|"When you are standing at the pinnacle of financial Journalism you are standing at sea level." ~James Grant||
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April 23rd, 2014
With veep Joe Biden supervising the U.S. involvement in the Ukraine-Russia affair and President Obama flying off to Asia to set things straight, we can turn our attention to other matters such as finally getting tomato plants in and seeds planted. It's been a chilly spring in our part of the south. With grocery prices inching up at a steady rate we'll be happy to consume our beans, squash, tomatoes, and other garden fresh vegetables this summer. Nutritious, tax-free food! What's not to like? (We did pay sales tax on seed.)
The quote from James Grant in the upper left corner is taken from the video of a speech he recently made. Among the several points that he made, this one stood out in our mind: "Thirty-six percent of Americans have savings of $1,000.00 or less."
As a boy we thought $1,000.00 was a huge fortune. But at the time the expression "going like sixty" meant traveling very fast. Driving 60MPH on a highway today is considered a snail's pace and $1,000.00 a drop in the bucket. And a third of Americans have that or less set aside in savings?
One could argue there's not much point to saving these days. The Federal Reserve's low interest atmosphere has led to piddling or non-existent rates of interest on common bank accounts. Bond yields have not been spectacular, and high risk stocks can be unnerving as well as unprofitable in the long run.
What next? Predictions of higher inflation are making the rounds again. The precious metals prices, on the other hand, are flashing a deflation signal. Anyone who knows absolutely what the next eight months hold, and manages his/her spare cash accordingly, will do very well. The rest of us will make our bets and keep our fingers crossed.
An Unsettling Report from Britain
Don't become undone by come-ons like this:
"On July 1, 2014 the U.S. Dollar Will Officially Collapse; because, on this date, U.S. House of Representative Bill 'H.R. 2847' goes into full effect, making it essentially impossible for Americans to protect their savings."
This bill is an attempt to identify Americans who park money overseas away from the prying eyes of the IRS. Foreign banks must start reporting these accounts to the IRS on July 1st and, likewise, American banks must report deposits they hold from foreigners to officials in their home country. This will be a pain for smaller banks, particularly, and many are refusing to accept accounts from foreigners because of the cost involved in handling the data.
To suggest the dollar will collapse on July 1st is ridiculous. It's true the U.S. dollar has been declining in purchasing power for a very long time. The value of the 1913 dollar, for example, has become about 4¢, That looks like quite a wipeout to us!
ARE YOU GUILTY OF GOLF?
Uh-oh! Has golf reached its zenith in popularity? Is the young crowd abandoning the sport for something else? Or, maybe it's too slow and time consuming for the fast-paced 21st century.
We've always thought of golf as healthful, drawing players into the fresh air for long walks. We took it up for a while in the 1960s until we were injured in a car wreck which sidelined us for a long time.
The late cynic H.L. Mencken was quite undone when, in a 1948 radio interview, he remarked that journalists of his acquaintance and taken up golf. Abandoning bar rooms for the golf course seemed to him to be strange behavior for news men.
Who knows? Maybe this will lead to a revival of Putt Putt Golf! A lot less distance is involved and one does not need to rent a motorized cart to get oneself around the course.
THE HEARTBLEED BUG
This appears to be sensible advice, but is a sad commentary on the safety of digital communications. New threats are constantly surfacing. It's a veritable war between users and malicious hackers intent on stealing whatever they can.