Cash for Klunkers?
Posted by truthtalklive on 11 August, 2009
This post was filed in Uncategorized and has 24 comments
Today Stu and The Christian Car Guy Robby Dilmore speaks about the Cash for Clunkers debt for suckers I mean uh “program”.
Do you think you should give them your car? Robby Dilmore calls this so called program “A debt for suckers”. So are you a sucker?
Democratic lawmakers have proposed a cash-for-guzzlers bill that would provide vouchers of up to $4,500 to people who trade in cars and trucks for new, more fuel-efficient vehicles. Read More Now…….
Stay connected!
24 Comments on “Cash for Klunkers?”
Cash for Clunkers has been a huge success!
Its helped out auto industry in a time of serious need.
The question remains, will the right wingers give credit where credit is due?
We’ll see…
its helped out *OUR* auto industry
sorry for the mistype.
*on a side note*
it would be helpful if there was a way to edit our post after its been posted so we don’t have to make another post.
just a friendly suggestion, moderator. I will say, this website has been getting more user friendly. Props.
X: “The question remains, will the right wingers give credit where credit is due?”
That’s the problem, credit. We have gotten ourselves into this situation because of too much debt and too much spending so logically the government is going further into debt, spending money it does not have, and encourage people that generally can lease afford it to go into debt. YEP this one has to be a winner. If anyone out there wants to get into a business that will really boom, you should consider the Auto Repo business. My guess is that in a few months that business will be hot as a pistol.
The death of the dollar is now a sure bet. Someone just called in with the latest stats on total US debt and unfunded liabilities and they stand in excess of $90 trillion. If we were to pay that debt off at the speed of light, $186,000 per second, it would take us 15 years to pay it off.
Those of you that think government is the answer ask yourself one question. How did we get into this mess? Of course to make any sense in your answer you must have some basic understanding of economics along with a grain of common sense.
Everything the government is doing has been tried before and failed miserably. Back in the 30s, government intervened in the economy and we wound up with a 12 year depression. The first such depression in US history, which why we call it the Great Depression.
Get ready all you “the government will help us” crowd we are about to experience the Greater Depression or Great Depression 2. This one could very well make the last one look mild in comparison as we will experience economic stagnation and high inflation.
Those of you that call yourselves Christians and support the statists policies of government control had better get down in prayer, ask God for wisdom, and most of all Read your Bible to see what God has to say. Nowhere in the Bible does it say that we are to depend on the Government. Throughout the OT and NT as well as throughout history, it has been government that has presented mankind with all sorts of pain. Our founding fathers knew this which is why they designed a Constitution limiting the power of government. Unfortunately we have undone what our founders gave us in the way of freedom. We have exchanged freedom for safety and soon we will have neither.
I love my tough clunker, every scratch, dent, and stain. Those aren’t flaws…..those are battle scars[grin]!!!
People see my busted, crappy-looking pickup truck and they can tell…that’s a Working Man who uses his truck for what a truck is for[I like to think anyway, as opposed to "What a piece of crap! That guy must be one sorry, cheap, irresponsible, reckless, #@!&*%!", hee,hee.].
So when is Truth Talk Live officially changing their name to Republican Talking Points Live (innocent wide eyed smile)?
Let me make sure I get this straight. A tax rebate under Bush of $300 – $1200 was a great idea to stimulate the economy. But a incentive program under Obama that directly encourages spending in a sector of the economy that is sufferring is unBiblical. People are supposed to live and die by their own decisions and not get any help from the government when it comes to welfare and health care, but we get to blame the goverment if someone stupidly trades in a car that is worth more than the $4500 rebate under this program (even though every article I have seen about it specifies it will only benefit those wanting to trade in a car worth less than $4500!) And finally, we are now going to accuse the government of evil because they are “posioning” the engines of the clunkers so they don’t make it back on the road since one of the goals is to replace low mileage engines with high mileage engines. Of course, there was discussion of retro fitting the engines to make them more gas economical, but the Republicans would never have supported it because it would have cost more money!!!!! You guys have no shame.
And finally, the laudable goal of getting higher fuel efficiency models out on the roads has little to do with global warming. If that had been the goal, we would have gone with higher emission standards as they did in Germany’s version of this program. No, the reason all Americans should be driving the most fuel efficient car they can afford is because it will save billions of gallons of oil every year. And that will keep our boys and girls from having to go overseas and die to prop up unstable, marginally democratic or outright corrupt regimes in oil producing countries. But go ahead and scoff at the program, and drive around in your gas guzzling Hummer, Suburban, or Expedition. Put a ribbon on the back that says “Support the Troops”. It’s a free country, after all.
