The Armchair Economist

It Is Called Cognitive Dissonance

2009-03-19T09:07:00.001-06:00

Cognitive dissonance is a feeling of uncomfortable tension that occurs when one holds two conflicting thoughts in the mind at the same time. For example, we are currently being bombarded with the notion that the current administration has everything under control. They know what they are doing and they know that their solution is the best for you and I going forward. That thought is comforting

Madoff Goes To Jail

2009-03-13T08:20:00.002-06:00

This of course was the news of the day yesterday. Justice prevailed. Not that investors will get any of their money back, but at least the mastermind behind the $50 billion ponzi scheme was handcuffed and taken away to jail. Next on the list, R. Allen Stanford, the Texas Business man who has been indicted for fraud for running an $8 billion ponzi scheme. What is going to make this case

The Two Biggest Lies About the Economic Crisis

2009-03-11T08:37:00.002-06:00

As investors watch the unfolding of our current economic crisis, questions come to mind about where money should be invested safely. Accurate and timely flow of information is essential when investing. Without accurate information, investors end up putting money in all the wrong places and suffering loss. Our very own government is busy promoting two very big lies that will be devastating for

Where There's Smoke, There's Fire

2009-03-10T08:53:00.002-06:00

On February 7, 2009, wildfires roared across the Australian state of Victoria scorching 1500 square miles of farmland and forest, destroying more than 1,800 homes, and killing 210 people. In spite of numerous government warnings, the fires caught hundreds of people off-guard. Jill Sanguinetti was enjoying a relaxing day at the pool in the town of Marysville. She later described her experiences

Obama Is Gambling With Our Future

2009-03-05T08:56:00.001-07:00

Every now and then, when I have nothing better to do, I will watch poker on television. It is a fascinating game that requires skill, luck, and an amazing amount of nerve. Anyone can learn the basics of poker; which hands to bet and which hands to fold, but successful professional players have an intuition that sets the winners apart from the losers. The ability to know when to go “all in” and

An Open Letter to Barack Obama

2008-12-23T09:03:00.000-07:00

I am writing you once again because I read yesterday that Hank Paulson is asking Congress to release the remaining $350 billion so he can bail out more of his friends. If you keep copies of emails, you can easily go back and find my email from October where I asked that you not approve this bail out plan.I warned that it was not the right thing to do and I still believe that to be the case.

Turbo Charge Your Investment Returns

2007-10-23T15:43:00.000-06:00

Chances are if you have read any of the posts here over the last several years, you know that I am a big believer in proper asset allocation. I don’t mean some combination of stocks and bonds, but a truly diversified portfolio of investments from several different asset classes. If you are not a regular reader of my posts, then spend some time reading my posts about investing and then come back

The Big Lie About Inflation

2007-08-15T08:54:00.004-06:00

Federal Reserve Chairman Ben Bernanke in his semi-annual report to Congress indicated that inflation pressures were diminishing and that the near term outlook was good. He also noted that inflation is one of the key factors that the Federal Reserve keeps a close eye on as it affects the economy in many ways. Listening to Mr. Bernanke, you might be led to believe that the government truly

The Big Lie about Social Security

2007-07-30T14:17:00.001-06:00

Do you ever dream about what your retirement will look like? Do you plan to visit certain places or volunteer for a certain organization? Maybe you look forward to just taking it easy and getting caught up on your hobbies. Are you counting on Social Security for a large portion of your retirement income? If so, please read on. What I am going to tell you could help you get to retirement in

The Big Lie About Hedge Funds

2007-07-24T08:41:00.001-06:00

Hedge funds are really making the news. About half the news is bad, blaming hedge funds for everything from market sell-offs to global warming. The rest of the time the news is gushing about the fabulous returns that hedge fund investors are banking every month. So whom should we believe? Well, I am pretty sure that hedge funds are not responsible for global warming but the surprising truth

Gas Up, Retail Sales Down, Consumer Debt Up

2007-05-11T08:52:00.001-06:00

Gas Up, Retail Sales Down, Consumer Debt Up These seemingly isolated news events hint at something ominous lurking just around the corner. We would expect that as gas goes up, consumers might begin to spend less at places like Wal-Mart. That piece appears logical. We have to get to work, get the kids to school, and all of the other activities that require a car, right? So if the cost of

Review of the new eBook, "47 Minutes To Financial Freedom"

2007-05-04T14:08:00.001-06:00

With the release of the new eBook, "47 Minutes to Financial Freedom, we have not just pumped out another investment book. This book covers totally new ground for the average investor. What makes "47 Minutes To Financial Freedom" different from other investment books? Mostly it provides a way for the average person to take back control of their investments without requiring a tremendous amount

Good Friday or Bad Friday

2007-04-03T08:02:00.000-06:00

I prefer the first option actually, but my fear is that we may get something else. The Russians have announced that the US intends to attack Iran on April 6, 2007. That of course is Good Friday, but if they attack, it will be remembered as Bad Friday. I remember back before we invaded Iraq. The administration was bad-mouthing Hussein and his

Another Potential Tipping Point For The Economy

2007-04-02T09:56:00.000-06:00

As if everything we have going on in the world wasn’t enough, we have yet another area of concern to pay close attention to. As we have covered in the past, we are now expecting a recession to begin this year. The signs are all there and have been in place since the end of last year. We are almost at 100% certainty. Additionally we have the

Where Does All The Money Go?

