Day by Day

Jewish Humor

Some years ago, Israel’s Finance Minister was charged by the Prime Minister to continue to fund the defence of Israel without raising taxes. Cash was running low after years of struggle.

Desperately, the Finance Minister goes to the IMF and asks for a loan. Naturally, they ask him for some collateral. Inspired, he offers them the Star of David symbol.

The IMF look at it and say to him, “OK, we’ll lend you $1m for it.”

“But it’s priceless,” the Finance Minister protests. “It’s been the symbol of my race for thousands of years and is entirely unique. Don’t you know who I am? I am the Finance Minister of Israel.”

The IMF reply, “When you wish to pawn a Star, makes no difference who you are.”

Collectivist Banking

Leave it to the Socialist/Marxists to first wreck an economy and then refuse to heal their mess.

German Government Has Ruled Out Taking Stake in Deutsche Bank

Officials told lawmakers last week state support for lender was ‘inconceivable’

Aides to German Chancellor Angela Merkel have told lawmakers the state wouldn’t take a stake in Deutsche Bank AG if it were to issue new stock to shore up its thin capital cushion, one person who attended the briefing said.

The fact that Berlin appears to have ruled out any aid for the embattled lender as both unnecessary and politically unfeasible could put Deutsche Bank under renewed pressure as it works to stabilize its share price and stay out of the news while negotiating an acceptable settlement in a U.S. misconduct investigation. [snip]

Deutsche Bank is currently negotiating with the U.S. Justice Department to bring down a settlement in several investigations over the mis-selling of mortgage-backed securities. Last month, The Wall Street Journal reported that U.S. authorities had floated a $14 billion amount as an opening bid, sparking a rout in the bank’s share price. The bank has said it would not pay anywhere near this amount, which would wipe out nearly all of its existing capital.

It is still unclear whether Deutsche Bank will need to increase capital and, if it does, whether it would need the government to pitch in. But the fact that Ms. Merkel’s government has ruled out any aid for the bank will come as a negative surprise to investors, given widespread expectations in the market that the state would offer some form of last-resort assistance given the scale of Deutsche Bank and the shock its failure could inflict on Europe’s financial system. [snip]

If you keep requiring the taxpayers or depositors to bail out the idiot thinking of the directors of any financial institution, they will never take any responsibility either moral of fiscal for their choices.

They need to have their fiscal well-being firmly tied into the financial choices they make with any profits and losses hitting them first. Then and only then will these persons care about how investments made work out.

Illegal Immigration

Clearly it is in the Democrats favor to support amnesty; the Latinos will vote for them and may be doing so through voter fraud now. What is in it for the Republicans? Hispanics are not going to vote for the GOP. Past records prove that.

5 Questions Pro-Amnesty Republicans Never Seem To Answer

[snip] It’s harder to understand why any elected Republicans or Republican consultants would support this idea – well, if you ignore the fact that it’s driven almost entirely by large amounts of cash being moved from the pockets of businesses that want to profit from illegal labor to the pockets of the GOP Establishment. If you took that money out of the equation, there would be very few Republicans who back amnesty.

Jose

Because the people who are pocketing this money can’t just say, “Look, Mark Zuckerberg is kicking in the max to my campaign; so of course I’m backing amnesty,” they spend most of their time fighting straw men and trying to distract people. None of these guys, not John McCain, Paul Ryan, Jeff Flake, Lindsey Graham or Jeb Bush can answer the most basic questions anyone has about this. (emphasis added) In fact, when you raise the most obvious questions that should be the first things anyone asks on the issue, immediately they start shouting “nativist, xenophobe,” falsely claiming that a fence won’t work and sneering, “What, you can deport every last person who broke the law? That’s IMPOSSIBLE!” [snip]

Yet, they never seem to answer the basic questions like….:

  1. How do Republicans continue to get elected if we make millions of illegal aliens into citizens who will vote heavily against us?
    Romney received 27% of the Hispanic vote and lost to Barack Obama by roughly 5 million votes.
  2. Why do you believe supporting amnesty will make Hispanic Americans vote for the GOP?
    There simply isn’t much evidence that support for amnesty is the key to the Hispanic vote. If it was, why wouldn’t Hispanic Americans ALREADY be backing the GOP after Reagan signed onto a “one time” amnesty?
  3. Why would anyone believe that if we give illegals citizenship or legalized status that we’ll get any better security in return?
    Reagan already cut that deal with the Democrats — a “one time” amnesty in exchange for security. They didn’t honor their part of the agreement and today, Barack Obama is openly defying existing law to facilitate more illegal immigration.
  4. If we’re not going to deport illegals now, why would anyone believe we’ll deport them later?
    There is no logical or effective way to deal with illegal immigration that doesn’t center on deportation.
  5. How does it benefit America to make Illegal aliens citizens?
    I know it seems a bit passé in these days and times to actually consider what’s best for the country before taking a position on an issue, but it seems particularly relevant in this case. Millions of Americans have been victimized by criminal acts committed by illegal aliens. Every one of those rapes, murders, thefts and other crimes wouldn’t have happened if our borders were secure.  When you look at the decline of the rule of law in America, the special treatment illegal aliens are getting is a big part of it. What moral case is there for following our laws if whole classes of people are allowed to break them with impunity? Moreover, 62% of illegal alien households are getting welfare. Why in the world would we want people who are collecting a welfare check to be given the privilege of American citizenship? Why would we want to make millions of people who are likely to stay poor long term because of a lack of education and difficulties with English into American citizens? Moreover, once illegals become citizens and aren’t just relying on their American born kids to sponge off everyone else, the number of government programs they’re eligible for would skyrocket. When you’re talking about making illegals into citizens, first and foremost you’re talking about importing more poverty into our country in the futile hope that it will somehow make life better for everyone else. That’s just not how the world works.

