Interesting...

Well, I know you haven't heard from me in a while... guess I got busy... or maybe just lazy. Actually, more busy than lazy. Anyway - I just had to send this out to everyone - things just seem to be getting crazier and crazier!

This is from Doug Casey's Daily Dispatch:

Cash for Carts

Dear Reader,

You’re going to love this. I came across a recent story from The Wall Street Journal about how Uncle Sam is now paying Americans to buy, of all things, golf carts. Yes, you too can own that great necessity of modern life thanks to the federal tax credit to buy high-mileage cars that was part of President Obama’s stimulus plan.

Here’s an excerpt from the article:

The federal credit provides from $4,200 to $5,500 for the purchase of an electric vehicle, and when it is combined with similar incentive plans in many states the tax credits can pay for nearly the entire cost of a golf cart. Even in states that don't have their own tax rebate plans, the federal credit is generous enough to pay for half or even two-thirds of the average sticker price of a cart, which is typically in the range of $8,000 to $10,000. "The purchase of some models could be absolutely free," Roger Gaddis of Ada Electric Cars in Oklahoma said earlier this year. "Is that about the coolest thing you've ever heard?"

The golf-cart boom has followed an IRS ruling that golf carts qualify for the electric-car credit as long as they are also road worthy. These qualifying golf carts are essentially the same as normal golf carts save for adding some safety features, such as side and rearview mirrors and three-point seat belts. They typically can go 15 to 25 miles per hour.

In South Carolina, sales of these carts have been soaring as dealerships alert customers to Uncle Sam's giveaway. "The Golf Cart Man" in the Villages of Lady Lake, Florida is running a banner online ad that declares: "GET A FREE GOLF CART. Or make $2,000 doing absolutely nothing!"

Golf Cart Man is referring to his offer in which you can buy the cart for $8,000, get a $5,300 tax credit off your 2009 income tax, lease it back for $100 a month for 27 months, at which point Golf Cart Man will buy back the cart for $2,000. "This means you own a free Golf Cart or made $2,000 cash doing absolutely nothing!!!" You can't blame a guy for exploiting loopholes that Congress offers.

The IRS has also ruled that there's no limit to how many electric cars an individual can buy, so some enterprising profiteers are stocking up on multiple carts while the federal credit lasts, in order to resell them at a profit later. We should note that some states, such as Oklahoma, have caught on to the giveaway and are debating whether to cancel or limit their state credits. But in Congress they're still on the driving range.

Remember, there’s no such thing as a free lunch. When politicians dole out tax credits and other subsidies for their pet projects (green or otherwise), you end up paying for them in the form of higher taxes on other things -- like work and investment -- and a loss of purchasing power of your currency

.

When will this end? A chicken in every pot and a rebate for every business!

With regards,

Allen

There's Bizarre, and Now... Bizarro World

# 033 June 19, 2009

By: Allen Wells

Each day it seems the news and the responses are becoming more bizarre… as a matter fact, I feel like I am living in “Bizarro World”. For example:

Bizarre: Fedzilla is bailing out and taking and ownership interest in General Motors. The President states, “ we have no interest in running an automotive manufacturing company.”

Bizarro World – two GM plants slated for closure have been taken off the list since the Congressional Representatives of those districts made calls to the car Czar to discuss keeping them open.

Bizarre: Headlines state that unemployment slowed in May.

Bizarro World: Actually, unemployment claims dropped in May because more people exhausted their benefits and fell from the unemployment rolls. In addition, some 3 million are slated to exhaust their benefits at the end of the third quarter (September). The President has two options: 1 – extend benefits (again) or 2 – use the statistical drop in unemployment claims to tout “the recession is over and his stimulus plan worked!” Either one is bad for the country.

What really interests me is the only segment of the population gaining jobs is the 55 + age category. The 55 + category gained 224,000 net new jobs in May. The rest of the population lost 661,000! In the past year, the 55 + category has gained 630,000 new jobs and other age categories have lost over 6 million jobs!

Bizarre: China, Brazil and Russia express (publicly) concerns over the stability of the dollar – then reverse their statements with very public response they have confidence in the dollar and have no intention of abandoning their investments in dollar backed currencies as the world reserve currency.

Bizarro World: China, Brazil and Russia in a closed meeting agree to start investing in IMF bonds and to start exchanging currency with each other. Not big news with the mainstream media, but a serious issue for US debt.

Bizarre: The Federal Reserve’s monetary policy over the last fifteen years created a large enough financial bubble to cripple the entire worlds economy.

Bizarro World: The President is pushing legislation to give the FED more power and oversight over all financial institutions.

Bizarre: Last year the Federal Government dug deep into the pockets of the American taxpayer and spent billions to bail out ALL the major banking institutions.

Bizarro World: In 2001 the banking industry spent $5 million lobbying in Washington. In 2008 they spent $20 million… guess it was a good investment (for them).

Bizarre: The President, the Fed and the mainstream media continually tout “green shoots” and a myriad of other ridiculous statistics showing we are at the bottom of this “recession” and that the economy is back on an “upward” swing.

Bizarro World: In Europe the decline in the industrial output of Italy and France are much worse than they were at this point in the 1930’s, and the United Kingdom and Germany are about the same. U.S and Canada declines are very close to the same. Even Japan, coming off somewhat of a recovery is still in a far worse position than they were in the 1930’s.

In addition, the collapse of world trade in the past year is equal to the first two years of the “GREAT” Depression! And… the stock market declines are greater than the first two years of the great depression! That’s right, Green Shoots!

Bizarre: President Obama is the darling of the media and the subject of adulation throughout the United States. If you believe what you see in the mainstream media, it’s as though he is a demi-god that can do no wrong.

Bizarro World: According to a new CBS News/New York Times poll, American’s views on the general state of the country have hit an all time low with 81% saying the nation is on the wrong track. This is the worst ever number for this barometer. I guess I missed that on the Nightly World News!

I could go on, but I won’t. The point is, it is time to use a skill most of us didn’t learn in government schools – logic. Let’s start using our logic skills. If we know 1 + 1 = 2, but a very powerful and influential person keeps telling us 3… it may sound good, and (if we are counting our money) we really would like for 1 + 1 to equal 3, none of what we wish or hope matters, 1 + 1 = 2. That’s it, that’s all. If people are losing jobs every day, virtually every corporation is losing money or profits have dropped drastically, if there are as many foreclosed homes on the market as new homes… things are not looking up.

I’m not complaining, or being pessimistic… I’m just saying…

With warmth and regards (as always),

Allen

To reply or comment:

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Senator Kennedy – Let Your Life be a Legacy!

# 032                                                                                  June 9, 2009

By: Allen Wells

Monday’s Wall Street Journal posts an article on page A3 entitled, “Ailing Kennedy Key to Health Bill.” The article states that Mr. Kennedy has, “championed health-care issues his whole career.” It further states [that], “If the liberal Mr. Kennedy takes a lesser role [in crafting the health care bill],  that could make it easier for the more conservative Mr. Baucus [D. Montana] to push the health care legislation in a centrist direction.”