2007-03-27T08:49:00.000-06:00

Since it appears that we are all stuck paying taxes for theforeseeable future, wouldn't you like to have a say in whereyour money is spent?I mean, after all, it is our money. It is supposed to be ourgovernment. Why is it that the government believes that theyknow what is best for us? Do you believe that? I don't.Here is what bothers me. For the last several decades the U.S.has taken on the

The Coming Entitlement Meltdown

2007-03-26T08:27:00.000-06:00

Today, a very important article from Congressman Ron Paul, probably one of the few decent congressmen left in this country. This article is important to everyone who thinks that the government is going to provide for future retirees.The Coming Entitlement Meltdown“When it comes to Social Security and Medicare, the federal government simply won’t be able to keep its promises in the future. That

Learn To Take What The Market Gives

2007-02-01T07:53:00.000-07:00

One of our basic rules of investing is to be a bull during abull market and a bear during a bear market. By positioning ourportfolios in this manner, we ride the long-term trends andbuild our assets.What would be nice is to be able to tell when a current trendis getting ready to come to an end. As we know from history,those reversals tend to be sharp and sudden. There arehundreds, maybe

Tipping Points For 2007

2007-01-10T10:25:00.000-07:00

Last year, over a period of several days, I covered some of the possible tipping points that could have sent our economy reeling. As I mentioned last year, they were "possible" tipping points. As it turned out we pretty well dodged all of them and the economy chugged along and everything seemed for the most part peachy.This year, as I look ahead, I see some of the same tipping points, or if you

The U.S. Cannot Be Both a Republic and An Empire

2006-12-22T13:27:00.000-07:00

A recent interview of Gore Vidal is posted at Counterpunch.org today. It is a very insightful article about America's fall into imperialism. It did not just happen with the election of G.W. into office. It has been going on since Thomas Jefferson was president.Vidal is now 81 years old. He has seen and heard a lot. He provided a perspective to history that you will not find taught in our

What Is Terrorism?

2006-12-20T09:19:00.000-07:00

The definition of terrorism is the deliberate use of violence and brutality for the purpose of political gain. Terrorism is not a new form of warfare. It has been around as long as mankind.It is typically used by a group of people who are weaker and have fewer resources against a superior enemy. One of the best examples of terrorism in history is the Revolutionary War. To get an idea what is

Bring Our Boys Home

2006-12-18T13:29:00.000-07:00

Today I am posting an article by Fred Reed. He now resides in Mexico after retiring from a job in the U.S. He is a Viet Nam vet and writes a very interesting weekly coloumn. You can read more of his work by visiting his web site here.It FloatsAddendum to ClausewitzFred ReedDecember 17, 2006 It’s all but official: The war in Iraq is lost. Report after leaked report says so. Everybody in

Treasury to Announce U.S. Debt at $3.5 Trillion

2006-12-15T08:33:00.000-07:00

Later today the U.S. Treasury is supposed to announce that the U.S. debt has reached $3.5 trillion dollars. Meanwhile the Whitehouse numbers are being reported at $248 billion. Now you may ask how can the numbers be so far off?The Whitehouse doctors their numbers in an effort to hide just how much money they are spending. Add to these outrageous numbers the amount of future obligations for

What Is Polonium 210?

2006-12-12T09:30:00.000-07:00

The recent news is abuzz about the former Russian spy who died from radiation poisoning after ingesting Polonium 210 or Po-210. The British are investigating. The Russians are investigating. Everyone is watching.Litvinenko claimed on his deathbed that he was poisoned by the Putin regime because of his outspoken opinions regarding Putin. Everyone knows that Russia does not take well to criticism

Collapse of the Empire

2006-12-07T10:26:00.000-07:00

What causes empires to collapse? Throughout history, we have seen empires come and empires go and when they go, they all go the same way.Countries do not start out as empires. Most countries are formed as a way to escape from an empire. The U.S. is a prime example. The British Empire was one of the most powerful in history. Their goal was to control as much of the world's resources as

