Sunday, January 01, 2017

First post of 2017......a view of an OLD NPR article about the transformation of a country to our most formative competition!

I figure my first real post of the year should have some significance to it.....no, it isn't something of my own creation, but rather a lesson learned by a group of people in a country we think of as Communist....but who are in many ways much more competitive in their capitalist ways than we here....and we can learn from that!

Good point....and here is another "REAL LIFE" story of a country from people who saw this lesson first hand!

Saturday, December 31, 2016

Wealth Creation / Maintinance In the Coming Times (Saving and keeping the value of your savings)

Well....I have written about this in the past, and things have barely changed....but that is (in some senses) a good things.

DEFINING THE PROBLEM:
The world is awash in debt, and I am talking about public as well as private debt.....the old saying is:
"we owe, we owe, so off to work we go...."

Well.....IMHO, the problem is that given the low interest rate environment we have had for the last 8 years or so, we might have "piled-up"more debt than we can actually service (pay for) in more normal times. Normal times...what do I mean by that.....I mean in times when interest rates are more normal!

What do I say this....because debtors need to at the very least pay the interest on their loans......if they could pay off the principle, they would not be in debt after all.

We are currently just coming out of our ZERO interest rate environment......the Federal Reserved has not raised their interbank lending rate to about 0.5%....still crazy low....and the market rates say for 30 year fixed mortgages ave risen from a low of about 3.65% up to around say 4.1%....still not a high rate, but moving closer to what might be more "normal"....say perhaps say 7%. (IMHO)

I am quoting mortgage rates, but the rate that the government pays for its finance is the thing I most fear......because the government needs to pay that debt, and they do so by extracting it from taxpayers. (or from everyone by debasing the currency via inflation....which is a sort of TAX on everyone)

So why does this bother me.....well, because I am a saver.....and as the old saying goes: "You can't extract blood from a stone"....when it comes to paying the debt, the government can't take money from those who don't have it. (As the bank robber once said: "Why do I rob banks, because that is where the money is!"....ditto for government tax collectors)

SO WHAT CAN I DO:
This is something that is difficult to fully appreciate because we are NOT really sure of how the government will "extract" their pound of flesh on savers.....they can do it directly by raising existing taxes......and one would be wise to find the various "incentives" government creates to get around that. (think along the lines of the tax-free growth of a ROTH IRA) But then the government might just throw us all a curve ball and create a NEW tax like a VAT or SALES tax that scrapes money from you whenever you spend or move it!

Worst than that, they might just crank up inflation and strip it from us by just making the value of ALL money less. (so that the dollars they pay back are worth less...easier for them to gather)

CREATE A PRODUCTIVE CAPACITY (Adding Value to the world):
One thing that is for sure.....no one wants to see progress grind to a halt.....we need things, and we want to see progress like cancer cures and higher efficiency cars and homes. No matter how things go regarding government tax collections, they would dare NOT kill the goose that is laying the golden egg....the goose that is producing!

So....as over simplified as this sounds, I suggest we all consider transforming our savings into something with a productive capacity.....think in terms of a marketable business. or skill.....think in terms of income property. Think in terms of production / service capability in the form of a business.

LIQUIDITY.....THE TRICKY BALANCING ACT:
Now if you think my statement above is far too vague, then you will really get turned off by this next point.....given that we don't know how the wealth "scraping" will come to us, nor at what pace, it will be difficult to know exactly where, how and how fast to invest in one thing or another. Investment has a certain "stickiness" to it....it often takes time to grow and generate profit.....and especially if you need to be side-stepping the various taxation schemes that will be creating what might be a less than fully stable investment climate.....and there is ONE thing for sure....business needs to make payroll....to have the cash flow to exist tomorrow......you need to have some level of "margin" or liquidity as things change.....so putting all one's eggs in one basket in one trip might not be the wisest move......being agile....


How this all comes to roost...no one knows. But I believe just sitting on vast sums of savings is NOT a safe place to me....you are an EASY target for a society hell bent on "redistribution of wealth" ....but even those people see the value of their landscaper, their grocer or their snow plowing company. Adding value to the lives of people will always be popular and in need.


Friday, January 15, 2016

"I will pay you tomorrow for a hamburger today".....or how the stock market was juiced up by the central banks!

Very interesting comments about the markets being "juiced up" by FED policy.....and here we are today....what now?

https://www.youtube.com/watch?v=7nuzT3rchPU

Tuesday, January 15, 2013

Decision Time Once Again

So our economy has been on a fairly wild ride since perhaps the year 2000......even earlier when you consider issues in 1987 and even back with the inflation of the '70s.

But in the past decade we lived through two bit bubble collapes.....the .COM bubble, and then the housing bubble.

So what was the big issue in the last bubble.....well, how about a debt that could not be sustained. That debt was in the hands of home buyers and that was then semi-transfered to banks and the government when homes went into the toilet.

But did we mop up that debt and get everything back in balance.....well, not really. In fact, I would say that you can not fix a problem of debt by adding even more debt. So I would say that we have essentially papered it all over for how.

Now what? Well....I think we have been blowing up another bubble....the bubble is now in our currency.....we have printed money like drunken sailors.....and if we are nor on our toes, it will fall on us like a lead balloon!

So now what? What do we savers invest in? Our money gets nothing in the bank, and I fear the money printing will cause inflation! What do we do to escape that?

Well....how about creating some sort of productive capacity....how about owning a business?\
That is what I think the best protection against the loss of savings, the development of a productive capacity....a skill or kind of useful work that people would pay for. We will see money printing taking a toll on the evaluation of our money.....that is, we will see inflation.

