http://demonocracy.info/infographics/usa/world_debt/world_debt.html
*****************************************************************************
I got this from Mike Krieger yesterday:
In case you missed this. Really summarizes the kind of nanny state, pathetic society we are becoming. You will need a permit to use the toilet pretty soon. Fines for digging too deep of a hole in the sand! Go LA, way to have your priorities straight.
http://losangeles.cbslocal.com/2012/02/08/la-county-oks-1000-fine-for-throwing-football-frisbee-on-beaches/#.TzNF39UMTwY.facebook
LOS ANGELES (CBS) — When you head down to the beach for a little fun this summer, county officials want you to leave the pigskin at home.
The Board of Supervisors this week agreed to raise fines to up to $1,000 for anyone who throws a football or a Frisbee on any beach in Los Angeles County.
In passing the 37-page ordinance on Tuesday, officials sought to outline responsibilities for law enforcement and other public agencies while also providing clarification on beach-goer activities that could potentially disrupt or even injure the public.
The updated rules now prohibit “any person to cast, toss, throw, kick or roll” any object other than a beach ball or volleyball “upon or over any beach” between Memorial Day and Labor Day.
Exceptions allow for ball-throwing in predesignated areas, when a person obtains a permit, or playing water polo “in or over the Pacific Ocean”.
However, during the winter off-season, the new rules will be relaxed.
Officials warned that any activities that could potentially harm “any person or property on or near the beach” should not be allowed during the peak summer season.
Your kids could also end up costing you big bucks: the ordinance also prohibits digging any hole deeper than 18 inches into the sand except where permission is granted for film and TV production services only.
*****************************************************************************
The sad thing is, there are people buying this junk.
*****************************************************************************
I'm starting to think I'm an idiot for paying my mortgage and my other debt. Apparently, Obama will pay them for me.
The U.S. government today announced a $26 billion foreclosure settlement with five of the country's largest home lenders. The deal settles charges surrounding allegations of "robo-signing" – or improper foreclosures made without proper paperwork. The money will go to reduce the principal owed by borrowers who are "underwater" (meaning their loan is worth more than their house) and/or behind on their mortgages.
In short, this deal will give relief to people who took bigger loans than they could afford and those who have stopped paying their mortgage. Meanwhile, folks who continue paying their mortgages on time get nothing. Financial analyst Dick Bove calls it "the mortgage deal from hell." He made his comments on CNBC this morning…
If you're going to do something which is going to reduce the value of existing homes where people are making payments, then every American should stop making payments on his mortgages and send a letter to the Attorney General in his state and say "I qualify to have my principal reduced because I'm not going to make any more payments on my house."
This deal is a crowning achievement for Obama… allocating bank money (which came courtesy of U.S. taxpayers) back to his government to enable even more entitlement. Bove drove the point home, saying, "There is no sanctity of contracts in the United States. Only fools meet their financial commitments. The nonpayers are truly enlightened."
******************************************************************************
Warren Buffett as a Gold-Hater
Warren Buffett is out with an anti-gold rant in Fortune magazine:
Today the world's gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce -- gold's price as I write this -- its value would be about $9.6 trillion. Call this cube pile A.
Let's now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world's most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?
Beyond the staggering valuation given the existing stock of gold, current prices make today's annual production of gold command about $160 billion. Buyers -- whether jewelry and industrial users, frightened individuals, or speculators -- must continually absorb this additional supply to merely maintain an equilibrium at present prices.
A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops -- and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil (XOM) will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.
Here's the problem with Buffett's rant. Gold is an alternative money. It is not productive land or a piece of capital. It shouldn't be compared to farmland, to Exxon Mobil etc. It is a means of exchange.
Gold needs to be compared to its alternative, in the U.S., the dollar. The proper way to look at the difference between the two is this way. If you take that 170,000 metric tons and put it into a baseball field and next to it you put the total money supply, over time you will see that the gold supply increases by roughly 2,500 tons per year.
According to the World Gold Council:
The stability of production comes from the fact that when new mines are developed, they’re mostly serving to replace current production, rather than expanding global production levels.
Gold production does experience comparatively long lead times, with new mines taking up to 10 years to come on stream. That means mining output is relatively inelastic, unable to respond quickly to a change in price outlook. Even a sustained price rally, as experienced by gold over the last seven years, doesn’t translate easily into increased production.
Contrast this with the supply of money (M2), which is controlled by the Federal Reserve. Rarely is money growth below 5% on an annualized basis. What's more there is no natural check on the increase in dollars as there is with gold, which has to be mined out of the ground.:
Looked at this way, which is the correct way, gold is a damn good place to put your money because if money growth continues at current rates, the cost of farmland is going to be much more expensive, but the price in terms of gold is likely to keep up, but if you tuck that same amount away in physical dollars, you are going to come up way short in terms of being able to buy the same amount of farmland.
Further, if we can use voter support for Ron Paul as a rough proxy for how many people currently hold gold, then it's only around 10% to 12%. As prices climb the potential exists for many more people to want to hold gold. Since current gold holders aren't likely to give up their gold cheaply, the price of gold is likely to climb much faster than farmland.
Of further note, Buffett is becoming quite Keynesian in his manner of aggregating things in ways that can't be aggregated. In his argument, he talks about an individual buying 16 Exxon Mobils, well damn, there aren't 16 Exxon Mobils. It's a phony proposition. Someone with $9.6 trillion to invest is going to have a very difficult time investing most of his money in anything close to Exxon Mobil returns. Indeed, Buffett in the Berkshire annual report proves this point when in recent issues he always "advertises" that he has money for the right acquisitions. If these great returns are so available, why isn't Buffett just investing in them?
Bottom line: The more of an oligarch Buffett becomes the more absurd his arguments become. The man is now dishing full out monetary quackery, ignore the nonsense, buy gold.
No comments:
Post a Comment