Gas Prices On The Rise

2006-11-10T07:56:00.000-07:00

This just in from the Southern California Auto Club… LOS ANGELES, CA -- (MARKET WIRE) -- November 10, 2006 -- The record-breaking slide that brought gas prices 30 percent below their all-time record has ended, with slight upturns in gas price averages over the past week in most local areas, according to the Automobile Club of Southern California's Weekend Gas Watch. "After 11 straight weeks of

More Happy Talk On Jobs

2006-11-03T08:11:00.000-07:00

Well, you didn’t expect the Bureau of Labor Statistics to tell the truth right before the election did you? The republicans are having a hard enough time retaining seats in congress. They do not need any bad economic news going into next Tuesday. Let’s look at a few numbers. According to the BLS unemployment fell to 4.4%. Seems good doesn’t it? There were 92,000 new non-farm jobs created

Jericho Revisited

2006-11-02T08:08:00.000-07:00

A few weeks ago, I talked about a new show on CBS called Jericho. It is the story of a small town in western Kansas that finds itself cut off from the rest of the world after an apparent nuclear attack on the U.S. For me it is a welcome break from the mind-numbing sitcoms and crime dramas that dominate network TV. My question back them was, why did the government allow CBS to air the show?

Is The Economy As Robust As the Republicans Say It Is?

2006-10-30T09:23:00.000-07:00

I happen to attend a party over the weekend. It was a pumpkin carving contest and I was chosen to be one of three judges. It was a blast. All of the contestants won prizes and we all got to eat a great meal.One of the guests at the party was a friend of the hosts. Apparently he is running for State Representative. He is a republican. My friend and host of the party asked this fellow if he was

Recession Warning Clouds Continue To Grow

2006-09-26T08:31:00.000-06:00

Everyone breathed a sigh of relief last week when the Federal Reserve decided to take a break from their campaign to raise interest rates. As is usually the case with the Fed, they are late to the dance. The stage is set, now we just sit back and watch.One of the most reliable indicators of future recession is the yield curve. It has been negative for better than a month. Based on historical

How About Jericho?

2006-09-21T09:37:00.000-06:00

I am not much of a regular television fan, but the premise of the new CBS show Jericho caught my interest. For those of you who haven’t heard about it, it is the story of a small Kansas town, (looks to be Western Kansas) and what happens when an apparent nuclear strike on Denver cuts the entire town off from the rest of the world. They later discover by way of a telephone answering machine

Do You Have Gold?

2006-09-20T09:03:00.000-06:00

Just a quick tidbit of news that caught my eye this week. It seems that there is an organization located in Indiana known as National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code (NORFED). This organization has been minting and selling gold and silver “liberty Dollar” medallions. Last week the U.S. Treasury Department issued a warning to purchasers of

Low Risk Way to Play the Real Estate Market

2006-09-19T14:48:00.000-06:00

I promised that I would give you a safe way to play the real estate market, just in case you think it still has legs left. (I don't, but we can always hope.) Let's say that the latest figures coming out on new home starts and existing home sales have spooked you and you have decided to sell you fairly new expensive home and pocket any equity you may have. I hope you have some because if you don't

The Real Estate Bust Is Here

2006-09-14T09:07:00.000-06:00

We have talked about the coming real estate implosion for over a year. If you have read my free report, “Five Things You Must Do Now To Protect Your Investments,” you know that one of the things I recommend is converting your home loan to a fixed rate mortgage. If you haven't read my report, you can get your free copy by sending a blank email to investoralert@freefollowup.com.The reason it is so

Inflation or Deflation Revisited

2006-09-08T11:50:00.000-06:00

That is the question after all. I have discussed this issue before. Several times in fact. Starting back in August of last year. It seems in reviewing my comments, I favored some sort of high inflation followed by deflation as demand dries up.Today, as I look at what the Fed is doing with the money supply, it seems that we might miss the big bout of inflation and go straight to deflation. Here's

Katrina: One Year Later

2006-08-23T11:43:00.000-06:00

You may recall from previous postings that I have urged folks to be prepared to take care of themselves and their families in the event of a natural disaster. Americans typically take it for granted that the government will be there for them. After all that is why we pay taxes.As someone who is a strong Libertarian, I feel just the opposite. The government does not have the ability to take

Recession Watch

2006-08-22T15:32:00.000-06:00

One of the most accurate predictors of coming recession is the yield curve. History tells us that when the yield curve inverts, that is, the short term rates are higher than long term rates, we typically see a recession sometime in the following 12 to 18 months.The yield curve has been flattening since spring and has flirted with with inversion on at least one other occasion. Today, the yield

U.S. Bankruptcy Within A Generation

2006-08-17T09:04:00.000-06:00

Just in case you thought that I make this stuff up, I decided to reprint this article from NewsMax. An interview with David Walker, the U.S. Comptroller General. In the interview, he points out some sobering facts about the country's debt level and the drastic measures that need to be taken in order to head off a national bankruptcy.When news like this comes from the people in charge of keeping

