A Soros double dip recession recovery interpretation

November 15, 2009

Economic_recovery_in_2010.doc

How will the United states of America come out of this recession.

Many economists are saying it should be soon. I do have my doubts. The further attempts by the Federal Reserve at creating another bubble by keeping interest rates at zero percent are encouraging for this prediction. But other are saying and signs are still showing that Commercial Property will be hit again soon. Banks are at risk. But companies are hiring salesmen and computer programmers and farmers are soon to plant new seeds when the United states grain reserves are completely emaciated. The kingdom of low credit cards are still not rocketing upwards rather the kingdom of high and usurious credit card rates are rocketing upward. Now more precisely.

Will the onset of H1N1 flu virus still ratcheting upward and delays in the vaccination shots being available the planned death of millions is still not unfolded. If one is sick one is not productive. But this does benefit the physician and the hospitals. Are the hospitals in a position to turn the economy around. No. Back to this later.

The price of today’s oil which is bumping the bottom of the $80 (1*) per barrel price range will help in slowing any type of recovery. The supply and demand model in oil is healthy and realistic. As prices of oil go up so goes down the demand. As demand goes down so will productivity at the oil refinery and thus supply at the oil refinery or the supply of the value of the dollar will be going down. At the present time it is looking like both the supply at the refinery and the value of the U.S. dollar is going down. (*2) With the price of oil hitting a price ceiling. The dollar is weakening.

Some are saying that a barrel of oil for a basket of currencies is inevitable. But is this realistic. Look at the underlying fundamentals from a “micro” economics level. In this case by micro I means country by country. A change of dollars to a basket of currencies would not only devastate the oil supplying countries but their investment holdings as well. No change to a basket of currencies can be thought of at the present time. If the price of oil is anywhere from (3*) $20 to $25 per barrel higher with a weak dollar (“Oil is about $20 to $25 a barrel higher simply it’s priced in dollars, and there’s a weak dollar:: Exxon Mobil chief Rex Tillerson.) then oil rich countries would be crazy to divest to a basket. An immediate loss of $20 would be (now macro-economics) undermining their individual countries GDP (Gross Domestic Product) but also hurting their countries balance sheets. Yes, a weaker dollar would immediately become stronger but the Producing Countries concern would be helping their own people first or themselves. A slightly stronger dollar in a basket would reduce the price of oil and thus the need for pumping more oil would further reduce their overall value per barrel because the supply of oil for the same return would have to be more barrels delivered. The only one’s to gain here would be the oil consumers and especially the United states. This by itself could change our economy around almost immediately but I am not counting on this change for an economic recovery.

 

Another aspect which could change the economy is actually from the micro aspect. But this would be slow and drawn out. If everyone who bought a new house under the H.R. 3548 (*4)(*5)(*6)(*7)(*8). With “The American Recovery and Reinvestment Act extended the tax credit which has provided a tax benefit to more than 1.4 million taxpayers so far.” … then maybe the construction and real estate trades can start again to get started. I have talked with individual contractors and sub-contractors and this is confirmed. Rug layers and painters are back in business. Some real estate construction is starting again. This is mainly in the residential arena at the present time however. The scaffolding trade from what I individually see is still idle. One has been virtually idle for the last six months. A one acre scaffolding lot is untouched.

From HR 3548 I see homeowners who have been in their residences for five of the last eight years finally being able to kick the tires of a new house. This will mean the remodeling industry will be back in business. New carpets, shade, a new jacuzzi finally with the new house, I don’t like that color repainting jobs, needs a new roof and that is why we got the discount, let’s buy a new car while we are closing this loan also. Even maybe someone might want to buy a completely electric vehicle and get the $7200 or $5500 vehicle tax credit. (Varies by manufacturer and model.) (*9) With a deadline date of April 30, 2010 for the Purchase and Sale Agreement being signed and a closing date of or before June 30, 2010 this recovery aspect could be very well short lived. This particular bill is assuming to be just a kick-start to the economy and not a continual fix and more fix piece of legislation.

So so far nothing seems to be what really is needed to truly get this economy going.

Back to the Basics. For an economy to get going when it is dead some basics need to be happening. An idea or agriculture. An idea is an innovation. From innovation to happen first the creative side of an individual needs to come. So let’s you and I start to get creative. So if you are one of the individuals that want to think and be happy then you can be the one to create something which will make others happy. The item must either make someone happier and/or it must be something which will reduce the time or cost of a method of production. O.K. individual companies need to make this happen. Like Boeing creating a 787 Dreamliner. This will get the Pacific Northwest and finally the South Carolina (Boeing to Place Second 787 Assembly Line in North Charleston, SC) economies to get a little bit of a spark. (First Boeing 747-8 Freighter Leaves Factory) (*11). I guess I am sort of bias toward Boeing since he worked there prior to WW II as a mechanic. But this will only be one sector of the economy. Let’s get to a bigger part of the economy.

