"NOBODY ASKED ME, BUT..."

09.10.2020

It has been almost six months since the lockdowns have started. Is there anyone that could have imagined back in March that we would be in such a position? It is depressing seeing empty stores with big "For Rent" signs plastered on the window. But there are other things that we do not see, such as the terrible mental stress that has breached every aspect of our lives. Tremendous anxiety pervades our society. There is a general unease about getting the Virus. More so the older one is. And worse yet, there is no end in sight.

And what about the economic effects? I saw a recent survey that half of workers in downtown office buildings would be hesitant to return to their positions. Who can blame them?. The formerly crowded Central Business District now is at a disadvantage due to what was it's strength; the concentration of the workforce at it's core. It is a mess. So much so that a trend has developed in which inner city dwellers are seeking the less concentrated suburbs. The looming election adds to a sense of uncertainty. That is not good for the markets. Yet the stock market is around record highs. How does that figure? The best I can guess is that the government has injected or made available to the markets and businesses all the money needed to keep things from seizing up .But this should only be a temporary procedure until the markets settle. Then the money should be repaid. The problem is that this financial underpinning becomes permanent as the injected funds are not withdrawn. And the enormous debt grows ever larger. I don't know how you are thinking, but the idea of borrowing and printing money does not feel like the basis for a solid economy. Take away the government assistance and we have a depression.

Keynes had advocated government assistance but also preached that any monies extended during a drop were to be repaid as things recovered. Government debt incurred to blunt the 2009 recession is still on the balance sheet. This is an area of great concern. Government spending is now out of control. The chances to balance the budget are quickly evaporating, let alone reducing the national debt. We are headed in a negative direction.

And has anyone noticed that ever since Ronald Regan's introduction of huge government budget deficits, interest rates have trended down. A forty year chart would reveal the correlation. As the borrowing and debt increases and piles up, interest rates have fallen to virtually nothing. A curious situation indeed! It would appear that the outlook is for borrowing to increase and continue. I have noticed that politicians of both parties are good at spending money. And as taxpayers we should rest assured that our tax money is being spent wisely and carefully. No doubt about that. And thankfully there is no fraud waste or abuse in government spending. And what a wonderful gift we pass on to the next generation.

Now that so many years have passed and I look back upon life and think how so much of life is uncertain. But the times we are now experiencing have altered our lives in ways we would not choose. The quality of our lives has been negatively affected. It has been just about six months since the lockdowns began. The big question is what will be in six months. That it is uncertain for sure. Although I can predict the future, rarely am I correct. It sure is easy to make predictions, it's a lot harder to be accurate.

But then again, nobody asked me.

-Malcolm

08.03.2020

As I am writing, the price of gold is making new highs almost daily. Inflation appears at bay so there must be something else causing this huge rise in the last year. What has been ballooning is the national debt. It appears to be over 25 trillion dollars and growing by the trillions. The last Coronavirus stimulus was about 3 trillion dollars. And all of this money is borrowed. The only entity stupid enough to buy this government debt is the Federal Reserve. They already had 4.2 trillion dollars on the balance sheet from the Great Recession from the Obama administration. This was supposed to be eliminated over a few years. The federal government sure knows how to borrow money, they just forgot that it has to be paid back!

This reckless spending is going to debase the dollar, and can very possibly cause a financial crises. The government of the USA, yes our government is bankrupt. There is no possible way to pay off the debt except and unless there is a run up in inflation. But if the opposite happens, and there is a deflation from the collapse of the debt, then we fall into the greatest depression ever known. In that regard I bring to your attention that malls before the Virus were in general not doing well. This virus may very well hasten the closing of more malls. That real estate and the loans on that real estate, become the problem. In fact commercial real estate may have some serious problems as the tenants may not be able to pay the rent and the owners cannot pay the loan. Some 80% of all bank loans are concerned with real estate.