Kash: The main difference between Bush’s tax rebates and the Cash for Clunkers program is that Bush’s program didn’t have any strings attached. It was just an infusion of money back into the system, into the hands and pockets of we Americans, to whom it belongs anyway. While I agree with you that Cash for Clunkers has some merits, and maybe should be revisited to retool it with more virtue and less vice, the problem is as was pointed out in the video is that in order for it to work it imposes several huge liabilities on individuals and businesses both seen and unseen. People are being encouraged to take on debt or more debt than they should/could; some very good vehicles that would be a blessing to some are completely removed from the system, not even available for parts. In the future there will be a shortage of good dependable cars for people to buy, and used cars will probably go for a higher price than needed, all because this program was implemented.
A better solution would be to give a tax credit to individuals for trading in their current cars if they have improved they fuel economy picture by the trade; say a $200 tax credit for every mile per gallon they improve from where they were with the old car (a fixed table of mileages can be published). That way, individuals are rewarded for saving fuel, cars are still in the system for others to own/trade/get parts from, etc and no ‘real’ impact is felt, except for those few cars with really really bad mileage. Over time they will be interred in the local junkyard, and eventually wind up as scrap metal, re-entering the system as tin cans or whatever.
Where was all this fiscal conservatism when we started two wars with a “conservative” president?
I mean, other than my boy Ron Paul…
Now that we’re trying to spend our money on health care for our own country, we’re being fiscally irresponsible.
I swear, neo-cons are walking, talking, contradictions.
X: “I mean, other than my boy Ron Paul”
Now here is something….make that someone we agree on. I’m a Ron Paul man myself. I am not a neo-con, I am a Strict Constitutional Constructionist and a Conservative.
kash, I was against the tax rebates and the Iraq War. I did favor the Afghan war as that was the origin of the attacks. I am all for bringing home the troops, all the troops. Why do we have to have troops all over the world. Cash for clunkers will push many to take on debt they do need to add to their already poor balance sheet. Besides THE US IS BROKE….THE US IS BROKE.
X: “Where was all this fiscal conservatism when we started two wars with a “conservative” president?”
Bush was no conservative and many conservatives opposed his reckless spending. Bush is part of the elite crowd that believes they know better than anyone else. How come we have two political parties that are in favor of reducing / eliminating the deficit and yet the US adds to the national debt each and every year, INCLUDING THE CLINTON YEARS.
I keep telling people that the problem is the Fed and the power it has to control the money supply. Reign in the Fed, enforce a sound monetary system, and we will not be debating many of the issues regarding government spending. Then again, the politicians will have to run on issues other than, “here is what the government is going to do for you…and it won’t cost you a dime.”
We are now feeling the real cost of government’s excessive spending; higher prices for goods and services. Inflation is CAUSED BY GOVERNMENT. INFLATION IS A MONETARY EVENT NOT AN ECONOMIC ONE. The Keynesian model, which all of our ruling elites of both parties, is fatally flawed. All Obama and the Democrats are doing is continuing the Bush policies on steroids.
This is the end game of all inflations as described by Jens O. Parrsons in his book, The Dying of Money. Everything the government is doing is wrong and will lead to more pain and misery for the American people.
While the Democrats beat up on the Republicans and the Republicans beat up on the Democrats the real power lies within the Central Bank. Old man Rothchild was right, “All me to control a nations money and I do not care who makes the laws.” When we had a gold standard….a gold backed currency, the People….ALL THE PEOPLE had the power over the money supply. IT was a free market controlled by Republicans, Democrats, Libertarians, and Independents….the people. Thus we were a free people. When the final nail was hammered into the dollar’s coffin by Richard M. Nixon in 1971 when he closed the gold window, we lost our freedom. The power to rule via the money supply now rested with the power elites. Is it no wonder that so many Secretary of the Treasury have come from Goldman Sachs?
Wake up everyone, both Democrats and Republicans…We are all on the same boat. If it sinks we all drown. This is not a Democrat or Republican issue; it is an issue of Freedom vs. Slavery.
Walt, thank you for your thoughtful reply.
