Here’s some interesting news that has hit the wire in the last couple of days:
- A new hedge fund dedicated to hyper-inflation is being created. Personally, if you really believe hyper inflation is coming, wouldn’t you just buy gold? Why on Earth invest in a hedge fund that can go broke on its big leveraged bets?
- Speaking of leveraged bets, Obama is speaking of giving the Federal Reserve yet more authority in order to regulate the financial system to make sure that the kinds of crashes don’t happen again. Let’s review folks. It wasn’t until the Federal Reserve was founded in 1913 that we had depressions in the first place. Up until then, we had plenty of downturns and panics, but never a depression. Since the founding of the Fed, we’ve had the Great Depression and, now, this. Clearly, the solution is to just keep giving more authority over to the private banking consortium known as the Federal Reserve and hope that they clear up things. That ought to work great.
- The people who followed Dr. Lacy Hunt’s advice and bought long term US Treasuries are down quite a bit. Holders of the 30-year Treasury are down roughly 25% since the start of the year. That’s gotta hurt.
The world has been going on it’s merry way the last few months. The dollars been gradually decreasing month after month much to the chagrin of the those predicting continued deflation. Gold’s been near its high and the stock market has just meandered about. Nothing truly Earth shattering has been occurring of late, just a lot of what was expected, including the State of California going broke. It’s projected that June is the last month for California’s budget. After that, that state’s out of money.
I find it bizarre that the state with one of the most onerous tax burden’s in the one going broke first. The state has a 10% income tax tacked onto a 9.25% sales tax. In addition, the state taxes corporations that do business in its state a minimum of $700 even if they didn’t declare a profit. How did these guys go broke again? Oh, yea, excessive government spending. That’s the funny thing about budgets, they expand to fill whatever money is available for them. The state ended up spending too much on things like prisons as it the three strikes law caused more people to spend their lives in jail and their “Health and Human Services Department” (which chews up 28% of the budget. What exactly does the Health and Human Services Department do, you might ask? I’m not sure, let’s check.
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