Pension Plan Changes Coming Your Way

2006-08-16T09:55:00.000-06:00

President Bush is expected soon to sign into law a bill that overhauls the country's pension plan laws.How will this affect you? Let's take a look. First of all, a defined benefit pension plan is one that guarantees a specific benefit for life. For example, you work for 30 years for a company and at age 50 you can retire and receive 75% of your pay. If you are in any type of pension plan that

Backed Into A Corner

2006-08-10T10:58:00.000-06:00

What do you do, as a country, when you have inflated your currency to the point that it is almost worthless, your leaders are involved in the most aggressive empire building campaign since Napoleon, manufacturing is fleeing the country at an alarming rate, and countries who have been loaning us money at a rate of better than $2 billion per day are starting to get cold feet?It certainly seems like

Minimum Wage, Why?

2006-08-04T08:08:00.000-06:00

The news this morning tells us that congress killed the minimum wage bill that would have raised the minimum wage by $2.10 over the next two years. Many people are up in arms over this news. Minimum wage hasn't increase for over a decade, but is this news bad? The minimum wage was established with the Fair Labor Standards Act of 1938. It was sold to Americans as a way to guarantee entry-level

Hard Money

2006-07-26T11:53:00.000-06:00

What Is It? Do We Need It? And Why?I think that before we get too deeply into this discussion, we need to define the word money. Money is a medium of exchange. It came about thousands of years ago when mankind began to exchange goods and services with his neighbor. Exchanging goods occasionally was made difficult because the people involved in the exchange did not share similar wants or

2006-07-14T08:59:00.000-06:00

I ran across this chart this week and I thought I would share it with you. What it shows is that since May the world markets have been in decline. And it seems that the US markets are trying to follow suit.We don't read much about this in the papers outside of the occasional comments about Japan's market or maybe a couple of the European stock markets and that is a little worrisome. It is as

What Is Economics?

2006-07-12T08:12:00.000-06:00

If you were to ask 100 people that question, you would probably get some very interesting answers. Some might say that economics is the study of the economy. Some might say that economics is the control of the economy. Others might say it has something to do with supply and demand. Most would tell you that they don't really know and more importantly they don't care.Unfortunately, even the

Do You Deserve Liberty?

2006-07-10T14:41:00.000-06:00

"Those that would give up essential liberty in pursuit of a little temporary security deserve neither liberty nor security."Benjamin FranklinBen Franklin was a true American success story. He was a self-made man of means. His wealth allowed him to concentrate on what he felt were important issues. The founding of a new country was at the top of his list.His quote says something about how the

The Ultimate in Fiscal Fraud

2006-06-26T15:54:00.000-06:00

According to the Wall Street Journal, total Federal Reserve Bank credit increased by about $2.5 billion. This is money that the Federal Reserve created out of thin air to carry on the business of, well; I don't really know why they need that much money, but they created it.And this is just the amount created last week. And it is down a little from the previous week. Sounds like a lot of money

Do You Have A Debt Problem?

2006-06-16T09:35:00.000-06:00

Debt is deceiving. If it weren't, we would have no problem with it. Debt satisfies a basic human desire, the desire to have it all right now. Our grandparents and great grandparents, many of who lived through the depression, learned the hard way about debt. As a result, most of the people who survived the depression were great savers. My grandfather paid cash for everything. He learned the

Debt: Tool For Wealth Creation or Incurable Disease?

2006-06-14T08:58:00.000-06:00

We live in a world of debt. Everywhere you look, there is debt. Our entire economy is based on debt. Buy a house… go into debt. Buy a new car… go into debt. Debt is a part of life. It is as common as toast in the morning…maybe more so.So what's wrong with debt? Maybe nothing, but probably everything. I am not saying that all debt is bad, but uncontrolled spending and consumer debt is a

Dollar on the Edge

2006-06-12T11:25:00.000-06:00

Interesting article on Whitley Strieber's Unknown Country website about the danger of collapse in the dollar. Notice what a drop in the dollar does to import items like fuel. From $3.00 to $6.00 per gallon in the event of a 50% fall in the value of the dollar. Well worth the 5 minutes it takes to read:Dollar on the Edge12-Jun-2006Over the past two months a strange and disturbing thing happened

Plan Ahead, The US Army Is

2006-06-05T08:55:00.000-06:00

Today I reprint quotes from the Army’s Engineer Research and Development Center. In it you will read about the Army’s assessment of our energy situation here in the U.S. This is something that the Army is concerned about as any type of armed conflict could seriously restrict the flow of oil into our country. In fact, an article out today quoting Iran saying that any action taken by the U.S.

