A Question Of Economics: Pt III

There's something eerily familiar about all this "buy gold now" shouting. Even Pat "9/11 happened because God hates gay people" Robertson is in on it too:



Again, I'm not an economist, but when I see people like Robertson, Beck, Hannity, Liddy, and various other conservative hacks pimping the precious metal I think one thing : bubble. And it's not going to be long before it bursts. And rest assured, when it does there's going to be some seriously enraged right-wingers.

But I can hear you say, "but airon, gold hasn't dropped in value for over 10 years". That is actually very misleading, since as recent as last month, gold dropped by over 4% while the dollar increased in value. And won't it stand to reason that the more people invest in gold, the more that the market is flooded with it, that the value will decrease by larger amounts at a faster rate?

All this gold versus dollar hysteria is apparently driven from the hyper-inflated theory that the dollar is going to be removed as the worlds default-currency, that it's going to be replaced by a "mixed-bag" of currencies from other countries. Not only that, but since China is the largest gold-producing country in the world, this is incentive enough to get certain American twitching with fear, feeling like they have to invest millions in gold as soon as possible.

My theory for China is this, they don't have the luxury of letting the dollar fall off the international/world stage, as all the treasuries that they have purchased from us are valued in dollars, not gold. If the dollar is no longer the yard-stick of the world economy, it stands to reason that those treasuries will be devalued and China will take a huge loss.

Then again, I could be wrong.

Who Can Really Afford It?

Every time I see a commercial on Fox"News" promoting investment in gold, I have to ask myself "who can afford to buy gold"?

For quite some time now, conservative talking-heads have openly promoted ( and some are even paid to promote ) investing in gold. From Sean Hannity, to O'Reilly, Beck and even domestic terrorist G. Gordon Liddy, gold is being hyped to viewers of Fox"News" and audiences of right-wing talk radio. But seriously, who can afford to do this?

With talk of the unemployed, those losing their homes, and those looking for affordable healthcare benefits, one has to wonder who these conservative pitch-men really have in mind while hawking the precious metal. Certainly not the lower income brackets, and not the middle class that they claim to love so dearly. Who is left but the more affluent in society that afford this avenue of investment. Sure, a small-time investor can use gold to strengthen their portfolio, but the reality of this comes down to the fact that investing in massive amounts of gold ultimately draws down the value of the dollar, a currency that conservatives claim to champion but seem to have little faith in.

An interesting sidebar to this is that on Friday, gold prices ( in fact all the precious metals listed ) closed down 4.2% while the dollar showed an increase of 1%. Though some analysts are showing this is a predictable dip that will rebound come March, there was literally no reporting done on this by those that touts golds superiority over the dollar.

While the Chinese are the worlds largest gold producing nation, as well as the largest holder of US treasuries ( which is still based on the value of the dollar ) I have to wonder exactly why they would want to promote gold as the more trusted currency and ultimately devalue their investment.

I am not an economist, never have claimed to be one, but the fact that conservatives are openly advocating that the more affluent in society drop their investments based on the dollar in favor of gold seems to smack of an urge to destroy the middle and lower income brackets of the entire country. Perhaps their perfect America is one where only the a small percentage of people actually matter.

The Speculative Fiction Of Right-Wing Legislation: Michelle Bachman Edition

After listening to Michelle Bachman doing her best Alex Jones impersonatin on Glenn Beck's radio program, I'm starting to wonder exactly what voters in Minnesota thought when they voted her in as representative of the 6th district.



That's right Glenn, most people won't understand that. Most people live in the real world where there are no evil wizards ready to cast spells to turn your children into goblins and dragons controlled by Rahm Emanuel are set lose to scorch small, family farms.

But Michelle's crazy isn't limited to Glenn Beck's show. She's actually introducing legislation based off of what the voices in her head are telling her.

This is the hot, new talking point with the Fox"News" crew as well. Newt Gingrich was on Sean Hannity's radio program to talk about China and the "one-world currency".

Not to be outdone, Sen. Jim DeMint chimes in on this as well.

The truth of the matter is, these people are not just peddling disinformation, they are diseminating - en masse - blatant lies. And, to top it off, Bachman is wasting time with this pointless legislation when there are far better causes that need to be addressed.

Bachman And Hannity Make A Great Pair

Michelle Bachman took her lie about the Obama administration and "global currency" to Sean Hannity's radio show:





What is this "oderly revolution" that she is talking about?

The Republican party isn't exactly "orderly" right now anyway. How can they expect their constituancy to be as such when they are more concerned with blocking anything the Democratic party does. They have no plans. The Republicans that managed to keep their seats won their respective elections stayed on simply because the voters knew they would be obstuctionists.

Strange that Bachman, and all like here within her party, are suddenly concerned with fiscal responsibility.

This woman is certifiable. How is it that she was even elected in the first place?

Michelle Bachman's Got It All Figured Out

The stupid, it BURNS!!!!

Here's Something To Ponder

Been reading quite a bit of prattling nonsense about how "China is calling for a new world-reserve currency to replace the dollar".

I'm not really one to understand business or the economy, but if the dollar is no longer the standard by which all other currencies are judged, isn't that going to completely invalidate ( or at least lessen to a HUGE degree ) all the invested interests China has in the US?

Am I looking at this wrong?

The Envy of Every Industrial, Capitalist Democracy

It's amazing how people - given the particular job duties that they are required to perform, how much money they make at said job, and how their willingness to perform these tasks increases their job security - will justify a bad situation. And they do it all with no verifiable facts and are rarely, if ever, questioned.

H/T to Newshounds for the video grab:



So let's examine what a 'great' economic state we are in.