The virus may be with us for some time. Remember all the talk of a second wave? What if that materializes in the autumn or next spring? The economy could be reeling. And on top of this economic mess we have a presidential election less than three months away. The economy is on life support from the government. If not for these cash payments the economy would be in a nose dive. Unfortunately I am not optimistic about the near future. Daily things in life have become a struggle and pain in the neck. Our standard of living has declined. I am a victim of Virus Fatigue.

I cannot believe my ears! I happened to be watching the television and some one from the Federal Reserve made the ridiculous statement that if we can get the economy going we can begin to pay off the debt. They have been talking that way for 40 years and all it is is talk. The banks may be absolutely overwhelmed by the amount of defaults. There may very well be a question as to the solvency of the banking system. A collapse in the commercial real estate market may in fact trigger a system wide collapse of the banks. If the real estate underpinning the bank loans should fall sharply in value, the banks may be in huge trouble. If that develops, it is quite clear that the asset to hold is gold.

At times I feel like running away and joining the circus. It actually sounds like a good idea.

Then again, nobody asked me!

-Malcolm

07.01.2020

Time to throw my two cents into the ring. The last few weeks have been interesting to say the least. The Big Virus Lockdown has now been going on four months, if anyone can believe that. What a shocker that has become. For some it is a real nightmare and for many others a tremendous uncertainty has become apparent. I never thought that this would be the summer of 2020. Back in March and April my sleeping patterns changed. Now I sometimes become confused as to what day it is. I do not shave as often as before. And it has become easy to become lazy and or get into trouble. I have come to realize that the busier I am the less trouble that accompanies me. As it is written, idle hands are the devils' workshop.

On top of a pandemic we are experiencing widespread domestic unrest. I am all for protesting as that is our right as Americans. But I am totally against violence. The recent round of rioting and looting is so appealing. Reason and law must always triumph over violence. So often I see rioters pulling down statues of people they do not like. But this is destruction by mob violence. The right way would be for the community to decide, and perhaps have a vote. Yes, Power to The People. And I am disgusted that the bias Main Stream Media, (MSM) portrays these actions by implying that there is some kind of justification. The MSM is biased and has become a defacto arm of the Democrat Party and thus is not to be trusted. Remember all the BS about Russia. There are some high ranking people that may be in legal trouble.

And look at how the MSM is handling this wave of defunding or dismantling the police. I remember about a few years ago, some Moslems shot and killed a couple dozen people or so in the southwest or somewhere and the MSM kept beating the drum that we should not blame a whole people for the actions of a few. But this is exactly what the MSM is doing when it comes to blaming all police for the actions of a few. How hypocritical can they be! All this talk of defunding the police is absurd.

And by the way, it is not just white people who are racist. There are plenty of black racists, and everything in between. In fact look at the Democrat Party in the 1900's. The Democrats from the South were segregationists. Jim crow laws were made by Democrats. Does anyone remember the Democrat Governor of Alabama, George Wallace standing in the doorway of a school to prevent blacks from attending?

And the economy is taking a hit. I just heard that the weekly unemployment number of filing was one and a half million claims. By any measurement that is a lot. A lot of places are closed and may not reopen. Before the Virus, malls were under pressure of maintaining themselves financially. There sure is a lot of uncertainty. Everything was better before the Virus.

But then again, what do I know.

-Malcolm

04.15.2017

It has been about eight weeks since we have had a new President. The main stream still has not gotten over the shock of Hillary losing and Trump becoming President. It is incredible how the main stream media is so biased against Trump. I just heard a poll that Trump has a higher approval rating than Congress and the media! Obama was treated much better by the media. But, ironically, the Democrats could have had the White House and maybe even the Senate if elements of the party did not rig the primaries. The Democrats, before any primary vote was case, gave Hillary Clinton 25% of the delegates needed to win nomination in the form of super delegates. They were all assuming that Hillary would be the nominee. As late as November 2015, she had no competition. The only person on the radar at just 3% was some off beat guy named Bernie Sanders, Senator from Vermont.