With our county is looking for is productive capacity....a skill or job that is in needed and people would barter for. Having a skill will be a good trade for the goods and services of all

Saturday, February 18, 2012

Where do er go from here? (Who will lead us???)

Just a quick post of a recent meeting where US Treasury Secretary Timothy Geithner admits to Representative Paul Ryan that the current proposed budget plan is a sort term plan at best. That sounds fine until you realize that it is really a matter of kicking the can down the road.....that this is NOT leadership. That is is exactly how we got into the mess we did in 2008.....that this is the problem that was laid out for us by Ross Perot and Morrie Taylor back in an election primary in 1996!

At that point I can see why people resisted getting excited about it all....but we have just survived a problem decade, are living with an imploding Europe as I type and have our debt problems staring us square in the kisser.....the TIME IS NOW for action!


Now what? I suggest we deal with out problems and not bury our heads in the sand.

As for what we personally do besides vote for people addressing things.....I suggest diversification of assets and around the world!

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Saturday, October 29, 2011

Another interesting video and some of my thoughts on investing.....

This video talks about a vision of how America pulls out of our current slide....I find Mark Dow to be well thought out and very bright. (I wish I could look so deeply at the big picture as people like Dow do)

Watch the video and then continue down to some thoughts I have on this, and how I am thinking about the future and my own savings capital.



Well, I also believe the USA will continue our slide and continue to lose our importance in the world. This will result in higher prices because of our slipping dollar and our slipping value to the world.

So what to do.....first, it depends on how we pull ourselves out of what I think of as the 'Occupy X Inequality". I think the Occupy Wall Street  simply want to strip the wealth from anyone who has it and give it to anyone who does not. If this is the way the country decides to go, then the obvious answer is to get out of dodge.....not so much flee the country, but make investments elsewhere where things might be sheltered or hidden from the grabbing claws of those doing the "redistribution"....I hate to think like this, but I also think I have done the right thing over my life in saving, and my gains are in no way "ill-gotten".....so like you would expect anyone to do, I want to keep them.

Having said that, I hope the government tries to try another tack....let's try to "grow" our way out of things.....let's make jobs by giving incentives to business in areas we so badly need.....areas we might be able to lead the world in.

So I am thinking I need to convert my savings to some sort of business....what that is, I am not sure.

Energy is something I think we will all see changes to in the future....I am thinking about some sort of wood pellet business. Perhaps dove-tail that will a recycling gig....but I don't want to get too deep into something I have not fully grocked out.

But the concept is the same.....to make money, one needs to take risk, and to add value. The value I see for the future is to create something....and create a business around that which adds value. (here and abroad...)

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Interesting perspective about where the problems lie......

The problems of our economy is an interesting thing to think about. How things have gone bad is not so obvious....the whys anyways. This video describes one opinion.....and then if that is true, this article makes me wonder if we are not in for a world of hurt.




Saturday, October 15, 2011

Simple video describing our debt crisis....

Yes, it is a simplified explanation and it skips over all sorts of details and lots of other inputs....but it is good to simplify at times which might help us consider our own future investment options.



Then there is this video, explaining the debt crisis in Europe.....  :-)



Then there is the video on the Crisis of Credit.....explaining the cycle we have when the credit system fails.


Now what am I doing......where have I been!?!??

Well, I suppose I simply slipped away from my computer and perhaps ended up too attached to things like FACEBOOK.

But, I have never left my life of following the investment world, the economy and the employment scene.

I remain employed by the same company.....well, except for it being acquired by Oracle Corporation.....so honestly, things have changed significantly since they bought us, but for the most part, for the better. We are making money and that was tough for us when we were Sun Microsystems.

My investments have changed a bit too....I added a 2nd Financial Advisor and I have taken some of my money under my own wing. No, no...I am not day trading. No, I simply play in a different arena, and a place I can't find an advisor to play in so I do it to broaden my diversification.

Without using money, let me toss out my investments as they sit today.

Financial Advisor #1:
Holds about 45% of my money
Invests in Bond and Equity funds
  • 70% Bond Funds
  • 20% Equity Funds
  • 10% Cash
Financial Advisor #2:
Hold about 20% of my investments
Invests in three different REITs and Annuity of Equities and Bond funds (started as a 50/50 split and I consider the REITS to be my toe into real estate)

Work 401K Fund: (self directed)
Holds about 20% of my investments
  • 70% in Bond Funds
  • 30% in Equities including maybe 15% in Oracle Stock
My Self-Directed Currency/Commodities Investments:
Holds about 15% of my investments
  • 70% of it are in currencies or CD's in other currencies
  • 30% of it is in Gold
I hold the following currencies (I mostly consider this CA$H)
  • Brazilian Real
  • Swiss Franc
  • Australian Dollar
  • Euro
  • Chinese Yuan
  • US Dollar
I like this level of diversification as I have it spread across investment people, across asset classes, and across products / markets. Right now my Gold is holding it's own because I made a huge gain on a sum I bought at about $800, but I recently about in at about $1720 as I think world economic issues will get less stable and GOLD might be a harbor for safety....but one never knows because it has been on a ride straight up for a long time.


I feel I have been doing well...but I also feel inflation is low. I worry that inflation is really on the rise, and staying still means losing. Also, I think the future of taxes is uncertain.....let me revise and extend that remark, I think it is more certain that I'd like to think....TAXES for people who have ANY money will go up. They have to, because our country is in debt people w/o money can't exactly pay. (makes me feel STUPID for being a saver at times)

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