Unemployment and Government Control

2006-06-02T13:43:00.000-06:00

I had a wonderful visit with my brother yesterday. I don’t see him nearly often enough. As is often the case, we were sitting close to a television, which was tuned to CNN. After seeing the story about the case of mistaken identity between the two girls and some idiotic congressman wanting to pass some law requiring search and rescue to rescue pets along with the people, we got to hear the

Which Future Do You Want?

2006-05-31T09:24:00.000-06:00

Yesterday, I wrote about aggression or the lack of aggression that is the mark of all Libertarians. (If a Libertarian tells you that he supports any of our current war efforts, he is not a Libertarian.) Today I present an article I ran across yesterday from L. Neil Smith. He is an author and strong supporter of Libertarianism and therefore the Zero Aggression Principal. Read and enjoy. He is

The Initiation of Force

2006-05-30T10:17:00.000-06:00

"No human being or group of human beings has the right-under any circumstances-to initiate force or use coercion against another human being or group of human beings, nor to threaten or delegate its initiation."This is what being a Libertarian is all about. If you ask the average person on the street, you will most likely get something along the lines of "a Libertarian is against government."

Feel The Burn

2006-05-17T08:11:00.000-06:00

The Bureau of Labor Statistics reported that the Consumer Price Index shot up .9% for the month of April. That my friends works out to an annualized rate of 11.35% or if you calculate inflation using the old weighting method, a whopping 12.68%. Feel the burn.Of course they will adjust that number using what they call a seasonal adjustment to tame the number a bit, but for you and I, there is no

Throw Civility Out The Door

2006-05-15T09:01:00.000-06:00

I wrote back in April about the coming collapse into another Great Depression. It is coming. When, I do not know, but that doesn't change the reality of it's coming. You may recall that I warned that things would be worse this time because of demographics. Far fewer of us live on farms and even fewer of us own those farms free and clear.This creates a situation around logistics and

The Solution For High Energy Costs and Peak Oil

2006-05-11T08:54:00.000-06:00

Lest you think that your government has your best interests in mind, you should read this article about hemp. The bottom line is this: hemp is easy to grow, could provide all of our paper needs while producing a fraction of the pollution that regular paper produces, replace cotton as a comfortable, durable fabric, replace diesel fuel, reduce erosion, and save our forests.The trouble is, your

Our Ship Of State Is Sinking

2006-05-09T07:31:00.000-06:00

A short but interesting article about the current state of affairs in the good ole US of A. He hits the nail on the head when he comments that all of the social safety nets that our government has created will be of little use to us in a real emergency. They have been created and maintained to give us the illusion of a safety net. This illusion keeps us all dancing on the deck of the Titanic

Inflation and Gold

2006-05-03T08:29:00.000-06:00

A couple of weeks ago, I discussed the increasing inflation as reported in the CPI numbers. As I recall, the numbers work out to about a 7.2% annual rate.Earlier this week the government released their numbers on personal consumption and expenditures. As is usually the case, the media put a positive spin on the data pointing to these numbers as proof of our ever-improving economy.Let's do a

The Merits of Poker

2006-05-02T07:34:00.000-06:00

Today I present for your enjoyment an article about poker. The amazing part about this article is that the author shows us how the game of poker demonstrates the basic principles of Libertarianism with a dash of Austrian economics thrown in for good measure.The reason I have posted this article is because it shows us the way that life and business should operate. The author provides us with six

The Real Pension Issue

2006-04-28T11:38:00.000-06:00

I have written at length about the coming collapse of Social Security as well as all of the defined benefit pension plans. If you are expecting to collect "what you are owed," pay attention before it is too late.The numbers just do not work. In a few years there are going to be more people retiring than at any previous time in history. When you look at the Social Security Trust Fund you will

Depression II

2006-04-21T08:36:00.000-06:00

Most economists of the Austrian school of thought will tell you in no uncertain terms that the massive manipulation of our country's currency will end badly. You cannot inflate forever and hope that things work themselves out.For examples of what happens, look at the Wiemer Republic of Germany in 1923 and Argentina in the 1990's. In Germany the inflation of the supply of money got so bad that

Jesus’ Government

2006-04-20T07:33:00.000-06:00

Today I post for your reading enjoyment, an article by Joseph Sobran. He nails the Libertarian viewpoint firmly on the head in this article. His key comment occurs in the second paragraph…"Government is organized force." Libertarians are against organized government because there is no proof anywhere in history that government has made anything better by getting involved. Libertarians are

Inflation Up, Gold and Silver Up, Dollar Down

2006-04-19T08:14:00.000-06:00

Actually this morning the dollar is up a tad, but that is a temporary situation. The wonderful government announced this morning that inflation as measured by the CPI was up .6% for March. If you do some quick math, you will find that pencils out to around 7.2% on an annual basis. If you read the whole report published here, you will notice that way down in the report they speak of the old

