NO REAL RECOVERY WITHOUT JOBS

I've said it before, there can be no real economic recovery without jobs.  Until our government does what is necessary to help businesses create more jobs, our economy will not make any meaningful recovery.  They can throw all the funny money they want towards quantitative easing, they can bailout whomever they please, but if they don't help get the people working again we're going no where fast.  All you have to do is look at the latest response in the stock market to June's poor employment report to see the truth of the matter. 

Yes, most people still have a job.  The rate of unemployment in Missouri currently stands around 8.9%, which means 91.1% of the states workers are employed.  However, when nearly 1/10th of the workforce is out of work it becomes a matter of perception.  How do the other 9/10ths percieve the state of the economy, with so many unemployed and so much talk of record government deficits?  When the majority of consumers believe we are living in hard times, like now, then it becomes a self fulfilling situation.  If the consumer is faced with hard times, they stop spending.  In a consumer driven economy this brings everything grinding to a halt.  When consumers don't spend, businesses lose money and begin to down size.  Down sizing leads to further unemployment creating an even more dismal view of the economy, leading to even further belt tightening by consumers until eventually things grind to a halt.  Or at least slow to a dreadful pace.  Instead of costly quantitative easing, huge bailouts and very unpopular health care reforms, perhaps the current administration should have considered boosting the economy by returning cash to taxpayers in the form of additional refunds.  Maybe some of the people who've lost their homes could have avoided foreclosure, maybe some of the uninsured could have afforded health insurance, at the very least it would have given the economy a much needed influx of cash.  Unlike bank bailouts, where the money was paid out in the form of record bonuses to bank executives while the banks themselves showed their gratitude to the U.S. taxpayers by clamping down on credit, jacking up credit card interest rates and foreclosing on homes.  

It's a sad state of affairs in the U.S. right now.  I'm hoping for a landslide victory for Republicans in 2012.  We're not getting anywhere with the current administration so let's vote them out in the next election.  "YES WE CAN!!!"

TIM GEITHNER SAYS RICH SHOULD PAY MORE TAXES????

Am I the only one who thinks it's the height of hypocrisy for Tim Geithner to be on his high horse about the Bush tax cuts?  Correct me if I'm wrong, but isn't this the same guy who almost blew his appointment as Treasury secretary for failure to pay all his taxes?  So now he would have us believe that the United States economy is doomed if the Bush tax cuts remain in place, tax cuts which he most likely benefited from. 

I would like to remind Mr. Geithner that not all people who benefit from dividends and capital gains are "rich".  I certainly would not be considered "rich" by any standards, but I do benefit directly from dividends, capital gains and interest on my investments.  Is there any good reason hard working Americans, who manage to save and invest for their future, should be forced to pay higher taxes to support those who fail to do so?  I don't believe there is.  

You can't fix unemployment and insufficient government revenues by taking money from one group of citizens and giving it to those who are less productive.  It's this type of thinking that is giving fuel to the rumors of the current administrations move towards a more socialistic form of government.  It did not work in the Soviet Union.  It did not work China.  It did not work in Cuba and it will not work in the United States of America.  

Promoting savings by low taxes encourage investments, which in turn generate capital for businesses.  When businesses have adequately capitalized and are free from excessive government taxes and restrictions, they hire more workers.  When more people are working, more people are spending and state and federal governments benefit from greater tax revenues.  It's just that simple.  If Mr. Geithner and anyone else in Washington doesn't understand this, they should not be there.  We should all keep that in mind during upcoming elections.

Tough Times Call For a New Strategy

When faced with tough economic times, it is important to review your investment strategy and make adjustments in accord with the changes in the direction of the economy. With seemingly no end to massive government spending in the foreseeable future and no provisions made to pay off excess debt, with the exception of some ill advised tax increases, I've decided to take a different approach. Robert Kyosaki, one of my favorite best selling authors, says that the rich make more money in a downward trending market than one that's going up. So I've taken a position in Proshares TWQ exchange traded fund. It is a leveraged ETF that shorts the Russell 3000 index of stocks. While I believe the stock market will eventually recover, I'm hedging my bets by shorting the market.

Another idea I'm looking at is investing more money in foreign shares. I like the fact that the government of Brazil is cutting spending to address their budget shortfalls, as opposed to increasing deficit spending the way our government has. While working with some good people from India on my last job location, I also came to appreciate their strong work ethic and entrepreneurial spirit, something we could use a whole lot more of in the U.S.. So I will be looking at ways to invest in India as well.

While this does represent a new approach to my investment goals, my overall strategy is still the same. Which is, to build a well diversified portfolio of dividend paying stocks to generate a steady stream of present and future income. There is always a way to reach your goal, you just have to find it. During these tough times, as investors, we need to stay on top of changes in the economic environment and change our strategies accordingly.

Enough With The Wining!

I just sat through another mind numbing "news" program about the problems with the U.S. economy and the inability of our political system to address the issues. Yeah, O.K. we all know what the problems are. Is it really helpful to anyone to carry on these endless debates in the news media about how it is just impossible to solve all our country's problems? Does this really accomplish anything? They always say they are, "addressing the issues." I think they are confusing "addressing the issues" with giving an address about the issues. If all the people who proclaim to be so concerned about the problems facing our nation, are truly concerned, wouldn't it be more productive to concentrate on proposing real workable answers to the problems, instead of endlessly wining about how we're faced with insurmountable dilemmas?

The show I was watching was about the millions of poor people in the U.S. and how companies are targeting these people for their collective wealth, estimated to be around $650 billion. Speaking as someone who comes from this group, I don't want any one's pity, I don't want any one's handouts, all I've ever wanted was the knowledge to rise above my humble beginnings. Has anyone ever seriously considered educating the poor to deal with their own problems? I do know of a few people who advocate financial education, but it has never, to my knowledge, been proposed as a solution to the generations of poverty stricken families here in our country. It is no big secret. Anyone in this country can rise above poverty if they have the desire to do so. They may not know how, but there is a simple solution to this problem as well. I personally believe that the book, "The Richest Man in Babylon" should be required reading in all our public schools. ANYONE who follows the advice set out in this simple, easy to understand book, will do well in life. And if we truly want to address economic issues in this country, then we need to start a grass roots campaign to end financial ignorance and illiteracy. In one of the parables in the above mentioned book, the King of Babylon desires that his city should become the wealthiest city in the world. So he sends for the "richest man in Babylon" and asks that he teach others his secrets to acquiring wealth and building an estate. As this wise old man in the book states, "Anything that one man knows, can be taught to another." So, if we truly desire to end poverty in this country, if we truly desire to lift the financial burdens from the poor, then welfare and social programs should only be temporary and for the poorest of the poor. Financial education should be the cornerstone of any true campaign to eliminate poverty in this country.