Handbook for Prosperity

Dec. 29, 2008

T-H-I-N-K III

Here we go with the third installment about Americans and thinking. Or lack of, depending on where you sit.

Whether intentional or not, there is a constant smoke screen floated out there by “talking heads”. So what are talking heads?

News and media people. People on CNBC. Fox. The major networks news programs – CBS, NBC, ABC. Politicians (national, state and local).

Why do I call what they say a “constant smokescreen?” Because they talk about things of little or no substance. They create noise that distracts and confuses. They fret about weather disasters (as if that is something new), murder and mayhem (oh, that helps me a lot), and mostly the latest platitudes and promises of governments to “save us” from the consequences of our actions.

Noise. A smokescreen. To hide something. To obscure something.

What might that something be?

Think about this. There are forces that have been unleashed that are killing our economy. Killing our companies. Our jobs. Our way of life. There is nothing known on earth to prevent these forces from doing their work.

Nothing in the textbooks. Nothing in government. Nothing in history.

In fact, the actions being taken right now by our elected officials are EXACTLY the same steps taken in the past that makes things worse. Not better, but worse.

Think about that. If the same things we are doing today made things worse when they were done in the past, what makes you think the results will be any different today?

Let’s think about this a bit more.

Let’s look at government programs implemented with the idea of “making things better”.

Education. Established in 1979 by President Carter, our schools have become the envy of the world. NOT!
EPA – environmental protection agency. What has this agency done to make things better? Billions upon billions. And what do we have? Toilets that don’t flush, and showers that you have to run around in to get wet.
Department of Commerce. Geeze, has our commerce gotten any better? Do we produce more, sell more, export more? What the heck do these guys do?
Homeland Security. Okay, more billions. Lots more. And what do we have? Multiple security agencies that still don’t talk to each other. Airport travel “security” that is simply stupid. I am sure that preventing people from waiting to pick up passengers has avoided many terrorist attacks. As has taking my shoes off when passing through security.

You can take virtually every government agency one by one, look at the money spent, and look at the results, and you’ll know that they don’t HAVE TO report results. All they have to do is spend money. No accountability.

And they get more money by spending all that is allocated to them. Spend more, get more. Our system at “work”.

That is our government hard at work to “save us” or, heaven forbid, “help us”.

So here’s the noise and smoke screen at work. Instead of doing their job, and doing in-depth reporting about the scam that government programs are, you instead are served up a non-stop diet of “the government is doing this today, doing that today, etc. etc. etc.” All on our behalf.

This is a very destructive force at work. Government creates nothing. It only takes, redistributes, and destroys. The last is what they are really good at.

It destroy initiatives with oppressive taxes. It destroys incentive by erecting barriers to business. It destroys real property through wars. It destroys freedom and productivity through its intervention in the marketplace. It destroys our wealth by debasing the currency and putting us deeper and deeper into debt.

The world of government is an endless supply of broken promises, programs that do not work, and corruption galore. But the noise and the smokescreen works to hide this from us.

So if you really want the truth, if you really want to know what is going on so you can take steps to protect yourself, and maybe even prosper – well, you have to do the research yourself. You have to hunt down the truth. Get the facts. Know and understand history. Get the stuff the noise and the smokescreen hides.

And what is the motivation of the people making the noise, creating the smokescreen?

Money. Jobs. Influence.

They get paid to carry out orders. Orders from people who have a vested interest in keeping the system going.

And if they want to advance, or be part of the “in crowd”, then they just better “report” the news spoon-fed to them by people in power. Or else.

Soon, it becomes normal to be a noisemaker. Without even thinking about it. Truth falls by the wayside. The smokescreen gets bigger and thicker.

Oh, I forgot the fear factor. Remember that part about government intervention in the marketplace and how that works to destroy our freedoms? Suppose you knew that your job was at stake if you did not “toe the line” with making noise, creating a smokescreen?

Suppose you knew that the government controlled the licensing of your TV station? Radio station?

Suppose you understood that the government can FORCE you to broadcast content that THEY want broadcast? Regardless of what your listeners want and need…

THAT is the problem with government intervention. Power leads to the capability to control. The capability to control is of little value unless exercised.

And history tells us, over and over and over again (are you sensing a broken record here?) that when given power and control, governments ALWAYS exert it. Always.

Now here is the thinking assignment.

Think about the noise and the smokescreen.

Think about getting factual information about what is really happening. Information about the forces that have been unleashed, and what you can do to cope with them.

Get the info, and then think about what you can and are going to do in your life to survive this mess, this calamity.

Then think about how you might be able to thrive in the midst of the chaos.

And for pete’s sake, quit listening to and buying into the noise and the smokescreen.

