February 26, 2012

Soaring Crude Oil Prices

It is interesting to listen to the media present their ideas of why the oil prices are going up.  So here is my understanding of what is going on.

Think about one of the most heard advertisements over the last 10 years... Gold is going higher. Higher... HIGHER.  Why is gold going higher... Because it is a hedge against inflation.  As the dollar becomes less valuable because the fed has to print money to purchase our debt... (oxymoron),   Gold goes up.  Gold is a commodity, and as the dollar value goes down, the price of commodities goes up.  That is the natural way of the markets.  So... crude oil is a commodity.  It is priced in dollars.  Like gold, corn, soybeans, wheat, beef, pork, orange juice, sugar, lumber and other markets.  All these markets are priced in dollars and traded on the open world market.  Because they are such.... they are open to investors and speculators putting their dollars in as a hedge against inflation.

It is not the investor and speculator participation that drives the price up as much as it is the dollar value.  The investors to some degree create a market place for the price fluctuation as well as making liquidity for moving in and out of the market, but they have a limited ability to push the market very far because of volume.  Volume and open interest shows the traffic of the market, and the number of contracts held open over night.  Contracts can be held for one day or for the life of the contract, but the contract has an expiration date and must be settled on the expiration date. Total open interest in the crude market is at the time of this writing down, not up.

Look at the chart below.  Crude oil prices follow the red and green line. The dollar index prices follow the double gray lines.  Reference to these lines is only to made to identify which prices belong to which market and have no relevance to this discussion otherwise.


What you see in this illustration is the reaction to market forces other than speculation.  If one wants to talk about real causes... it is directly related to the spending and economy created by the Federal Government.  The more money they spend that we don't have, the further these price fluctuations will go.

Put the blame where it is deserved... on congress.... email this link to everyone you can think of that has anything to do with government or you hear blaming the speculators for their involvement in these markets.  It simply isn't their fault.

Iowa White House President...

February 20, 2012

Rights Creating Quality or Equality Creating Fairness

Philosophically, do we want quality of life through freedom, or equality producing fairness?  Fairness to whom?  Who defines rights and fairness?  From each according to his ability, to each according to his need?  What does this mean to you?

Personal freedom has been the banner under which the United States has operated under and prospered for 200 plus years.  What is so amazing and disturbing is that we have a society today that is pushing and dragging us kicking and screaming across the great, vast gulf which separates these two philosophies.  Dennis Prager uses the analysis that the government money machine is like heroin to the drug addict.    We now have a majority of citizens addicted and dependent.

I don't know of another government's constitution that as the United States uses personal freedom as it's foundation.  Every other country uses fairness and equality as a foundation to build their constitution on.  The right to life, liberty, and the pursuit of happiness is unique. It is a God given right in a country founded by christian people. We still hold that up as a divine right granted by God, a god that an increasing number of people want to banish to the trash bin.

So the argument goes something like this.  It is not fair that someone can make millions of dollars a year running a company or being an entertainer, and someone else such as a teacher or nurse, only makes 40 - 75 thousand dollars.  The teacher & nurse are forming, shaping and saving lives.  Why is their work worth so little when they are so important in their duties.  This argument is so appealing on an emotional level at first glance, but so at the heart of what freedom and dependency is all about. 

Does freedom matter?  Or does one only care about money?  The heroin addict doesn't care about freedom... the next fix is the only thing that matters.  Without the fix, life ceases to have value.  Without the government dole for the leftist liberal, life has no value. The next installment of cash is all that matters.  Does that sound like freedom?

