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January 31st, 2015

    One month down...eleven to go in 2015.  In addition to the nightly news video clutter of the ravages of war, the effects of bad weather, and political blather, Americans will undoubtedly demand more entertainment options - be it on TV, their computers and portable digital devices, or sports stadia.  (It seems irreligious to say spectator sports is entertainment, but it is.)

  Local television news, we've noticed, has shifted away from costly in-depth reporting to the easier route of police blotter items and promotional fluff. A three minute report from a restaurant kitchen extolling the virtue of its hamburger preparation in no way can be considered "news".  

  We once had the pleasure of observing Edward R. Murrow and his team at work in our town.  He had come to speak to the Chamber of Commerce annual banquet that night and would broadcast his CBS network nightly newscast from our humble studios.  In frequent phone calls to his office in New York, and constant examination of our Associated Press printer, Murrow and his people worked all afternoon preparing the bits and pieces that would come together for his broadcast.  

  By late afternoon Murrow began timing the various stories with his stopwatch.  By airtime he had everything together and sat in our Studio "A" waiting for his cue, the smoke from his cigarette curling up from the glass ashtray close at hand.  

  Fifteen minutes later he was done and hurried away to give his speech at the nearby auditorium.  

  This was back in the heyday of radio, to be sure, but the "takeaway" is that pros of that day and time worked hard to achieve accuracy and timeliness and had no desire to entertain their audiences.  Newscasters were there to INFORM. It never occurred to them to try to be entertainers as well. 

  The program department slogan in those days was "News...information. . entertainment."  ("Information" included those all-so-necessary commercials.)

  We glimpsed our first television receiver at the 1939 World's Fair in New York.  We couldn't begin to imagine how pervasive it would become. Let's hope it doesn't entertain us to death.

The rich get richer...the middle class doesn't.
Give David Stockman an "A" for trying to explain it.,

   "We've had two huge bubbles that collapsed already in this century. When this third bubble collapsesóand surely it willóI believe that will be the day of reckoning. The credibility of all this central-bank-dominated, Wall-Street-coddling policy will be totally repudiated, and maybe then we can clean the slate and start over."  Wealth Inequality A Problem

   Folks in the middle income bracket are feeling squeezed even though the long-running nearly zero interest policy of the Federal Reserve was supposed to lift all levels of the economy.  Former administration budget director David Stockman does as good job of explaining why Fed policy helps the gamblers in Wall Street and not the middle class.  

   Knowing why things are the way they are is one thing.  Doing something about it is quite another.

Cash stashed in the mattress?  Krugerrands in the sock drawer?  
Return of an old fashioned phenomenon.

    "Where to stash your cash? Some Americans are sleeping on it - literally.  

    "While banks are still the go-to solution for most consumers, 29 percent say they're keeping at least some savings in cash bills and coins, according to a new survey of 1,820 adults from American Express."  Stashing Cash

Just when cash was supposedly losing favor and electronic transfer of digital money was touted as the latest thing, we learn that almost 30 percent of people with a little spare cash are keeping some of it tucked away in a sugar jar, the mattress, the freezer, hollow books, and other home hideaways.  

      Are they crazy?  What if the house burns down or thugs break in and grab the cash?

       The pros and cons of holding spare cash is a timely topic!  There's an adage:  "Cash is king!" To many it's comforting to have some handy.

Diversity is promoted as a positive trend.
Fred Reed argues against it.  

Scurrilous commentary by Fred Reed.  "Diversity is a disaster. Why people cannot see this is a mystery. A country can ignore an unfortunate reality, but it cannot ignore the consequences of ignoring it. Why governments allow and even encourage immigration of incompatible populations is a greater mystery. Few things cause more misery, hatred, death, and destruction than does diversity. One may wish it were not so, but it is so."  Koom. Bah. Humbug

   As usual, readers will surely find Fred's curmudgeonry hard to swallow, but he's a splendid honing stone against which to sharpen one's own conclusions. . . and prejudices. 

Amazon and the S.C. "Two tier" Sales Tax
It's a stupid complication Amazon and other retailers must struggle with.


    Thank you for being a loyal customer of Amazon.com LLC. We appreciate your business and look forward to continuing to provide you vast selection, low prices, fast delivery and convenience.

