Good afternoon,
I am now answering #4.
This is an interesting question. I believe we make these divisions between the candidates, and in most cases it is the candidates themselves that are formulating the answers to some gigantic economic or political issue.
But, in this case, it is enigmatic. The answers are really coming from the Treasury, the Federal Reserve, and the IMF (International Monetary Fund). This is seen on a broad based level as a mathematical and confidence issue whose relationships are above the "US Neighborhood" , as it were, to a "Global World Neighborhood" level. Therefore, neither candidate has the experience, nor the "marbles" to play in this game. Their rhetoric is more substantive of political party than of genuine personal ideas.
In short... The answers ani't comin' from them... The rhetoric is comin' from their parties.
Tuesday, October 21, 2008
Monday, October 20, 2008
The Purpose
Good Morning,
I am only able to write this information one way... jumping in with both feet.
First, I dedicate this site to the Glory of God...
Secondly, the purpose of this blog is to bring to the readers some clarity and peace concerning financial and economic matters. If we can Define, Interpret, and apply what is going on... we have kept ourselves from making knee-jerk reactions.
All that is of financial consequence in the United States affects you and me, the consumer. We must operate within a frame work that allows for good decision making on our part. What we do has compounding affects for us or against us in the future.
Thirdly, no information posted on this site is to be taken as advice for your personal situation. This can only be done with personal contact, face-to-face, kneecap-to-kneecap.
Fourthly, to begin with, know that the majority of information you hear on the major and secondary networks is generally laced with much hyperbolic language. We are in an age where "news" is coming at us 24/7/365. Why is this? I find no usefulness in it. It is more of "entertainment", and less of pragmatic useful communication.
Fifthly, it is good to educate yourself on the broad topics of economics... after all, you are producing commerce when you make and spend a dollar. Let us explore together how the system works and what it means to you and I, the consumer.
Let me begin, by answering the questions asked this very morning.
#1 Banks themselves by the very regulations that govern them, are secure. The problem arises when the portion of the banks deposits that can be invested are invested poorly. As a general rule, banks don't try of make "Las Vegas" style investments by "wanting a piece of the action" in any one sector of the economy. This time, the banks got caught in the mortgage sector with some not so well thought mortgage contracts.
Banks have historically governed themselves very wisely. They need to return to the very standards and protocols that gave them the gold standard world wide.
#2 Inflation is generally defined as to be "too much money chasing too few goods". This is the very simple observation definition. I have found over time to be very little consensus on the causes that are the fountainhead of an inflationary period. Every time we have a big negative mitigating event in the "general flow" of the economy, we must ask whether we will have a period of inflation.
Today the consumer price index is one of the indices that are used as a barometer, if you will, to test the economic atmosphere of whether prices at the wholesale and the retail level are rising.
Big natural disasters which affect product production or product transportation are catalysts for inflation. Fewer barrels of oil produced per day will equal greater prices at the pump and for things that are produced by petroleum.
The good news, as I see it, is that the recent linage of hurricanes that has hit this country over the past five years has allowed the economy to deal on a real-time consistent basis with what it is like to have these disasters on our doorstep. We have weathered it supremely well!
I don't think the current banking liquidity crisis will affect consumer prices significantly. The opposite is really playing out in the market. There are more coupons flooding the news papers and mail today than ever. More sales at retailers and lower gas prices keep the consumer in their cars, and retail sales and coupons keep the consumer spending... This is the making of low inflation for now. Knowing the prognostication of whether the price of something or things is the hardest forecast of all...even harder than predicting Texas weather. Really!
So many factors are involved. But, what do you see? Coupons, mailers, internet advertisements, less people at a store, less people driving, less people traveling by car, even the media talking of consumers spending less this Christmas season than last, are all catalysts for price reductions at both the wholesale and the retail level.
#3 The truth is, and this is a long answer, the President can only do a little, on a systems level, for the current problem. But, he can introduce ideas and legislation that would be brought before congress to consider. The real bottom line is that character cannot be legislated or made a political issue. The private sector, the banks, mortgage companies, and investment companies, (to make a broad based statement), are to be servants of the consumer. Their motive should be to serve the general good of their clients, the consumer and the economy, on a broad based macro level. This is not the case in the areas related to mortgage backed securities and mortgages made to the consumer over the past seven years.