If the entertainer making millions has that opportunity taken away from him... does he have any incentive to compose new bodies of work?  To create great works of art, to perform wonderful shows to thousands paying large sums of money to see them?  Without that opportunity, the incentive is gone, the income stream stops and those depending on it have to do without.  But that is years down the road after this is all set in motion upon people who don't have a clue what is really happening

Do you know why it is important to have wealth creation? One of the famous quotes of  BO in the campaign of 2007 was, "we need to spread the wealth around."  For some, it was a ghastly horrific example of what this man wanted to do.  For others it was a welcome sound of music to their ears.  As we go into the 2012 election, that mantra has changed to, "the rich need to pay their fair share". Wealth creation is the natural way of spreading it around.  There are few self made millionaires,  ones who have acquired millions without the help of others in the process.  Creating wealth requires hiring others to help you along the way.  There first must be the need to drive the expansion of the dream.  Then there needs to be the dedicated passionate building of that business to fulfill the dream.  The putting together the workforce accomplish all the task needed to bring the product or service to completion to meet the demand.  That workforce is usually few at first... but builds as the demand builds.

This is not however the only workforce that expands as the expansion takes place.  As a business grows, their suppliers also have to expand their workforce to meet that increased demand.  The effect of all that increased demand is not seen sometimes because the expansion is not all in one small local. Look at the population growth of cities across the United States.  This increase is evidence that there is a growing business someplace expanding and hiring more workers.  With all those businesses bringing in additional workforce, the infrastructure, housing, food supply chain, transportation, entertainment, and all the peripheral industries that must expand to meet the needs.  Since all this increase is fueled by increase, the increase does not stop with one or two increases... and increase creates the need for another increase and the increase goes on.  Do you see what is happening?  This is called the economic engine.  The fuel is the innovation, creativity and drive of a few people investing their time, capital and efforts into these businesses.  Sometimes businesses take years to grow, but others are created because of a demand that is insatiable by a small business so a business can afford to build fast borrowing money from investors or banks to purchase needs from brick and mortar to supplies for production or services.  Those investment dollars receive dividends based on profitability of the business and insure the availability of a future supply of cash for future development of new business and growth of existing businesses.

So after that long winded dissertation... it is those dollars of profitability that are so important.  As those dollars come in to the system, they are looking for new places to go.  In the fairness model, those dollars are taken from the system, and put into the hands of those who are deemed treated unfairly.  They are not going to return them into the investment pool.  They are just going to spend them.  In the fairness and equality model, the government is the one who has to continually infuse the system with these abundance dollars.  Those dollars going in have strings attached according to the agenda of the political forces at the time.  Agenda's that do not always carry fairness in its true form... but fairness according to POWER at the moment. 

In the freedom model, there is no power agenda; it is about a return on the dollar.  If I invest, I want a return.  There is nothing immoral about that.  It is how growth is fueled.  A person with a passion, a vision, a skill, is willing to give of him or herself to others via a product or service to better the life of all.  What is immoral about that?  In the process there is money spread around in so many ways that it is beyond the wildest dream any government official could ever imagine. All without the control of how it is spent and guarantee that there will be more. 

The argument that the government is a better judge of how we should spend our money and the freedoms we have is easily debunked by looking back at how this country was founded... founded because a government was doing just that. 

Dennis Prager ask the question the other day… and it needs to be understood and discussed by everyone… “Who do you fear more?  Big Government or Big Corporations?

Dennis implored us to consider this in thinking about it… who has the power to come knocking on your door and break it down to arrest you and throw you in jail?  Who has the power to take your guns away from you? 

From Iowa
The Prez. 

February 15, 2012

Now JUST WAIT ONE MINUTE!

What is it with the media trying to make an issue out of contraception?

Since when does any republican, liberal or conservative, want to limit availability of contraception?

They don't!

No republican has ever and has no reason to want to.... for it to be said by anyone otherwise is so false and disgustingly misleading, and truly an outright lie.  But to the administrations credit they so far have not actually said those words... they just want to put the perception out there.  Like in health care they talked in a way that led those not keeping up with the debate, who only listened to the major news networks who didn't tell all the story... just the sound bites they wanted to spin with, thought it was a freebie.  So they voted him into office.

