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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!

The Federal Reserve Has been CHECKMATED! QE to Infinity

The dollar is on a rally the past few weeks, due to the crisis going on in Europe’s economy. But, can it last? Or will that same very crisis in Europe end up leading to a reverse and help the dollar fall faster once the psychology factor levels off?? -Joshua Gamen

 

Compliments of VisionVictory and CrushTheStreets.com and FutureMoneyTrends.com

 

Mad As Hell

Mad as Hell

Unemployment, Greed and Lack of Financial Education

In the movie, Network, Howard Beale, an aging news anchor, gives one of the most famous speeches in movie history, capped with the line, “I’m as mad as hell, and I’m not going to take it anymore!”

Crazy-eyed and drenched in rain, he proceeds to encourage all of New York City to put their heads out the window and yell the same thing at the top of their lungs. Surprisingly, it happens and the whole city erupts in the yells of the residents’ pent up frustrations. Beale’s speech, set in 1975, is eerily relevant today as it deals with themes like inflation, unemployment, depression, and more.

I thought I’d share this speech with you:

I also thought I’d share some articles with you from the last couple weeks that will show you why, today in real life, many people are also as mad as hell:

  • Banks Extract Fees On Unemployment Benefits” – People who are broke and unemployed are now having to pay fees to the banks to get their unemployment money from the bank. It’s ironic that the actions of the banks lead to the financial crisis and now they’re punishing the very people they made poor.
  • BofA Retreats on Debit Fee, Citing Uproar” – Bank of America, greedy for more money, nearly put in place a plan to charge people $5 a month to access their own money via debit card before bowing to intense consumer pressure. The other greedy banks quickly abandoned their same plans.
  • The Net Worth of Congress Rose 23.6% Since 2008” – Rather than fix our economy, our politicians have instead, personally gotten richer. Further proof that financial crisis is good for the rich and bad for the poor and middle class, as explained in Conspiracy of the Rich.
  • Everyone on Wall Street Is Playing ‘Heads I Win, Tails You Lose’” – The rich and the powerful are using the system to get richer by playing by the new rules of money while everyone else loses money by playing by the old rules of money.
  • Why the Kids Are All Broke” – “A perfect storm of economic forces has caused the net worth of people under 35 to fall by 68 percent between 1984 and 2009 according to the Pew Research Center. It’s a bitter pill to swallow for the young and depraved given that the nation’s olds (people 65 or older) saw a net worth increase of 42 percent in the same period.”
  • The true picture of US unemployment” – While the government wants you to believe unemployment is around 9 percent, the true unemployment rate is around 16.5 percent. Many people have been out of work so long that they’ve simply quit looking.

As you can see, there’s plenty of reason to be mad as hell. The question is, what are you going to do about it?

In the movie, Network, people stick their heads out the window and yell. It’s a poignant yet pointless moment. It doesn’t change a thing.

In the streets today, many people are doing the equivalent of sticking their heads out the window and yelling. They’re sitting in parks and unsure what will happen next. Others are complaining on blogs. Seems everyone shares the sentiment that they “aren’t going to take it anymore,” but very few people are doing anything about it.

As I’ve written before, I don’t think yelling and protesting will fix our problems. They only make us feel better for a while, but at the end of the day, our situation is the same.

Instead, I believe that financial education is the only way to change our life and the lives of others.

After all, the reason why the rich and powerful can take advantage of us and game the system is because they have a financial education, and the average person knows nothing about money or how the rich use it to get richer off of them.

Instead of yelling, throw your energy into financial education and learn about money and investing. Instead of protesting, take action and beat the rich at their own game. Instead of complaining, be part of the solution.

As the few articles above show, there is plenty of legitimate reason to be angry. Most people have been dealt a bad hand. But life isn’t fair, and those that win in life are those who make their own cards. We’re all mad as hell. Let’s do something about it that will create a better future for us and our families, not just an interesting footnote in the history books.

To increase your financial education now, visit our free resources and community here.

Written by: Robert Kiyosaki

Economic Update: Information – Taxes – Gold n Silver

This week we are talking about information, and how it effects you if you are a trader or a cash flow investor. We’ll talk a bit more about employment. Also on the agenda is the tax code and why it is set up the way it is. Of course I’m going to rant about gold and silver. And then I’ll let you know what I see this weekend in the BCS 

 

State of the Union…”Don’t nothin ever change??”

By: Joshua Gamen

We already knew President Obama had polished speaking skills, now he’s got jokes too. I must admit that I really liked some of the points made by President Obama in his State of the Union address to the nation. I liked how he was optimistic and talked about the positives of our future. I was frustrated however to see him ignore huge issues and appear to say exactly what the masses want to hear, despite his actions in office.

I did not like how the President began the speech by talking about how great the recovery is in the first 5 minutes, stating that Corporate profits are up as well as Wall Street’s with the Dow Jones. He failed to mention unemployment is still crucifying us and the dollar is becoming worthless, or that millions of Americans are still losing their homes to the banks..

