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!

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...)

Inflation vs Deflation.....how do you tell?

I have been busy with work and not paying too much attention to my finances. But then, I am more of a buy and hold guy than a "trader" anyways.

Well, I poked my head out of the sand today, and noticed that a lot of things were changing. In fact, I thought the market had been going up for a time a few weeks ago....and I was susprised because I just didn't see a reason for it.

But now it seems to be sliding down, and at least doing a sideways dance.

I also noted that there were talks about higher then expected inflation...but I wondered it that was due to rising energy and food prices, or if it was across the board.

Interesting to find this article that seems to be saying that there are a number of things that have actually been going down.....

Why do I ask....well, deflation is a very bad thing, and should we fall into that spiral, we would be cooked.

Our economy is based on spending, and at the very least investing.....we invest in areas looking for a return. If the return is larger just putting the money in our mattress, then that is what happens.

But the economy NEEDS money out there....flowing from place to place.

Without it, it isn't dynamic.

Deflation results in a situation where you make more money just sitting on it....so people do. But this just goes to further contract the supply of money....which cripples the economy.

I wonder if energy prices are being manipulated to keep inflation positive. In fact, perhaps inflated to stunt the growth of trade.....which would tend to create more "home-grown" opportunities everywhere...and less "outsourcing".

The result might be a slowing of capital drain from places like the USA, which is already in a heap of trouble in that regard.

But is it possible that any group can have such control over energy? I think not, but then.....never say never.

Well....I'm not sure what is going on....but at least investment things are going in a direction that makes sense to me....albeit DOWN!

Oh well....I'm still looking for the bottom of the housing market....maybe that would be the time to invest in rental property. (risk, risk, risk.....)

Yikes......here is a pretty negative article......are people catching on to the situation?

I only skimmed this article, and I didn't research any of the facts....but it doesn't take a deep read of it to see he is pretty negative about our countries situation.

Wow....I've seen a lot of negative stuff written lately...yet the stock markets seem to hold firm.

Could it be that money is fleeing all kinds of other investments, and needs a "home"....so stocks are it for now?

I don't think people like the idea of holding cash, so perhaps they move it from one thing to another.....

What to do is a good question......and when to do it is perhaps a better one.

Teaching kids about money.... (how to handle it, and hopefully how to save)

A while ago I wrote a BLOG post describing how my wife Cheryl and I tried to teach our kids the value of saving...and how to put money away for later purchases. (or a rainy day)

The idea was to make them see the value of saving, and the value of interest paid for doing so.....I just had to exagerate the interest so that they would "see" how it works in a short time.....vs over 20 years.

Well, there are plenty of other aspects of handling money that we need to teach our kids....and I remembered that when I read this article that was written to explain just that.

But let me say this about all of that.....I truly believe that money is but a tool. We must not let it rule us.....but we MUST rule it, or at least respect the place it has in our society. (and take responsibility for ourselves)

My dad used to say, "Money doesn't make the world go around, but it sure greases the wheel." I believe that, and it means we at least have to make it a part of our sphere of responsibility. We don't want to worship it, but need to take responsible of it in our lives.

So teaching our kids about it is important if we ever expect them to do the same.

Bottom Line......I'm losing about 5% of my investments already this year!

The bottom line for me so far this year is that I am currently losing 5% of my invesmtment money at this point......and we are less than a month into it!

I'm not even counting the value loss of my house......I have been told that this would be upwards of about 15%...but that isn't really "real" until I sell it. My investments are "real" in that I pay taxes on some of the gains I made last year.....so while I don't have the cash in my hot hands, I will have the check to pay for it soon.

But the big question.....what to do, how to defend.....I'm not sure.

So I suppose this BLOG isn't all that useful.....plenty of warnings and "sky is falling" with little in the way of solutions.

Maybe next time.......

Is The Stock Market Catches Up With The Economy?

I suppose if you look back at my posts for the last year or so, you can see see that I have been a sort of economic pessimist. I have been seeing lots of things from housing sales/prices collapsing, to people going bankrupt and even my brother in-law who is in the middle of a house development struggling to stay afloat.....oil prices upwards of $100 per barrel and even watching gold going through the roof.

I think I even commented that I was surprised that the stock market continued to go up....past 13,000 at one point, and almost not caring about the state of the economy.

Now it looks as though inflation and unemployment is on the rise, and most daming of all, consumer spending for December was DOWN by 0.4%. (apparently only discount stores like Walmart showed an increase)

Well, the last week or so the stock market has been sliding, slowly on some days, and more quickly on others. But will it continue or for some reason rebound? I don't know.....it has been a total mistery to me so far.

Warren Brussee's BLOG (the guy who wrote the book suggesting a "Second Great Depression" would occure in 2007) has started to comment that things are really beginning to notice the downturns....and since much of it is in the various money centers of focus...like banks and mortgage companies....it is all getting proper focus.

So do I believe the current market moves, or not. If I do, what do I do.....putting money into CASH doesn't make sense if you believe that inflation will be the "release" for our economic pressures. If he resulting "escape" is deflation.....cash is the way to go....but deflation would be so very bad for the whole situation and would make our problem a very long term one indeed.

I'm no economist, but I would say that inflation will be the poison pill we take because printing money is well within the governments power and it would "solve" our world debt problem by simply diluting the debt.....of course, it will also mean our very valued dollar would become as valuable as toilet paper........so it might be time to invest in wheelbarrels like the German people needed after WWI....we might need them to pay for bread at the store.

Credit Card Debt problem "pile on" top of Housing Refinance Debt problem.....what next?

Why is it that my person BLOG (Journal) is fairly upbeat, and my personal finance BLOG can be so worried and negative.

Well, there are plenty of troubling signs in the economy....and this is yet another. Credit card debt is mounting as noted in this article.

Apparently as the home refinance crisis clamped down on home mortage refi's, and as house prices fall (making pulling money out impossible) people seem to go to the NEXT well (albeit a high interest source) their credit card! (do you suppose the next stop will be the corner loan-shark?)

This was sort of outlined in Warren Brussee's book about the Depression of 2007.....and then in his BLOG. But while the economy seems to be slowing and sputtering at times, the stock markets seem to stay high.....which makes me think a little about March 2001.....remember the High Tech NASDAQ bubble?

Oh well, there I am being negative again.

What to do, what to do......the ride up over the last year has actually been pretty good......I did go from 70% Stocks/ 30% bonds down to a 50/50 split.....so I did pull-back a little.....but should I pull even further into safer investments? I just don't know.....