Ross Perot is back with his charts...updated for the 21st century problems

Ross Perot is back again.....and I think he is sorely missed. (once again with charts in hand....errr, on a website I guess)

Yes, I worked for his effort back in 1992....and I voted for him twice.....and he sure did focus though on the right issues......thought I thought he was a bit of a hipocrite. (he touted UWSA as a bottoms up organization, when it clearly was not...but I digress)

But even with this, Perot was the perfect canary in the coal mine....he brought problems to light when others had trouble beinging them down to size enough for people to grasp.

His simple explanations were perfect....and they are again!

BTW: Perot was right....there is a "Great Sucking sound"...but not from Mexico.

So he has on sort of a come-back tour.....no, not running for president....but trying to get the word out (apparently) in order to drive the presidential debate.

Good for him...and good for his charts.

Check them out at http://perotcharts.com/

Here is an article that describes the content and purpose of Perot's website.

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.....)

Is the Future INFLATION OR DEFLATION?: Here is a vote for Deflation.....not what I wanted to hear

Check out this BLOG that seems to be describing a future of Deflation......not a pretty sight.


I will have to study what they are saying because quite frankly, it is all going over my head right now.....but if we are going to suffer deflation, it would be critical to know NOW! (save, save, save....cash is king)

Great Money Discussions In The Least Expected Places

This afternoon I had to bring my van to get inspected and I brought it to a local mechanic that my family has been using here in Hudson since 1993. (When he opened)

He is a good mechanic, and honest guy, and I have had some good conversations with him in the past. (He used to be a Volvo Mechanic but opened his own shop...and I had a Volvo back then, but I now bring him anything from Jeeps to Honda Civics...but I digress)

So tonight when he sat down with me to get the inspection paperwork squared away, we started talking about the economy and I was surprised at all the ground we covered. Not that I didn't think he knew as much as he does, but in the more than 13 years I have known him, we have never talked about politics or money.

He is apparently a fairly liberal fellow, and I a conservative...and we actually agree on quite a few things. (which doesn't surprise me since some of my other liberal friends also have violent agreements with me too.)

Anyways, we started off by talking about some of our friends who were unemployed....the state of the economy, outsourcing, the housing bubble, the stock market melt-down in 2001, the current negative savings rate, medical outsourcing to India (which he had not heard of, but could see coming once I mentioned it).....

I admit to often being a "glass half-empty" person.....the Engineer in me is always looking for possible failure modes and looking for all possible recovery scenarios. He seems like a glass half-full guy, but he wasn't too positive about the trajectory our country is taking. (in his words, ever since Reagan)

Well, it is funny he picks that time-frame for his start of our countries woes, because it was about that time that our national savings rate began to take a nose dive from about 8%-10% to the current negative 1% savings rate. (he picked the date before I told him this statistic)

Anyways.....we sort of agreed that things would probably continue in the manner that they currently are.....in my words, like a frog sitting in a pan of water on the stove set at low...the water is getting so hot so slowly that the frog does not even notice that he is soon going to be dead from boiling water....the change is so slow he never sees it coming until it is too late.
(I think that this is what the world means when they talk about our having a "soft landing"....a soft crash landing)

We also agreed on two things.....those with money would probably fare better in the long run (so saving was important), and that slow and steady wins the race. The race for a fast buck puts you even more at risk should a downturn strike while you are exposed. (I have a brother in-law who can attest to that...and he owes so much I can't even fathom EVER being loaned that much....it absolutely shocked me!)

Does a falling dollar cause inflation? Will the Fed care?

The following thought that came to mind is a simple one....does the lower dollar cause prices increases that result in increases of inflation that the Federal Reserve will work even harder to squelch?

First, I have heard that our new Fed Chairman is the kind of person who "targets inflation" as the main way to judge the need to stimulate or slow the economy. The idea is that a "hot" economy would stimulate demand for labor that might the be in shortage which would cause wage and shortly thereafter, prices to rise.


Second, I think everyone can plainly see that a vast sum of common goods for sale here in the USA are made elsewhere. If the dollar continues to weaken, it means other currencies are getting stronger and this means that the price of goods being imported is going up. If this is true, then I would think that companies selling these products can only able to absorb those increases for a short amount of time...and will than begin raising prices.

It would seem to be that those price increases would result in ever increasing inflation which is what the Federal Reserve would be triggering on.

Would the Federal Reserve see this increase and automatically decide to try to slow the economy down to counteract the price increases. Could those attempts show it down more than it really should be.

I am sure the Federal Reserve takes a large number of facts and figures into consideration....they probably release simplified remarks to us because releasing more would not benefit most of us.

As far as R&D Spending, China swaps places with Japan! (Closes in on USA)

Well, I guess you might have seen it coming when you looked at the graph to the left....even though the numbers reported there look small for those years, the trajectory of growth is one that should be scary. (According to an article, in 2001 the USA spent $282 billion and Japan $104 billion)

So how has all this progressed....well, I am not sure it is going to be clear from the way money is spent since the world currencies are fluctuating and some say the Yuan is not properly set to the dollar. (China apparently fixes it and it is supposed to currently be undervalued)

But this article in 2003 clearly indicates that China is a distant third in R&D spending. Then
this 2004 article talks further about the advances in R&D spending in China, and their steady increases as a percentage of GDP. (this and the steady growth in technical education make it clear that this is a plan, not a fluke)

Then in 2005, this article simple asked the question directly in it's title, "Is China the next R&D Superpower?"

So last night we see this article that is yet another in the series.....this time we see that China has eclipsed Japan in R&D spending, and according to other articles I read is spending about 41% of what the US is in R&D. (That's $136 billion for China vs $330 billion in the USA...but that about that devalued Yuan...could they already actually be spending more than we calculate?)

What does this all mean.....well when a person at the Organization of Coorperation and Development is quoted as saying the development is "stunning", we might want to stand up and take notice. (and work to maintain our lead)

We will see if the news organizations in this country even report this. (I think it should be front page news)