The Economy Guy

Stocks fell again today.  They started up, as per the last few days, but couldn’t maintain the gain.  Stocks are hitting new lows.  Today’s excuse was poor health care companies – probably lamenting the President’s impact on their future.

Bonds moved sideways, and maintained their high interest rates.  The Dollar moved sideways.

Oil and gasoline soared today as the bulls are running.  Get ready for higher priced gasoline.  (Have you thought about how higher gas prices will drag the economy deeper, deeper, deeper…..)

Gold feel as profit taking hit the gold market.  This is the beginning of a good time to buy more gold.  Buy on the dips.

In the news today…..

I am going to devote today’s write-up to only one news story.  President Obama’s 10 year plan on how he will implement his programs, and how much they cost was released today.  I don’t need to go into details here – but believe me the numbers are eye watering.  And, in addition he said he will cut the budget deficit in half by the end of his first term.  The big number items were National Health program and the cost of the 2 wars we are in.

How will Obama pay for this program?  Easy.

1. Increase taxes.
2. He also said he would make “hard decisions” to stop programs that aren’t working, but his budget doesn’t show that rabbit coming out yet.

How does he plan to increase taxes?  Easy.

1. No one earning $250,000 or less will have their taxes raised “one dime.”
2. Soak the Rich – everyone making over $250,000/year.

Is this all bad news??  (Well, this truly is all bad news).  However, there is one bright spot that I’d like to highlight for you.  Hollywood Actors and Actresses make a lot of money, and definitely fall in the “RICH” category.  So, they will be hit between the eyes with a much higher tax bill – and I think that’s great.  However, even more importantly to my way of thinking was the outcome of the Oscars.  Slumdog Millionaire proved that movies can be “outsourced” to India.  You don’t need high paid stars.  You don’t need high cost studios.  The very best picture last year was made outside of the US without an American star in it.  Goodbye all you Hollywood bums who think you know so much more than the rest of the American public.  When these folks start collecting unemployment payments, I will truly feel sorry for them, and they won’t have to be hit by those high taxes any longer.

Now, let’s get serious.

President Obama’s Budget Director, Orszag, said today that the budget deficit will hit $9 TRILLION over the next 10 years.  Do you find this as amazing as I do?  How could Obama say, or be allowed to say, that he is going to halve the budget deficit if it’s just going to keep on growing?  Does this sound IMPOSSIBLE to you?  It does to me.  Obama must be very unhappy with this information coming out in public – transparency does have its bright side.

Now let’s get even more serious – and do some math.

Here is the real math.  If you tax all “rich people – ones making over $250,000/year” at a 100% tax rate.  In other words, the government confiscates ALL the money they earn each year, then the taxes collected WON’T PAY the SPENDING.

Didn’t anyone do any basic mathematics before they allowed Obama to start all these speeches?

Here are my conclusions:

1. The Obama plan is dead on arrival.  If it can’t be paid for, it will eventually die as the American public more fully understands what price they must pay for all this “spending.”
2. The Congress is spending like a drunken sailor, and doesn’t know how to do anything but spend like a drunken sailor.  They cannot reduce spending, or cut back programs.  This lends fuel to my argument that “all the bums should be thrown out.”
3. No one in the Obama Administration ever took “addition” in grammar school.
4. And my most dire prediction is that Congress will continue spending, knowing it can NEVER be paid back, and this will end up very badly – runaway inflation, following by an inflationary depression.  (Guess who will go down in history with this albatross tied around his neck?)

 
Here are the last numbers:
Dow Jones 30 Industrial – 7182 (down 89 points)
10 Year Treasury Bond – 2.97% (up 0.03%)
Euro – $1.2737
Gold – $943 (down $26) – the beginning of a buying opportunity
Oil – $45.22 (up $2.72)
Gasoline – $1.30 (up $0.13)