Mr. Kennedy (as most are aware) is the recipient of a vast family fortune amassed by his father, Joseph Kennedy. The elder Mr. Kennedy created the majority of his wealth during prohibition days, running untaxed liquor off the coast of Massachusetts while keeping many federal agents and employees on his payroll… I’m not making this up. That was the elder Mr. Kennedy’s first legacy. His second legacy was to have a son in the White House.

As a result of his family’s vast wealth and political connections, Mr. Kennedy has lived a life of ease and leisure that far outdistances that of the average American taxpayer; a taxpayer with whom Mr. Kennedy has no problem forcing to pay the costs of his liberal ideas and policies.

Senator Kennedy has quite a reputation at this point in his life… unconvicted murderer (his family bought him out of that problem), unabashed liberal representing one of the more liberal states, key contributor to the loss of Jimmy Carter in his re-election bid for President.  Senator Kennedy is well known for business bashing and  the attacking  of free market supporters and business owners for increasing productivity (“at the expense of the worker”), and a supporter of ever increasing taxes on the producers to pay for non producers. I could go on, but that is not the point of this essay.

As I was saying, I have a great idea that will enable Senator Kennedy to leave a positive legacy and perhaps benefit an entire generation of working Americans. Senator Kennedy (as you know) is fighting brain cancer (a losing battle) and is already partially incapacitated.

As with the very wealthy, the good Senator has the finest staff of doctors and specialists, nursing staff, hospital suites and care. As a matter of conjecture, I would bet that at this point, Senator Kennedy’s care might only be rivaled by that given the President of the United States.

Here is my idea:

Mr. Kennedy who has, “championed health-care issues his whole career”, should forgo his super wealthy medical care, his superb Congressional health care benefits and come forward to issue a statement stating he believes that public health care is far better than private health care – and completely adequate to treat his disease; to that extent he will immediately cease all paid health care for his terminal illness and check himself into a public hospital in Boston. In order to prove to the American public and Congress his belief that government managed and public funded health care is equal to and possibly superior to private health care, he will donate his personal wealth to charity and submit himself for indigent care. In fact, his belief in his principles of government funded and managed health care is so intense that he is willing to put his own life on the line in defense of this principle.

What a legacy! Finally a liberal politician will be able to state emphatically, not just in words but in deed – I believe so completely in the cause I have championed my entire career that I am willing to put my life on the line to show the American public how strong my commitment is to government controlled and funded health care.

If the good Senator from Massachusetts will show his true belief, I would suggest a Kennedy monument, grander than the Washington monument… a legacy for a “public servant” who was willing to “take his own medicine” (so to speak).

With warmth and regards (as always),

Allen

To reply or comment:

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Fedzilla Works to Steal our Freedom (again)!

VOICE CAFÉ

INFORMATION UPDATE

 

Fedzilla Works to Steal our Freedom (again)!

# 013                                                                                    June 5, 2009

 

[Following is the entire copy of an email I received this morning. Liberty Dollar is an independent organization that mints true gold, silver and copper coins for barter for personal collecting.  Since the inception of this organization the Federal Government and Treasury Department has harassed and arrested the founders. Read below for an update on Fedzilla’s most recent attack.]

 

LIBERTY DOLLAR ALERT:
June 2009 Vol. 11 No. 06-A

Urgent News for All Liberty Dollar Supporters!

FBI Arrests Bernard, Kevin, Sarah & Rachelle
The battle for a value based currency has began!

The last two days have been amazing! Just shortly after midnight on Tuesday, the phone started ringing and I let the answering machine take the call. But very soon there was another call… with an even more urgent message! Very quickly, a friend of Kevin Innes, explained to me that Kevin had been "detained" by the local sheriff and was being held for the FBI to arrest him! Holy Cow!! The #2 supporter for the Liberty Dollar and co-instructor at the Liberty Dollar University training sessions was in deep trouble with the Feds! I was sure to be next. But would they arrive in a few minutes or would it be a pre-dawn Nazi style assault?

Finally, I got up at 4:00 AM. I was very concerned for Kevin and wondered when the FBI would hit me. Fortunately the morning was quickly filled with a flurry of calls from Kevin's friend, other interested parties, the usual business calls and making preparations for the inevitable knock on the door. But nobody came. Then just after noon, Niles, who's wife, Rachelle, manages the Liberty Dollar Fulfillment Office, called to tell me that Rachelle had been picked up by the FBI at the LD Office and was due to be arraigned in just a few hours! The FBI strikes again!

Luckily, I was able to talk to Rachelle via her cell phone while the FBI was holding her. I was pleased that the FBI agents were the friendly professional types and afforded Rachelle and I quite a few minutes of private conversation. Under the circumstances, Rachelle's demeanor and resolve was right on target. And very quickly, I learned that a warrant had been issued for my arrest. And just a quickly, Rachelle was off to court to be arraigned.

Much later in the afternoon, I learned to my surprise that three big FBI agents had arrested Sarah at work. She and Rachelle were arraigned together and quickly released to on their own recognizance (OR) before the sun set on a very eventful day for the Liberty Dollar. The quick, professional effort with Sarah and Rachelle were gratifying and encouraging. Unfortunately, I was to learn that Sarah lost her job because of this event.

By last afternoon it was clear that the Liberty Dollar would be best served by my turning myself in to the to the US Marshals, otherwise known as 'self reporting.' After a few calls, I found myself talking to Agent Andy (aka Agent F) who was his usual friendly, chatty self. He even recognized my voice although we had only spoken twice and that was over 18 months ago. Sure enough he confirmed that a federal arrest warrant for my arrest had been issued. And after a bit of gamesmanship with Agent Andy, I agreed to report to the US Marshal's office in Fort Myers, Florida at 9:00 AM on Thursday morning as it was too late to be arraigned, plus an overnight in jail would have wrinkled by clothes :)

The following morning, Thursday, June 3, 2009, I actually arrived at the Marshal's office at 8:30 due to light traffic. As the saying goes, "If you gotta do time, do federal time." Quite simply, the federal boys are better educated, better trained and have better manners. I was immediately escorted to a holding cell. After an hour or less, I met with the Pre-Trila Service rep and made it to court at 11:00 in chains and handcuffs. The female judge was businesslike and granted my request to attend my son's graduation in Physics from UCLA next week. After fingerprinting, signing a $50,000 Appearance Bond, one final meeting with the Pre-Indictment Service rep, I was free.

In general, the arraignment was a pleasant affair. The US Marshals did their job with very little attitude, as they should. After all, I am self reporting, and it is for anything violent, I just want to prove that I have a right to issue my own currency and if anybody chooses to use it then it is a "private contract." It is certainly not a crime.