As I've said before, I'm not an economist, but I know when I'm being fed a load of horse excrament. So, here are some facts for this chap that thinks the American economy is just spot-on fantastic as droves of people from the UK and Europe 'flee' to America to take a bite out of what we've got.

1- Unemployment:

THE EMPLOYMENT SITUATION: MAY 2008

The unemployment rate rose from 5.0 to 5.5 percent in May, and nonfarm
payroll employment continued to trend down (-49,000), the Bureau of Labor
Statistics of the U.S. Department of Labor reported today. In May, employ-
ment continued to fall in construction, manufacturing, retail trade, and
temporary help services, while health care continued to add jobs. Average
hourly earnings rose by 5 cents, or 0.3 percent, over the month.

Unemployment (Household Survey Data)

The number of unemployed persons increased by 861,000 to 8.5 million in
May, after seasonal adjustment, and the unemployment rate rose by 0.5 per-
centage point to 5.5 percent. A year earlier, the number of unemployed per-
sons was 6.9 million, and the jobless rate was 4.5 percent. (See table A-1.)

The unemployment rates for adult men (4.9 percent), adult women (4.8 per-
cent), teenagers (18.7 percent), whites (4.9 percent), and blacks (9.7 per-
cent) rose in May. The jobless rate for Hispanics (6.9 percent) was unchanged.
The unemployment rate for Asians was 3.8 percent, not seasonally adjusted.
(See tables A-1, A-2, and A-3.)

2 - An Economic Recession Started in March 2001

NEW YORK (CNN/Money) - The world's largest economy sank into a recession in March, ending 10 years of growth that was the longest expansion on record in the United States, a group of economists that dates U.S. business cycles said Monday.

The National Bureau of Economic Research (NBER), composed of academic economists from Harvard, Stanford and other universities, joined a chorus of economists and investors who were saying that a recession had already begun. The group posted its decision on its Web site.

It ruled that the long expansion ended in March and the nation's tenth recession since the end of World War II began at the same time. The declaration means the longest expansion lasted exactly 10 years. The previous record for uninterrupted economic growth was set in the 1960s, a period of eight years and 10 months lasting from February 1961 to December 1969.

3 - Bush's Tax Cuts Benefit A Small Percentage Of Americans

...Economists and tax analysts have long known that the biggest dollar value of Mr. Bush’s tax cuts goes to people at the very top income levels. One reason is that two of his signature measures, tax cuts on investment income and a steady reduction of estate taxes, overwhelmingly benefit the wealthiest households.

But the Congressional study offers additional insight because it incorporates information about what people paid in 2004, the first year in which taxpayers could take full advantage of the cuts on stock dividends and capital gains.

The study estimates that the effective federal income tax rate, which excludes payroll taxes for Social Security and Medicare, declined modestly for people in the middle- and lower-income categories.

Families in the middle fifth of annual earnings, who had average incomes of $56,200 in 2004, saw their average effective tax rate edge down to 2.9 percent in 2004 from 5 percent in 2000. That translated to an average tax cut of $1,180 per household, but the tax rate actually increased slightly from 2003....

4 - The Dollar is the New Peso

It’s no secret that the dollar is on a downward spiral. Its value is dropping, and the Fed isn’t doing a whole lot to change that. As a result, a number of countries are considering a shift away from the dollar to preserve their assets. These are seven of the countries currently considering a move from the dollar, and how they’ll have an effect on its value and the US economy....

Countries are growing weary of losing money on the falling dollar. Many of them want to protect their financial interests, and a number of them want to end the US oversight that comes with using the dollar. Although it’s not clear how many of these countries will actually follow through on an abandonment of the dollar, it is clear that its status as a world currency is in trouble.

Obviously, an abandonment of the dollar is bad news for the currency. Simply put, as demand lessens, its value drops. Additionally, the revenue generated from the use of the dollar will be sorely missed if it’s lost. The dollar’s status as a cheaply-produced US export is a vital part of our economy. Losing this status could rock the financial lives of both Americans and the worldwide economy.

In the interest of fairness, it should be noted that the above statement appeared in November of last year.

And as far as the statement of people fleeing to come to America because of the economy.....

With a wheezing economy that’s struggling with housing and credit problems - as well as a weak dollar - it’s clear the United States won’t be in the investment spotlight this year.

But don’t despair. Because a trend that has long been talked about - economic decoupling - is finally starting to manifest itself as other world economies, particularly the so-called “BRIC” markets of Brazil, Russia, China and India, have continued to grow even as the U.S. economy has slowed. That means profit opportunities abound for U.S. investors, despite myriad messes on the home front that include a collapsed housing market, a mortgage crisis that turned into a five-alarm credit conflagration, and a plunging greenback that seems to have left its parachute on the airplane that it jumped from.

Some of the profit pathways to play:

- Investors can eschew the U.S. market completely, and pursue profits abroad.

- They can latch onto the U.S.-based members of the “Global Titans” club, companies with their headquarters in America that derive a hefty chunk of their profits from overseas markets.

- Or investors can ferret out U.S. investments that are either immune to some of this country’s current economic afflictions, or that are problem-plagued now, but a good bet for a turnaround later.

You're more often to hear that a fair tax system only "punishes" the successful. Well, that's a nice talking-point to stir-up your base with, but it's really nothing more than that. Sure, people that have worked hard their lives to get where they are deserve to have nice things. But, who's doing the talking here? Who(m) is truly afraid of being 'punished'? Are they talking about the man that struggled as a child in a poor neighborhood in Detroit, managed to go to a great college, became an award-winning chemist, and is now working on a cure for AIDs? Or, are they talking about a man who dropped-out of college, made sure they didn't have to be drafted to fight in Vietnam, and ended up hosting talk-radio show where they continually tell their audience that a fair tax punishes the successful?