Wednesday, February 26, 2014

We buy what we cant afford

In just about every way imaginable, America has borrowed beyond its ability to repay. Meanwhile our foreign creditors continue to provide vendor financing so that we can buy what we can't really afford.

Tuesday, February 25, 2014

Peter Schiff on Mark Zuckerberg of facebook

Mark Zuckerberg, the owner of Facebook, is not your typical corporate CEO. 

Through a combination of technological smarts, timing, luck, and questionable business ethics, he became a billionaire before most of us bought our first cars. 

And in the years since social media became the buzzword of the business world, Wall Street has been falling over backward to funnel money into the hot sector. As a result, it may be that Zuckerberg looks at real money the way the rest of us look at Monopoly money. 

Monday, February 24, 2014

Peter Schiff on Whatsapp acquisition

Facebook paid $19 billion for a company with just 55 employees, little name recognition, negligible revenues, and little prospects to earn much in the future. Given the size and extravagance of the Facebook deal, it may go down as one of those transactions that define an era. 

For the same money the company could have bought American Airlines and Dunkin' Donuts, and still have had $2 billion left over for R&D. Alternatively they could have used the money to lock in more than $1 billion in annual revenue through an acquisition of any one of the numerous large cap oil producing partnerships. Instead they chose a company that is in the business of giving away a valuable service for free. 

WhatsApp gained its users by giving away a service (text messaging) for which cellular carriers charge up to $10 or $20 per month. It's very easy to get customers when you don't charge them, it's much harder to keep them when you do.

Thursday, February 20, 2014

Peter Schiff on CNBC interview



Peter Schiff interview on CNBC where he thinks the QE will ramp up again.

Wednesday, February 19, 2014

Govt policies should encourage people to work

If people leave the labor force due to government transfer subsidies, our collective standard of living must drop, as fewer people contribute into the economic pot and more people take from it.

The bottom line is that any society will get more of what it subsidizes and less of what it taxes. 

By providing a low-income subsidy, Obamacare will encourage some people to take a pass on the drudgery and inconvenience of working. Unemployment insurance does the same, at least temporarily. 

Tuesday, February 18, 2014

Obama did not liberate women

It’s ironic that the Obama administration is claiming credit for liberating women from the workforce. But before 1960s, most married women already enjoyed those luxuries.  But when taxes and inflation rose to pay for the roll out of the welfare state, the single income household went the way of black and white TV. In the 70′s and 80′s the huge influx of women into the workforce was heralded as a great boost to the economy. Oh how times have changed.

Monday, February 17, 2014

Difference between quitting a job and not taking a job

What is the difference between quitting a job you don’t really want, because the government provides you with a health care subsidy, and not taking a job you don’t really want because the government gives you an unemployment subsidy?   

While it’s true that most Americans would gladly give up unemployment benefits if a good job came along, it is also true that the same people may pass on an unattractive job as long as they could get by without it. In fact, very low wage jobs can’t compete at all with the full spectrum of benefits offered by unemployment, such as unlimited personal days, zero commuting costs, and lack of oppressive bosses. And while it may be rational for some individuals to hold out for something better, is the economy really better off with people deciding not to work?

Sunday, February 16, 2014

Obamacare making people less likely to work

White House press secretary Jay Carney said that the low cost of Obamacare health insurance will give workers the flexibility to leave the work force if they choose. He agreed with the CBO’s opinion that many individuals work at jobs that they don’t really value solely because the positions provide health insurance. So, whereas Obama once said, “If you like your health care plan you can keep it,” he is now saying, “If you don’t like your job, you can leave it.”

The subsidies built into Obamacare are exceptional in their severity. As has been noted by many observers, even relatively small increases in income can result in substantial losses in federal subsidies. 

With health care costs eating up increasingly large portions of personal incomes, it is easy to see why health care subsidies could be the deciding factor for many people to stay home.

Wednesday, February 12, 2014

Difference between Santa Claus and Obama

Political correctness finally comes to town for Christmas. Many now regard a white Santa Clause as being racist. We have a black president so we need a black Santa Clause. Some might argue that Barack Obama is like a black Santa Clause. 

Of course, the main difference between the "real" Santa Clause and President Obama is that the real Santa doesn't steal the stuff he gives away!

Tuesday, February 11, 2014

Joe Rogan Experience with Peter Schiff

Peter Schiff on the Joe Rogan Experience

Monday, February 10, 2014

Markets will be under more pressure

The rally in bonds is only because of the false safe haven bid that the bonds are getting because of all the problems, just the beginning of the taper is causing. 