And so it came to pass, 2009 years after the birth of Christ, that four regular Americans have taken a stand to defend the People's right to protect themselves from a government currency that has a long and unforgiving history of stealing the people's purchasing power. This is a test of individual rights, as protected by the Tenth Amendment. It is the deciding moment that a private voluntary barter currency (PVBC) is legal in the great United States of America. This is a test that the Liberty Dollar must and will pass, for that I have no doubt. But it will not be easy or cheap. Please, if you support our efforts, support us with any kind of money you have, including pro bono services. Now that the Liberty Dollar faces a federal criminal trial, it is the US Government v Liberty Dollar ala Bernard, Kevin, Sarah & Rachelle. Please help us win. Please help yourself win. Please help American win.

Very simply this is a Win or Lose battle. In addition to money for this legal fight we need articles that reference non-government currency, such as Air Miles as currency, legal research assistance, expert witnesses, legal assistance, etc. If you support the ideals of the Liberty Dollar, this is the time to get behind the Liberty Dollar. We critically need your help! Please send your digital info to Legal@LibertyDollar.org and your donations of value including other kinds of "currencies" to:
LIBERTY DOLLAR
225 N. Stockwell Road
Evansville. Indiana. 47715

The best news is that the Liberty Dollar finally has the opportunity to prove beyond a shadow of a doubt that it is legal. Over two years ago I sued the US government for a Declaratory Judgment to resolve the legality issue. And how did they respond, they raided the Liberty Dollar and confiscated over $4 million dollars in gold, silver and cash. The US government has done everything possible to kill the Liberty Dollar! And guess what? It has not worked. The mere fact that the Liberty Dollar is still in business is a testament to your demand for Real Money and the ideals that the Liberty Dollar represents.

Thank you, thank you, thank you for your support! Trust me, the Liberty Dollar is not made up of any fat cats. We are all just regular Americans. And we all just want good money, a lot less government and no damn war!

Click HERE for a stilted Press Release by the DOJ. Its three pages with a whopper by Owen Harris, Special FBI Agent in Charlotte who said, "When groups try to replace the US dollar with coins and bills that don't hold the same value..." WOW what a telling statement of pure spin.

Click HERE for the 13 page Indictment.
Click HERE for Sarah's Arrest Warrant.

Guess what?! Liberty Dollar still in business and we need more business! As there has been no Cease and Desist Order, Liberty Dollar remains OPEN FOR BUSINESS. Please visit our shopping cart for all the 2009 Liberty, Peace, Freedom, T-Dollars and more. Don't be bashful or stupid. Silver is going to the moon, just as sure as the US dollar is going to hell with your purchasing power. Now is the time to protect your purchasing with the "inflation proof" currency and help usher in a new monetary model that provides the only proven, peaceful, and profitable solution to the monetary cancer that has infected America.

OUTSTANDING ORDERS: Please rest assured that we will fill all outstanding orders. Yes, after producing a sizable amount of pre-minted Silver Libertys and finally getting current with most orders, we changed mints and are now behind again. We apologize emphatically! Poor and/or slow delivery is not acceptable business. It hurts everyone. And just when we were about to get current again we were arrested. Please continue to support us with your patience too. We promise to get every order out ASAP. But as I hope you can understand, it is a struggle to run a business, any business, in such an environment and fight a major legal battle for our right to protect our purchasing power

The last few 2009 Arrest Dollars. Are you familiar with the Arrest Dollars? Starting in 2007 and continuing through this year the Arrest Dollar is one ounce Silver Liberty that is specially hand hallmarked with a micro "handcuffs" stamp and my federally registered mintmark. Issued only from the day of the raid to today. The last few 2009 Arrest Dollars are currently on the Shopping Cart. After these are gone, they are gone to eBay for much more money.

The 2009 Tea Party Dollar (T-Dollar) is still available and we are still waiting confirmation on the shipment. We are still expecting to have the first batch order in the first 24 HOURS here for the July 4 events. The T-Dollar is still only a buck for an ounce of copper AND you can still get them for 10% discount to the $1 face value for a 100 or more. Hey, they are only a buck… you can't go wrong. Plus every copper issue has sold out. Get these while you can and help support our legal efforts too

The 2009 Silver Libertys! The backbone of the Liberty Dollar model is the one ounce .999 fine silver Lib! Just in the last few days, silver has bounced back over $16, soon the 30 day moving average will be $16 and the Liberty Dollar will Move Up again to the $50 Silver Base. PLEASE don't be dumb and buy silver when it is high. Get it NOW!!! Sure it is not $5 per ounce any more, nor will it ever be again. $5 silver is just not possible with the government spending phony baloney fiat money like a drunken sailor. Please order silver now and protect your purchasing power and profit tomorrow!

Stay tuned to the Liberty Dollar News as we vindicate and validate the legality of the Liberty Dollar. Please take an active role in this exciting and profitable time. Don't lose out. Get involved with the Liberty Dollar to make money, do good and have fun. I am having as much fun in my 60's and I did in The 60's and hope you are too.

Thanks again for your support.

Bernard von NotHaus
Monetary Architect
Editor@LibertyDollar.org
www.LibertyDollar.org
888.LIB.DOLLAR
888.421.6181

 

 

Folks, the loss of our freedoms is increasing by leaps and bounds daily. This attack on the Liberty Dollar started during the Bush Administration and is now continuing through the Obama administration.  Guess the concept of “freedom to choose is no longer true in the United States of America!

 

I thought you might just want to know!

 

With regards,

Allen

 

Information contained herein is deemed reliable but not guaranteed.

http://VoiceCafe.blogspot.com

Objective Reality vs. Subjective Reality

# 031                                                                                                        May 26, 2009

By: Allen Wells

U.S consumer confidence has increased to the highest level since September.  According to Bloomberg.com, “Confidence among U.S. consumers jumped this month to the highest level since September, reflecting growing perceptions that the job market will improve… The Conference Board’s sentiment index surged to 54.9, higher than forecast and the biggest gain since April 2003.

U.S. Home prices fell a record 19.1% in the first quarter, compared with a year earlier, according to the national Case-Schiller home price index released today. David Blitzer, chairman of the index committee for Standard and Poor’s (compiler of the Case-Schiller index) stated, “we see no evidence that the recovery in home prices has begun.”

It appears to me the American people are confused (at least the ones being polled), unable to differentiate between subjective information and objective information. 

Subjective information is information based upon our opinions or “biased” information. Subjective information does not have to be grounded in fact, only in what we think or feel. Objective information is fact based information with factual and tangible references. We may not agree with the results of an objective statement, but the information is verifiable and grounded in fact.

For the record:

Objective information (fact based, tangible, able to be verified)

Home prices continue to fall, housing starts are now at an annualized 460,000 (+ -), down from an annualized 2.26 million in 2006.

Unemployment is at 8.5% (a government approved percentage), while “unapproved” estimates put the number of unemployed or underemployed at 15% (+). This is an average of at least 1 in 10 wage earning Americans’ out of work.