The left wing of the Democrat Party just did not comprehend that they had a flawed candidate. They just did not want to believe the truth. But, the rank and file Democrats were electrified about Bernie and he really gave her a run for her money. If Bernie had won the election, it is my opinion that he would have crushed Trump in the general election, and the Democrats may have taken control of the Senate. However, as we all know, the opposite happened. And let me add that personally, I always prefer when the political parties have to share the power of government. Either they cooperate, or nothing gets accomplished. And by the way, when government does not accomplish anything that may not be so bad. Just look how screwed up things are in our country.

The reality is that Trump is the President and it would behoove all of us if he does well. I think we should give him a chance and monitor how things develop. But there are some people, Democrats and the media, that are absolutely going nuts against Trump. There definitely is FAKE NEWS and exaggeration. I personally no longer trust the main stream media.

Meanwhile, the Obama administration has buried this country in an avalanche of debt. Under that dummy, the debt rose from EIGHT TRILLION DOLLARS to NINETEEN TRILLION DOLLARS! And the Democrats think he was so great. He was a disaster! He left this country in worse shape than when he arrived. And he was a disgrace to leave such a large burden to us, our children, and our grandchildren. And let's not forget that the national debt is growing faster than the GDP! If this continues, there is no good outcome!

But then again, nobody asked me.

-Malcolm

01.29.2016

Can you believe that the election season is upon us? It really is so unbelievable how the years pass. Hopefully you have good health, make money and enjoy yourself. There has got to be a lesson about life here somewhere. One thing I do know, is that youth is truly wasted on the young. And I am guilty of that!

The big story of this year has to be the tremendous fall in the price of oil. Besides we as consumers saving money at the pump, there are a myriad of other consequences. Certainly this will have a large influence on money flows. How this all plays out and effects us is quite unknown. I'm just happy that I wake up each morning and can feed and cloth myself.

Gasoline prices are certainly falling fast, and that is an immediate savings to anyone that buys gasoline. I myself drive about 1500 miles a month and this translates to savings of more than $80.00 a month! And if gasoline continues to fall I can easily save $1,200.00 a year. And the savings will increase as the price of oil falls. Recently the OPEC oil minister said that production will continue unabated. If anyone out there took Economics 101, they would remember that if supply increases faster than demand, the price will fall. By the way, this basic economic fact proves that our illustrious president knows nothing of economics. Unfortunately for all of us, we an incompetent President. Luckily, we have him for less than a year!

I think that money for households is very tight. It just costs such much money to pay bills and make ends meet. I believe that average household income in the USA is actually contracting. Our wonderful standard of living is in decline, unless you are living on government handouts. Virtually free housing (section 8), food stamps, free medical care (Medicaid), and probably some other government programs to give you a little extra! This is national suicide! And the government is paying for all this with borrowed money. How totally irresponsible and idiotic! The USA has become the land of handouts instead of the land of opportunity. There are so many lazy freeloaders in this country. There really has to be a time limit on these handouts. You work for thirty years, lose your job and get six months of unemployment benefits. You go on the government dole and get a lifetime of free benefits. Why the hell are taxpayers paying someone else's bills for life? This can not go on forever. This country is not on the right track.

Did anyone notice that interest rates for some country's sovereign bonds are clearly in the negative? Negative interest rates would be devastating. With negative interest rates, a normal saver would be better served taking their money out of the bank and keeping it as cash. The implications are scary. On top of all that, if the stock market continues to fall, many pension funds, both municipal and private, would be highly under funded. The debt can be overwhelming. Hold on to your hat!

Unfortunately for us, there is no good ending!

But then again, nobody asked me.

-Malcolm

12.19.2014

Can you believe that Christmas is just around the corner? It really is so unbelievable how the year pass. Hopefully you have good health and make money and enjoy yourself. There has got to be a lesson about life here somewhere. One thing I do know, is that youth is truly wasted on the young. And I am guilty of that.

The big story of this year has the be the tremendous fall in the price of oil. Besides we as consumers saving money at the pump, there are a myriad of other consequences. Certainly this will have a large influence on money flows. How this all plays out and affects us is quite unknown. I'm just kind of happy that I wake up each morning and can feed and cloth myself.

