THIS IS MY 88TH BLOG ON UNDERSTANDING MONEY TOOLS
In this blog we are going to look at immigration in the US
and the world and hypothecate on the economic effects it may have.
There are three distinct groups of people coming into the
US; these being legal aliens that need and want to work, wealthy from around
the world that want to diversify their financial worth and lastly illegals. All
three are going to have a relationship to you and your employment. So let’s learn.
First, let us look behind the scenes as to why the
government has defined laws permitting the first two of the above. I believe
everything we do as a country is controlled to a large degree by the whims of
the large corporations and wealthy, who own stock in these corporations….back
to money, greed and power. This formula hasn’t changed since mankind. The
lineage here is big corporations, to lobbyists, to donations to politicians, to
politicians designing laws in favor of the big corporations and wealthy; a nice
clean circle.
A law was created to bring in aliens, not immigrants, to
fill our employment needs, one program is referred to as H-1B law. It is a visa granted to a foreign
individual that continues as long as there is a need by a US employer for
specialized services, usually medical or technical. It is normally for a term of 3 years and then can be
extended. It has been around for a long time, and I remember it especially when
hospitals needed trained nurses, so we brought them in from foreign countries
like Africa. Just like many things
that have good intentions at the start, this law is tremendously abused. Here
is one personal experience I have had. A lady I know employed by a major
technology company had the role of going to India, three months at a time,
training hundreds of people for the company’s applications. Then, she would come back to the US,
get together with their human resource department and post new jobs stating
specialized requirements at very low salary. Of course, current employees
wouldn’t work for that level of income, therefore would not apply. After a
certain amount of time passed the company could then bring in these trained
Indian foreign aliens to fill the jobs; hundreds at a time, and the company
released current employees. Lousy,
yes, but it is the way corporate America thinks.
Another example of abuses with the program is connected to
hospitals. Hospitals usually need specialized employees. Some H-1B individuals
come to the US, work for a few months at a hospital and then just don’t show up
for work, but stay in the US and never report back to our government. In this week’s news, (1-18-16), after I
started writing this blog it was reported on the news that over 500,000 of
these people have not reported in, and the government has no idea as to their
locations.
Now let’s go to EB-5 programs. We have covered these programs pretty thoroughly in the
past, so I won’t place much time on specifics. To recap quickly, if a wealthy
foreign individual places either a minimum of $500,000 or $1 million into an
EB-5 program they have certain immigration rights as an investor. These
privileges include being able to buy a home in the US, placing their children
in schools and residing here.
Right now with the world turmoil, the world’s rich are diversifying and
using this program, especially on both coasts. These people, mainly Asians
seeking the West Coast, are buying expensive real estate from Seattle down to
San Diego. Twenty years ago, British Columbia had a similar program and the
Asians flocked there. These are educated
people and are financially self sufficient, certainly not a drain on our
finances, but perhaps our nerves!
The northern cities on the East Coast have an influx of
money coming in from Europe, Russia and wealthy Middle Easterners. Florida has South Americans purchasing
real estate.
Let us look at the wealthy Chinese. China reportedly has
about 7 million millionaires. It has a population of about 1.3 billion and a
fast growing middle class. The
media is all about the slow down in China, however GDP growth there should be
in the 6.5% range, that is over three times what our GDP is projected to
be. As the world’s economy has
weakened their future expectations of exports is down, and they will in turn look
toward internal consumer spending for goods and services; a healthy
transition. I will reserve a bit
of space at this end of this blog for the stock market and a further comment on
China.
In comparison the USA has averaged only a meager 2% growth
rate over the past 7 years. We
have a population of about 320 million people and have about 9.5 million
millionaires, but a shrinking middle-class. There are opportunities to be had here with EB-5 programs
and meeting the service needs to these people migrating to the US.
The last category of immigrants is the illegals. I am sure most are very nice, however
taking care of them for basic needs of housing, food, clothing, medical,
education paid for mostly by our middle-class is going to drain us financially,
as it will in the European Union.
On the positive side here, all the needs paid for by government support
is providing employment for Americans in the public sector.
I am going to mention immigration into the European Union
quickly. I believe countries like
Germany are permitting immigration to satisfy their own GDP needs, as their
exports will also trend downward.
By this I mean, as the world has economically weakened the past couple
of years, Germany is preparing to move from a private sector/exporting country
to a more public sector economy providing goods and services to the immigrants.
As I have mentioned before this cost estimate to date is $1 trillion or more
for Germany alone. Hope it
works. I am thinking that it won’t
and the European Union will break apart because of the capabilities of each
country being so different and more dissatisfaction arising. This debacle was first seen in Greece,
with the lack of immediate attention by the EU.
Stock market quickly.
I loved to watch the farce happening the first couple weeks this month,
except for the amount of money lost by some good people. At first the downtrend was blamed on
China’s economy, and then the second week you never heard about China but the
drop in oil prices took precedence. Oil is a commodity related to supply and
demand. We have a ton of world supply, and weakening economies around the world
need less oil. We should be more
concerned about what is happening here in the US. We export only 13% of our
GDP, so fewer exports won’t be hurting our economy like Germany and China, however
we need to support our consumer based economy and middle class jobs. Good paying wages need to keep up. Around 1990 the US debt to GDP ratio
was about 5%, today it is over 105%.
We better mind our own economy!
Henry Ford told us what to do many years ago when he started his auto
company, and no one has listened.
Who knows where the market will bottom, but I think it has
got a ways to go. We should go
back to more historical norms.
The market never trends down without some up-tick days. Is that the time to buy back in?
No. On January 19th, an
up-tick day, I looked at volume. Yup, you had the DOW trading only 144 million
shares when daily average should be 250 million shares or more. This told me
you had a few suckers coming back in, but not strength or institutional buying.
Also, this is indicative of people having to cover their “shorts”…..short
positions, not dress code here!
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