I would just add that I will be very surprised if the used car business suffers from this program. At least we won’t have what is happening in Germany – high emissions cars that were supposed to be scrapped being sold on the black market to third world countries.
As an economic stimulus, the program is purely “Keynsian” and totally flawed. Just look up “The Parable of the Broken Window.” A brief synopsis would be: a kid breaks a window and someone says, “look, he’s helping the economy because now the glazier has work, and the glazier’s income will subsequently be spent to other merchants etc.” The fallacy ignores that the window owner could have spent the money on something besides replacing what was a good window. The net economic effect of destroying valuable assets is a negative.
The auto industry asked for $15-25 billion handout. They are getting that. The government is shelling out $3 billion and having the rest collected from the same taxpayers that will provide the $3 billion, through profit on sales of cars and loans.
For individuals, the program can benefit a few people who have a “clunker” worth less than $4500, and who can replace it with a new car paid for with cash or at an effective rate of 2-3% (typically achieved through home equity lines of credit or mortgage refi’s where the borrower has stellar credit, a ~5% rate, and for whom the interest is totally tax deductible). For these few people, they will pay less for this program than others — they will reap a benefit off the backs of the less fortunate who will pay the debt without getting a “deal.” For most people participating, they’ll not only get their part of the $3 billion bill, they will end up with costly debt on assets (the new car) whose value is artificially inflated by the program itself. Essentially, the program inflates the price of the clunker replacements by $4500. If it were not for the program, dealers would have to lower the prices that much to make the same sales.
Perhaps the best case for the program is an environmental one, but that remains unproven. The program itself has substantial negative environmental impacts that are difficult to assess. It takes a lot of energy to scrap good cars and build new ones. The scrapped cars will leave residual waste that is not recyclable. The replacement cars are not likely to be as efficient as ones produced years from now. On the other hand, the environmental benefits of the program are easier to quantify (in terms of mpg), but because gallons of gasoline already have a cost associated with them it is easier to regulate demand for gallons by the price than it is by increasing the effective supply. Fewer gallons consumed will lower the price and increase the demand by the same amount it was offset by the increased mileage. An economic negative is rarely beneficial to the environment in the long run. Want to see an environmental nightmare? Just look at the world’s worst economies.
The program is a government spend at a time when the nation has a record deficit and a risky debt to GDP ratio. It seems altogether contrary to the principles established by God’s word for a nation to enjoy blessing. Still, I imagine it would be well down the list of reforms needed to get the nation straightened out.
The issue is not really a political one, but a moral one. It is Caesar’s money, and Caesar said, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” So the program seems to be violating the submission to the governing authorities that God commands. Still, I am sure God is more wroth that children are being killed.
ben, you are confusing us with facts, statistics, and a logical argument. Thank you for a very well thought out discussion on the issue. As for the debt to GDP ratio that is not approaching 460%, the greatest in US history. What is even more frightening is that US GDP is becoming more dependent on Government employment. Government produces nothing and basically consumes what the a nation produces. Wealth is the creation of goods and services that people are willing to buy…..the free market. The old Soviet Union had NO UNEMPLOYMENT. Cuba basically has NO UNEMPLOYMENT. Yet these economies provide very low standards of living.
For those of you that think the government is all about lowering costs. Keep in mind that these are the same folks that paid $500 for a toilet seat and $200 for a hammer.
Politicians always pay $66 million for a $49 million jet. These are the same people that showed fake anger when the Banksters came to congress on private jets. These are the same people who are going to run good ole GM and promise to lower healthcare costs.
Why Is Congress Paying $66 Million for a $49 Million Jet?
AUGUST 10, 2009, 1:30 PM ET
By Robert Frank
What struck me most about the Congressional private jets was the price tag.
As if loading up on private jets in an economic crisis wasn’t enough, Congress has pulled off a feat even today’s most extravagant billionaires would have a hard time matching. That is, they are paying $66 million for a jet with a sticker price of $49 million. (Read about the backlash that has started in Congress here.)
I’m talking, of course, about the G550. Congress is buying three, at $66 million a pop.
That price sounded high to me, since the G550 buyers I know paid around $45 million (at most) for their planes, and that was during the boom times. So I called Robert Baugnier, spokesman for Gulfstream. He informed me that the sticker price for a brand new, completed G550–leather interior and all–is $49 million.