It frustrates me that politicians think they are economists. Sometimes it frustrates me that economists think they are economists tho too(Hah). In relation to the deficit(the governments budgets which currently spends more than it takes in.), President Obama talked about the cuts they would make for hundreds of billions of dollars. He failed to touch on the fact that we are a few months away from hitting the federal debt ceiling(the limit in which the government has reached it’s limit on how much it can borrow to spend, which can only be raised by an act of Congress.) The truth of the matter is, when we hit that debt ceiling later this spring, only one of two things can happen, and neither is good. Either Congress can deny raising the debt ceiling, which will cause America to default on it’s loans and cause a global crisis which would devestate trade and employment, or they can raise the debt ceiling, which would allow for the printing presses to ramp up even more and devalue the dollar further in order for the government to pay their debt with monopoly money. The latter would also devalue American’s savings, checking, and retirement accounts, not to mention make your pay check buy you less. Quite the catch 22 here, but no, it wasn’t touched on tonight, not important enough for the “state of the union” I guess..

Another thing that wasn’t touched on, was the fact that medicare and medicaid are broke. The President did say that he was open to all suggestions on ways to make the current health care bill more affordable, but God forbid him from telling the American people that the government funds for medicare and medicaid don’t have any money, and are simply a ponzi scheme in which the current costs are paid by new taxes to cover the fact that there is no money in the funds. Nope, he just said that he is going to continue to push “free” health care for everyone. After all, what does it matter that the current government funded health programs don’t have any more money, they can just print more anyways. Nobody will notice that is just causes our money to be worth less and less, and the cost of living to go up and up..

In relation to finance, the President said everything that everyone wants to hear. The problem is however, he speaks in fairy tales. He didn’t mention that the dollar is falling like never before, that paychecks are thinner than ever, that unemployment is still crippling the production of our nation, that China is crushing us with production and exports, that the world is no longer buying our biggest product(debt), that China is trying to make their currency(the Yuan) the reserve currency of the World. No…none of that was mentioned.

All Mr. Obama did was pushed for new government spending on infrastructure projects, education, and scientific research while calling for deep cuts in other parts of the nation’s budget.

The President spoke about how we need to “level the playing field,” by not extending the tax breaks to the top 2% of the population in terms of income.(The group that is responsible for creating the most jobs in our country by the way, and are responsibly for majority of donations and charities that exist in our nation..) He said that it doesn’t make any sense that people who have accountants and attorneys can get away with not paying taxes, while the rest of the people get stuck with the bill. This translates in my book to, “bye bye middle class.” The President was put in office by the richest men in the world, he surely is not going to make them pay more taxes, hell, they benefit from taxes, especially the biggest tax of all(inflation). The way to level the playing field is not by stopping tax cuts to the top 2% in income, the way to level the playing field would be to extend tax cuts to the bottom 98% in terms of income. Make it so that the middle and poor class pay the same amount of taxes as the true rich.(Who account for less than 1/10 of 1% of the world’s population..)

I agree completely with President Obama on the fact that we need more good teachers in our country. I agree with him that our teachers are our “future makers” of our nation as well. However, I don’t understand that he can acknowledge how important teachers and education are, but leave out anything to do with financial literacy not being taught in our schools. Maybe if we taught about the difference between as asset and a liability in the classroom, or cash flow and capital gains, then we would not have these MASSIVE spending deficits in our country…just a thought.. My financial mentor Robert Kiyosaki put it this way, “It’s my belief that the countries that prosper in the future will be those that properly educate their people about money and investing. If the US desires to be competitive, it must teach its children how to be financially intelligent and to stop living by the old rules of money.”

The President mentioned that we will be bringing home our troops from Iraq this year. Neat, didn’t he say he would be bringing them home as soon as he took office?? Let’s face it, the troops are not over there to preserve democracy or freedom for Iraqi’s, they are there because that land is rich in oil.

What I got out of the speech the most was this, “Government, both sides, Democrats and Republicans, we need to work together to continue to take care of the country. The people need us, we have the answers to everything, but only if we work together.”

I’m sorry, I’m just not much for big government. It seems to me that any government that tries to do to much, doesn’t do anything enough correctly.

What I would have liked to see addressed(which I’m not surprised at all that they weren’t) are the following issues: unemployment, unfunded liabilities(such as medicare, medicaid, and social security), inflation, and financial education.

I will continue to stay educated financially, so that regardless of what the government does with the tax laws or to our currency, I am sheltered and secure financially, as is my family. I urge others to do the same. What I beg of you however, is that you do not simply listen to the President, or anyone else for that matter, but that you also WATCH their actions. If you want to stay REAL, follow the government’s ACTIONS, not their WORDS.

PS: We all saw you in the audience with that stick up your ass Nancy Pelosi, and I personally wanted to backhand you more than ever.

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.