Farming is one of the largest businesses every known to mankind. Where does farming come in right now. North and South Dakota have the absolute lowest unemployment rates in the United states. These both are heavy into farming. But the unemployment numbers are discounted out when it comes to “unemployment” or non-farmer numbers. For September 2009 the numbers are 4.2 and 4.8 percent respectively. (*12) With Michigan at the bottom with 15.3% our country has a wide diversity and diversity in this sense is not positive.

So far, nothing is here to prove or to disprove the Soros hypothesis that our economy will be taking a double-dip before the recovery happens.*13-14). For more in-depth conversation about the economy and an interpretation of what George Soros might have said I always go to Alex S. Gabor website for additional information. Mr. Gabor, like the rest of us, is on the other side of the spectrum of the financial power but has a mind of interpretation to the side of a billionaire. He also is Mr. Soros’ nephew and his father was the King of Hungary at one time which is the same country of birth as George Soros.

Back to farmer to help to disprove or to prove Mr. George Soros’ hypotheses of a double-dip in the economy.

With the crashing of the dollar what will help in stabilizing the dollar from its free fall. Or is that necessary. With a falling dollar the products produced in the United states remain the same inside of the United states. However, with respect to foreign markets our depressed dollar becomes a haven for increasing purchasing power from outside countries. So the eventual benefits of a falling dollar may thus increase the value of the dollar.

At the present time our agricultural basket from a national stockpile basis is zero. Do I need to repeat this. It is absolutely zero. With CCC Inventory numbers at zero with a former high of 791.2 (million bushels) in 1986-87 and the price of wheat now focusing on 539 or approaching $9 per bushel. The United states is the world’s largest exported. But can this be sustained. When our stockpiles decrease and we have nothing more to stockpile the price of wheat should be going up. This will be good for the farmers. From this point farmers will hopefully plant more wheat and thus the price of wheat will come down. As the price of the dollar strengthens then other countries may look for alternatives in other countries which will weaken the price of wheat because of over production. Maybe this will happen in the 2011/2012 timeframe though. Farmers should plant, plant, plant.

My recommendation here is for every last one of the governors of the different states to build “state” silos so the stability of wheat as a commodity and assurances for the citizenry can be maintained. Perhaps this could also be a method whereby the states could make some money as the price of wheat continues to climb back up. Washington state has ownership of timber and this commodity for schools. For preservation of the citizens perhaps a wheat silo and production facility should be maintained as well. Some allodial lands could be created for farming purposes and perhaps prisoners could be used to harvest a crop. The grain being put into silos and the education of our children could improve. No one does not loose and in fact everyone gains and especially the prisoners and the children. Or perhaps the unemployed could make a living greater than their unemployment by farming. A style of a WPA (Work Project Act) as modeled from the great depression. No one would have the excuse of being out of work. The state perhaps is the greatest benefactor. In the Great Debates of the 1900 Governor’s race in Washington state the topic of homelessness was address. A rejuvenation of this topic but for a benefit and a service from the homeless could be achieve now rather than the situation being a headache, problem or shameful circumstance.*17

But I myself come back to the old norm of power to myself. *18) If I have a home and a bill. Maybe I should be creative and try to invent a way to get out of the bill. Creativity would demand this if not just in frustration to giving up my work to someone else. If that someone else is demanding more dollars per hour than I wish to give back to them then a revision of ideas or work must ensue. One of the monthly bills I know you have and I most certainly have is the cost of power. If there was a method where I could afford the cost of independence then I should pursue the goal with ambivolance, no with blinders and forward motion. The website “Power 4 Home” is one such website which I have come across. As of yet I have not order the product for my own personal consumer or personal reading pleasure. Perhaps I indeed need to first buy a pare of blinders for my next low utility value product so I can reduce my cost of living so I either do not have to send taxes to the government. Or better yet, perhaps others inside of the government will send money back to me because other people are lazy. I just have to order the book and make a windmill or two and perhaps some solar panels which actually could be cheap as well. Maybe one project could pay for the other project and the next project.

With nine banks closing in California several weeks ago and more looking like they are ripening for takeovers from the Federal Reserve to be required to be purchased by U.S. Bank in the next few weeks due to poor balance sheets is the recovery here. No way. The recovery is not here. If it were the pressure would be receding and not mounting. From above you have a lot of positive news which looks like a recovery. A now I present the ugly part. More potential for bank failures. “The closings boost the number of failed U.S. banks this year to 115. In 1989, during the savings-and-loan crisis, the FDIC closed 534 banks, or about 10 a week.” After the crash during the first 10 months of 1930, 744 banks failed – 10 times as many. In all, 9,000 banks failed during the decade of the ’30s. By 1933, depositors saw $140 billion disappear through bank failures. *19) The supply of money was the problem which produced the Great Depression. The problem was really with the banks at that time as well. The banks became too greedy and failed.

