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Don’t Drink the Unemployment Kool Aid

No Jobs Just More Student Loans (Debt)

Written by: Joshua Gayman

Yesterday I posted a status on my Facebook fan page stating, “For those between the ages of 18 and 24, the unemployment rate is at a staggering 46 percent according to a recent report by the Pew Center. That equals the highest unemployment rate for this demographic since reporting began in 1948.” A friend commented saying that she feels many people between the ages of 18 and 24 are lazy. Too some extent I can’t help but agree with this young lady(who is an educated young professional and works very hard). However, I have to agknowledge that there always has been, and always will be, lazy people. The difference is that right now there are too many people unemployed in this younger demographic to simply chalk it up to laziness.

The numbers can be deceiving, as the latest unemployment numbers have the rate down to 8.3%(Down from 9% one year ago). But things may not be as good as they seem, especially for those under 30.

If you are to account for people who have given up on looking for a job, unemployment soars from 8% up to 17%!(Source: Boston Globe) This number equals 5.4 Million lost-workers over the past 3 years and a huge loss in productivity for our nation.  Losing this kind of productivity means that we will see a slower recovery, and have fewer people contributing to our nation’s output, less people buying goods and services, and less people paying taxes. These people are then much more likely to become poor, rely on government assistance, and develop mental health issues(too much stress). This means simply that 5 million people are now consuming and not producing, and are more likely to require money from a government that already spends nearly $1 Trillion more than it takes in every year.

For the future generation, unemployment is at an all time high(since they began reporting in 1948).

*Ages 18-24: 46% unemployment rate(source: Pew Center)

*Ages 18-34: more than 33% have gone back to school and taken on more debt because they can’t get a job.

*34% of those between the ages of 25-29 have moved back in with their parents, and almost 25% of those between 18-34 have!

*One in 5 have put off marriage or having kids because they don’t have the money 😦

TRANSLATION: Kids are not growing up, not producing, and not ready to take over for their aging parents or care for them when they retire.

Add college loans and entitlement programs like Social Security that transfer wealth from young to old, and you can see why kids are fleeing back to their parents’ houses and their childhood bedrooms.

Robert Kiyosaki(author of Rich Dad Poor Dad), puts it this way: “Rather than preparing the next generation to support our country, we’re taking their wealth, their jobs, and instead still taking care of them.”

2012 is an election year, so you can be sure the media and politicians will be serving the Kool Aid. Don’t drink it! Invest the time into yourself and increase your financial education! Invest to acquire assets that put money in your pocket before you buy liabilities that take money out!

How Your Taxes Can Help Build Your Wealth

Taxes are most people’s biggest expense. Therefore reducing that amount means more money immediately available to invest. The tax law is a series of stimulus packages for real estate investors and business owners.“- 

How Your Taxes Can Help Build Your Wealth
Most people view taxes as a drain on their wealth. If it weren’t for their taxes, they would have more money in their pocket, would finally be able to get ahead and could start investing.

I look at taxes very differently. I look at taxes as a way to increase cash flow. The tax law provides tons of opportunity to reduce your taxes. When you reduce your taxes, you increase your cash flow (often immediately) which can be used to increase your wealth.

Reducing your taxes goes hand-in-hand with your wealth strategy. For most people, taxes are their single biggest expense. This means that reducing their taxes results in instantly increasing the amount they have available to invest.

The Government Wants You to Reduce Your Taxes
The tax law is a series of stimulus packages for real estate investors and business owners. This is true in all developed countries.

The government wants to provide jobs and housing. To encourage others to do this for them, the government provides tremendous tax benefits to those who provide jobs (business owners) and those who provide housing (real estate investors).

Your Tax Strategy is Part of Your Wealth Strategy
Once you understand what the government wants you to do in order to reduce your taxes, you can use this information in your wealth strategy to invest in assets that not only fit with your wealth goals but also produce tax savings.

This is a powerful formula and one that can be used over and over and over again because many of the tax benefits for entrepreneurs and real estate investors produce annual tax savings.

Then, as your wealth grows, so do the opportunities for tax savings, which means not only does the cycle continue every year, it grows every year as well so your tax savings are more, your increase in cash flow is more and your wealth increases even more.

Do you see why I am so passionate about taxes? Taxes are a tremendous tool to build your wealth.

Tom Wheelwright

Today’s statement by the Fed(11/3/2010), and it’s translation into plain English

 

 

Fed’s Statement:

Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in output and employment continues to be slow. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts continue to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy was Thomas M. Hoenig. Mr. Hoenig believed the risks of additional securities purchases outweighed the benefits.Mr. Hoenig also was concerned that this continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.

