"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands  should be curtailed lest Rome become bankrupt.  People must again learn to work, instead of living on public assistance."  Cicero - 55 BC

 And so, it has always been this way . . . If I recall, Rome collapsed completely

 

Things are bad, money is scarce and credit is tight. Right?

Not for everyone! Politicians at every level of government are spending like....well...like politicians.  There seems to be no shortage of money for them. Do you suppose they've found a way to tap that "Bail-out" fund?  Hundreds of millions of dollars in political funds are being pumped into the advertising industry this year.

Did you ever wonder where it all came from if money is so tight? This influx of money (there are rumors some of it's foreign) makes advertising rates artificially high for legitimate business that really can't afford the extra expense.

There's a reason for the sharp downturn in business this year.  The reason is politics.

A social experiment

On his way to lunch, a man passed a homeless guy with a sign, "Vote for Obama, I need the money."  Inside the restaurant his server wore an  'Obama in 08' button. When the bill came the customer explained that he was exploring the Obama wealth redistribution concept.

The server stood in disbelief as he was told the customer was going to redistribute his tip to someone more deserving and in need like the homeless guy outside. The server angrily stormed away uttering some unkind words. The customer gave the homeless guy $5 and told him to be sure to thank the server inside.

At the end of this unscientific redistribution of wealth experiment, the man realized the homeless guy was very grateful for the $5 he did not earn, but the server was pretty angry that the money he did earn was given to someone who needed it more.

Redistribution of wealth is easier in concept than in practical application.

More than a year ago in an interview, Alan Greenspan gave his cerebral explanation of "Globalization." It's hard to interpret into normal language, but let me try! In order to bring the living standard of the 3rd world up to that of the USA, our living standard must decline.

The financial crisis indicates with no uncertainty that international banking is one of the culprits and the Council of Foreign Relations (CFR) of which Greenspan is a member has it's tentacles spread around the globe. CFR was organized in 1921 by "old money" folks like John D. Rockefeller and J. P. Morgan. All the talk about the "Amero" to compete with the Euro hints that the elitists in monetary circles are planning the demise of the Dollar and the Pound Sterling.

Ever wonder why President Bush doesn't stop the illegal flow of immigrants from Mexico? He's a member of CFR and they're vision is for a North American work force. Colin (CFR member) Powell's recent endorsement of Obama hints that McCain might not support the flow of cheap labor although he too is a member of CFR.

Just a year after Greenspan's classic explanation, we are indeed seeing the influence of what is lovingly called "Globalization." A better term for the occurrence might be "World Wide Socialism." I predict that all the phony bail-out money we're printing to save the financial industry will come home to haunt us in the form of massive inflation over the next few years.

One of the basic defensive operations taught in the Marine Corps was to dig a hole and keep digging till the barrage stopped. Better gird your loins and dig that foxhole deeper! The CFR troops are hard at it.

Fannie Mae and Freddie Mac are certainly part of the current financial crunch. But looking deeper than that, the Community Reinvestment Act is probably more responsible than anything else for the housing collapse. It was implemented by congress during the Carter Administration in 1977. They push banks and other lenders to allow ridiculous latitude on the credit worthiness of applicants.

Their acronym is CRA. I have trouble with acronyms, so I just add a "P" to help me remember it for Google purposes. Check it out for an educational awakening.

Written by the Rev. William J. H. Boetcker
Presbyterian Clergyman in 1916
 
You cannot :
 bring about prosperity by discouraging thrift.
 help small men by tearing down big men.
 strengthen the weak by weakening the strong.
 lift the wage earner by pulling down the wage payer.
 help the poor man by destroying the rich.
 keep out of trouble by spending more than your income.
 further the brotherhood of man by inciting class hatred.
 establish security on borrowed money.
 build character and courage by taking away man's initiative and independence.
 help men permanently by doing for them what they could and should do for themselves.
 

The dust hadn't settled on the big Wall Street bail-out when big shots admit that 700 billion is not enough. Banks have lost 1.5 trillion and need more capital to survive. What worries me is when politicians start asking;  "What comes after a trillion?"  Then we'll know the end is near. But one thing is clear, Wall Streeters and politicians will not go to jail.

Watching Neil Cavuto on FBC, I was struck with the guy he was interviewing. Remember Barry Minkow, the 18 year old carpet cleaner who swindled Wall street out of  $100,000,000.00? He did the crime and served the time and is now selling advise on how to defend against fraud.  Do you think Cavuto sees some similarity in this swindler and the Wall Street/Washington fiasco? The carpet cleaner was locked up.