Any other country will either jail you, fine you and/or confiscate your valuables or immediately after fining you, put you back across the border with a warning don’t come back.
If you come in by commercial airline, you are put back on that plane and flown out at that airlines expense. Minus a suitable fine of course.

Welfare, hospitalization or social help? Bring money if you are legal; illegals get bupkis. That means shutting off the welfare food stamps, free hospital ER or anything government supplied. Schools are available but only if the illegals prove they paid taxes to the district just as a citizen has to do.

We don’t have to hunt down illegals for deportation. Cut off the work and check that through E-Verify. If someone hires an illegal, that illegals is deported immediately and the owner of the company gets a hefty fine, say $100,000 per individual. Those fraudulent Social Security numbers will bounce regardless of the driver license and other state paperwork. Just like Obama’s bounces.

They will self-deport; as Donald Trump states, they can come back legally in line and go through the process which keeps them off the welfare rolls.
The kids if born here can stay, be put up for adoption with legal families or go back and return with their parents.

You will see a huge decrease in our budget, our debt and in the need to increase taxes. All comes as a bonus for not having to support Mexico and Central America.

 

 

Laissez le bon temps rouler

What do you do when the “Good Times Stop Rolling”? Will you be standing outside the bank doors with a fistful of unsecured paper currency? Keynesian monopoly money that the Central banks and the Fed have used to scam the populations for all these years.

There’s a problem coming up. Your turn to roll the dice and the best you can do is land on Boardwalk. Whadda know? Somebody built hotels on the Boardwalk and they don’t want paper money for the rent. What can you get for that funny money RIGHT NOW.

Let us take a look at what that toilet paper will buy or exchange for goods.
2016 YTD-performance
Oh boy, that doesn’t look good.

Getting “physical”…from Rico

When normally silent and invisible figures like Lord Rothschild publicly express their ‘concern’ over the Keynesian unbacked paper fiat-money experiment by Central Banks (and very ‘privately’ increase their Gold investments like he just did) maybe it’s time to start “paying attention.”
– It’s also time to consider holding “paper” promises vs. getting “physical.”

By “paying attention” I ask what are “paper” promises (IOU’s) going to be ‘worth’ in any one of these three likely economic scenarios?*
– Deflation, Stagflation, Hyperinflation.

*I’m NOT holding out any hope of a return to normal business and private sector cycles absent central-planning manipulation or corrupt crony “rigging” any time soon.

By “physical” I do not mean tugging-on the old sweats and going to the gym or for a run around the block, I mean hard assets like precious metals, oil & gas, real estate….tangible things. Those with serious wealth to protect have already moved into antiques and art as well.

The attached 2016 YTD chart of returns on assets is my point. Silver is in the #2 spot with a +36.6% return, and Gold is at #4 with a +26.19% return. Oil (WTI) shows a +9.61% return and NatGas +7.38% return.
– In a ZIRP and NIRP economic environment, how does that compare with returns on Certificates of Deposit or Bonds? [zero interest rate policy; negative interest rate policy]

– How about holding good old CASH? The return YTD for holding USD is -4.61% (not factoring-in an inflation rate of 8-10% on top of that). OUCH.

Since the last time we posted about silver here, the price rose from $13± to $20± per ounce. Gold has come up in price. If you follow the mechanizations of the bankers on the COMEX, you will see the price driven down for a short period. That is when the large buyers make purchases. This manipulation is done by selling off the ETF’s in silver pushing down the price,then buying them back bringing up the price again.

Tell me honestly, how long do you actually believe this nonsense can go on? Are you believing that Obama and Hillary care about this country? That this Congress cares about something other than their wallets?

If you do a fast vacation trip to Venezuela should help you understand how all this ends.

Observations

The idea of a cashless society sounds good until you get to the one 800 pound gorilla in the wallet: The Government.

The downsides? One is a loss of anonymity because cash allows consumers to make transactions without a paper trail.