Payrolls fell by 539,000 in April, the fewest in six months.

The economy has lost 5.7 million jobs since December 2007.

Subjective information (opinions, biased, slanted, one-sided)

“We expect to have positive economic growth in the third quarter. The job declines will fade.” As stated by James O’Sullivan, as senior economist at UBS Securities, LLC.

“The share of consumers who said more jobs will be available in the next six months climbed to 20 percent, the most in more than five years.”

“The proportion of people who said jobs are currently hard to get fell to 44.7 percent from 46.6 percent.”

Do you see the difference between objective and subjective?

Where am I going with this? Those of you that know me personally know I am not a negative person. In fact, I have often been accused of being overly positive (ok, maybe not that often, but at least once or twice). I believe in a positive mental attitude, and I believe that you must be optimistic and focus on the good, rather than the bad. However, I am also somewhat of a pragmatist.

In the real world, you can be as positive as you want, but you must also be ready to face the facts and anticipate the results of the negative things happening around you and how they will affect you, your family and your livelihood. Trillions of dollars have been lost in the real estate crash and the stock market crash. Yes, the stock market is rising very rapidly. We all know many, many people that lost their life savings or retirement savings in the real estate and stock market crash.

The stock market is gaining back its losses; with this in mind – how many of those that lost in the market are now gaining back their equity just as fast? Who’s winning in this new Bull market?  Who do you know that has made back half their losses since the first of the year?

Those that lost the value in their real estate and personal residences will not likely see a return to the original equity for many years, if ever.  Where has the money gone? It is lost.

Consumer confidence is up… pundits, MSNBC and the others are telling us things are bottoming out and the economy is about to be on an upswing. I hope so, for my sake and yours.

It’s just that I keep seeing these nagging issues, like, no more equity in real estate… a national deficit at 13 percent of our GDP… government bailouts and nationalizations (de facto) of banks and industries… more than 10% of the nation out of work… huge increases in federal spending… health care costs through the roof…

Yes I am positive we can (and will) get through this time of turmoil. Are we going to get through it with larger government, more re-distribution of wealth and a heavier hand of taxation and regulation? Or, will we come to our senses, drop our subjective concepts and look at the real facts facing our nation?

Objective facts like these:

The recent sub-prime mortgage meltdown:  a direct result of federal government pressure to lend to lower income, less credit worthy borrowers in less than optimal neighborhoods? The markets were required to conform to the pressure from Barney Frank and the congressional gang to make more risky loans to less credit worthy borrowers. The market did what the market does – it spread the risks with new products and derivatives.

1% of earners in this country pay over 39% of the federal taxes and this same 1% have had their tax bill increase by 3% in the last two years.

32% of Americans pay no federal tax at all!

A President that ran on a platform of change – stating emphatically that if elected, “earmarks and partisanship will be a thing of the past” [paraphrased by me] – only to pass a “landmark” stimulus bill with over 9,000 earmarks!

Folks, these are objective statements, easily verified. I’m not arguing if these facts are good facts, bad facts or in the middle. I’m just stating these are facts. Consumer confidence may be a concept in someone’s mind with no bearing on any fact, just feelings. We cannot run a country, a business or our life based just on “feelings”. At some point facts must play a hard and fast part of any intelligent decision.

Please, Mr. & Mrs. Congress, please Mr. President – let’s look at the facts. Let’s stop the ridiculous arguments about the CIA and who lied and who didn’t lie. Let’s get rid of the red herrings.  Let us work together to take an honest look at where we are and how we got here. Let’s consider the results of our actions.

Let’s look objectively at the facts, let’s set our opinions aside for the moment and OBJECTIVELY review the situations at hand.

Our country and our lives may very well depend upon it.

With warmth and regards (as always),

Allen

To reply or comment:

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Has Anyone Found the Recovery?

# 030                                                                             May 20, 2009

By: Allen Wells

Aside from the stock markets inexplicable rise, has anyone seen any other signs of the pending recovery?  I keep reading about how the recession has bottomed and things are “looking up”. The problem is that the facts don’t uphold the previous statement. 

For example, Lowe’s home improvement stores are the darling of the stock market this week, with an 8.1% jump in the value of their shares. Why the increase? Lowe’s announced a modest rise in first quarter gross margins mostly based upon sales of small ticket items such as paint and other do it yourself products and outdoor gardening items. In reality, sales of items over $500 are weak, and Lowe’s forecasts a sales drop of 4% to 8% in the second quarter over last year. 

Lowe’s modest sales increase has been hearkened as the bellwether of the beginning of the recovery in the housing market. My question is, how can a home improvement chain that had a modest increase in small ticket item sales be a sign that the housing market is coming back? Excuse me, but how is paint and flowers sales an indicator of an increase in new home sales? 

The conventional wisdom is that the housing market will lead the country out of this recession.  I agree, but I do not agree it will be happening anytime soon. The Case-Schiller Index of 20 U.S. cities shows the residential real estate market is down 31% since its peak in 2006. The last time housing declined over 30% was  1930 – 33 (in a 3 year period).  Understand, housing is not the stock market. It will take far longer for the housing market to make up the losses suffered over the last three years. Many people are “underwater” with their mortgages. It’s like Hurricane Katrina (without the high winds and Kanye West) hit the entire housing market and flooded the homes! Home values are down anywhere from 11% (as a low in Dallas) to 50% in Phoenix. Notice, I said values, not prices. Price is what you are trying to sell your home for… value is how much you can sell your home for.   

Regardless of how the Bureau of Labor Statistics manipulates employment data, real unemployment and underemployment is rising. Foreclosures are increasing monthly, health care costs are rising daily. All these do not bode well for a quick housing market recovery or an end to the recession. As housing goes, so goes many industries – furniture, electronics, appliances, trucking, truck sales, equipment sales and on and on. 

The bottom line is this – Lowe’s profits are down. Lowe’s sales are down. This is not a sign that the market is recovering. This is a sign that people are staying put – they do not have the money to buy new homes. Drop new home interest rates to 1% - you still need 20% cash equity and an 800 credit score. Americans are out of work, out of money and out of optimism.  

President Obama was elected  with a mandate for change… here’s the change: UAW ownership of GM, Fedzilla ownership (by proxy) of the major banks, a giveaway of Chrysler to the UAW and a foreign company… but  it’s ok, we’re going to make it back with “green” technology. I do not blame the current administration for the woes with the automakers. I do not blame the current administration for the problems with the banks and insurance companies. I do, however take issue with the same old concept of raise taxes on the “rich”, cut services to the have’s (you know the ones still paying taxes), give more and better to the “have nots” and turn everything else over to the unions. 

Folks, the only recovery right now is with the rising stock market and that probably will not last very long. Very few companies are making money – including financial companies. How long can stock prices continue to exuberantly increase with quarterly results continuing to show losses and cutbacks?  Smells somewhat like the tech boom of the late ‘90’s to me. Won’t they ever learn?

