A more sane view instead of 0 interest rates for the following two years

Message to the IRS, the U.S. Treasury, and to the Federal Reserve Board:

Here is some simple math that applies to lots of folks in the United States:



Income = I(t) = A(t) * ROA(t) (Assets and ROA)

A = A(t)(1 – RL(t) + ROA(t)) (Rate of Living and ROA)

ROA(t) = (SX(safe rate) + RY(risky rate))/(X + Y) (X and Y are % of assets in each)

RL(t) = CPI(t)*Z(A,C, t) where Z is a varying coefficient and a function of A, C = consumption, and time

Assume:

RL(t) is a positive number

SX = 0 because S = 0

RY(t) is as in P(1:1 gambling)

Then:

A ----> 0

Therefore I(t) ----> 0 and IRS revenue ----> 0


These facts are mathematically indisputable.

And the rest of the folks?

1. Those who live from taxes do not contribute to revenue
2. Those who do not have jobs do not contribute to revenue
3. Those who do have jobs are getting paid less and less in the deflationary outsourcing cycle so their contribution to revenue is declining and ----> 0


Fellas and Gals Somewhere in U.S. Financial Decision Making:

Your POR cannot work. Not only is it not working, it hasn’t worked and mathematically CANNOT and NEVER WILL work. Please review the above math and try to make a change in some of the variables you control in the above equations. Thank you.

Bernanke Huge Mistakes to be Remembered - Future Economics Students

1. Never follow a leader, no matter how persuasive, into setting an after-election date for an economic event.

2. Never reverse the natural order of human events, e.g. create artificial negative interest rates when the human race would otherwise choose positive interest rates.

3. Never assume your personal and past ideas about yield curves have any merit for the human race at the present time.

4. Never artificially deflate or inflate currency. That is a bastardization that will most likely reverse on you; instead, remember that a currency is only valid when it correctly represents a value of goods and services.

5. Never be a protectionist in a fully internationally-interdependent world.

6. Never make the same mistake twice let alone three times. Proactively act, observe, maybe react, but at all costs do not do the same thing expecting different results.

7. Never live a life behind a glass wall and then dictate to the real world. The real world will most likely fail in that case.

Cisco and Nvidia Earnings from the Valley

These are easy ones - sell, sell, sell!

Both have taken advantage of a worthless US dollar to scratch out a quarter. A person could argue that anyone should have made 5% or so on the currency no matter how badly they have performed.

Of course, sometimes the Silicon Valley folks have been known to withhold last-day shipments from one quarter in order to slide them into the next quarter for cosmetic purposes... but neither of these companies would ever do that because they are too professional.

But the worst: both companies gave upward forward guidance in an economic climate where cyclicals have no idea where they are headed. How irresponsible for the widows and orphans who may be purchasing the stock.

And it worked for the companies, at least for some short time, in terms of hiking the stock price temporarily. Maybe for insiders to sell, etc.

It will not work for long. Don't get left out of the short position gains you can have once you understand the situation for these near-term underperformers.

NASDAQ Moves

It is not a good idea to listen to the hype from TV and try to rally the market for a worthless reason, e.g. the US may not default for a while is not really good news.

Greece has already defaulted, Italy will default soon, Spain probably next. The question is whether or not the banks can get out in time while selling the worthless securities to widows and orphans. That works sometimes, but the widows and orphans are smarter these days and the banks will need to take a huge bite of the proverbial xxxx sandwitch.

Just don't be part of the bank when it takes the bite!

NASDAQ is a high beta play on the cyclical world. The cyclical world is in a bad cycle.

Don't get left out!

Apples to Oranges in CA!

Watch out! The Orange Co. numbers to not agree with the more Northern CA Apple producing region numbers.

That is, the offset is a little ... a ... a little weird.

We don't care about accounting standards, we only care about results, i.e. real results after the severe US dollar devaluation that has caused more than 100% of some of the corporate "earnings" but is only ficticious.

Our clients are not susceptible to lies; instead, we help them to discern the lies from reality.

Force Majeure

Force Majeure is only tenable when the cost of force majeure is less than the assets it can achieve.

In the year 2011, under Pax Americana, we think it is unlikely that force majeure is attempted to solve any economic issue, except by the Americans. Very much unlike the years 1917 and 1941, force majeure is not likely to influence long term economic stability.

End Game for the Euro

Unfortunately, the Euro was a bad idea. The Euro is a single currency that represents the economies of many autonomous countries.

Any scale of ten countries, for example, would have a worth-rank from 1 (best) to 10 (worst) and number 1 would most likely not be happy with number 10, etc.

Also and unfortunately, the degree of socialism in the Euro block has proved to be a large economic problem so far.

In essence, the Euro is relatively worthless and will become more so with defaults.

You can call a default anything you want to call it, just as you can call printing monopoly money "quantitative easing" but the facts are the same.

Europe has fallen, again. Probably this time the US will not be shortsighted enough to pay.

This time, there is no WW3 because no one in Europe has the power to force a WW3.

There can only be world-wide European default. (Of course, that will be a problem for China and China also does not have the power to force a realistic WW3.)

Most likely, the Euro default will be in the form of monopoly money from the printing presses to the admonition of the number 1 and 2 countries in the Euro zone.

Watch out. There are not 10 years of lies left, there are only a few years max. Everyone needs to consider every aspect of investing. Gold can help you, but you need to live in China in that case.