Gasoline prices are certainly falling fast, and that is an immediate savings to anyone that buys gasoline. I myself drive about 1500 miles a month and this translates to a savings of more than $60.00 a month! And if gasoline continues to fall I can easily save $1,000.00 a year. And the savings will increase as the price of oil falls. Recently the OPEC oil Minister said that production will continue unabated. If anyone out there took Economics 101, they would remember that if supply increases faster than demand, the price will fall. By the way, this basic economic fact proves that our illustrious president knows nothing of economics. Unfortunately for all of us, we have an incompetent president. And we have two more years!

I think that money for many households is tight. It just costs so much money to pay bills and make ends meet. I believe the average household income in the USA is actually contracting. Our wonderful standard of living is in decline, unless if you are living on government handouts. Virtually free housing (section 8,) food stamps, free medical care (Medicaid) and probably some other programs to give you a little extra! This is national suicide! And the government is paying for all this with borrowed money. How totally irresponsible and idiotic! The USA has become the land of handouts instead of opportunity. There are so many lazy freeloaders in this country. There really has to be a time limit to these handouts. You work for thirty years, lose your job and you et six months of unemployment. Go on the dole and it is a lifetime of free benefits.

Why the hell are we taxpayers paying someone else's bills for life. Eventually this cannot go on forever. And the Democrats want to solve everything by increasing taxes and expanding these programs.

Unfortunately for us, there is no good ending!

But then again, nobody asked me.

-Malcolm

03.18.2014

Spring is just around the corner and the sequestration has just begun. Here's the way I see things. The return of Social Security rates to prior mandated levels combined with rising gasoline prices is an effective policy to slow the economy. Blah, blah, blah, take home pay for those that pay taxes has been reduced. Consumers (and we are all consumers,) discretionary income clearly has declined. If you don't believe me just look at your paycheck. One does not need an economics degree to figure this out. Thirdly, take a look at the prices in the supermarket and the size of the products you buy. I remember when a pound of coffee was actually sixteen ounces. Now I think it is about 11.5 ounces. In a nutshell, we have less money in our pockets and have to pay higher prices. And for good measure, add the Obama tax increases and you have a textbook example of how to slow the economy.

Now let's look at what I call the Great Conundrum. Low interest rates are fantastic for anyone financing a major purchase like a house or a vehicle. But, if you are older and looking towards retirement or are already retired, CD rates at the bank are ridiculously low. The rate of return is lower than inflation. Living solely on Social Security is impossible even if your house is paid for in full. Property taxes and household expenses will eat that Social Security check up even before you get to the supermarket.

On top of all this gloomy microeconomic stuff that effects us all as individuals, we have all the bullshit coming out of Washington. Now before I begin my normal rant, let me state quite clearly that I am registered to vote as "unaffiliated." I am neither a Democrat nor a Republican. But let me first have another drink of my favorite beverage, Crown Royal Black. In the situation today we have a government that is addicted to spending. Thus , John Boehner, Republican leader of the House of Representatives, has it correct when he stated that this is a spending problem not a tax problem. GOVERNMENT SPENDING IS OUT OF CONTROL!!!! They are spendaholics and their recklessness and total irresponsibility will have the result of a collapse of our economy and a lower standard of living. The skyrocketing government debt eventually will wreak havoc on our nation. The scary part is that there is no good outcome. We are surely screwed. It is only a matter of time. Just like the sands of an hourglass.

And whom do we have leading us down the path to disaster? A lawyer with absolutely no business experience whatsoever and no knowledge of economics. Obama never ran a business, never had to make payroll or comply with government regulations. Unfortunately he is an economic disaster for America. He has increased the national debt more than any other President in history. Compounding this nightmare is the former incompetent president Bush. He and his gang should have been jailed for starting the Iraq War. That son of a bitch lied about the supposed nuclear weapons during his State of the Union speech. And let's not forget the mental genius who first initiated these huge deficits, Ronald Reagan. The creator of Voodoo economics.