“In this case, the changes were not the result of a deliberate policy experiment, but were instead the outcome of a lack of Federal intervention in the banking sector at a time when conditions for banks were quite perilous.”*20) From what I am seeing the banks still have not and the banking system still has not learned its lesson. From ’29 to ’33 when the first dip was completed. And now investors such as India are putting their funds into Gold. In 1933 President Roosevelt took the country off of the Gold Standard and again we were shot into a depression. Now without learning a lesson countries are trying to be reliant upon the Gold, the shiny stuff, the ancient metal.*21) A cultural reliance upon gold is one thing. But the mere buying of gold for stockpiling purposes can shift dramatically. In the Indian culture the women have gold placed upon them prior to getting married. This gold will be their personal salvation if the future husband ever decided to leave. The wife keeps the gold. O.K. that cool. An insurance policy for divorce. I totally understand that as an economic stability policy and a deterrent to the husband so he does not leave. But gold is volatile in its pricing model. Although gold can be manufactured it has not been done as of yet. When it is started the value of gold will plummet. The yield to a ton of gold is diminishing but slowly. Moreover the price of gold in relationship to other commodities is becoming overstated in relationship to other commodity investments *22) The shiny stuff is alluring but so was the tulip bulb for the Dutch in February of 1637.*23) Speculation and trying to overcome or to out smart disadvantages is why we are in this mess in the first place.

Banks have overcharged for credit card interest rates. Banks crash. Federal Reserve and others scramble. Congress intervenes. Bankruptcies increase. Individuals start to hoard money. Economy collapses some more. Presidential orders for a changing economy. Restrictions on asset flows are tightened. Banks gobble up other banks. Constitutional mandates are disobeyed. Presidential orders and conduct have not basis in “Law” or also are “Unconstitutional”. Slow recovery starts to ensue. Production starts. Banks and other countries start immediately to speculate. Commodities are in short supply. M1 is high. Prices of commodities increase substantially. More speculation. Banks get into the act to get quick returns. Bigger banks fail. Recession recovery turns into a secondary recession. Secondary recession thus turns into a depression with over 20% unemployed. Workers dissatisfied due to no fault of their own. Federal Reserve collapses because States take over Federal Reserves functions by unifying with our States and create one currency based upon grain reserves of the states. Productivity increases. Economy recovers.

I do not exactly see the Federal Reserve collapsing but it possibly could. I would see the states collecting back their sovereignty first and the United states collapsing with another unifying government geared more toward the benefit of the states rather than a federal system of government.

But in the meantime. You need to get independent. How can you de-emphasize your existence from the federal government and also from the state government. Make you home your castle and become fuel independent or should I say non-reliant upon outside sources of expenses. If God is willing to give you something for “Free” then take that commodity which God is giving you and make money by sharing it with others who do not believe God wants to give you a gift. Wind and Solar. A free gift. Electricity is something which needs to be harvested and sold at a higher price. Why does the government have a monopoly on something which you have a right to as well.

END

 

 

Source:

*1 and *3) http://www.msnbc.msn.com/id/12400801

Oil dips to lowest level since October

Refiners operating at near-record lows amid weak energy demand, dollar

**

*2) http://www.suntimes.com/business/1884273,CST-NWS-oil15.article

oil demand in U.S. is down 4.5% since the beginning of the year.

*4)

*5) http://www.irs.gov/newsroom/article/0,,id=213375,00.html

*6)http://www.irs.gov/pub/irs-pdf/f5405.pdf Form 5405 for 2008 See updated form for 2009 later.

*7) http://www.govtrack.us/congress/billtext.xpd?bill=h111-3548

*8) http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3548enr.txt.pdf

*9) http://www.mcelectricvehicles.com

*10) http://boeing.mediaroom.com/index.php?s=43&item=906

*11) http://boeing.mediaroom.com/index.php?s=43&item=931

*12) http://www.bls.gov/web/laumstrk.htm last modified October 21, 2009.

*13) http://www.zimbio.com/George+Soros

*14) http://www.investorazzi.com/2009/11/02/george-soros-sees-possible-%E2%80%98double-dip%E2%80%99-recession/

*15) http://www.marketskeptics.com/2009/07/us-govt-completely-out-of-wheat.html

*16) http://www.wikinvest.com/concept/Wheat_Prices

*17) http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=3849

*18) http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=3849

*19) http://www.livinghistoryfarm.org/farminginthe30s/money_08.html

*20) http://www.econreview.com/events/banks1929b.htm

*21) http://goldnews.bullionvault.com/gold_india_demand_jewelry_price_rupee_volatility_072820083

*22) http://www.investmenttools.com/futures/metals/welcome_to_the_page_about_gold.htm

*23 http://en.wikipedia.org/wiki/Tulip_mania

Tax Credits $8000 and $6500 and Wise Home Buying, H.R. 3548

Read more: http://personalbudgeting.suite101.com/article.cfm/8000_or_6500_home_purchase_tax_credits#ixzz0WsbCwx9D

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