The problem is that people have forgotten that it takes time to make money and we must save for a rainy day. The bubble economies of the last 15 years (tech boom, dot.com, housing, etc.) have influenced a generation to believe millions can be made overnight. That certainly does happen, but as a general rule money is made over years, not months.

I think most Americans, at least the average American, not the high flying financiers and market players, are beginning to understand this. Saks, Bloomingdales and Nordstrom’s sales are down, Wal-Mart sales are up. Starbucks sales are down, McDonalds sales are up. Why buy $3 coffee when you can get it for $1.50?

The recent Fed “stress tests” of banks showed us nothing – who doesn’t believe the reports weren’t rigged? Now we are told, don’t worry about the big banks, it’s the smaller local and regional banks that face big losses, due to the commercial real estate loans. These loans could generate up to $600 Billion in losses within the next year. How convenient – hmmm… do you think when this happens, the USG will step in with more money - not for the smaller local and regional banks, but for the major banking institutions (you know, the ones too big to fail). Then these banks will come in and rescue the smaller banks, buying them and placing them under their control.

How convenient; we will have the major (too big to fail) banks, controlled by the USG with the TARP funds and stock ownership, now controlling the local and regional banks. I’m no conspiracy theorist (so to speak) but what a convenient way to nationalize and consolidate the entire U.S. banking sector, slowly, a bite at the time with not a peep out of the U.S citizens. Kind of like boiling a live frog!

The USG and 16 states are suing the pharmaceutical giant Wyeth for fraud for giving discounts to hospitals that it did not offer to Medicaid – gotta love government insurance. You see, Medicaid is a government controlled monopoly, and when you make the laws and control the distribution system anyone that does not play by your rules is immediately a criminal. Wyeth is a criminal organization because they did not offer the USG the same deal they offered others… so much for a free market. I cannot wait for our national health care plan.

Oil prices are up, gasoline is projected to stabilize at about $2.50 per gallon (more or less) this year.  Housing starts for April were estimated at 525,000 (annualized) but came in at 458,000 (annualized). This was a 12.8% decrease. Where’s the headlines? This does not sound like we’ve hit bottom. Just so you can compare, January 2006 housing starts were an annualized 2.27 million…  All this adds up to – THE RECESSION (DEPRESSION?) ISN”T OVER!

Like I said – we need to get our heads out of the sand and realize, the recession is still here, in our face and it is not going away anytime soon. As I wrote the other day, we must take a stand against Fedzilla and its unmitigated grab for power. Given the current Federal spending and increase in deficit, we are headed for trouble far worse than the recession we are now facing.

We cannot let this economic downturn be a catalyst for more Federal control and spending.  The individual States need to band together and make a stand against Fedzilla now, before all rights are lost and the concept of statehood becomes only a geographical term denoting the area of the country you live in. 

With warmth and regards (as always),

Allen

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Has The Revolt Begun?

# 029                                                                                          May 18, 2009

By: Allen Wells

The taxpayer revolt may be starting. California (the state that brags if it was an independent country it would have the 10^th largest GDP in the world) is on the verge of bankruptcy.  On May 19^th   (tomorrow) the citizens of California will vote on 6 propositions, 5 of which deal with raising taxes, one deals with freezing legislatures salaries. The only proposition projected to pass is the one freezing legislatures salaries… hmmm … imagine that! California has one major benefit (for taxpayers) that most states do not have – any tax increase must be approved by the voters. 

Most likely, the 5 propositions will fail and California will be left with an operating deficit of $42 Billion! This shortfall, in effect will produce a bankrupt California. Something will have to be done – most likely a request from the Governator for a federal bailout.  You can be certain legislators from other states will be watching this vote closely. Nancy Pelosi better start polishing her debating skills and pulling in favors. My guess is Congress is in no mood to bailout California, but then again… Maybe Ms. Pelosi should spend more time trying to help her home state instead of trying to put former President Bush on trial with her truth commission… me thinks Ms. Pelosi may not be able to handle the truth (and it’s political repercussions for her career). 

Perhaps (hopefully) this refusal to approve more taxes will be a trend that will sweep the nation. Taxes are too high. They are onerous, one sided and literally suck the life out of productive individuals and businesses.  If the Constitution still had a place in our federal laws, state taxes would be higher than federal taxes, and federal taxes would be a minimal expense for the average American. Instead we have massive federal taxes, sucked from the productivity of the states. 

In reality California will probably head to Congress, hat in hand, requesting a bailout. I mean, if CitiFinancial, Countrywide and the others were too big to fail… where does that leave California? 

Hey, I have an idea, maybe all the [very] liberal multi-million dollar actors and actresses could get together and have a fundraiser for the state – what’s a few billion dollars among the ultra wealthy? They could kill two birds with one stone – first, they could prove they are willing to voluntarily dig deep to help others (like they seem to think everyone else should do under government compulsion), and second (since they think the government is the answer to making everything better) they can give more to the government and let them “take care” of California’s financial woes. What a great and shining example they would be… 

Fedzilla is encroaching more and more each day on the rights of states and forcing rules, laws and regulations down our throats. In the fight against Fedzilla’s encroachment, Montana is fighting back working to maintain some semblance of their own sovereignty.  In the battle over gun control, Montana has fired the first shot (so to speak) against Fedzilla. The Montana Legislature has passed a bill (and signed by the Governor) stating that any gun, ammunition or affiliated weaponry manufactured in Montana, sold in Montana, and intended to be kept in Montana will be exempt from federal gun registration, background checks and dealer licensing laws. Usually Fedzilla enforces these types of laws by invoking the commerce clause of the Constitution. Montana maintains the commerce clause does not have jurisdiction because no state lines will be crossed. You can bet the ATF will soon be knocking on Montana’s door. 

Ultimately enforcement of this bill will go to the courts for a decision. Alaska and Texas are preparing to enact similar laws.  I foresee more and more states fighting to throw off the yoke of Fedzilla’s heavy handed control. The showdown will come as Fedzilla withholds federal funds from states that refuse their bidding… at that point, we may very well have a revolt on our hands at the state level. I think this is the only level that may work. 

Things won’t change with smaller groups of individuals and independent organizations trying to garner support against Fedzilla. The media is well versed and capable of making grass roots movements out to be fringe, lunatics and zealots. Look at how they undermined Ron Paul’s presidential campaign. You don’t have to be a fan of the Ron Paul rEVOLution to see how the media portrayed him as out of touch and unrealistic. When that did not turn people away from him, they ignored him entirely. 

This cannot be done if states pass laws pre-empting federal control in areas Fedzilla has no constitutional right to be meddling. The media can ridicule one state, but when multiple states jump on the bandwagon – they will be a force to be reckoned with. Watch closely – the states that will be willing to take on Fedzilla will be the states that are not bankrupt (i.e. Texas, Montana, etal). The bankrupt states (California, New Jersey, etal) will continue to allow (and request) Fedzilla’s control in order to suck up more federal dollars to fund their own welfare states. States that have practiced fiscal responsibility (at some point) will say no more to Fedzilla sucking money from the citizens of those states and giving it to the welfare states. I think I do hear a giant sucking sound, and it’s not coming from Mexico… I’m pretty sure it is coming from Washington D.C. (and California, and New Jersey, and Michigan…)! 