Jet broker Jay Duckson of Central Business Jets tells me that because of weak demand for private jets amid the recession, he can get clients a new Gulfstream G550 for less than $43 million. “It’s like the auto dealers right now,” he said.
http://blogs.wsj.com/wealth/2009/08/10/why-is-congress-paying-66-million-for-a-49-million-jet/
The light at the end of the US economic tunnel is the runaway freight train called hyperinflation. When it hits it will wipe out the savings of most Americans. It will impoverish the middle class. The elderly on fixed incomes will suffer the most. All of this will have been brought to us by the benevolent government some of you love so much. The inflation will push people into higher tax brackets while robbing everyone of their savings. Savings that took years of hard work to earn. In doing so the government will have enslaved its most productive citizens.
$90+ trillion of debt means the nation is basically bankrupt. That’s us ladies and gentlemen. You, me, and all our children and grandchildren. We had better stop arguing amongst ourselves and start working together to put the ship of state on a healthy course. It is too late to avoid severe pain, that’s coming. We have let the imbalances get so far out of line that there is no way to avoid the pain of fixing the system. Think about it….Christians pray about it. Do not be deceived by the politicians that brought on the current crisis and for now are making it worse.
I was wrong. Seems like we are not $90 trillion in the hole.
Ask yourself a simple question: Is the following from this article a solid fundamental reason to be dollar bullish?
In complex times the right answer is always simple.
“The United States is functionally bankrupt.
Our collective capacity to deal with this astonishing fact is seemingly nonexistent.
Our national politics have become show business, exhibiting a complete refusal to strategically respond to this reality.”
We broke the bank!
We need to rein in our overspending
By Mike Whalen | Tuesday, August 11, 2009
The United States is functionally bankrupt. Our collective capacity to deal with this astonishing fact is seemingly nonexistent. Our national politics have become show business, exhibiting a complete refusal to strategically respond to this reality.
Let’s look at the simple numbers of our national debt. Our on-the-books national debt is $11.6 trillion. But off-the-books federal debt, including Medicare and Social Security, is $107 trillion. This is not a made-up number; this is the money we should have in the bank, according to the federal government’s own accountants, to pay for our current promises to our retirees and future retirees, and this doesn’t include unfunded obligations that we have to the pensions and benefits promised to federal workers and veterans. Nor does it include huge unfunded pension and benefit obligations for other public employees at levels below the federal government.
But let’s just add the $11 trillion to the $107 trillion, and we get $118 trillion. These are big numbers but still just fifth-grade math. Now our total annual national output, or gross domestic product (GDP), is about $14.3 trillion. Total federal receipts, or income if stated in business terms, are about $2.5 trillion. This means that our debt to federal income ratio is about 47, and that ratio assumes that the federal revenues are free to retire the obligations, which they are not. We must pay for defense and a myriad of other programs. Again, in business terms, there is no free cash flow to pay these massive obligations.
Our total national private net worth, according to the Federal Reserve Board, is about $51.5 trillion. That means our federal unfunded liabilities represent 2.3 times our collective net worth. That’s pretty darn broke.
Ask any accountant, banker, or anyone remotely familiar with simple accounting knowledge if we can service this debt, and the collective answer is a resounding “no.” Any business with these ratios would be a complete basket case, hopelessly bankrupt. Unlike General Motors Corp., there is no one with the wherewithal to bail out the U.S.A.
http://washingtontimes.com/news/2009/aug/11/we-broke-the-bank/
In today’s news we hear that the Fed will soon cease its program of buying treasuries. Now where do you think the Fed is getting the money to buy our debt and why do they have to buy it in the first place? Could it be that the world’s appetite for our debt is diminishing. Ask yourself this, why would any nation use its savings to loan us money so that we can keep on spending? Wouldn’t they be better off spending their savings on themselves and thus consuming what they produce?
The path the US is on is unsustainable. It was a great party while it lasted but now it is time to pay the piper and the piper will be paid. The longer we delay doing the right thing (stop spending, start saving, and resume production) the greater the pain will be at the end of this road.
Cash for clunkers, stimulus packages, bailouts, etc. are all bad policy. Similar programs did not work in the 1930s and they will not work now.
Why inflation is now guaranteed and hyperinflation is becoming a high probability. The following comments are from Dr. Marc Faber.