The frightening truth of why Iran wants a bomb

2006-04-18T07:55:00.000-06:00

Part of our problem in understanding what is going on in the Middle East is the fact that their culture is so different from ours. With that in mind and all of the recent talk of military action against Iran, I present an article published Sunday in the Telegraph.The author has a wonderful grasp of the Middle Eastern mindset. The frightening truth of why Iran wants a bombBy Amir Taheri(Filed:

Gold, I Told You So

2006-04-17T08:24:00.000-06:00

Today gold broke the $600 barrier. I am sure that we will hear the usual suspects come out of the woodwork downplaying the move, saying that gold is overbought, it is a relic, it is time for a correction. They will try to talk down the price of gold. We may even see some of the large banks selling gold in an effort to bring the price down.All of this may work…for a while, but the bottom line

Are We All Sheep?

2006-04-12T10:07:00.000-06:00

I ask this question because as I look around at the kind folks that I work with, no one seems to care about what is going on in the world. No one cares that Iran just hit another milestone in the uranium enrichment process. No one cares that the war in Iraq, which we were duped into, has devolved into a civil war. No one cares that the government increased the debt ceiling to $9 trillion. No

Shortsighted Immigration Policy

2006-04-11T08:05:00.000-06:00

No doubt you have read or heard all of the reports surrounding the legislation regarding immigration. It has resulted in mass demonstrations around the country. As is typically the case, our government is trying to fix what they perceive to be a problem; mass illegal immigration from Mexico.In a nutshell, the new law would make it a felony to be in this country illegally. The bill, which

Real Gross Domestic Product

2006-03-30T09:09:00.000-07:00

The Bureau of Economic Analysis released their numbers yesterday for the fourth quarter of 2005. As expected, the GDP was up 1.7% for the quarter. Not bad eh? Multiply that by four and you get a number in the neighborhood of 6.8% for the year. Now if you read that article and came to that conclusion you would have no problem believing that the economy is doing wonderfully well, which is what

To Save or Not To Save

2006-03-28T13:25:00.000-07:00

Any good financial planner worth his salt will tell you that you should have between three and six months of living expenses saved for unexpected emergencies. My guess is that most of us are not anywhere near that number. Why is it that we need so much set aside in a very liquid, convenient place? Let's take a look.If you have watched the news over the past five years or so, you will have

More Information Surfaces About the Avian Flu Threat

2006-03-16T09:51:00.000-07:00

Because I believe that most people reading this blog have pretty much dismissed all of the discussion surrounding the Avian Flu threat, let me provide you with some more information. This website was created by the federal government. It went live in November. It is something that you need to read.First, the latest odds on the flu mutating into something that is contagious between humans is

Tipping Points, Tripping Points

2006-03-14T15:25:00.000-07:00

Maybe tripping points makes more sense. You see, back in January, I spent several days discussing possible tipping points that could affect the economy in 2006. Tipping points are events, which trigger changes in the status quo. Sometimes they seem like insignificant events when they occur, however, when looking at them later, they turn out to be the event, which set into motion major

I Love America. Do You?

2006-03-09T08:09:00.000-07:00

by Harry BrowneMarch 3, 2006Editor's note: Harry Browne, libertarian author and activist, died Wednesday, March 1, 2006. The following piece originally appeared on Antiwar.com Nov. 20, 2001. We reprint it in memory of this great friend of peace and liberty.I love America.I love every concept the Statue of Liberty stands for - that individual liberty is held above the objectives of government;

Batten Down the Hatches

2006-03-07T09:16:00.000-07:00

A fellow that I read every day, George Ure, over at www.urbansurvival.com makes a very interesting comment today about changes coming in the near future and how he has prepared.Let me give you a quick update on his worldview. He believes that there are some major events on the near horizon, which are going to affect our lives in the coming months. Since about 1996 he has been predicting the

Good News Bad News

2006-03-01T08:40:00.000-07:00

Consumer spending up .9% for the month. Yippee, the news reports that sure enough things are rosy. The economy is growing. Happy times are here again. Right?Wrong. Incomes were only up .7%. That means that we are spending more than we are making. How do you do that? Well, you spend savings. Last year the savings rate for the country was negative .4%. The worst since the great depression

The Razors Edge

2006-02-28T08:26:00.000-07:00

That is where the Federal Reserve finds itself these days. It is a tightrope walk for sure. On the one side, they continue to inflate the money supply at an almost double-digit rate. On the other side, they continue to slowly increase short-term interest rates. Both of these actions work against each other. Increasing the money supply works through the economy and causes the price of goods

