

It is time to get rid of dollar denominated assets. Buy physical things.

  • Real estate.
  • Metals.
  • Guns
  • Ammo, food, consumables.

When the dollar falls, its purchasing power will disappear. Stocks, bonds, and bank accounts will become worthless.

By Divemedic, ago

Insurance

News for homeowners in Florida who wish to have insurance is rough. Insurance companies can’t do business in Florida, mostly because of the high cost of hurricane damage. The average Florida homeowner is paying $4,231 for their property insurance: nearly triple the national rate of $1,544. Homeowners in Florida pay the highest rates of any state in the US. Those rates are set to increase in June by an estimated 40%, on average.

The state of Florida has a taxpayer funded insurance system for those who cannot obtain homeowners’ insurance from a private carrier. This carrier is called Citizens’ Insurance. One in five Florida homes is insured by that fund, and that number will continue to climb as insurers leave the state. Things can’t continue on this path.

Insurance is nothing but a dilution of risk. That is, the risk of damage to homes is spread out among all of the people who have insurance policies, and the premiums of everyone are used to pay the damages of those who have losses. The problem with diluting risk in Florida is that oceanfront homes are worth 50 to 100 times as much as homes located further inland. For every insured oceanfront home that is lost, the premiums of as many as 150 inland homes are used paying for the damages. Pick any coastal city in Florida and look at the home costs. A single family home on the oceanfront that sells for less than $1,000 per square foot is a steal. In Miami, single family oceanfront homes START at $20 million each.

Couple that with the fact that the vast majority of hurricane damage is within two miles of the coast. Insurance companies can’t charge $100,000 a year for insurance premiums, so they spread that cost amongst every homeowner in Florida. This can’t continue because it is mathematically impossible for the situation to stay as it is. Currently, I pay 1.5% of the value of my house each year to insure it.

If the state of Florida wants to fix the insurance problem in the state, they need to divorce the risk pool of oceanfront homeowners from the rest of the state’s homeowners. If you want to build and live in a $10 million home on the beach, fine. But make your insurance premiums 5% of the home’s value, but stop raising my insurance to cover for your house.

By Divemedic, ago

Shell Game

California is going to a fixed rate electrical billing system where electric rates are set by the household’s income level.

  • Households earning less than $28,000 a year would pay a fixed charge of $15 a month on their electric bills in Edison and PG&E territories and $24 a month in SDG&E territory.
  • Households with annual income from $28,000 – $69,000 would pay $20 a month in Edison territory, $34 a month in SDG&E territory and $30 a month in PG&E territory.
  • Households earning from $69,000 – $180,000 would pay $51 a month in Edison and PG&E territories and $73 a month in SDG&E territory.
  • Those with incomes above $180,000 would pay $85 a month in Edison territory, $128 a month in SDG&E territory and $92 a month in PG&E territory.

Setting aside the entire “make more/pay more” thing, this is really dumb. People will be paying between $15 and $128 per month for electricity, no matter how much they consume? Yep, that is EXACTLY what they are proposing.

Under the SDG&E plan, customers would pay a fixed price that covers most of the utility’s energy delivery service that would not change month-to-month regardless of how much electricity is consumed.  

I said to myself that there had to be a catch. It turns out that there is. This pricing scheme only covers the part of your electric bill that is sold via SDG&E.

 This portion of a customer’s bill, which is mostly related to the electricity purchased from natural gas, wind and solar plants, will continue to vary based on electricity usage. In San Diego County, nearly 85% of customers have their electricity purchased by local governments known as community choice aggregators or other entities – not SDG&E.

OK. This is just another grift, with the intention of redistributing money from one class to another, using socialism as cover.

By Divemedic, ago

CA Price Controls

California will be enacting price controls on gasoline within the next 4 months, with the expressed purpose of eliminating gas and oil from the state.

As I predicted this moths ago, communists always start by going after landlords before enacting price controls elsewhere. Price controls always fail. California is headed for disaster. If you are an oil company, there is only one way to beat this, but I don’t think that they have the balls to do it. The stated goal is to put the oil companies out of business, so Californians will switch to wind power. OK. Let’s do it:

This important legislation should be part of an all-out push to move the state to clean, renewable energy and off oil and gas

Stop selling all gasoline in the state immediately. Within 72 hours, there won’t be a cop car, city bus, fire truck, or National Guard vehicle moving in that state. No more food deliveries. No more goods moving anywhere in California. Give them what they want. Now they are dependent on wind and solar.

The law will be gone in less than a week.

But the oil companies won’t do it, and will participate in their own destruction.

By Divemedic, ago

Biden’s War on Banks

So the Biden administration has just guaranteed all depositors of the SVB bank. Now that he has taken this step, this has effectively nationalized all of the deposits of all banks in the country. Now banks are free to take all of the risks that they want, because they aren’t risking their own, or even their depositors’ money. It’s more free money from Uncle Sugar’s printing press.

The thing is, those who owned stock in the bank are getting screwed out of their money. The bank has declared bankruptcy, and anyone who owned stock in the bank can’t even sell it. In fact, those who were selling the bank short have also lost all of their money. The billionaire depositors are being bailed out, but the bank’s stockholders are not.

The government has removed risk from the banking sector, now it doesn’t matter if you are a good bank manager or not, you are gonna get paid by the taxpayers. There are those calling this a failure of capitalism, but they are wrong. In a free market system, well run businesses are rewarded, poorly run businesses fail. That is how the market stays healthy- the poorly run businesses are eliminated.

Not so in our system. In this system, poorly run businesses that are favored by government are continually bailed out, thus avoiding all consequences of their poor decision making. This is the government picking winners and losers. So let’s look ahead and see the consequences:

Stocks in small banks just became a whole lot riskier, while keeping huge balances in them are now without risk. Banks will have gigantic pools of money that they are now able to use to make risky loans and investments. If the risks don’t pan out, the depositors will be made whole, and the stockholders left holding the bag. A larger bank will then buy out those risky investments for pennies on the dollar. It’s a system begging for abuse and fraud. The ultimate consequence is the destruction of small banks, concentrating all banking in the realm of banks that the government has deemed “too big to fail.”

I wonder who paid one of the Biden clan to make this happen, and how much did it cost?

By Divemedic, ago