“Deflation can be avoided through debt and money printing. This isn’t to say that I support such policies, or that I find deflation to be “bad” and inflation to be “good.” (Price stability is the most desirable condition.) But the point is that if a government is really determined to inflate its problems away, it can be done. Those people who believe in deflation have, however, some strong arguments. Their principal contention is that the economy is so weak (output gap) that the private sector’s contraction cannot be offset by government spending and money printing.”
In fact, the massive money printing and the rest of the stimulus are why gross domestic product has held up as well as it has. More from Marc:
“The deflationist argues that, because we have a weak economy, we shall have deflation; an argument with which I would tend to agree in the very short term.”
I believe that in fact we have passed the point of maximum downside pressure. But more from Marc:
“A true deflationist will also argue that because of deflation, economic conditions will worsen and, therefore, long-term U.S. government bond yields will decline. . . . But what happens to fiscal deficits and monetary policies under a scenario of a further decline in economic activity and a further collapse in asset prices? The answer is very simple. Deficits will increase further and more money will be printed. And the longer weakness in the economy prevails under the deflationary scenario, the more fiscal deficits will pile up and the more easy monetary policies will be pursued.
So, whereas near-term deflation is a distinct possibility, in the longer term inflation is more likely because of several factors. When the economy recovers (and the recovery is likely to be fragile), the Fed will be very reluctant to increase short-term rates. Another reason for the Fed’s reluctance in this respect will be the size of the government debt, given that higher interest rates would increase the interest burden. Therefore, I can’t imagine any scenario under which the Fed wouldn’t keep interest rates at an artificially low level, as it also did post-2001. That such a monetary policy, combined with the growing fiscal deficits discussed above, is more likely to lead to inflation rather than deflation should be clear”
And here, in Marc’s words, is what the funding crisis could look like:
“For the reasons I explained above, inflation will pick up. With or without Fed tightening, interest rates will shoot up because of a loss of confidence by foreign U.S. dollar debt holders and the dollar tanks. Government debt payments and health care expenditure will soar. Instead of contracting, fiscal deficits will increase and force the Fed to continue monetizing the debt at a time when it should be tightening. . . .
A vicious cycle of higher and higher inflation rates and a weaker and weaker dollar will follow amid economic weakness, because personal incomes will be squeezed by inflation. Eventually, hyperinflation will follow. So, in the debate about inflation and deflation, both camps could be right but at different times.”
Health care costs as are all costs are going to skyrocket and all thanks to our beloved government that some of you seem to think is so benevolent.
“Similar programs did not work in the 1930s and they will not work now.” Really? Tell that to my grandfather, who was able to dig his family out of poverty working for WPA projects in the southwest. It wasn’t a perfect program, nor was it without its political machinations, but for the families who were able to put food on the table because husbands and sons finally had a paycheck it got them off relief and out of the breadlines.
“Health care costs as are all costs are going to skyrocket and all thanks to our beloved government that some of you seem to think is so benevolent.” Health care costs are already skyrocketing. And although I do not think the government is benevolent, I think it is more likely to act in a benevolent manner than private insurance companies. I mean, think about your private health insurance company (assuming you are not on Medicare, since you are so anti-government). Is benevolent the word that comes to mind?
kash: “Tell that to my grandfather, who was able to dig his family out of poverty working for WPA projects in the southwest. It wasn’t a perfect program”
I did not say that NO ONE BENEFITED. I said that most of the programs set up by FDR made matters worse. Your grandfather may have gotten a better job with a private company producing real goods instead of many of the DO NOTHING PROJECTS of programs such as the WPA, which workers nicknamed We Piddle Around. Some of the government’s projects did indeed benefit the economy such as the building of the Hoover Dam or TVA which after completion led to economic growth through cheap electric power.
Increased taxes, first by Hoover from 25% to 64% then by FDR from 64% to 84%, along with the establishment of sector cartels stifled economic growth. Sec. of Treasury Henry Morganthau stated in 1939 that after 8 years of government spending and debt the unemployment rate was basically unchanged from the beginning of the administration.
Who would you rather determine the use of capital within a free market, the government or the invisible hand of the people – private enterprise? The government’s role is to function as referee and insure that no one cheats. When government gets too big is consumes to much of a societies capital and therefore limits productivity.
Your anecdotal evidence proves nothing. I could say that Hitler was not an evil man, he gave us the VW Beetle.
kash: “Health care costs are already skyrocketing. And although I do not think the government is benevolent, I think it is more likely to act in a benevolent manner than private insurance companies.”