Let’s look at Congress and their percs. Are you aware, [that] in addition to their salaries and benefits (which include excellent health and dental insurance, and a pension plan that far exceeds the Social Security plan we are forced to fund), members of the House of Representatives get an allowance of $1.3 million to $1.9 million a year and Senators get an allowance of $2.3 million to $3.7 million a year for “expenses” which include official costs, staff salaries, office expenses and “business” travel. In addition they receive free gym memberships for themselves and staff members, and up to $400,000 to furnish their state offices. 

If you aware of the huge uproar in Great Britain as a result of the ridiculous usage of expense allowances for Members of Parliament, don’t worry, it cannot happen here. You see, U.S. Congressional expenses are not subject to freedom-of-information requirements, and receipts are only available for inspection if the member consents.  Isn’t that interesting coming from the same Congress that wants to control financial institution pay and expenses…. I guess what’s good enough for the goose isn’t good enough for the gander! 

Hey, last time I checked, Congress was funded by the U.S. Taxpayer also… how about a little oversight for the millions we’re paying to support Congress… whatever happened to taxation with representation?  I’ll be honest, I’m not very happy with any of the representation I’m receiving! 

I say it’s time to hold Congress responsible for unrestrained spending and just say no, we’ve had enough. 

With warmth and regards (as always),

Allen

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Idiocy as an Art

# 028                                                                             May 14, 2009

By: Allen Wells 

Editors Note: I’m sorry it’s been a while since I’ve written, I know many of you can’t have your morning coffee or start your day off right without my introspective, intelligent words of wisdom (humor). I’ve been very busy lately (that’s a good thing, gotta make the doughnuts). Thank you for your inquiries and your interest in the blog. I promise I will do better.

 

Here we go, more idiocy from Washington and everywhere else in the world… is it my perspective, or is the multi-national business world and the political world going stark raving mad? In actuality, I believe normal, everyday people and businesses are working diligently and honestly to get by, make things work and to make clear, appropriate decisions in this time of [near] economic chaos. 

The problem, as I see it, is a dearth of truth from government and quasi-government organizations. Fedzilla is spoon feeding us lies with help and collusion from the “main stream” media. Here are a few examples (I could give you more, but it might end up being a ten chapter book!): 

Foreclosures and the Housing Market

The Story: Major news services and mainstream television news are replete with stories as how the housing market is making a comeback and that new home sales are up.

The Truth: Foreclosures jumped 32% last month. This is in the residential market and U.S. median house prices are down 14% from the first quarter last year. If you recall, our government overseers have been telling us that first quarter last year (2008) was the “bottom” and things are looking up… but let’s not mention the debacle that awaits us with the option arm resets due in 2010.

“In the last three years, housing starts have plunged from 1,823,000 to 358,000, or 80.4%. At the February sales rate, it will take 12.2 months to clear the inventory of new homes for sale, versus 5 months in a healthy market. In the past year, the median price of a new home has fallen from $251,000 to $200,900, a drop of 20%.” This information from John Mauldin’s Investor Insight Newsletter.

Unemployment

The Story: The Bureau of Labor Statistics reported last week that the economy added 226,000 jobs last month from  (get this) “business creation”. I’m not sure about this… I’ve taken a look around, maybe I’m looking in the wrong areas – has anyone out there noticed a surge in new businesses? Hello, this is a recession, I’ve seen a lot of businesses close and not many open! Truth is, Fedzilla needed some good news so they made up a way to report some good news.

The Truth: April job losses were reported at around 600,000 with Fedzilla creating about 72,000 of those jobs. Folks, if Fedzilla is creating jobs by hiring more government employees, we are paying for it… either through higher taxes or higher inflation – there is no other way around it.

Here is what is really going on with the unemployment figures, from John Mauldin’s Weekly E-Letter:

“First, there are actually two surveys done by the BLS (Bureau of Labor Statistics). One is the household survey, where they call up a fixed number of homes each month and ask about the employment situation in the household and then take that data and extrapolate it for the economy as a whole. So, while the number of employed rose, the number of unemployed rose a lot faster, by 563,000 to 13.7 million. In addition, there are 2.1 million who are "marginally attached" to the workforce. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

According to the survey, headline unemployment rose 0.4% to 8.9%, the highest level since 1983. But if you count those who are working part-time but want full-time work, as well as the "marginally attached," the unemployment rate (called the U-6 rate) is an ugly 15.8%.

For whatever reason, the markets were happy that the headline number of the other BLS survey, the establishment survey of lost jobs, was "only" 539,000, down from a negatively revised 699,000 in March. At least, the thinking was, the numbers were not getting worse, though it is hard for me to be encouraged by half a million lost jobs. That may not be the worst of it, however, since 66,000 jobs were temporary workers hired for the 2010 census, and the BLS estimated that the birth-death ratio added 226,000 jobs as a result of new business creation. Really? This will mean that there will likely be a major revision downward at some future point. The number will likely be well over 600,000 in the final analysis.

Further, it is likely that we will see at least another 1.0-1.5 million lost jobs over the rest of the year, taking unemployment very close to 10%. As an aside, the Treasury used an unemployment rate of 9.5% in their stress test of the banks, which suggests the test was not all that stressful. And, showing further weakness, there were 66,000 fewer temporary jobs. If there was really a nascent recovery, you would see a rise in temporary workers.

Average wages rose by a mere 3.2% on an annual basis, and by just 0.1% for the month, and the average work week was at an all-time record low of 33.2 hours. In nearly any inflation scenario, rising wages play an important part. This suggests that inflation is not in our near future.”

“The economy needs to create 125,000 jobs each month, just to absorb the number of new entrants into the labor market. If job growth were to average 325,000 per month in coming years, it would still take four years to replace all the jobs lost in this recession. With so much excess labor capacity, wage growth will be weak for the next few years, which will make it harder for consumers to increase savings and spending. The combination of less credit availability, weaker business investment and consumer spending will be headwinds whenever the economy emerges from this recession.”

Government Intervention into Business

The Story: Fedzilla is here to help, bailing out and “assisting” those “too big to fail”.

The Truth: The Fed, the Treasury Department and the Obama Administration are trampling the U.S. Constitution and the rule of law, becoming more bold and more blatant as each day passes. Consider these examples:

The Chrysler bankruptcy – bankruptcies are never fast, never streamlined and never easy. Article V of the Constitution prohibits States from interfering with the obligation to pay debts. Chrysler bondholders (holding a secured interest in Chrysler) have been browbeat and bullied by the Obama administration into accepting 30 cents on the dollar for their interests.  Secured bondholders hold a secured interest in the business, this is why these bonds are more popular and pay a lower return than unsecured bonds. Fedzilla has manipulated and cajoled these bondholders in violation of the “absolute priority” rule – only to [plan to] turn around and give the company to Fiat with no money down, no recourse and government backed loan guarantees. As a side note, the Auto Workers Union will receive 50 cents on the dollar for their “junior creditor claims”… where is the outrage?