Translation:

The economy still sucks. People are spending a little bit more, but they’re stretched thin: One in 10 workers can’t find a job, wages are basically flat, home prices are way down and nobody can get a loan. Companies are buying more stuff, for now, but they’re not building new factories or offices. Nobody’s hiring. Nobody’s building. Inflation has gone from low to super low. 

The Fed has two main jobs: Keep unemployment low and prices stable. At the moment, as you may have heard, unemployment is really high. And inflation is so low that it’s making us nervous. We keep saying that unemployment’s going to fall. And it keeps not falling.

So to give the economy a kick in the ass—and to pump up inflation a little bit—we decided to go on a shopping spree. First of all, we’re going to keep buying new stuff when our old investments pay off. Second—and this is the big news for today—we’re going to create $600 billion out of thin air and use it over the next eight months to buy bonds from the federal government. We hope this will make interest rates go so low that people will borrow and spend more money, and companies will start hiring. By the way, this is an experiment, and we don’t really know how it’s going to work out. We reserve the right to change our plans at any time.

Of course, we’ll continue our policy of letting banks borrow money for free. If you’re worried this is going increase inflation and destroy the dollar, please reread everything we’ve said to this point. We plan to keep rates near zero for as long as it takes, but we won’t tell you how long that is. In the meantime, we’ll keep an eye on things.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy was Thomas M. Hoenig. He’s the president of the Kansas City Fed, and he’s voted against Fed policy at every one of our meetings this year. He thinks this whole creating-$600-billion-out-of-thin-air thing is going to do more harm than good.He also thinks that all this money we’ve pumped into the economy could inflate another bubble and create widespread worries about inflation. That could lead us right into another crisis.

Change coming?

By: Joshua Gamen

While the politicians are doing everything they can to keep the attention of the crowd, the real game players are behind the curtain, sitting at a table, plotting out how they can keep control of the world.

Obama is still the president, for another 2 years. His popularity rating is falling, people are frustrated, they want jobs and they want the lifestyle back. But I assure you it is not up to the government to provide the life you want, it is up to you.

The election was tonight. The House of Representatives had the majority swing back to the Republicans, as the balance shifted to a count of 236 Republicans to 162 Democrats. Democrats still have majority of the Senate by a slim count of 51-47. There is a lot of talk about the “GOP”(Grand Old Party, Republicans), tea parties, etc, and what they will try and change. But while the same game continues to get played in Washington that has gone on for generations, the real players are in the backroom keeping their plan going to make the rich richer.

While Americans were heading to their polling places Tuesday to decide who will represent them in the halls of the Capitol, just two miles away the Federal Reserve’s Open Market Committee  was having a two day meeting in its historic Board Room.

Odd that the election came the night before the Fed makes their big announcement. Or is it?

“While the talking heads will be focused on who won what seats in congress, the real power will be making an important decision whether to begin another round of quantitative easing, a.k.a printing money, to try and jump start the economy. The way they do this is by buying their own debt in the form of bonds. ” -Robert Kiyosaki.

The Federal Reserve was established in 1913, we are almost 100 years into it’s existence. The elections are held every 2 years. What does it tell you when the two meet at the same time. Think about this, the Federal Reserve is not part of government. The Federal Reserve is a private entity. It is not Federal, it is not a bank, it has no reserves. All they do is print paper. And yes, they feel the need to have a big meeting over the 2 days while the elections are going on and then come make their big announcement the day after the votes are in. Could they be getting their strategy ready for the next batch of elected officials and their plan to play off of them as well as possible?

They are going to buy back their own bonds. Bonds are IOU’s. So basically, they are just removing some of the IOU’s. Why would they do this? Well, if the interest that they have created based on all of the “loans” they have made in their existence, is greater than the production we can achieve, their only hope to keep the system going is to just pull back and say, “it’s ok, we’ll take some of this off so that you can continue to pay us.” It’s the ultimate “loan mod.” Seriously, their whole goal is that you keep working to give your money to them. You are creating stuff, and meanwhile they are keeping control of everything being created. If the people wake up and realize that we are paying them with dollars that don’t mean anything anyways, then they will quit paying them all together. If the people don’t think they “owe” anything, then they don’t “owe” anything. Could the Federal Reserve order the military to force people into going to work and then handing their money to them? No, not “yet” anyways. Remember, the Federal Reserve is a private entity. Scary that they have the power they do.

Leave your thoughts!