So now they have come up with this contraception issue... where did this come from.  Dick Morris hit the nail on the head saying they were re-framing the issue from abortion to contraception.  Forcing everyone to provide it via health care is just another way of making sure the abortions are covered.  You may not want your dollars going to a company providing those services but that doesn't matter.  You must do it any way... My blood pressure is mounting and I can't speak anymore just thinking about how this administration is taking our freedom away.

Framing the issue to make the conservatives look like we are not wanting to provide services because we don't want to be forced to pay for them, makes people think we are the ones supporting the DEATH PANELS.  In reality it is the leftest liberals who are wanting to add a new layer of bureaucracy to the health care industry and to make sure you are #1 paying your fair share and #2 worth spending money on to begin with.

Take for instance the issue with school lunches.  Not only are schools mandated that their lunches contain certain amounts of specific food groups, you as a parent also must provide that quality or you will be charged for it.  The USDA will send an agent to inspect your lunch bag and determine if it meets the standard... don't believe that?  Here is an article where it is already happening.  School Lunch Bags

So why does this matter?  I think about people who have talked about being afraid of... purchasing using loyalty programs   because the government may soon require retailers give up your purchases to track if you are eating properly.... then if they deem you not sufficiently responsible for your health... they can deny you health care based on that, even though you have been paying into it... and then fine you and maybe even stick you in jail if you don't pay.  They say if all companies sales are online... your charge cards can be tracked... invoices followed, and total life style judged reprehensible.  Just think of the savings there will be... lots of people who are not draining the system of dollars because they are deemed unqualified & will soon die.  Does this sound like taking away your health care choices... no... they are providing it... charging for it... just not handing it out because your not worthy.  Who is wanting to do this... THE DEMOCRATS... NOT REPUBLICANS.  Think not?  Does Death Panels sound like compassion to you?


 What is the so called "Wall Street movement" all about?  It is laying the groundwork for a rebellious uprising against the capitalist system.  What are they offering?  In the scruffy multi-millionaire Michael Moore's words... "there isn't anything... we will have to invent it."  It is already there... they just know they can't use the word yet... SOCIALISM.  It isn't about corporate greed at all.  It is about nationalizing every company because the government is more capable of providing compassionate service and products at a reasonable price. 

Want to read more... I have an article coming up about spreading the wealth around... econ 101... stay tuned.

A more compassionate understanding President than the one on Pennsylvania Avenue.

February 4, 2012

Unemployment Numbers

According to the Department of Labor, employers added almost a quarter of a million jobs in January.


The number of jobs not available to be filled exploded by an unprecedented, record number of 1.2 million.  That’s not a typo.

So... let me get this straight... we have a 250 mil new employees, but with the decrease of the number of openings to fill.... how can you have an increase of a quarter mil... oh, I see... they were different jobs than the ones eliminated.  How about all those poor folks out of work... the ones who have been out of work for more than 99 weeks.  When we look at the complete picture you will find that the real unemployment number is more like 11%. 

Just a dose of reality.  Someone will get the picture when the bill comes due.

Pres....

February 1, 2012

Racism from the media... Chuck Todd & Jonathan Martin

The left are accusing the right of using racist code words... like food stamp president, entitlement society, work ethic, founding fathers, constitution and American values...  but then they come along with this and totally over look it.

"I think the reason why north Florida is going to be fascinating to watch tonight is because it's going to give us a sense of what's ahead in March, when this primary does move to the deep south states. As you know, Chuck, a lot of those counties in the Panhandle, in north Florida, the "cracker counties" more resemble Georgia and Alabama than they do Florida. So, it's going to be interesting to see if Romney can really show some signs of strength in and around places like Pensacola, Panama City, Tallahassee and Jacksonville." said Jonathon Martin with Politico to Chuck Todd on the Daily Rundown.

So... you southern folks now know how you are viewed.  It is ok if they want to label you a bunch of crackers  defined in the Oxford English dictionary as: "A contemptuous name given in southern States of North America to the poor whites", but for the conservative to talk about helping those people via anything but demeaning hand outs, is racist.

 I hear no outrage because of this.. and the silence is deafening...