The Nationalization of Banks

The Story: Fedzilla does not want to own banks and does not want to “nationalize” our banking system. All they want is to restore the stability and confidence in the U.S. banking system.

The Truth: The recent “stress tests” were a farce, manipulated by the Fed to give a semblance of respectability back to the major “too big to fail” financial institutions (most of which have contributed greatly to Democratic campaign funds). TARP was a grab for power that has succeeded far beyond any expectations. Americans have complacently agreed to allow the USG to take over our banks through the back door, loaning billions of dollars and then refusing to allow the banks to pay the money back.

Just announced the “administration is in early talks on ways to curb compensation across finance.” This bank pay overhaul will included banks that received TARP and other federal bailout funds, and banks that did not receive TARP and other federal bailout funds!

I’m curious, if a private business person (let’s call him Guido) loaned money to multiple businesses in his neighborhood, then refused to allow them to pay him back and instead required ownership in the business, continued payments and a say in how to run the business including dictating how much the owners and employees can be paid… wouldn’t we call this extortion? Or perhaps racketeering? Isn’t there a statute under federal law (known as the RICO statute) that is already used by the federal government on a regular basis to trample citizens rights?

Let’s take it a step further, once our enterprising businessman Guido get’s the businesses he’s loaned money to under his control, then he (as a result of the power he wields over the biggest businesses in the neighborhood) goes to the smaller businesses and makes them this offer (with a smile and a wink), “I now control all the major businesses in the neighborhood. If I choose to let them fail or go out of business, you will go out of business also because you need them to fund your business and supply products and services. From this point forward, I am going to dictate how much you can pay your employees and what your owners can be paid. I am doing this because I do not want your business to be able to hire personnel from the businesses I control. If you do not go along with this plan, I will bring in my “regulators” and shut your business down.”

I’m just asking, isn’t this extortion? Isn’t this racketeering? Why is Fedzilla allowed to do this? Where is the outrage? This is idiocy and Americans are going along with this blatant takeover of the entire country without so much as a whimper!

“There are only two truly infinite things: the universe and stupidity. And I am not so sure about the universe.” Albert Einstein

With warmth and regards (as always),

Allen

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Another Day, Another Crisis

# 026                                                                             April 29, 2009

By: Allen Wells

GM has proposed giving the USG up to one half ownership (that’s 50%) in the company in return for another $11.6 Billion in loans… and they are proposing to pay off half of the $20.4 Billion it owes the UAW fund (to cover health care) by giving the Union ownership of another 39% of GM. Well, I’m no mathematician (thank God), but doesn’t fifty percent plus thirty-nine percent equal eighty-nine percent ownership?

Who gets the other eleven percent? Will it be the lenders and individuals that invested in the company? No, the USG is pressuring them to take less than 30 cents on the dollar for their investments (and their faith in the system). 

America’s largest automobile manufacturer is about to be nationalized, state owned in a partnership between the bureaucrats at the USG and the United Auto Workers Union. Wow.  On the brighter side (so to speak), I bet there is some happiness in hell today… Lenin and the rest of the dead socialists are probably leaping for joy… everything they dreamed of doing to America, but couldn’t… we are doing to ourselves!

The end is coming to our lifestyle. It will take some time to destroy the economic base and industries that have been created in America over the last two centuries, but make no mistake… the end is coming. We are rapidly becoming a one world organization, government by bureaucrats and planners, manipulated by crises and hysteria.

Take a look at the crisis of the day – the “swine flu pandemic”. Presently, approximately 150 people have died in Mexico City. World governments have moved in an amazingly coordinated process to lock down Mexico City and to “protect” their citizens. If the worlds governments have worked quietly and efficiently behind the scenes over the past few years to manage an influenza epidemic episode, then what else have our overseers worked together to control? More global financial meltdowns? Restructuring of the worlds banking systems to control all capital? The nationalization of major industries? I’m sorry, I was not aware that we have become the United States of China.

I do have a question about the swine flu crisis. This “pandemic” sure seems to be moving very slowly. If this is such a serious threat to global life, why aren’t people dropping dead all over the world? The Spanish Flu epidemic killed somewhere between 30 million and 100 million people in just 4 years. That’s 10 – 25 million people per year.

Epidemics are generally fast moving and [for the most part] unseen before it’s too late.  We live in an age of crisis. Crisis takes our attention away from the truth. Crisis gives us something to worry about that takes precedence over everything else. Swine flu is not a crisis in America today. If your child breaks his (or her) arm and blood is spurting out and the bone is poking through the skin and you have to drop everything you are doing and rush the child to the hospital… that’s a crisis… wait - no, that’s an emergency.  I guess if you get sideswiped on the way to work by some idiot that damages your car and you don’t have enough money  for the deductible on your insurance… that’s a crisis… no, that’s an unfortunate situation, but it’s not a crisis.

What actually is a crisis? If you have no money, no place to live, you can’t care for your family and you cannot feed your family… that’s a crisis. In America today, how many families are really in crisis? How many true crises do we have?

“Crisis” has become one of the most ill-used, over-used terms of our generation. Everything is a crisis. This is much like the boy who cried wolf. In all honesty, I’m one crisis too deep to even care about the next crisis. We have the crisis of global warming, the crisis of nuclear proliferation, the crisis of Islamic terrorists, the crisis of the financial meltdown, the crisis at General Motors and Chrysler (hey, that almost sounds like crisis!), the crisis in Afghanistan, the crisis in Pakistan, the crisis in Somalia… Why is it that every crisis that appears, somehow, someway requires us, as American taxpayers to fund the response to these crises? Just asking.

The housing crisis is still around, but have no FEAR! This just out, Tuesday’s Wall Street Journal (article on page A2) tells us, “More Homes in California Are Selling.”  The article states that sales of existing single family homes  increased 64% from the prior year period and median home prices rose month-to-month for the first time since August 2007. Of course, you have to read down to the last two paragraphs of the article to find out that the improvements are “partly statistical”. Partly statistical? Is that like partly dead? Which part? As the article continues, “… the number of sales in March of 2008 was especially low.” What? That’s like asking someone you have not seen in a while, “how are you doing?” and they respond, “better.” Better than what?

The last paragraph of the article ends on a bright note (humor)… “Another concern is the recent ending of moratoriums on foreclosures by Fannie Mae, Freddie Mac and some big lenders. That is expected to lead to a new increase in foreclosures in California and elsewhere over the next few months.” I don’t believe the housing crisis is over!

