Category: Economy

It’s all over the news subprime lenders are imploding left and right.  The net result is tighter lending standards that eliminates many new buyers and affects the trade-up market.  What happened to the good old days when a person with a $60K job could afford a $600K McMansion?  Obviously there is plenty of blame to spread around. 

Here are three excellent articles that discuss who took the punch bowl away.  Make sure to read the comments to the articles as well.

Nouriel Roubini’s Global Economics Blog

Mish’s Global Economic Trend Analysis

Ron Paul’s Texas Straight Talk

Ron Paul is one of the few in Congress that really “gets it.”  He has filed to run for the Presidency in 2008, but has been really quiet since filing.  I wish that he would pick up the pace, because he is one who could make a difference.

Source: Texas Straight Talk
February 19,  2007 

Federal Reserve Chairman Ben Bernanke testifies twice every year before the congressional Financial Services committee, and I look forward to these opportunities to raise questions about monetary policy.  I believe monetary policy is critically important  yet overlooked in Washington.  Money is the lifeblood of any economy, and control over a nation’s currency means control over its economic well being. Fed bankers quite literally determine the value of our money, by controlling the supply of dollars and establishing interest rates. Their actions can make you richer or poorer overnight, in terms of the value of your savings and the buying power of your paycheck. So I urge all Americans to educate themselves about monetary policy, and better understand how a small group of unelected individuals at the Federal Reserve and Treasury department wield tremendous power over our lives.

The following are some excerpted comments from my opening remarks at the hearing with Mr. Bernanke:

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The following two articles highlight the poor fundamentals of the U.S. Dollar.  What are you doing to protect your wealth?  

Countries and Industries with Tailwinds
by Monty Guild, Tony Danaheur

The authors use a scoring system to measure the fundamentals of the U.S. Dollar and break it into its short-term, intermediate-term and long-term components. 

Short-term currency valuation indicator: Real interest rates (current short term interest rates less the current inflation rate).

U.S. interest rates are flat, British Pound rates are rising, Japanese Yen rates are close to rising, and Euro rates are steady.

Impact: neutral to bearish for the U.S. currency. Score: -1 for the U.S. Dollar.

Continue reading “The U.S. Dollar Fundamentals Stink”

No one says it quite like Peter Schiff.

“December’s larger than expected jump in non-farm payrolls is predictably being touted as evidence of a more vibrant U.S. economy.  Unfortunately, the data does not support this conclusion.  The bloated service sector added 178,000 jobs, while manufacturing shed another 12,000 jobs.  What this means is that 178,000 more workers will be consuming goods while 12,000 fewer will be making them.  The result will be larger trade deficits that merely compound already stretched global imbalances and exacerbate America’s inevitable day of reckoning.”

Even Ben Bernanke should understand this…

“As an example, suppose that ten castaways were marooned on an island.  What if on the day they washed up on shore they all decided to assume the following jobs; lawyer, accountant, banker, economist, actor, philosopher, astrologer, beautician, teacher, and nurse.  How long do you suppose they would all remain alive without food, water, or shelter?  Someone has to provide those things or everyone will perish.”

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