Ok, enough ranting and raving. Time for another drink. Now we come to everyone's favorite topic: predicting the future. As I have always stated, it is easy for me to predict the future, being accurate is the hard part. So here goes. The economy, with all the aforementioned headwinds will surely decline into a recession. This is I believe presently occurring. In fact, on a per capita basis we are already in a recession. When the population growth exceeds the growth rate, we then have a recession. The government definition is worthless. As the recession worsens, this will reduce government revenue and produce greater outlays for give away programs. Thus, the National Debt will increase. And this is after a tax increase and sequestration. With our bloated budget and huge debt, this will set the stage for a destructive inflation.

Prediction: Gold will be at least $1,500.00 by the end of the year or sooner.

At this point, an inflation rate of 8 to 10% would be devastating. Just think what that would do to mortgages. A $250,000.00 mortgage would cost $2,000 a month just in interest. Add ever-increasing property taxes and principle payments, and that would propel the cost of housing out of reach for a great majority of people. Government interest payments on 14 trillion dollars of debt at 8% would translate to annual interest payments of over one trillion dollars.

Unfortunately for us, there is no good ending!

But the again, nobody asked me!!

-Malcolm

12.20.2013

The Federal Reserve has just announced they will begin their long anticipated tapering of bond purchasing. Specifically, they will reduce their monthly purchases from $85,000,000,000.00 to $75,000.000.000.00. Thus the annual amount will be at the rate of $900,000,000,000.00 instead of the previous $1,020,000,000,000.00. You may at this point wonder why I am writing out the numbers, instead of spelling the amounts. I believe when you see the huge amount of zeros, the magnitude of the amount becomes more apparent. So far the immediate result of the announcement of tapering has been a higher stock market along with a fall in gold and a rise in the interest rate of the ten year bond to approximately 2.93%. It would be wise to keep an eye on the ten year bond rate as that is the key to whether the Fed can indeed proceed with the planned tapering in January.

I've said it before and I'll say it again; the health of the American economy depends on three main pillars; the first is housing, the second is housing, and the third is housing. Mortgage rates have been at historically low rates for years, and in addition house prices nationally have declined. The actual monthly outlay to own a house has certainly declined. So the big question is why hasn't housing boomed when the cost to own a house has declined? And therein lies the problem. For the last five years medium household income has declined about 8%. In plain English, good paying jobs are slowing disappearing. A $200,000 house at a 6% mortgage equates to $12,000.00 a year in interest expense. When that same house declines to $160,000.00 with a 4.5% mortgage, the annual interest is $7,200.00. A $400.00 a month reduction to own that house. But if you lost your good paying job and are now earning much lower wages, the house is unaffordable. I remember my father telling me that during the Depression, the Chinese Buffet was only twenty five cents, but he never ate there. I asked him why and his reply was, "I didn't have the money".

On the other side of the coin, more people than ever before are on some kind of Government Handout Money For Free Program. Food Stamps, Section Eight Housing, WIC, EBT Medicaid, and so forth. But rest assured about these programs that there is no waste or fraud or abuse. It is a well run government program, just like Obama care! Bear in mind that I'm not talking about Social Security as this is a government sponsored Ponzi scheme that we have paid into our entire working lives, and we do get some of it back.

So now, before I leave on my two week vacation to sunny and warm Florida, let's see if we can try to figure out the markets for the new year. In that regard, the markets, whether stock, commodity, bond, real estate, or otherwise are just like women. There is no figuring them out. And it doesn't make a difference how much research you've done, how many books you've read, an so forth. I recently spoke with an old timer who has been involved with the gold market since the 1960's, and asked him if he had any insight to the direction of gold. His answer, "no". I also spoke to a customer who has been married for over forty years and asked him what he knew about women. After a ten second pause he answered, "nothing". So there you have it in a nutshell.

So if seek my advice as to insight to the precious metals, or women, the answer is that I don't have a clue!

But the again, nobody asked me!

-Malcolm