Ironically, just before the fraud story broke, Minkow had been declared "Man of the year" in one of our more dubious cleaning industry publications. He was lauded on the Oprah Winfrey show and openly bragged about his little company taking in 50 million a year. Speaking of taking in, just showing the trappings of success apparently is enough to fool some people. Those of us who are really in the cleaning business knew better.

Election campaigns always ask this question. Are times Better or Worse?  When flying was fun, you could pick up the phone and in a few minutes have a ticket and boarding pass mailed to you. Now we do all of their work on our computers and never talk to a live person until we meet the rude security people at the airport. Is that better or worse?

If inflation is really only 3% as advertised why are prices jumping so drastically? Why is a business loan so hard to get? Did you notice the jump in income tax brackets? Local property taxes are going berserk. Is that better or worse?

Try calling a government agency and you get a long-winded computer menu.  Streets and sewers can’t be repaired because cities don't have enough money. Crime is up because they can’t afford more police. The bureaucratic mantra is more tax money or services will be cut.  Is that better or worse?

Governments everywhere are building elaborate buildings, adding staff and buying the latest and best furnishings and equipment. Government employees attend seminars at posh watering holes at taxpayers expense on how to govern. "How to fleece the populace" would be a better name.  Is that better or worse?

They can put lipstick on it but if it looks like a pig, eats like a pig and sounds like a pig, it is a pig. We probably won't feel the repercussions of the 700 Billion Dollar time bomb our Washington representatives are tossing our way until inflation runs wild.

Are times better or worse? The answer is, YES! No matter the stripe of the politician, times are better for them, the ruling class, and worse for we serfs, better known as taxpayers.

I have heard too many people say that the "Wall Street Bailout" is simply going to put money into the pockets of already overpaid Wall Street execs.  Believe me that the problem is much more global than that.  Unfortunately our media is not giving us much information about this side of the crisis.

Investments in Lehman from banks and governments around the world has created a crisis worldwide.  China, where the banks are still government controlled has lost over $300 million on their investments in the failed company.  India, representing 1.3 billion people, has lost over $400 million although since this was from private companies rather than government owned, it may have less impact on the world.  Japan, the largest supporter of the US economically has lost $1.6 Billion.

Russia has fallen victim to their own actions but it has been exacerbated by our financial crisis.  Following Russia's invasion in Georgia, billions of dollars investing in that booming economy started being withdrawn in favor of more secure markets.  The US financial crisis piggybacked on this trend and sent the entire Russian stock market into chaos.  The Russian stock market was forced to close last week following the announcement of our crisis.  It reopened last Friday but after a few hours, they were forced to close again.

Last night the President of the US used grim language to drive home the seriousness of the situation.  Jobs in the US, loans for homes and other projects are all at risk.  If we don't solve this problem domestically, it will affect us here at home but it will also kill the global economy we live in today.  This is serious although I have confidence that, now recognizing the problem, we will find a solution quickly.

Too often we are so consumed by what is happening in the USA, we miss changes in the global market that impact us here.  An example is the implementation of an 80% export duty that the Russian government has levied on logs leaving the country.  Since they were the largest exporter of logs in the world, this will have an impact on lumber prices globally.  The purpose of the duty is to entice Russians to develop a value added wood industry for export rather than just ship out raw material.  Don't be surprised if in 5 years the best value wood flooring isn't coming from Russia.

Last month, India and a group of Asian countries including China signed a free trade agreement similar to the North American Free Trade Agreement or the European Economic Union.  This agreement was 5 years in the making and provides for duty free trade between countries and dispute resolution mechanisms.

The Olympics were spectacular and I would not want to be the next city to host these games.  While China performed superbly, their shining moment does not cover up some basic problems in their economy and society.  With over 20% of the world's population, they have only 7% of the world's water.  Many of the old government owned businesses have been turned over to entrepreneurs who are ill equipped to manage profitable businesses.  The assets are carried on the state bank's books at full value; loan defaults are not recognized because state businesses are often sold for a dollar a year plus a balloon at the end of 20 years for the remainder of the value.

An global agricultural agreement promoted by the World Trade Organization fell apart last month when the USA and India objected to the way government subsidies to farmers and crops were being treated differently between countries. 

How will all of this affect you?  Ripple affects will impact businesses here in the USA over the next five years.  Whether it is a company in China that can no longer pay their bills, a new wood floor from Russia, higher food and biofuel costs due to the international agricultural market, global changes will impact your business.  Keeping informed now will help prepare for the future.