The guaranteed inflation now baked into the US economic cake will lead to ALL COSTS skyrocketing. Politicians are interested primarily in getting themselves first elected then re-elected. Why is it that politicians decided it was a good idea to co-mingle Social Security Funds with the General Fund? Why have politicians continued to fund the Welfare state when all the evidence points to a system that has destroyed many families. Barak Obama just the other day admitted that the government does a poor job of running the Post Office. Amtrak has had to be bailed out year in year out by the tax payers ever since the government took over Penn. RR in 1974. It is still cheaper to fly to than to go by train.
The Free Market is neither benevolent or malevolent. It is based on profit and competition. It is the profit motive that provides the best goods and services at the best price. Health care costs have been rising BECAUSE OF THE GOVERNMENT.
There is one area of health care where the GOVERNMENT IS NOT INVOLVED and prices have been dropping for years. When the government keeps out, the market functions quite well.
kash, I suggest you look carefully at this chart:
http://stockcharts.com/h-sc/ui?s=$USD&p=D&b=5&g=0&id=p72299501145
The little rally we just had in the USD is over. Anyone with a basic understanding of technical analysis will tell you that this USD chart looks extremely weak. RSI never got over 70 even during the strong rally that led to 90. Since the March low at 82.63, the RSI has not been able to break above 50 and has dropped below 30. The MACDs did get over the Zero level but soon fell back below.
This last rally was only able to carry the USD back up towards 80 but not through this level. A break below the recent lows of 77.43 and the dollar will be headed towards its all time low and major support of 72. When that one fails and the dollar falls below 70 hyperinflation will most likely be a sure bet.
Weekly chart: http://stockcharts.com/h-sc/ui?s=$USD&p=W&b=5&g=0&id=p78102733270
On the weekly chart you will note that a spike bottom formed at the 70.70 price point. Support is clearly seen at 72. The daily chart has a very negative configuration in its moving averages. The weekly is about to join the daily. When the 30 is below the 60 and the 60 below the 90 DMA, the dollar will have resumed its long term downtrend, which resumed in 2001 and only recently took a short break known as a counter trend rally.
THE CHARTS DO NOT LIE. It is government that will decide which direction the US dollar takes. Go back to what Marc Faber says is the fate of the USD. Our benevolent government will no doubt blame greedy corporation for the inflation we are about to get hit with. This is what they did in the 70s. Yet it is the government which is destroying the US dollar, and why not? The government is the biggest debtor the world has ever seen and it is to their advantage to lower the value of the dollar. The hidden tax of inflation will be felt by every citizen tied to the US dollar.
These are the people you have so much faith in. I am sure you will parrot whatever the government says about rising inflation. So far you continue to repeat the liberal government lines perfectly. You actually repeat the talking points perfectly. On that I compliment you.
Reality will hit you as surely as Pompeii was hit by Vesuvius. The good people of Pompeii were warned but did not heed the warnings. They could not imagine their entire city would be destroyed in an instant. Nearly all such catastrophes provide some sort of warning. I do believe the Biggest of All the RED FLAGS is when someone says, “it can never…….”
I believe you to be an intelligent person and wonder why you so slavishly carry the water for any political party. It is time for the American People to stand together and fight for our freedom, unless of course you like living under the oppression of the Statists.
Cash for Clunkers is proving that whatever the government gets into that should be left to the free market, it messes up and messes up badly. Retail number fell in part due to Cash for Clunkers. So whatever jobs were saved in the auto industry have been lost in the rest of retail. Furthermore the demand for cars is once again falling as all those that wanted to buy cars bought them and now we are back to where we were before the Cash for Clunkers programs. Auto analysts believe that demand for new cars will fall below what they were before Cash for Clunkers.
So we can all now rest assured that the Government is in Control. Forget God, he had nothing to do with the bailouts, stimulus, and now cash for clunkers; maybe He has become irrelevant in the economy. After all we know that it was Israel’s great kings that made the nation great and prosperous. It was only through a series of “bad luck” that they were all taken into captivity.
Certainly America will sidestep the fate of all great civilizations that rotted from within due to the people that ran the government. GET THIS THROUGH YOUR HEADS it is the government that creates most of our problems. Rarely is the government a solution…..RARELY.