Weapons of Mass Financial Destruction

2006-02-22T14:19:00.000-07:00

As you recall, I discussed the first shot fired against Iran back in January. It was not a conventional blast. It was a weapon of mass financial destruction. It occurred when Swiss banks notified Iran that they would no longer do business with Iran. Even though it did not make a great deal of noise, it was powerful just the same. It forces Iran to take action. Action that could result in a

The End of the Dollar

2006-02-16T08:15:00.000-07:00

Yesterday on C-Span Representative Ron Paul from Texas spoke about the coming end of the domination of the U.S. dollar in world markets. It was all about what we have been discussing here at the Armchair Economist. Basically, he told the congress that the wars we have been fighting are not so much about terrorism as they are about regime change. The US intends to maintain its position of

The News Trickle Will Soon Become a Flood

2006-02-14T15:59:00.000-07:00

Back at the end of January, I wrote about what I believed to be the first shot fired in the war with Iran. It was a little covered story about Swiss banks refusing to do business with Iran. While it seems a minor thing, it is major in how it impacts Iran's finances.As I wrote back then, it could be the opening shot in a war that is just getting started and will no doubt grow. While the media

Not a Job to be Found

2006-02-13T09:25:00.000-07:00

Unless you like flipping burgers.You may remember my comments last Thursday regarding the president's remarks about our reduced number of scientists and mathematicians. If you recall, I suggested that we let the market determine our need for such individuals. Seems logical enough. Today I have posted an article written by Paul Craig Roberts, a former Assistant Secretary of the Treasury under

The One Big Thing in Economic Theory

2006-02-09T11:44:00.000-07:00

It does not matter which economic theory you subscribe to, well actually in the long run it does, but that is another topic for another time. All economic theory rests on this one principle. People, this includes you and I deliberately undertake specific actions with the goal of making their situations, at least as they see them, better than they were previously. Think about that for a minute.

When the Optimists Become Pessimists

2006-02-06T11:09:00.000-07:00

First, let me start off by saying if you are truly interested in managing your own money, and I believe you should be, you have to do some reading. I do tons of it, not only because it helps to create a better picture of what is going on In the investment world, but because I enjoy reading.For me, reading is a way to learn, to increase knowledge. Since elementary school I have been an avid

Bad News Friday

2006-02-03T11:22:00.000-07:00

You may recall that I have written about concerns over the 9/11 terrorist attacks. One article asked about the passenger lists and how our government was able to identify the 19 hijackers even though none of the names appeared on any of the manifests.Another article, a research paper, by a professor in Utah questioned the accepted theory that all three towers fell as a result of the two plane

Spare Change, Anyone?

2006-01-31T08:42:00.000-07:00

Last night on C-Span I watched a gentleman give a speech about the current U.S. economic situation. I forget his name and in fact did not catch the entire speech, but what he had to say was impressive coming from a former Reagan economic advisor. First, he explained why we are in the position we are in today. Developing countries around the world are accepting dollars from us in return for

Shock and Awe II

2006-01-26T11:03:00.000-07:00

Did you hear it? The press reported the first shot fired in the Iran conflict on Monday. And no, it was not a weapon of mass destruction. It was a weapon of mass financial destruction. For all of his simple ways, no one can say that President Bush is not an intelligent man. He is faced with a country that hates the U.S., hates Israel, and hates being told what to do. Of course all countries

Road To Ruin

2006-01-20T08:13:00.000-07:00

Heres a note from a CPA in Florida regarding home prices. As written here earlier, I believe the housing bubble is beginning to pop. Apparently Sir John Templeton sees things in a similar light.I am a Certified Public Accountant here in Central Floridaand also work as Financial Reporting Manager for one of the largest timeshare developers in the country. Thanks to the nature of my work and from

Housing Prices to Fall By 90%

2006-01-17T07:52:00.000-07:00

Yesterday I reprinted an article about a secret peace conference that could have ended the Civil War early. The point of the article was to show you that the supposedly greatest president in the history of our country almost single-handedly voided the constitution. He put to an end forever, the states right to secession. The war was not about the abolition of slavery; it was about keeping the

The Failure of Modern Government

2006-01-16T09:13:00.000-07:00

After reading some of my postings, you might come to the conclusion that I am a Bush basher. That is not the case. I am simply a Libertarian and a severe one at that. If I had been writing during the Clinton era, I would have criticized his decisions as well. It is my opinion that government has no place in the business world and yet they have convinced a large number of us that they alone

Textbook Economics

2006-01-13T07:58:00.000-07:00

Well, the PPI numbers were released and although there will be those that seem surprised, it is certainly no surprise to me. As I have been saying repeatedly over the past year, when you increase the supply of dollars, it eventually shows up as price increases. In the past, the price increases came much quicker because we were not peddling our debt to foreigners. Not so today, and as those

