-- Posted Friday, 23 January 2009 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Friday, January 23, 2009
“Phenomenally accurate forecasts”
We’ll know soon enough whether Obama’s presidency will begin with a soak-the-rich belly-flop on tax policy. He’s said up till now that he would not even consider a tax hike, given the deathly state of the economy. But if that is so, what were the usual suspects doing on Fox yesterday, telling Neil Cavuto that Obama has not really made up his mind? Nancy Pelosi was quoted as saying just that, and it could not have been just a casual remark. Two other dim Congressional lefties appeared on the show, and both had the chutzpah to argue that more taxes, if paid only by the “rich,” would be better for us all.
Cavuto, the best hardball interviewer in television, would have none of this. He pointed out that if taxes on the top two brackets were jacked up to their old levels under Clinton, it would raise only an additional $300 billion. This compares with proposed new outlays of nearly $2 trillion, noted Cavuto. Whose taxes would cover the shortfall, he asked?
The larger problem is Congressional Democrats’ apparent failure to distinguish between real money and play money. When you talk about raising taxes to cover the deficit, you are talking about taking real money out of real workers’ pockets. That is far different from enacting huge stimulus packages and bailouts that everyone knows we will never be able to pay for anyway – at least, not with real money. Why saddle our most productive workers with back-breaking new taxes to finance outlays that exceed by tenfold our ability to pay for them?
We’ve given a dozen reasons why all stock market rallies these days are just fool’s gold. But if Obama doesn’t get this one right, the weight of despair is going to crush Wall Street, and soon.
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More on Inflation vs. Deflation
Our recent commentary, “Calling All Inflationists!” touched off quite an e-mail firestorm. Unwavering deflationists ourselves since the 1990s, we’d challenged readers to explain exactly how inflation might emerge amidst the devastating asset collapse now occurring throughout the world. [ Click here to drop in on this lively discussion at the Rick’s Picks forum.] Here’s another excellent letter – and our thanks to Brian Battaglia for submitting it:
“Gold is insurance, and it is as simple as that. Have a little just in case. The hyperinflation theorists have hit a wall, in that there is no demand. People have accumulated everything they want or need. The banks are not lending because no one wants a loan. Further, one must evaluate if it is prudent to refinance to reduce debt, by dropping thousands of dollars into a depreciating asset - i.e., real estate. Keep the cash, you may need it. Also, do you want to buy a house or building that is still declining in value, and take the risk that you cannot find a tenant, as well as the fact certain that the tax collector will raise your taxes and the insurance company will raise your premiums every year to fund outlandish salaries and pensions, and in order to offset the carriers loses in the derivatives market and real estate?
“The bottom line is that at some point there will either be significant inflation (and salary increases) to pay for the 5 to 8 percent increase each year in
- insurance (of all types)
- taxes (real estate and personal)
- service fees (indirect tax)
- education
- food
“And if not, well? The answer to your question is that we will know when inflation has returned when gold spikes and continues. Its as simple as that. We obviously are not there yet. Gold is having descending peaks at this time.
“ps: The article below reflects the problem with our pension system and other programs, and the article appeared in the Tampa Tribune of December 18, 2008, concerning the termination of four police officers. Note that the three officers received full pensions and other benefits for life (the day after they resigned) and these individuals are fairly young. The amount of money that someone in the private sector would have to put into an annuity to get the amount below on an annual basis would be in the millions. These pensions need to become effective later and there should be means tested. This inquiry is similar to one last year where a burglary detective, Evonski Lennear, repeatedly engaged in personal business on city time: shopping; visiting relatives, her church, and her hairdresser; and searching for houses her investment friends could flip, records show. Lennear was found in neglect of duty and insubordinate and was demoted to a master patrol officer, records show. Here’s an excerpt from the article:
‘Police spokeswoman Laura McElroy said Lennear had not been fired because she had worked late into the evening and on weekends without authorization to make up for hours wasted; she had not failed to work a 40-hour week.
Retired Officers Will Get Pensions
‘The personnel files of Rochelle, Noblitt and Bush indicate they were respected, dependable officers. Bush and Rochelle, who each retired Nov. 5, earned $83,970 a year. Noblitt, who retired Oct. 30, earned $80,434 a year. The three retired officers will receive their pensions.
‘Rochelle will receive $55,634 a year for life plus yearly cost of living increases, said Pat Lynch, chairman of the Tampa Fire and Police Pension Fund. Because of his deferred retirement option plan, Rochelle also will receive a one-time lump sum that could be as high as $225,535. Noblitt will receive $44,645 a year for life plus cost of living increases. Through the deferred retirement option plan, she also will receive up to $167,417.
Bush will receive $52,865 a year for life plus cost of living increases. Through the deferred retirement option plan, he also will receive $61,675. Dennis was not vested and won't receive a pension. She had not been with the department for 10 years, Lynch said. She will receive the $19,000 she had contributed toward her pension.’ ”
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2007, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Friday, 23 January 2009 | Digg This Article | Source: GoldSeek.com