    As you may know, Amazon.com LLC is not required to collect sales or use taxes in South Carolina. However, the state of South Carolina requires us to provide the following notice to you:

    You may owe use tax on purchases you made from Amazon.com LLC during the previous calendar year. The amount of tax you may owe is based on the total sales price of the items you purchased during the calendar year unless an exemption exists under state law or you have already paid the tax. A sale is not exempt under state law because it is made through the Internet. The total sales price of purchases you had shipped to South Carolina in 2014 was $184.97. This is the amount that you may include on your South Carolina use tax return to calculate the appropriate use tax owed unless you have already paid the tax.

< Amazon presently doesn't collect a sales tax on orders shipped within South Carolina, but that will change on Jan. 1, 2016.  

     How will Amazon handle the strange two-tier sales tax in S.C.?

     The deal is this:  The state sales tax for people aged 85 and older, buying goods and services in South Carolina for their own use, is 5 percent.  For persons under 85 it is 6 percent.  

     The 1 percent exemption for people 85 and older was made law in 1984.  State authorities are reluctant to make senior citizens aware of it, and merchants are often unaware of it and do not display a notice about the exemption as required by law.

      There are several thousand people aged 85+ in South Carolina who are paying 1 percent too much state sales tax on things they buy.  State officials from the governor on down avoid publicizing the exemption.  Consequentloy, for every $100.00 they spend elderly shoppers pay a dollar too much in sales tax. 

Jim Rickards:  Awful currency collapse coming. 
Gary North: It's silly to predict such a thing.

     Jim Rickards has sold a lot of books predicting a world-wide currency collapse.  Gary North, who also makes his living selling his economic opinions, disagrees.  "There is not going to be a collapse of all currencies. There has never been such a collapse. There has not been hyperinflation in any large, Western industrial nation north of the equator except after World War I: Germany and Austria in 1921-23. To worry about hyperinflation in America, Canada, and Western Europe is just plain silly. It has never happened in peacetime." Where WWIII Starts?


    What really ticked off Gary North was THIS PHOTO, which automatically pops up on web sites all over the Internet, including HIS.  North's complaint is that Jim Rickards is using a photo of a bare-bellied girl merely to lure dumb guys into watching a sales pitch for a book on a "currency doomsday." 

    North says flatly there is not going to be a collapse of ALL currencies.  He notes there has not been a hyperinflationary blow-off north of the equator since 1923.  But he was careful to point out that he was speaking of LARGE Western industrial nations.  He knows there have been several money inflation episodes in lesser nations north of the equator since the German embarrassment of the early 20th century.

    Our personal view:  Beware the doomsayers whose mission is to sell books and make a bundle promoting fear.  But the economic caution flag is flying and it would be foolish to ignore it.  

   Scuttlebutt has it that the Fed'l Reserve won't actually begin raising interest rates 'til June.  If then.  There's even talk of resorting to more money pumping with "Quantitative Easing  #4."   The Fed would like to see inflation at an annual rate of 2 percent and it's lower than that, still.  

     Meanwhile, Bloomberg News calculates the average yields on European sovereign debt at 0.68%.  With the quantitative easing program of the ECB set to begin in earnest in March and to likely drive bond yields even lower, whatís an investor to do?

     The European economic dilemma has made the picture in the U.S. look quite good in comparison, but not good enough for the Fed'l Reserve to put on the brakes on its loose money policy.  The fear of deflation is still holding the Fed back from letting interest rates rise to a level that might smother some levels of the American economy.  It's a Catch 22.  

     So, what's a hapless citizen to do?  Our guess is that avoiding debt traps is a good idea, despite the endless TV ads that claim "a little or nothing down and payments for years" will make us happier.  It usually doesn't.  

"We're All Economists now."
   "Why was it that   George Washington didn't have guided missiles with which to pummel the British or a cell-phone to communicate with his troops? After all, the physical resources that are necessary to make missiles and cell-phones were around at the time. In fact, the physical resources were also around at the time of the caveman. What wasn't around was the ingenuity from the human mind to make missiles and cellphones. BASIC ECONOMICS  < This is a flat out plug for Dr. Thomas Sowell's latest revision of his excellent book on basic economics.  It's written by Dr. Walter Williams who has published plenty of columns and books on the subject himself.  

      The basic idea is that we all are (or should be) familiar with some basic economic principles in order to avoid being constantly ripped off.  

     "Where is this going? Will our leaders allow the international monetary system to implode? Is there no plan B? And we are supposed to believe gold isnít of any significance in economics?"   ~Koos Jansen

     Mr. Jansen writes an exhaustingly long article on the question of whether gold might return to a role in the confusing monetary system.  We doubt anyone will plow through the details nor examine the several charts.  Reader comments at the end run on at great length, too.  Buried in all the rhetoric may be some clues about what the future holds with respect to the current money muddle.  