Loose changeIf the market place does go cashless, all of your money is in one place: The bank. You tell me who controls the banks? Any money that is in any account can be grabbed by the IRS for any reason that the government chooses and you will go through hell trying to get it released.

A Progressive/Socialist Administration may decide you have too much in your accounts for the earnings you make; you’ll need to “share” that with others.

Stores to customers: “Cash not welcome here”

To get a glimpse of the future of commerce in America, look no further than Sweden.

The Scandinavian country is largely a cashless society, with consumers relying on mobile phone payments or plastic. While the U.S. is still far from achieving the same level of cash-free existence, increasing numbers of restaurants and retailers are now snubbing the lowly dollar bill.

Some merchants such as SweetGreen, a salad chain, refuse to open their registers for cash, telling customers they can pay only with mobile payments or cards. With some newer vending machines, only a card or mobile wallet will get that cold Coca-Cola to roll down the chute. [snip]

“What we’ve seen is a push toward electric payments because of convenience, especially for Generations X and Y and onward,” said Greg Burch, vice president of strategic initiatives as Ingenico Group, which makes payment systems for merchants. “The phone has become more personal than the wallet has.” [snip]

Another negative impact is stores that refuse cash may be effectively shutting out many lower-income customers. About one out of 13 U.S. households are unbanked, which means they have don’t traditional banking accounts, such as checking or savings accounts. Such families tend to be lower-income and rely on cash to make their purchases.

While federal law allows merchants to set their own rules about which types of payments to accept, at least one state makes it illegal to refuse cash: Massachusetts. The issue came to a head recently after a rash of stores catering to well-heeled young professionals posted “no cash allowed” at their registers.

SweetGreen, the salad chain, changed its cashless ways in its Boston locations after learning about the rule, according to The Boston Globe. SweetGreen didn’t return CBS MoneyWatch requests for comment. [snip]

Of course, the bigger hassle for consumers might be the flip side of going cashless. Many retailers and restaurants still have cash-only policies, which can prove increasingly irksome as consumers visit the ATM less frequently.

Cash isn’t in any danger of disappearing, but maybe it should: The U.S. has much to gain by phasing out cash, according to researchers from Tufts University. Writing in the Harvard Business Review, they noted that the U.S. spends $200 billion each year to keep cash in circulation. (China also has high costs related to reliance on cash, they noted.) [snip]

Another downside is the tendency to spend more than one has, since they buy without really handle any cash. Direct Deposit, auto-pay for bills and paying with the phone or a card removes the sense of cash accrual.

Many Millennials don’t have much more than $1000 in their savings or IRA’s. Without any thought for the future that $7.50 coffee can become quite pricey in tough times.

Bankers Gnomes & Trolls

Chicken 01The money flows to the only game in town, st least for now. Interest rates won’t change since Europe is in a mess and they’re not cleaning up their act anytime soon.
But don’t be fooled by the quietude in the economy. This placidity is heading toward some speed bumps in the investing road which are outside the current awareness of the small investor.

Outside this country there are tidal pulls on money coming from how the international economies are working in relation to one another and to ours. Those eddies and surges have effects that don’t have much force until they get in phase. Such as this.

Foreign ownership of US debt slips again in May

WASHINGTON (AP) — Foreign holdings of U.S. Treasury securities fell for the second straight month in May.

The Treasury Department says total foreign holdings dropped 0.5 percent to $6.21 trillion after slipping 0.8 percent to $6.24 trillion in April.

Japan, the second-biggest foreign owner of Treasury securities, reduced its holdings by 0.8 percent to $1.13 trillion. China, the biggest foreign investor in Treasurys, increased its holdings slightly to $1.24 trillion.

The national debt is nearly $19.4 trillion and is expected to grow, which means the United States will need foreigners to keep buying Treasury securities. (emphasis added)

Of the debt total, nearly $14 trillion is publicly traded on financial markets. The rest is money the government owes itself, including holdings in the Social Security trust fund.

The only reason the US can keep printing money rests with other countries buying our debt. If they cease buying or worse start selling US Treasuries, the Government has to make up the difference by curtailing spending and/or raising interest rates.

While the benefits to your savings accounts are good, mortgages, all loans and borrowing will cost more. Those rates have to go up high enough to attract buyers of T-Bills. The payment of interest must come from somewhere and it does: Higher taxes and fewer and/or smaller entitlement payouts.

If you are old enough to remember Jimmuh Carter’s wonderful years of Stagflation where a car loan for 3 years had rates of between 11% and 14%. Mortgages got up to where people were priced out of the market and the housing market stalled for lack of sales.

With the rise of interest rates comes the decline of the equity markets as money will flow to safe havens, AND if the interest rates keep rising, that money will depart for commodities such as metals, food stuffs and/or fossil fuels. All those are negotiable when money is worthless.

We either get control of this situation now or we’re going to have a serious problem.
If you want a preview of how all this turns out, look no further than Venezuela.