Yet Another Possible Tipping Point

2006-01-12T11:23:00.000-07:00

Tipping points come in all shapes and sizes. This year there seems to be an abundance of possible tipping points. I dont know why that is, but there are several that could jump up and bite us this year. Each of the possible points we have covered could cause, if they occur, a severe recession or worse.Iran RevisitedToday the news is abuzz with a couple of tipping points that are making

Death By A Thousand Cuts

2006-01-10T08:40:00.000-07:00

Over the past several days we have been looking at potential tipping points. Tipping points are events which may not seem important when they occur, but in retrospect turn out to be the event that tips the scales.There are manymore potential tipping points out there that could tip the scales and cause our economy to tank. Over the past couple of days, my reading has involved not only the ones

Watch Those Tipping Points

2006-01-06T07:48:00.000-07:00

Today, before I dash off to my real job, let me just remind you to watch the tipping points we have been discussing. One that concerns me most right now is the chance that our creditors will grow weary of the dollar and stop buying our debt. Our debt finances our excessive, live beyond our means, lifestyle. This article which appeared in the Financial Times yesterday could be the beginning of

Bang Bang Boom

2006-01-05T15:57:00.000-07:00

Today we look at a possible tipping point for 2006 that is not a pleasant scenario. (As if any of the other tipping points are) The tipping point I speak of is world war.Now before you click away to some fantasy site that excites and soothes your tattered mind, stick with me here for a few more minutes.We live in perilous times and the weight of world affairs is teetering on those overloaded

Would You Buy A Car From This Man?

2006-01-04T08:55:00.000-07:00

The third possible tipping point for 2006 has to do with ethics, and in particular, the ethics of our current administration. As you may recall, back on December 21st, I wrote about the then emerging story about President Bush ordering thousands of illegal wiretaps. What made them illegal? The fact the he did not obtain the permission of the FISA court. Now George claimed at the time that he

2006-01-03T10:17:00.000-07:00

Yesterday I began the New Year by looking at possible tipping points that may lead to an economic slowdown. First, we looked at the Peak Oil problem and how it is not going away. The economic impact of Peak Oil and what that means to our way of life could be extreme. Now, it doesn't mean that it will happen overnight. No, it is far more likely that it will be a slow process. In fact, I would

Drilling In Alaska

2006-01-02T14:37:00.000-07:00

Is This The Answer to High Gas Prices? The short answer is no. Peak oil is real and it is here now. From now on the amount of crude oil available will decline. The experts estimate that there are 10 billion barrels of oil in Alaska. Sounds like the answer to our prayers doesn’t it? It turns out

Is A Recession In Our Near Future?

2005-12-23T14:29:00.000-07:00

One of the best predictors of coming recession is the yield curve. The yield curve represents the difference between short-term interest rates and long-term rates. Normally, we would expect long-term rates to be higher than short-term rates because investors need a higher interest rate to offset the risk of holding a long-term bond. When short-term interest rates go higher than long-term rates

Absolute Power Corrupts Absolutely

2005-12-21T08:16:00.000-07:00

Lord Actons famous quote is one of my favorites. "Power corrupts and absolute power corrupts absolutely." How true. This is the downfall of all forms of government. When you put someone in power as the head of the government, they believe that they are entitled to special privilege. That for some reason, the laws do not apply to them in the same way. All of a sudden, this person who we

Why Is Gold Money?

2005-12-15T11:36:00.000-07:00

Yesterday I asked then question, Do You Own Gold? I gave my reasons why I, and many others, believe that it is important to own some gold as insurance against economic calamity.I realize that many people may not even understand why gold is important or why it is even considered money. So today I would like to explain.First, gold has intrinsic value. That means that even if it is not formed

Do You Own Gold?

2005-12-14T10:15:00.000-07:00

I read an interesting piece yesterday from a well-respected investment guru. He informed his readers that he owns gold and has for some time. Basically, there are two ways to own gold, you buy it and hold it. This would be for insurance. The other way is as an investment. With this gold you are looking at making a return on your investment. This is much harder to accomplish, but over the

Revisiting GM

2005-12-13T09:00:00.000-07:00

A few weeks ago I wrote about GMs woes and how the future just does not look good. Today I have a few more facts for you to digest. I hope you do not own GM stock or collect a GM pension check.Here are some numbers:1. GM monthly sales are down for the fourth consecutive month. 2. GM lost $4 billion in 2004. 3. GM is slashing 30,000 jobs. 4. GM is closing 12 plants to "bring capacity in line

Bear Market to Resume Shortly

2005-12-07T08:32:00.000-07:00

If you have read my previous posts, you will know that I believe we are in the midst of a secular bear market. The last secular bear market occurred in the late 1960s and lasted until 1982. Secular bear markets are like secular bull markets, they last a long time. Typically a bear market does not end until stock valuations as measured by P/E ratios drop below what I call the normal range. The