Never Start a Trade War with China

A favorite quote from The Princess Bride was to, "never get involved in a land war in Asia.” I would like to expand upon that thought and say, “never start a trade war with China.”

The USA has been pestering China for the last few months, with the House of Representatives going so far as to add amendments to the atrocious Smoot-Hawley Act of 1930, which now says that we can slap sanctions on China because they manipulate their currency. (HR 2378) Wake up hypocrites! We manipulate our currency! The politicians are just pissed because China plays the game better. Smoot-Hawley was one of the many reasons that the Great Depression lasted so long… so let’s try it again shall we!

One fun little consequence of messing with the world’s largest exporter is that they may turn around and stop selling you stuff you actually want and need… like rare earth elements. China produces about 95% of the world’s supply of these fun little metals, but they’ve decided to stop selling as much to Western Nations. I wonder what Americans will think if they can’t get their fancy smartphones, IPads, and other technological wonders that cannot be manufactured without the rare earth elements? It’s funny, the House passed a Rare Earth and Critical Material Bill (HR 6160) the same day as the Currency Reform Act mentioned above. Coincidence? I think not. The problem is that we will be moving at the speed of government to get our own mining operations up and going. How well will the technology sector fare in the meantime?

Are you ready to have your wallet mangled in an ill-advised trade war? Are you ready to pay through the nose for technology? Washington doesn’t care! I say get rid of the whole bunch! Especially morons like Rob Bishop and Jim Matheson that voted for the Currency Reform Act. Thank God for Jason Chaffetz, a single ray of hope in a dismal political landscape!

More True than We'd Like to Admit

http://townhall.com/cartoons/2010/09/23/912deb3f-7419-4400-b802-0cfa9efc492d

Perspective on the National Debt

The amount of debt that the USA now has is staggering. It seems that all we hear about is the amount of debt that we have (around $13 Trillion) as compared to the GDP (estimated around $14.4 Trillion). That doesn’t sound too horrible, right? But it is misleading! The GDP is NOT the amount of money the government has available to spend. The Federal Government only collects between $2-3 Trillion in tax revenue per year. The estimated DEFICIT (money collected minus money spent) is around $1.5 Trillion!

Let’s put this in perspective, and compare the government to an everyday occurrence. Let’s pretend that you (government) make $100,000 per year and that you’ve taken out a mortgage on a $400,000 house. That doesn’t sound too bad, does it? Payments would only be about $2,150 per month on a 30 year fixed at 5%. That's over half your income, but you decide it's worth it. But wait just a second. In reality, you’re not making mortgage payments. Really, you’re constantly refinancing the interest payment, as well as other foolhardy purchases, back into the mortgage to the tune of an additional $50,000 per year. Oh, and it’s an adjustable rate that is low now, but could go up at any time. Does that sound like a good idea? How long would you keep your house at this rate? Will your debt ever be paid off? Of course not! But this is exactly what our country is doing.

How long is it going to take before we’re no longer able to refinance our country’s debt? When will the general public wake up and realize that someday the ENTIRE federal tax revenue will be spent solely on interest payments on that debt? The hard fact is that our nation is insolvent right now. We are bankrupt! The printing press is the only thing keeping us on life support, but the crash will eventually come. As soon as our creditors lose confidence, the jig is up.

The emperor, in fact, has no clothes!

Your Portion of the Greek Bailout

How much are you paying to bail out Greece? How charitable do you feel? Do you feel sorry for the Europeans to the tune of $39 Billion? That’s how much we’re on the hook for. That’s only $130 from every man, woman, and child in the USA. That’s like my family of 5 giving a charitable donation of $650 so that foreigners can retire at age 53. Wow, I’m getting all kinds of warm fuzzies inside.

Most people don’t know that American taxpayer dollars are ticketed for going overseas to Europe via our “quota” in the IMF. When the IMF agreed to help Greece, you get to pay your fair share. And, by the way, America’s “fair share” is MUCH larger than anyone else’s “fair share.” Some Republicans are trying to introduce a bill to stop American funds from going to a European bailout, but it probably has a very slim chance of passing. You may wonder why we’re financing the rest of the world when our problems here at home are far from over. You might concede that we’ve lost almost the same amount of money by taking over GM. And don’t even get me started on the money pit that is Freddie and Fannie. But we need to draw a line in the sand. No more bailouts! PERIOD! And especially no American money for foreign bailouts!

As if that weren’t bad enough, the Fed restarted its currency-swap tool, just in time to watch the Euro get flushed down the toilet. That’s right, we are now exchanging dollars for Euros. Don’t worry that the Euro is going to go down in value. Don’t worry that we’ll get left holding the bag, because they will swap back at a later date… assuming they actually have dollars in the future to swap back. Where did we get these dollars to swap with anyway? Aren’t we currently running the largest single year fiscal deficit in history? None of it makes sense. Eventually, the entire worldwide currency system is going to come crashing down. Then what?

Two Things...

Two things are really starting to bug me.

1) If I hear the phrase “Greek debt contagion” one more time I’m going to lose it. Debt is not contagious! That’s like saying obesity is contagious. Portugal, Italy, Spain, etc. are having problems because they spent too much! Not because Greece is having problems. Nobody’s pointing it out, but the UK’s deficit as a percentage of GDP is actually higher than Greece, and the US isn’t far behind. We should stop looking at Europe and start trying to fix things here at home.

2) Apparently, employers added 224,000 jobs (annualized) but the unemployment rate jumped to 9.9%. Huh? They say more people are actively looking for a job. Maybe, but it sounds more like spin to me. If they said something like we had a “net increase” in jobs, then I would be more prone to believe them. For now, it almost seems as if they have conveniently started reporting only jobs created, without mentioning the number of jobs lost during the same period. Look, we added 224,000 new jobs…aren’t we awesome! but, shhhhh, we also lost 300,000 jobs that we won’t tell you about...

The Socialist View of "Love Thy Neighbor"

http://www.cagle.com/politicalcartoons/pccartoons/archives/ramirez.asp

Shooting Down Missiles with Lasers Now a Reality

Back in the 80’s Ronald Reagan started a strategic defense initiative for shooting down incoming ballistic missiles. I also remember playing a board game called Fortress America where the premise of the game was that America was being assaulted from every direction because they were deploying satellites with lasers that could shoot down ballistic missiles from space. Remember, during the cold war one of the things that prevented a nuclear holocaust was the fact that if the USSR shot their missiles at us then we would fire our missiles at them and we would all be destroyed. A strategic missile defense shield would give one side a huge advantage.

Now we have made and successfully tested just such a laser that has destroyed both solid and liquid-fueled missiles while in mid-flight. This is one of the things I don’t mind spending a few $Million tax payer dollars to fund. Read the Missile Defense Agency’s news release here: http://www.mda.mil/news/10news0002.html