THIS IS MY 102ND BLOG ON UNDERSTANDING MONEY
TOOLS
I’ve taken a bit of a respite from my blog writing, but time
to comment on things. In this blog
we are going to look at “Globalism” as the word is bantered around so
frequently today. According to
Google it is roughly defined as the “world view” rather than a national view of
a country’s individualism; “treating the whole world as a proper sphere for
political influence with imperialism and internationalism”.
Like so many blogs, I can’t refrain from starting with
comments about our current media reports and how “rosie” the economic situation
at home is. So many things to
counter, so little time and space!
Let’s try to set clear our current US economic situation as far as I can
tell. Stock market insanity isn’t ebbing; second highest P/E ratios in
history. Corporate bankruptcies
are up 50% over the past 12 months.
No secure place to put money, let’s put it in the stock market.
Crazy. If you do buy stocks, go
conservative and buy with a high yield, and perhaps a bit in gold stocks. The economic forecast is for
insignificant growth over the next 5 to 10 years. A normal stock market is related directly to growth. If the GDP remains just over 1%, as it
is currently, stock markets cannot grow much more than that, and the same on
bond yields. Perhaps you can
get lucky and find some individual stocks that beat the market, but your risk
also goes up, versus a market fund.
We need growth (GDP) of 4%, but it is not in the cards.
Jobs report 255,000 new jobs, that strengthened the US
dollar, hence we were able to unload US bonds. No one mentioned the quality of jobs, full
time/seasonal/part time; the hourly wage slightly up, but how much? On August 9th the Bureau of
Labor Statistics retracted their previous figures stating that first quarter
wages did not go up 4.2%, but actually decreased 0.4%. Wow! There are still over 93.5 million Americans of worker age
not employed. However,
unemployment is still magically under 5%.
Be careful not to ask for a raise or you may be replaced by an HB-1
foreign worker who will work for less, and most likely be younger! Why do you think Silicon Valley led by
Wall Street wants liberal open borders with younger, cheaper “techies”, and
less regulation? We will address
this later in this blog.
How about the government bragging rights that we took a
record amount in for taxes of $2.67 trillion? The problem, as I have mentioned
before, is that even with that tax collection, we can never keep up with the
increase of debt. There is an inverse relationship between debt, personal and
governmental, and growth; you can’t have your cake and eat it too! Taxes are related to GDP and growth;
little growth, fewer taxes collected. Everything is common sense.
Wow, home foreclosures are down. Good! We have been more regulated on lending until the last
couple of years, and many see a real estate bubble happening once again. The other meaningful statistic here is
that home ownership has dropped from about 68% to 62%, that’s 6%. There are so many types of new
mortgages today to help people with little money buy. People don’t have money! Here is an example. I work part time for a new homebuilder.
A couple weeks ago a mortgage lender assisted a buyer in closing on a new home.
With incentives from all concerned the buyers closed with putting less than
$1,000 down. Are we drifting toward another disaster when people have little or
no money and equity in the purchase? I would think so.
Focus back to our intended blog on Globalization. There are benefits of open borders:
free trade, easy conversion of currencies, cheaper products and more. With NAFTA designed by President George
H. W. Bush and pushed through Congress by Bill Clinton and the Pacific Trade
Agreement pushed through by President Obama we have opened many more countries
to free trade. If one believes in the trickle down theory of money, that person
needs a dose of reality. These
trade agreements are designed by the wealthy and large corporations for control
and making more profits. The
benefit to the daily worker will be negligible, if at all.
If it works for the “big boys”, will it work for me? Here is an example in fact. A friend who works in website design is
an $85/hour consultant, and completed two nice websites for me. He has located international companies
who offer technology assistance and website design mainly from Asia; he went
with one a couple years ago and here is the story. You match your needs to one of their consultants, normally
in India or Far East. Past assignments have been graded (1 to 5 star rating) so
you know about what to expect from each person. You pay more for 4 or 5 star rating. You never pay the worker directly but
can go with different payment services once work is satisfactorily completed like
Pay Pal. My friend has developed
internet relations with two outstanding people from India who he chooses for
his assignments. Bottom line is
that these foreign individuals produce excellent work so he only needs to go
over initial points, and then final review. He invoices his clients here at $85/hour and pays these two
individuals via the employment firm $3.50/hour. Leverage your time!
Here is what I expect to be one of the negative points to
our Globalization and trade agreements.
The only two good industries remaining in the US are health care/drug
and technology. There are more and
more foreign HB-1 workers taking jobs from Americans here in the US. With more Globalization a clear picture
comes to mind for me. I picture a
45 year-old techie working in Silicon Valley, or another high tech area, making
$75,000-90,000/year. The company
he works for is private, or publicly traded (even worse as Wall Street is
placing pressures on the company).
The company wants to make more money so they let this individual go and
bring in a young techie from a third world country (under an HB-1 work visa)
who currently makes nothing. A
$15,000 year job would seem like winning an Olympic medal. How do they live on that income? They rent and many times live more than
one family to a residence. These
trade agreements aren’t going to make our employment picture better here in the
USA! What compounds the ugliness
is that our government has been known to help subsidize US companies starting
new factories abroad, like in China; modern, robotic factories taking our jobs.
Is Globalization something relatively new? Let’s go back in history and let me
have some fun with satire in the big picture of Globalism. In today’s world all we should do is
substitute the word “ exploitation” for “plundering”. My mind flashed upon 6 good historical examples of
Globalization, the 7th being the NAFTA and Pacific Trade
Agreements. Let me recap:
1)
Greek Empire from about 496 BC to 200 BC. Some of the greatest years under
Alexander I.
2)
Roman Empire from about 27 BC to 500 AD. Expansion and free trade all the way
north into England and far to the East.
3)
The greatest of all land expansionists, and under one entity
was with Genghis Khan in 1206 to 1227.
He almost went as far as Rome where upon his troops became very ill from
disease. It is rumored one of the Popes came north from Rome to meet with him.
4)
British Empire from about 1500 to 1783. Our American Revolution threw a real
mix into their nice free trade in America and that was the beginning of the end
for the Empire.
5)
Let’s try a little French Empire with Napoleon Bonaparte I
around 1789 until 1799. This is
when beautiful Marie Antoinette lost her head on October 16, 1793 because of
all the exploitation by the rich.
Teaches you not to eat cake!
I don’t know if you got that one?
6)
How about Hitler’s Third Reich? This was unification, drawing open borders, I would say free
trade from 1938 when he moved into Austria and then into Poland in 1939. I guess he was tired of bratwurst and wanted
to get some Polish sausage!
7)
NAFTA and Pacific Trade Agreement. Ouch! Mexican
factory workers are now making about $3.50/hour, but we are going for people
who will work for less than $3.00/day, benefiting our biggest international
companies.
Do you like the correlations? My belief is that nationalism will hopefully trend stronger,
countries will fall back into being more conservative than liberal; being their
unique unto themselves, producing goods known world over to them. Outside of London, England, the people
showed this trend with their recent voting.
No comments:
Post a Comment