Think about that.

Be prudent. Be safe. Be confident.

Dec.23, 2008

Think II

Okay, here’s part two of T-H-I-N-K...something for Americans to, ummm...think about.

One of the ways you can tell if the gang in Washington - or anywhere else - is telling you the truth, is to look at hard facts. Especially when it comes to numbers.

Example: certain politicians are always railing against the rich when it comes to taxes. “We need to tax the rich, make them pay their fair share...while lower income folks, and the middle class, need to have THEIR taxes reduced.”

They spout these positions as a means of creating class warfare, and appealing to those Americans who cannot - or will not - think. Don’t be one of those Americans. Break free. You CAN think, I know you can.

Think this: any story along these lines is an absolute, unmitigated lie. It is simply a ploy to get MORE MONEY into the hands in Washington, and out of the pocket of men and women. Period. Nothing more, nothing less.

The other side of that coin is power and control. Because when you take money from free men and women and give it to politicians, the purpose they have in mind is to fund a program to “help you” that THEY control. You only get “help” if you play by their rules. Which means behaving as they want you to, not as you choose to.

This is why sending money to Washington never works. Oh, it might give the appearance of “working” at first. But other than war, let’s consider for a moment: what government program or initiative has been successful? I can think of but one - the space program. NASA. Of course, what NASA did private industry could have done for a whole lot less. As proven recently when a private company put a man in space for less than $50 million. While NASA spent hundreds of billions and continues to do so.

Okay, I’m all ears. Tell me what program of the government “works”?

Okay, back to the class warfare, tax the rich, make them pay their fair share.

Think. Who decides what is fair? Some politician or bureaucrat who never worked in a real job? Who actually had to produce something of value to get paid?

What’s fair is equal treatment. Like the idea of the Fair Tax. Fair is everyone pays the same percentage of their income in taxes, no matter how much or how little they earn. Such an approach MOTIVATES people to earn more to improve their lives. Because they know if they earn more, they will keep more.

Okay, here are the hard facts. This is information provided by the IRS. If anyone has a bent towards soaking the rich in terms of taxes, it is this group. Here is what they report in tax year 2006.

Who Pays Income Taxes? See Who Pays What

For Tax Year 2006

Percentiles Ranked by AGI	AGI Threshold on Percentiles	Percentage of Federal Personal Income Tax Paid
Top 1%	$388,806	39.89
Top 5%	$153,542	60.14
Top 10%	$108,904	70.79
Top 25%	$64,702	86.27
Top 50%	$31,987	97.01
Bottom 50%	<$31,987	2.99
Note: AGI is Adjusted Gross Income Source: Internal Revenue Service

Now let’s play the “think” game. We’re looking at IRS generated numbers. These numbers are based on tax returns. As in actual income declared and paid taxes on.

So we’re seeing that the top 1% pays 38.89% of the taxes in the U.S. The top 10% pays 70.79%.

The bottom 50% pay only 2.99% of all the income taxes collected in this country,

“Oh! Oh!”, you may say. Bush passed tax reductions that favored the rich. They should be paying what they used to pay. Okay, let’s take a look at the year 2000 when Bush took office (this is not to defend Bush, but rather to encourage you to T-H-I-N-K)..

Here are the taxes paid in 2000. Compare it to 2006. Whose taxes have gone up? Whose have decreased?

For Tax Year 2000

Percentiles Ranked by AGI	AGI Threshold on Percentiles	Percentage of Federal Personal Income Tax Paid
Top 1%	$313,469	37.42
Top 5%	$128,336	56.47
Top 10%	$92,144	67.33
Top 25%	$55,225	84.01
Top 50%	$27,682	96.09
Bottom 50%	<$27,682	3.91
Note: AGI is Adjusted Gross Income Source: Internal Revenue Service

Come on, people. Think.

These are hard, factual numbers reported by the IRS. The rich - and the top 50% - are paying more in 2006 than they paid in 2000.

So who’s lying?

Ummm, maybe, just maybe, it’s the folks running for office. The ones who seem to hate the people who create and earn wealth. Maybe they feel guilty, because all they do is eat at the public trough their whole lives. Beats me.

So what’s fair? How much more do you want the “rich” to pay? Put aside the crooks who are milking the system on Wall Street and inside such government agencies as Fannie Mae and Freddie Mac.

Just think of the people who take risks, start and build companies, invest in companies to make them grow, who create the jobs we need in America.

Do you really think that 10% of Americans should pay more than 70% of the taxes?

Think.

Think about the money wasted in Washington - and in your state capitols, for that matter. How they spend our tax money (OUR money, not theirs) to fund pet projects. To line their own pockets. To hire staff. To take boondoggle trips around the world.