It’s not the healthcare legislation, the cash for klunkers, the corporate bailouts or any of the other government policies that have Christians like Mike, Paul and the rest of the fundies upset. There’s a black man in the White House! Anyone can read between the lines of their drivel and see the bigotry and hate present in all of the evangelicals who post on this blog.
The case against gold. An interesting article:
“There’s no reason to invest in gold,” said ‘Betsy’
Jeff Clark
Casey’s Gold & Resource Report
Aug 14, 2009
“There’s no reason to invest in gold,” said the finance editor of a major newspaper interviewing me. “If gold goes up because of inflation, then so does everything else, so why buy it? It’s not really a good investment.”
She was serious. Yes, she is a finance writer. And yes, it’s a newspaper you’ve heard of.
I was so dumbfounded that I must have sounded like an infant struggling to form its first words when I attempted to counter this inane line of thinking.
Tell me you’re a deflationist, tell me the Fed will rescue us, tell me foreigners will keep buying our debt – but don’t tell me that gold serves no purpose!
I tried to point out the exploding monetary base, the soaring debt, the failing economy – but it was readily apparent her mind was made up. The interview was over and she hung up.
It may sound vengeful, but I’m tempted to keep a list of people whom I could remind someday of their negative comments about gold. I’d put “Betsy” at the top. I probably would chicken out in the end, but right now it’s a wonderful reminder of why we’re not in a bull market mania yet. Besides, I think the odds are stacked in my favor that she’ll someday be buying insanely inflated gold stocks from me. I’ll have to thank her then.
But I can address Betsy’s misunderstanding now, because part of what she said is correct: gold is not an investment. Gold’s primary purpose is to preserve your purchasing power. Whether it be roaring inflation, or dollar debasement, or economic upheaval, or out-of-control government spending, it has been the absolute best form of protection throughout the history of mankind. And I can prove it.
Let’s trace what an ounce of gold or silver – true money – has been able to purchase at various periods in history, and how it compares to today.
1979: Gold’s average price that year was $306.68. This bought an average-priced full-size bed.
Today, 30 years later, $950 would still buy you a full-size bed.
1963: A gallon of gasoline in America sold for 31 cents. This meant that 3 silver dimes could buy a gallon of gasoline. The total weight of silver in 3 silver dimes is .217 of an ounce.
Today, 3 silver dimes would buy a gallon of gasoline anywhere in the U.S.
600 AD: In the Middle East, a chicken at the time of Mohammad would cost a family one silver Dirham (3 grams).
Today, 1,400 years later, a chicken in the Middle East would still cost a family one silver Dirham.
Time of Christ: Under the Roman Empire, an ounce of gold purchased a Roman citizen his toga (suit), a leather belt, and a pair of sandals.
Today, one ounce of gold will still buy a man a suit, a leather belt, and a pair of shoes.
400 BC: Some scholars report that during the reign of King Nebuchadnezzar, an ounce of gold bought 350 loaves of bread.
Today, an ounce of gold still buys about 350 loaves ($950 divided by 350 = $2.71/loaf).
1000 BC: King Solomon was known to have purchased many horses for his army. Historical records show he bought them in Egypt for 150 shekels of silver each. 150 shekels was about 55 troy ounces of silver.
Today, you can still buy a riding horse for 55 troy ounces of silver ($800).
Betsy, gold has characteristics no other matter on earth has…
Gold cannot be:
Printed (ask a miner how long it takes to find it and dig it up)
Counterfeited (you can try, but a scale will catch it every time)
Deflated or inflated (it can’t be reproduced)
Gold cannot be destroyed by:
Fire (it takes 1945.4 degrees F to melt it)
Water (won’t rust or tarnish)
Time (a gold coin remains recognizable after a thousand years)
Gold doesn’t need:
Feeding (like cattle)
Fertilizer (like corn)
Maintenance (like printing presses)
Gold has no:
Time limit (most gold mined is still in existence)
Counterparty risk (remember Bear Stearns?)
Shelf life (it never expires)
Gold as metal is:
Malleable (spreads instead of crushes)
Ductile (stretches without breaking)
Beautiful (just ask an Indian bride)
Gold as money is:
Liquid (easily convertible to cash)
Portable (you can hold $50,000 in one hand)
Private (no mandatory reporting here)
Gold is internationally accepted, lasts for thousands of years, and best of all, they aren’t making any more of it.
Now, Betsy, are you sure there’s no reason to buy gold?