moneyFYI
Financial Freedom Is Merely Organized Common Sense
Are Governments The Answer To All Problems?
Think about one of them. Can The Economy Recover? First you have to assume the economy is in trouble. I hope you have already come to the conclusion that it is.
Government overspending when inflation and interest rates were low, huge debt, higher prices, rising interest rates, higher taxes, and fast approaching the precipice. Is that curable? Yes, but not by the government or their agencies.
The same arguments apply to other problems.
Why not the government and its agencies?
They have proven themselves incompetent. By trying to look good and make the people feel like things are getting better while they are getting worse.
The FED has caused the problem trying to bring about programs the politicians think worthy. If you try to connect the dots, their policies make no sense at all. How does overspending, more debt, rising prices, and higher interest rates work to your advantage? Hold that thought.
Politicians care about nothing as much as getting reelected. Only their own unemployment matters. That is antithetical to making hard decisions. Do you know how much time politicians spend raising money for their next election? In the United States, members of the house of representatives are burning from 4 to 7 hours a day on that plan. Politicians have become telemarketers.
They don’t care what happens to you. The want to be re-elected.
How many current policies and problems are ones you would devote a lot of your money to resolve? Do they hype the problem to gain power? Of course they do. Do they solve problems once they’re identified as problems. Not often. Make a list. Short one isn’t it.
The future
The market, that is the people acting to optimize their own lives, would never have gone this route. They would have dealt with the small problems along the way and dispensed with the politicians who authored them. Can that happen now?
It could, but it’s unlikely. There are now too many people who think the government can do things for them. If the crunch comes, would the social order also break? Quite likely. People who have been infantilized don’t know what to do, or how to do it.
Not a pretty picture.
The problem is simple enough.
When you believe things that are not true, you have trouble acting. You end up with stasis. Like Japan.
Their stock market is up a about 19% in the last 31 years. That’s 0.57% per year. Government debt is 235% of GDP. Private debt is slightly higher. The ten year government bond rate is 0.0%. Think of an incentive to save and create capital. There is clearly no incentive to save and no disincentive to borrow. Much like in North America and Europe.
What happens if interest rates go to 5%?
What to do now
There is a simple answer. No one knows for sure.
Have you ever seen what happens in situations like this in an “economically advanced” economy? Neither have I. So I don’t know. Venezuela is the nearest thing I’ve seen. Not attractive.
Common sense says it wouldn’t last forever. Maybe a year or two if the people instead of the government set out to fix it. Surviving two years would be a challenge.
The first step
Minimize the government’s lying to support their own purposes. Until the politicians rein in the bureaucracy there is little hope. Over the past 30 years or so the politicians have ceded control. Bureaucracies are neither accountable nor measurable. Giving up political control over them was unconscionable. Lazy. Their goals and yours no longer coincide. You cannot listen and have a hope of understanding what is workable.
Mistrust corporate media. They are mere propaganda machines.
Mistrust social media. It is nearly a fact and logic free zone.
Abraham Lincoln had it right and the government and their allies are trying to prevent it. “I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts” Can you see any effort to go with that thought today.
Use your common sense.
You can do that with little effort. If something sounds foolish, misleading, or wrong, stand up and demand an explanation. Remember the admonition form High school. “Show your work”
When was the last rational argument with evidence you saw from the government or their agencies
Examples:
We don’t know enough about Ivermectin to allow its use. We must vaccinate young children because we don’t know enough about potential side effects.
Climate change will end the world in twelve years. The IPPC says climate change will harm the economy by 10% of what it could be by 2100.
The vaccines are safe and effective, but unvaccinated people will harm you.
March 2020 wisdom. Masks don’t work. Don’t hoard them because we need them for our medical personnel.
Government debt doesn’t matter. The economy can support whatever it needs. Look up Modern Monetary Theory
Intellectuals who have never been responsible for implementing something measurable know what to do and how to do it.
Beware of word arguments
There is a thought in economics that says, two times the unemployment rate plus the inflation rate totaling more than 25% is a crisis. If we use untainted measurements, we are well past that now. Expect more word solutions to fix both. Changing how you measure or what you call a thing makes no difference to what it really is. You cannot rename a broken refrigerator as an insulated closet and make your life return to normal.
Watch for diversion. Shutting down travel from infected areas is not racist.
Watch for areas where the policies change to increase funding to things that didn’t work. The problem was bigger than expected, or people took advantage of the program, or words to that effect usually mean it was ill-conceived or poorly executed.
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I build strategy and fact-based estate and income plans. The plans identify alternate ways and alternate timing to achieve both spending and estate distribution goals. In the past I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning, have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, Banks – from CIBC to the Business Development Bank.
Be in touch at 705-927-4770 or by email to don@moneyfyi.com
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