And you want to send them more money? What are you thinking???

Oh, sorry. You must be one of those who is NOT thinking.

Let’s just get back to common sense and thinking. Let’s consider what has gone before. The Great Society. The War on Poverty. The Department of Education. The Department of Agriculture. The Environmental Protection Agency.

What have any of them done that has had a positive long-term impact on Americans at large?

Come on, you thinkers out there. Give me some explanations, some examples. And the idea of “we need to spend more” or “we did not spend enough to make these programs work” do not count. That is not a thinking response. That is stupidity in its finest hour.

Now think about this: we live in the greatest country on earth. A lot of blood has been spilled to make it that way.

What makes us great is NOT the folks in Washington. It is US - the people in the cities, towns and byways of this land. The ones who work in the factories, drive a truck, wait on tables, teach our school kids, foster parent the unloved kids, save lives in hospitals, protect us in uniforms of blue and red and black and green.

Believe me, it is NOT the folks in Washington.

We are in a war with those people. The war is about whether we, the people, who make this nation the greatest on earth, are willing to roll over and let the politicians have their way. Or if we are willing to stand up and fight for the freedoms and the principles and the rule book - the Constitution - that secures our freedoms and our greatness.

Are you willing to think that through? Or are you going to lay it all down at the alter of those who say they will take care of you.

What do you think?

What will you do?

And that is the end of Think II - lessons in thinking. Third installment soon.

Be prudent. Stay safe. And be confident.

Dec.21,2008

Whatever happened to the American ability to think?

Did we give it over the Department of Education? (Which, BTW, was founded in 1979 by none other than the illustrious Jimmy Carter, the prez that was and is determinedly determined to have the U.S. gobmint do all of our thinking for us. So how is that working out: we rank 18th out of the 24 industrialized nations on earth. Don’t you just love it
when Washington - or your state capitol - somehow assumes that they are smarter and know better than individual Americans are and do???)

But I digress.

We still ought to be able to T-H-I-N-K. But it is obvious between media and marketing and advertising brainwashing, coupled with the robotron-based “education system”, this is a fast disappearing commodity in the U.S.A. Commodity is a poor choice of terms - thinking is now as rare and valuable as platinum. Or should I say rhodium?

If you could think, would you settle for:

The U.S. Congress and the President conspiring to turn over constitutional authority for our money and our financial system to a single man - the “vaunted” Henry Paulson, our dear and precious Treasury Secretary. That’s right, the man makes decisions with no accountability to anyone at any time with OUR money - and so will his successor. WE allowed that with nary a protest to the Washington elite we call “representatives”.

The “bailout” of the auto industry, which has invested the last 25 years taking the entire U.S. based auto manufacturing base into absolute and complete bankruptcy. This is no bailout. It is simply another pint of blood for a drunk dying from cyrhosis of the liver - drunk on printed money and endless debt. Okay, so let’s shovel some more money on this roaring fire pit of losses and stupidity in Detroit City. Except that now it’s OUR money, yours and mine, and the new debt funded by our money will be carried on the backs of the kids and grandkids of today.

Shoveling money at banks, so they can shore up their reserves and fund their dividend payments - again, at our expense with OUR money.

The government allowing the ongoing printing of money (today it is done with the digital press we know as bits and bytes created by keystrokes on a keyboard), that is eroding the value of our money at an alarming rate.

Adding $7.6 trillion in new debt to our citizens (that’s you and me, friend, you and me) without a thought of the consequences. Think: how much of that $7.6 trillion created out of thin air have you seen hit your bank account? Last I checked, my balance keeps shrinking. Despite $7.6 trillion in new “money” since the beginning of the year.

OH, EXCUSE ME - HERE IS THE LATEST COST OF THE BAILOUTS, AND STILL GROWING. THANKS, PAULSON, BERNANKE, CONGRESS AND THE PREZ. KEEP UP THE GOOD WORK, BOYS AND GIRLS!!! We've now spent more on the bailouts in real dollars than we spent on winning a World War. THINK about that.....

Dec 14

It’s a long, dark road we are going down.

Look, I can write how-to stuff all day long…but unless you have the context that will motivate you to action, what does it matter? So take a gander at this little column from Investors Business Daily about the ongoing departure of large, important and significant companies from the shores of the USA - and then think of the snowball effect this is having on our economy…and inevitably on your personal economic well-being.

http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=313977823484200

Then seriously consider getting off your duff and moving towards work that you love and can control, and taking steps to protect yourself and those important to you. Now is a good time to start. Later is not.

Be prudent out there!

