Friday, January 09, 2009

You can take a trip through your juke joint smoke-filled paradise You can give it your all, cause you are walking a fine, fine line

My lack of understanding economics is killing me, for it's crucial in truly understanding what's going on. I don't trust media outlets and blogs that say the sky is falling, its human nature to think that way, and its a sure fire way to increase ratings.

Our collateralized debt obligation will lead to us as a nation not being in control of our own destiny. From what I've read, and throwing in that I'm not an expert, most of our collateralized debt is in the form government bonds, 60% of which China 'owns,' with a slow and steady rate of 6% return. Ayn Rand would be rolling in her grave at the quick / greedy schemes conjured up these days to undermine hard work. Prosperity and hard work go hand in hand.

The free market will live on, and like an optimist says, a phoenix will rise from the ashes, but that phoenix will be soaring with the bald eagle, and that's indeed how it should be. The global economy will find new markets, and find its way to societies in which people are begging for and deserve a better standard of living.

The creatives in China and India are working for a sort of 'grass roots' capitalism, one that doesn't manifest itself in the rich. The new hotness is by cheap goods by volume for the volume.

People say its the 'perfect storm,' blah blah, and its been hard to not repeat this doom and gloom. The contrary suggests the connected world market is more of a blessing than curse, it keeps institutions in check, and it has mechanisms to punish bad behavior. Whoever you want to blame it on, the USA will have a nice black eye and broken leg when the dust settles.

In a nutshell, my thoughts are, to fix this, globally, the governments of India and China will allow more expansion to keep the global economic ship afloat, funded by a consistent 6% return on investment of our debt collateral for the unforeseeable future. At some point, western civilization (this side of the Atlantic) will have to take the hit, could be now, could be later.

The old line, payback is a b*tch. The last 2 years I've made SERIOUS compromises on my life to enjoy a debt free living, the law of averages says America as a collective has to do the same. Cultural humility and awareness should be baked into the solution too.


Mike Mahon said...

America is finally having to pay the bill after a smorgeshborg of epic consumption based living. Time to hunker down, tighten the belt straps, turn green and maybe plant a garden. That in my uninformed opinion is what is going to need to happen. The major movement in the economy will be micro-economies on a national scale. People will start conserving cash, investing in profitable assets and basically living a more frugal lifestyle. That's a good thing. I think the media is unknowingly fostering the "paranoia" factor in the people and this will just fan the flames of the thrifty fires that will keep the homestead warm & cozy. Innovation will also play a big part in the future, as to whether that innovation comes from Americans is up to us. We've just been set on parole after a brutal 3 year stint in the doldrums. It's going to be tough but we can do it, I know I can and will start adopting a less is more attitude.

Lee said...

First up I agree that it is hard to understand economics when the "experts" and politicians lie to us and muddy the waters. Throughout the past decade and 1/2 we are told that if you wanted a 12% increase in your pet program but only got an 8% increase then those evil republicans were "cutting" entitlements. We are told that, although the statistics show otherwise, that tax cuts hurt the economy when in fact the Reagan and Bush tax cuts brought record amounts of income into the treasury, only to be spent by politicians as if they were drunken sailors on leave. Now we have a new administration that says we have to spend our way out of debt! Did that work for you Robert? Think not. So, yes our economy will be in the tank for at least the next four years because those in charge for the past two years and will be in charge for the next four are putting it there.

Now, as for trying to get a decent, and I think the only honest assessment of this, I truly recommend a six week diet of listening to Rush Limbaugh, Laura Ingraham and maybe Shaun Hannity.
I know this seem like listening to the anti-christ to some but he has consistently cut through the bullshit over the years and shown how economics really works and where we are being boondoggled by congress.

Also, Mike is aware of him, but Robert I also like listening to Clark Howard for some straight forward advice for the lay person who is trying to save money and invest wisely.