Housing date released yesterday showed housing prices declined overall at a slower rate in February than in January. January’s decline was 19%, and February’s decline was 18.63%. We are told this is a good news and a call for celebration… should we really be celebrating an 18.63% in home prices?

Hmmm…. I wonder what the next crisis will be… “meet the new boss, same as the old boss.”

With warmth and regards (as always),

Allen

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The Internet as "The Dark Side"

Guest Essay

By: John Gault 

April 28, 2009

[Editors Note: This is a guest essay by our friend and reader “John Gault” (who is John Gault?). If you would like to post an essay you are very welcome. Just send the essay to AllenWells@mindspring.com and I will post it for you. ] 

Several years ago the History Channel aired their “Top 100 Greatest Humans” show and the number one slot did not go to Jesus, Einstein or Elvis.  Rather, it went to Johannes Gutenberg.  Gutenberg was the inventor of the printing press. At first thought, this may seem like an odd choice. The reason he was chosen (by a large panel of scholars), was that his invention allowed for the first time news to spread to large regions.  Exact words could be read and understood, without lost meanings or facts, which is often the case using only word of mouth communication.  Think about it… this does make sense. After all, the Bible and the tenets held within were only able to spread due to Gutenberg’s invention. Thusly, Gutenberg is the father of communication. 

Centuries later, we now have the extraordinary World Wide Web.  The Web has literally transformed the world. The benefits of the Web are very well known; there is little point in trying to list them.  

What about the evils of the internet? For all the talk about the indispensable freedom of the internet, very little is ever mentioned about the dark side for existing businesses.  

This is not a discussion about pedophiles scouring MySpace, or pornographic websites (we have Dateline with Chris Hansen for that). Rather, the dark side is about a loss of appreciation for art, as well as skilled workers.  One can clearly see a future where people no longer get paid besides those with brick and mortar jobs.  The problem is that the internet makes thing just so easy, that people just don't want to pay for anything anymore.  Now let’s be straight here, new technology always replaces the old and that’s life.  The Model T replaced horse and buggies, (thank goodness).  However the new technology always created new costs for those who purchased them or used them, and new income for those providing the new service or product. The internet is an entirely different beast. 

A good example of this is the article you are reading. Contrary to what many think, 99.9% of bloggers make zero or next to zero dollars. Rather, they do it for passion. And why are blogs free? Because users abandoned early blog sites that charged a fee.  The only way to truly make a livable income by blogging is by having hundreds of thousands of unique visitors to your blog and getting the attention of major advertisers, which will then pay you whenever a visitor clicks on a banner ad.  There are probably less than 50 blogs which make big money, out of the millions of blogs.  

As you probably know, national newspapers are shutting down every week.  People simply do not want to pay for a newspaper when they can get fresh and immediate news for free.  I will not be renewing my newspaper service.  By the time I get my Sunday paper, I’ve already read all the news online or seen it on cable news.   Newspapers are closing down, one by one, because it's old news by the time it hits the web, and the web articles are free. YouTube just announced they are starting a TV channel that will offer all favorite TV shows online. At some point, I could cancel my cable service and watch online, as I already do with many shows. 

The reason I pay for HBO is because I enjoy Real Time with Bill Maher. Incidentally, I just read that HBO is testing an offering of all their content online. This means (for me) as soon as this is available I will be canceling my cable service.  Certainly there will be a fee, but free shows will be posted on other sites such as youtube, which brings us to the mother of all internet catastrophes…Music. 

Popular music has always made the bulk of their money from teenagers. This goes all the way back to Buddy Holly, The Beatles, to The Rolling Stones.  Naturally older people purchased music as well, but in much fewer numbers.  Since the advent of the internet, record sales have been in such a steep decline as a result of free sites with servers all over the world, and most experts agree there is nothing that can be done about it.  

In 2000, US consumers purchased roughly 785 million albums. In 2008, that number dropped by 200 million.  So far this year, record sales are down another 20%.  Well how about ITunes you ask? It’s nice in theory, but it’s simply not working.  In 2008, 95% of the music downloaded from the internet was done illegally, meaning for FREE.  The reason is that (we know this from polls conducted) teenagers simply do not believe that music should cost anything. 

Why does any of this matter anyway? Well, beside the fact that thousands of employees have been laid off from record labels that have folded or merged, it matters because we as humans are losing one of our greatest treasures- music.  In the 1970’s, music labels would sign young musicians and bands up left and right. These days, that no longer happens.  Very few new recording artists are signed to major or independent labels. There no longer is a profit motive. Remember, we ARE NOT ALTRUISTS, everything we do is based on some type of survival. For record companies, that means money.  There is no money to be made, so why bother spending your dollars and time finding new talent in hopes they’ll make it big?  

This is why we now have these terribly unoriginal and manufactured pop stars.  Think of your favorite music.  What do you listen to most often? Is it a new act from the last five or ten years? If you are like the majority, the answer is no.  Turn on the radio and you’ll notice an interesting phenomenon, which is that the most popular stations are those that play music from the 1980’s and 1970’s.  This makes sense because in those two decades record labels were signing up thousands and thousands of artists.  What this means for us and our children, is that fifty years from now, we will still be listening to those same artists because that unfound talent playing in his garage will never get signed, he will never have that big record, which would allow him to make a second and a third album, and so on.  

To make this point even more clear to you, let me ask you a question.  Who does EMI, one of the worlds biggest (and few) remaining record labels, make their money from?  Any guesses?  Some of the hot new acts? Perhaps a singer with a number one pop song you’ve heard on the radio? Nope…Any guesses? EMI survives due to their catalogue of three particular British acts-The Beatles, Queen and Led Zeppelin.  They can’t make a dime from new bands or singers. 

The internet has also changed the landscape of the “consulting” world. Do you realize how many consultants are without jobs because everything you could get, advice wise, is available for free online?

Two weeks ago, there was a problem with my toilet. For those that don’t know me, I am not a handy man whatsoever. Years ago, I would have called a plumber. But instead, I googled it, and found a free site that gave detailed step by step instructions on how to repair every possible toilet problem and voila- I fixed the toilet.  There will always be a need for plumbers of course, but I guarantee you their phones ring much less these days. Shakespeare’s wish in some ways has come true, “Kill All The Lawyers.” Do you realize how much money lawyers have lost due to the internet? (Yes I know, this is wonderful news indeed). Every legal form needed is available online for free, or for very cheap to do your own basic legal work. In fact many lawyers who don’t work in a niche field are struggling to make ends meet these days.

Like I said, brick and mortar businesses will always be there, such as home builders, etc. But many white collar and some blue collar jobs will become extinct. However, unlike in times past, the new technology will not replace the old business platform with new jobs. Rather, there will be lots and lots of free stuff.  As they say, the best stuff in life is free. As for musicians…perhaps you should learn another trade that will utilize your creativity. How about a journalist? Oh wait, scratch that… 

With Love and Friendship,

John Gault