The Recession is Over: BS! – Take II

By: Joshua Gamen

I am downright ticked off when I hear politicians say that the recession is over and that we are in a recovery. I understand what they are trying to do(gain votes), but it disturbs me when politicians play off of the naive, hard working Americans. I don’t like it when business people do it either. It seems every other commercial I see on TV now days is from an insurance or “investment” company, begging people to give them their money so that they can have a “bright future,” or “safe retirement.” Hear this: there is no shortcut. If it were so easy that you could just hand your money to someone until you retire and have them pay your retirement for you, the government would do that. Or wait, isn’t that what social security is? Then again, social security and medicare are estimated to be a $50-$60 TRILLION dollar time bomb! We will start to see in the near future that there is no money in these funds, as the massive demographic of baby boomers begins to try to retire. No, it’s just not that easy. If you want a brighter future and a cozy retirement, you need to be financially literate – understand how money works. A good first step would be to take notice that financial “advisers” are actually in fact, financial salespeople! And politicians will play off of whatever emotions they need to so that they can gain your vote, and along with it, power – for themselves and the ultra-rich of whom they represent.

The recession is not over. First of all, it’s a depression, the government just quit using the term after the the “Great Depression.” Unemployment is still soaring, the government manipulates the numbers and does not count the people that they don’t want to count, to manipulate the statistics so that they can brag about recovery to gain votes. US trade is not increasing either, and the world is moving away from the dollar. Countries are not buying US debt anymore. Housing prices are not seeing any stabilization, people still can’t get a mortgage and the number of foreclosures is still growing. I have yet to see one stat on CNN that suggests housing is rebounding that makes any sense to me, and I work in real estate every hour of every day! The only thing I hear that is up these days is luxury luggage, which is a clear indication of the only people profiting from these economic times are the rich. The middle class is being wiped out right now and it is time for that demographic to get their minds right and take action! Individually, the best thing you can do is get yourself educated. In this global economy where our dollar is drowning(which happens to be the reserve currency of the world), knowledge is the new currency.

Last month I wrote the post “BS: The recession is over.” – This month I would like to elaborate on some of the details.

When you look at the size of our deficit, the size of our debt, China getting out of dollars, Russia moving out of dollars, rich oil-producing countries moving out of the dollar, less global confidence in the dollar, China hoarding gold, it becomes obvious that these are trends that clearly show that we are a bigger credit risk than we have ever been. Our debt is absolutely out of control. Soon we will have debt that is 100% of our Gross Domestic Product. This means that our nation’s debt will be the same as the value of the goods and services that our whole nation produces in a year. These trends will effect our national security, our standing in the world, our quality of life, etc. We are headed towards financial instability. If we keep this up, the dollar will soon be removed from the world’s reserve currency. What’s more scary is I don’t see anything coming that is going to fix these problems.

Look at Obama’s budget, TRILLION dollar deficits FOREVER! Now I realize that some people do have faith in the dollar, but long term, when you look at countries like China, Japan and Russia moving out of the dollar, you have to see that the world is losing confidence in the US and in the dollar. We desperately need China and everyone else to buy our bonds. We operate on debt, if we can’t get people to buy our debt, we can’t operate! Our living standards are headed down and if we don’t do something soon, our living standards will never be the same.

Inevitably, I do believe we are going to see some changes in the near future. All you have to do is look at Obama’s popularity rating. What historically has created change has been president’s before them creating disasters. If you look at what created Ronald Reagen, what created Bill Clinton, even what created Obama, it is the President’s before them creating disasters to open up the minds of the people to vote in changes. Look at George Bush, he was an absolute disaster, so along came Obama. We got what we wanted, a bigger disaster! While American people will get bored with the details, they will demand change!

The change is going to have to be very different to create a successful shift. They are going to have to be committed to cutting our costs and shrinking the cost and size of the government. To shine some light on the disaster that is currently in the White House, we are trying to add a new entitlement(a guarantee of access to benefits based on established rights or by legislation) to healthcare. Are you freaking kidding me!!!??? If you are for this, I am sorry, but financially speaking you must be absolutely crazy! We can’t pay for any of the entitlements we already have! We can’t pay for medicare, we can’t pay for medicaid, social security is BROKE, literally. The freaking post office is broke! Everything is bankrupt, and we are adding a new entitlement???!!! Harry Reid(Senate Majority Leader) and  Nancy Pelosi(Speaker of the House of Representatives) are actually trying to get us to believe that we are going to cut the deficit doing this! CRAZY BS!

The American people need to demand an administration that is going to balls up and shrink the size and cost of government, shrink the debt, and shrink the deficit. Make no mistake, we are going to have huge pain in doing this. But I do believe the American people will pay the price if they understand the logic of what is needed. Nobody understands the logic of what is going on right now. I don’t claim to either. None of this makes any sense. The guys who created this mess are in Washington making speeches of what we need to do, that’s freaking BS!