Thursday, December 18, 2008:

According to Bloomberg, the federal government has made commitments worth a total of $8.5 trillion in the bailouts of 2008. That includes actual expenditures as well as loan and asset guarantees.

Bianco Research puts the total value of the bailouts at $8.7 trillion.

The $296 billion spent on World War II, America’s most expensive war, would be $4.1 trillion adjusted to today’s dollars, according to the CRS report from June.

What are we thinking?? I have a sneaky hunch we are not.

Thinking is dead.

Ignore what’s going on. “They’ll” fix it. The markets will bounce back. Housing will recover. Move along, nothing happening here.Are we NUTS? If we cannot afford to buy cars, how on earth will afford to buy houses? 10% of home owners in America are now delinquent on their mortgage payment. - the highest since the Great Depression. Jobs are evaporating in gigantic chunks, tens of thousands at a crack. Housing starts are at an 80 year low.

THIS is the environment for an economic rebound?

Think. Think. Think.

The numbers of simple math do not lie. None of this adds up.

And neither does the drivel coming out of Washington. Or on the networks, the newspapers, CNBC, Fox Financial, whatever. It is noise and distracts you and me from the real task at hand.

Take a deep breath, face the facts. Washington is not going to save you or me or anyone but the fat cats who buy them off. The new administration will be no different in their deceit that any other administration. The die is cast, the players have their parts assigned, and they are going to play them to the hilt. All at our expense.

Then get busy and protect yourself and the people you care about from this mess. This is not going to get better until it gets much, much worse. Think in terms of years. Several of them.

Think. About how to earn an income in an imploding economy. How to secure food and shelter. What to do when they come for what you have (think Katrina here). A safe place. A community you can trust.

Think. Plan. Then act. In fact, act while you are planning, and make adjustments as you go along. The road ahead will have many twists and turns as the people in power will do anything to stay in power. Anything.

Think otherwise at your own peril.

The prudent see danger and take refuge; the simple keep going and suffer for it. Proverbs 27:12

Why this is all happening, what needs to happen to fix it, and a step-by-step game plan to protect yourself and those you care about are in the book: The Handbook for Prosperity.

Quit getting played by the system and the masters running it.

Think. Be prudent. Be safe. And be confident.

Dec 6

Sometimes, others say it better.

Here’s a post I lifted from an investment forum I frequent. Just a word of warning that I hope will stimulate some kind of coherent thought out there, folks. Be prudent!!

The Nightmare German Inflation

Posted on December 6, 2008 at 9:40 am by sailman -

“The ones who fared best were the small minority who had the foresight to exchange marks into foreign money or gold very early, before new laws made this difficult and before the mark lost too much value.”

Foreword: The many parallels between 1924 Germany and present-day United States are cause for concern. Though the U.S. has not yet reached the depths to which Germany descended in that era, few can look at the constant depreciation of the dollar since the early 1970’s and fail to be alarmed. It seems contemporary America differs from 1924 Germany only in the duration between cause and effect. While the German experience was compressed over a few short years, the effects of the American inflation have been more drawn out.

In my view, this has occurred for two good reasons:

First, American central bankers have learned enough from the German experience to delay and extend the consequences of printing too much fiat money.

Second, Germany was a small state isolated from the rest of the world, a pariah nation of sorts following World War I. As a result, it had a difficult time finding a market for its government bonds. German deficits had to be financed internally — a difficulty which greatly accelerated the printing of fiat currency.

Up until recently, the United States enjoyed a strong world-wide demand for its government paper. Thus, the negative affects of government deficits have been subdued. Now, with consistently low interest rates, and a growing fear globally that U.S. deficits may have run out of control, foreign support for the U.S. bond market has faltered. In the absence of international buyers, the Fed could be forced to monetize an ever larger portions of the debt — the modern equivalent of printing money.

Whether or not the situation will slip out of control is a matter for debate. The trend, however, is alarming. The largest annual contribution to the outstanding public debt during the Nixon years was $30.9 billion; Ford - $87.2 billion; Carter - $81.2 billion; Reagan - $302 billion; Bush(Sr.) - $432 billion; Clinton - $347 billion; GW Bush - $596 billion.

As this report points out, the correlation between deficits and inflation is sacrosanct — deficits lead to inflation and uncontrolled deficits lead to uncontrolled inflation. Whether or not there will be a Nightmare American Inflation remains to be seen. Let it be said though that the trend is not favorable.

The survivors of the German debacle did so by purchasing gold early in the process. As a citizen and an investor, the best you can do is prepare, and then hope that it doesn’t happen here. This report of Germany’s hyperinflation, originally published in 1970 by Scientific Market Analysis, could play an important part in your preparation process. There is little doubt it will affect your thinking. - Mel J. Kosares

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