But I am not basing my idea that the taper isn`t working on the recent sell-off in the market. I knew this sell-off was coming, that is why I said, when the Federal Reserve starts to taper, the markets are going down. 

As the Federal Reserve tapers more, the markets are going to be under even more pressure. And imagine how much pressure they would be under if the Federal Reserve actually tried to sell the 4-plus trillion in Treasuries and mortgages that are currently on its balance sheet.


Thursday, February 6, 2014

0% is the Highest Interest Rate the U.S. Economy can Afford



Peter Schiff talks on why the US is in trouble with interest rates.

Wednesday, February 5, 2014

Monday, February 3, 2014

Peter Schiff on the Daily Show

When I accepted “The Daily Show”’s invitation to be interviewed about my opposition to a minimum wage increase, I knew that I was walking into a trap. But given how counterproductive I know such an increase would be to those the law proposes to help, I took the risk anyway.
Peter Schiff with Samantha Bee of the Daily Show
Of the more than four hours of taped discussion I conducted, the producers chose to only use about 75 seconds of my comments. Of those, my use of the words “mentally retarded” (when Samantha Bee asked me who might be willing to work for $2 per hour – a figure she suggested) has come to define the entire interview. Although I had no intention of offending anyone, I just couldn’t remember the politically correct term currently in use (it is “intellectually disabled”). Assuming she knew it, Bee could have prompted me with the correct term, but she chose not to. By including those comments in the final package, “The Daily Show” proved that they did not care who they offended, as long as they could make me look bad in the process. The volume of hate mail I have received in the show’s aftermath confirms their success on that front.

When asked the $2 per hour question, I responded that very few individuals would take a job at that pay, even if it were legal. In a free market, businesses compete for customers by keeping prices down, and for labor by keeping wages up. Any employer offering even low-skilled workers just $2 per hour would be outbid by others offering to pay more.

However I did suggest two groups of people who might be willing to work for $2 per hour. The first group — which was edited out — was the unpaid interns who tend to value work experience and connections more than pay. (In fact, “The Daily Show” staffer who booked me, and who was present during the interview, had been thrilled to start there as an unpaid intern). Since many interns work for free, $2 per hour would be an improvement. Some interns are even willing to pay to work. Since employers are afraid to hire them without pay for fear of violating labor laws or inviting lawsuits, they often hire young people working for college credit. These individuals are forced to pay college tuition to get a job they could have had for free had there been no minimum wage.

The other group was the intellectually disabled, who are in fact already exempt from the current minimum wage law by federal regulation. Although many have taken my support for this exemption as some sort of advocacy for modern slavery, I offered good reasons for the rule. While saying nothing about any person’s value as an individual or a human being, it is undeniable that the intellectually disabled have, in general, fewer marketable skills than the general population. Anyone arguing otherwise is just speaking from emotion. If an intellectually disabled person can’t perform work that produces a minimum wage level of output, then no employer seeking to make a profit could afford to pay that person the official minimum wage.

I further explained that since such individuals typically live with their parents or other caretakers, they are not working to support themselves or anyone else. They are working for the self-esteem associated with having a job — the pride of working and making a contribution. Many of the jobs they perform may seem mundane to those of normal intelligence, but they are often the most enjoyable and rewarding aspects of the lives of people with intellectual disabilities. I pointed out that if the federal minimum wages were to apply to them, a great many of those opportunities would vanish. Others may disagree, but I believe a job for such a person at $2 per hour is better than no job at all.

Businesses are not charities, and employers are not in business to lose money. If they do not make a profit, they go out of business — and all of their employees lose their jobs. Of course, for “The Daily Show,” all of that boiled down to my comment that “you are worth what you’re worth,” which left the impression I believe some people have little or no value.

But “The Daily Show” was never interested in an honest debate about the minimum wage. Nor is it concerned with the intellectually disabled, whom they have no qualms about offending if they can get a laugh. In fact, it’s “The Daily Show” that wants to tell the intellectually disabled they are worthless, as they want to make it illegal for them to have jobs. I did not notice any intellectually disabled people working at “The Daily Show.” I’m sure many would jump at the chance, particularly if they were offered minimum wage or higher. But since they choose to pay their intellectually capable interns zero, why should they be expected to pay the intellectually disabled more?

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