My View

Random thoughts from a warped and fevered mind...

We all have known someone who has a great job and a very good income. They also have an equity line of credit on their house and a credit card with a large credit limit. They spend all they make, and to live the lifestyle they want, they use the equity line on their house. Soon, the only thing that can be paid on the equity line is the interest. The credit card is maxed, and outside of the basic living expenses, the remainder of that great salary is going toward debt service. What happens to that individual? Some, many, file bankruptcy and walk away from their obligations. Some continue to pay and work toward reducing debt, and to do this, they radically alter their lifestyle. Luxuries are removed and the standard of living is dramatically scaled back.  We all know someone that has been in this situation. This is where the United States finds itself today. The sirens are sounding and warning signs abound about our periolous financial condition.  Those that are prudent will pay attention.

You know how they say you can catch more flies with honey? That's true, but you also attract bears, and those things will rip you to shreds.

Our national debt is over $13 trillion dollars, and a new budget has been submitted to Congress by the White House that will create another $1.6 trillion dollar deficit for the next fiscal year. The non-partisan Congressional Budget Office has looked at the current deficit and the unfunded liabilites that exist in Social Security, Medicare, and Medicaid entitlements  and concluded that in the very near future, the United States is going to have to either significantly raise taxes, significantly cut spending on social and defense programs, or some combination of the two. The other, unspoken at this time, alternative for the United States is to default on our debt. Simply put, the "full faith and credit" of the U.S. to honor our obligations would be worthless. Just as the individual that I used as an example above faces difficult decisions, so does our country. And the result of those decisions will affect our standard of living for generations to come.

The problem with ignorance is that it picks up confidence as it goes along.

Since the first of the year, the Dow Jones Industrial average has lost over 700 points, and as of today has breached the all important psychological barrier of 10,0000. The markets are expressing their displeasure and anxiety with new tax and regulatory proposals that have come out of Washington as well as heightened concern over the debt load this nation carries. Keep your eye on the money. The move to the sidelines is another indication that fiscal discipline and not politics is desired by investors. And realize this, every time a politician besmirches "Wall Street" and wants to tax or punish that euphemistic entity, they are punishing Americans. Over 60% of Americans own stock, either directly or through mutual funds in their retirement accounts. Understand that what is good for business in this country is good for you. And follow the money.

Never, EVER, moon a werewolf.

And that, my friends, is my view.