(More later)
The Advocate
I am only able to write this information one way... jumping in with both feet.
First, I dedicate this site to the Glory of God...
Secondly, the purpose of this blog is to bring to the readers some clarity and peace concerning financial and economic matters. If we can Define, Interpret, and apply what is going on... we have kept ourselves from making knee-jerk reactions.
All that is of financial consequence in the United States affects you and me, the consumer. We must operate within a frame work that allows for good decision making on our part. What we do has compounding affects for us or against us in the future.
Thirdly, no information posted on this site is to be taken as advice for your personal situation. This can only be done with personal contact, face-to-face, kneecap-to-kneecap.
Fourthly, to begin with, know that the majority of information you hear on the major and secondary networks is generally laced with much hyperbolic language. We are in an age where "news" is coming at us 24/7/365. Why is this? I find no usefulness in it. It is more of "entertainment", and less of pragmatic useful communication.
Fifthly, it is good to educate yourself on the broad topics of economics... after all, you are producing commerce when you make and spend a dollar. Let us explore together how the system works and what it means to you and I, the consumer.
Let me begin, by answering the questions asked this very morning.
#1 Banks themselves by the very regulations that govern them, are secure. The problem arises when the portion of the banks deposits that can be invested are invested poorly. As a general rule, banks don't try of make "Las Vegas" style investments by "wanting a piece of the action" in any one sector of the economy. This time, the banks got caught in the mortgage sector with some not so well thought mortgage contracts.
Banks have historically governed themselves very wisely. They need to return to the very standards and protocols that gave them the gold standard world wide.
#2 Inflation is generally defined as to be "too much money chasing too few goods". This is the very simple observation definition. I have found over time to be very little consensus on the causes that are the fountainhead of an inflationary period. Every time we have a big negative mitigating event in the "general flow" of the economy, we must ask whether we will have a period of inflation.
Today the consumer price index is one of the indices that are used as a barometer, if you will, to test the economic atmosphere of whether prices at the wholesale and the retail level are rising.
Big natural disasters which affect product production or product transportation are catalysts for inflation. Fewer barrels of oil produced per day will equal greater prices at the pump and for things that are produced by petroleum.
The good news, as I see it, is that the recent linage of hurricanes that has hit this country over the past five years has allowed the economy to deal on a real-time consistent basis with what it is like to have these disasters on our doorstep. We have weathered it supremely well!
I don't think the current banking liquidity crisis will affect consumer prices significantly. The opposite is really playing out in the market. There are more coupons flooding the news papers and mail today than ever. More sales at retailers and lower gas prices keep the consumer in their cars, and retail sales and coupons keep the consumer spending... This is the making of low inflation for now. Knowing the prognostication of whether the price of something or things is the hardest forecast of all...even harder than predicting Texas weather. Really!
So many factors are involved. But, what do you see? Coupons, mailers, internet advertisements, less people at a store, less people driving, less people traveling by car, even the media talking of consumers spending less this Christmas season than last, are all catalysts for price reductions at both the wholesale and the retail level.
#3 The truth is, and this is a long answer, the President can only do a little, on a systems level, for the current problem. But, he can introduce ideas and legislation that would be brought before congress to consider. The real bottom line is that character cannot be legislated or made a political issue. The private sector, the banks, mortgage companies, and investment companies, (to make a broad based statement), are to be servants of the consumer. Their motive should be to serve the general good of their clients, the consumer and the economy, on a broad based macro level. This is not the case in the areas related to mortgage backed securities and mortgages made to the consumer over the past seven years.
(More later)
The Advocate
Friday, October 17, 2008
For all those who know me well....this is so out of my comfort zone. But, I have reluctantly agreed to pursue this technological super-highway of communication.
Thank you!...to Jason Lay for making this blog possible.
Thank you!...to Joel Engle for making me do this!
Thank you Elizabeth for helping me communicate to my clients on this information highway!
Your Friend & Servant
Mitch
Thank you!...to Jason Lay for making this blog possible.
Thank you!...to Joel Engle for making me do this!
Thank you Elizabeth for helping me communicate to my clients on this information highway!
Your Friend & Servant
Mitch
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