Jim Rickards on the tiresome game of currency competition.

    The lesson of history is that citizens should own some gold, store it safely, and donít believe government and central bank lies. In fact, we could see more investors fleeing to the safety of gold in the coming months as trust in central bankers wanes.


Jim Rickards
for The Daily Reckoning

   Rickards recalls Franklin Rooseveltís sneak currency attack in the early '30s. "In 1933, President Roosevelt devised a plan to increase the price of gold in dollars, effectively a dollar devaluation. But he had a problem. If he increased the price of gold while Americans owned it, the profit would go to the citizens, not the U.S. Treasury. He knew that he had to lie to the American people about his intentions in order to pull off the theft of the century."

   The point being - - monetary history is peppered with instances when the government had to lie to put something over on its citizens.  It would not happen if the schools would spend more time on teaching tots the actual fundamentals of function of money and credit.  Educationists don't do that - - for good reason.  An aware population is far more difficult to manipulate.

Our staff curmudgeon briefly reviewed the monetary muddle in Sept. 2009

   "The United States dollar was defined by the Founders as a coin containing 371.25 grains of pure silver.  A dollar was 1/ a unit of measure controlled by Congress, 2/ a medium to facilitate exchange of goods and services, and 3/ a reliable store of value.   Today's Federal Reserve note is only a medium of exchange - nothing more. 

  "The Federal Reserve note was redeemable in "lawful money" from 1914 to 1963.  It is redeemable today only in copper/nickel coins which, unlike the paper currency, have some small intrinsic value because of their metal content.  However, if people become aware of this distinction and choose to hold more metallic money a coin shortage will erupt.  

  "Which is better?  The money of the Constitution or  paper notes printed at will by the Federal Reserve System?"  The Battle for Honest Money

A modern psychiatrist may diagnose you as ODD.
We kid thee not. "ODD" is the acronym for "oppositional deficient disorder." 

   Our personal obsession with an  out-of-control federal government and the national urge to promote socialism would clearly make us ODD.  It is a mental disease.  We tend not to knuckle under to the endless costly projects of special interest groups and we believe that the tax level...federal, state, and local - both hidden and visible...has exceeded the capacity of average citizens.  

     If you're opposed to the constant encroachment of the governing class you are ODD.  That puts you into the same category as Thomas Jefferson and the other colonial leaders who decided Great Britain was overdoing it in the taxation and regulation department.  

     We may be diagnosed as "ODD" but it doesn't mean we're crazy. 

     Here's the link to the article.  ODD


Our aging staff curmudgeon says: "It's the fiery furnace for me!"
A true environmentalist would not want to use expensive energy that way.

   Nearly two years ago, when he thought the shadows were rapidly getting longer and he might have to shuffle off this mortal coil, our staff curmudgeon commented on options for his final exit

    "My foster father was a New England Congregational minister and conducted many funerals in his day. His own did not occur until he was 92. I was not surprised that he opted for cremation. I once overheard him remark to a friend that our remains were destined to return to dust anyway. Why delay the process with costly caskets and concrete vaults?

    "We hear that burial at sea is relatively popular with those who can afford to have it done within the confines of the law. The U.S. Coast Guard permits committing human ashes to the seas three miles or more offshore. If one wishes his carcass dropped into the seas without benefit of cremation, that must be done 25 miles offshore.

    "Another alternative - one of the forty environmentally friendly cemeteries here and there across the United States. An organization called The Green Burial Council can supply details. (Google its website.) Itís uncomplicated. A hole is dug, the body in shroud, cardboard casket or other biodegradable material, is buried and the location is recorded by the proprietors. Nature runs her course and the final resting place remains in its natural state. No headstones or bronze markers.  And no metal vases with plastic flowers.  Itís reported traditional funeral directors are not happy with this 'green burial' scheme.

    "Iíve asked my offspring to keep my ashes in a sturdy cardboard box or other suitable container until my lady departs this life, at which time her ashes and mine will be mixed together. (None of this side-by-side stuff for us.)

    "At some appropriate time and place we will be 'sprinkled' someplace where we can help Mother Nature in her work. The missus says a rose garden would be nice. I maintain one cannot eat flowers and therefore weíd do more good in a vegetable garden.

    "Weíll leave it to our descendants to settle that detail."   Foot in the Grave