THIS IS MY 158TH BLOG ON UNDERSTANDING MONEY
TOOLS
February, 2019
In this blog we will cover an assortment of “things”
including “tools” for making or the preservation of money, and a bit more
history on “walls”.
In the last blog we started with “walls”, the big topic and
issue between the Legislative Branches, the Republican and Democratic Parties.
Before we get into any finances permit me to write about one wall I never
covered and that is the Vatican City wall. I find this history to be wonderfully interesting, hope you
do. I am not Catholic, however
most every religion intrigues me.
(If you want a great rundown on religions of the world, I
recommend the books or audio books by scholar Huston Smith. Mr. Smith passed away in 2016, but most
libraries have his books available.)
The Vatican is an independent City State surrounded by Rome,
Italy. The head of the Catholic
Church resides there. The Vatican
was not a “State” until 1929. It has a population of only 800-1,000. Popes resided in Avignon, France from
1309 until 1377, including 7 successive Popes. In 1377 they returned to Rome. I lived in France for a bit and loved the beautiful city of
Avignon.
The first structures on the Vatican site date back to 15
BC. The Basilica, over St. Peter’s
grave, started in the 400’s AD.
The City State is situated on 110 acres. Very famous artists are related to Vatican City including
Michelangelo, Raphael, Pinturicchio and Giotto. What amazes me is the huge obelisk in the center of St.
Peter’s Square. Emperor Caligula
brought it back from Egypt. He was
emperor of the Roman Empire between 37 and 41 AD. The obelisk stands 84 feet high with a base of bronze lions
giving total height of 135 feet. I
wonder how many slaves were used for this task?
The Vatican Wall surrounds most of the 110 acres. In places it stands 30 feet high. Here
is the irony I want to hit upon.
The Pope is all for “globalization”, however he has a huge wall giving
him privacy. Everyone who resides there has a specific purpose to the
“wealthiest non-profit corporation in the world”. There are no poor or homeless street people living within
this City State! Many wealthy politicians in the US have walls around their
homes, like Nancy Pelosi at her Napa Valley home, Paul Ryan, ex-speaker of the
House, ex-president Bill Clinton, etc. etc. All these people speak well of globalism, “as long as it
doesn’t incur in my domain”!
Once in Rome, I went to hear the Pope speak in St. Peter’s
Square. It was quite crowded, however a remarkable experience. As a person could not see the Pope
well, they had a large video screen so people could view and hear him. A person needed to enter only at one central
point, pass through a screener like at an airport, and closely watched by many
Rome policemen. (You might already
know that Popes had their own Swiss guards since 1506 when many men left
Switzerland to find work as mercenaries.)
Again, I find it ironic that the Pope can speak of world globalism,
however he lives behind one of the most protected “walls” there is on earth.
Equating this wall, and the others I described in my last
blog, it boils down to immigration requirements for policies and strict
regulations for entering into the USA.
There needs to be incoming and outgoing of people “only” at certain and
designated points. This monitoring
of incoming people must include certain health standards, as well as a purpose
to reside here in this country. We
must admit at some point that the US is broke, and recovery at our levels of
debt is not possible. If
immigrants can’t find work, and are not sponsored on entry, eventually I am
afraid they will find other means to make money as they are now doing in
Germany, Sweden and other countries.
These “means” are the easier ways out and include gangs, drugs and
prostitution.
Now, let’s move on to money. This example is from an acquaintance in the town where I
live. She is a lovely lady who
manages a restaurant. She purchased a new car recently. After owning the car less than 45 days
she was broadsided by another driver who was to blame for the accident, and
totaled her car. They were both
represented by the same insurance company. This lady financed 100% of her new car through the
dealership. As soon as you take
delivery of a new car and drive away it depreciates 10-15% in value. In this case, even though she had full
insurance, settlement was based on “market value”. The market value was $4,000 less than what she paid days
before, and therefore owed the finance company this money. This sum was up and above the insurance
coverage, and money she did not have.
She had a “hard lesson” on well-needed “gap insurance”. If you purchase a new car, it picks up
this difference.
Let’s look at my favored stock markets. As I mention in each blog, I don’t
understand valuations, and there is no such thing as current rational analysis
of technology companies and relatively new start-ups. It is unbelievable the stupidity that leads to the market
gyrations these days. If mister
Trump combs his hair wrong the markets go down, if he should wear a red tie the
markets go up! In my mind there
are only 3 fundamentals you need to concern yourself with, and those are the
assets and liabilities from the balance sheet and pre-tax earnings from the
income statement. I have done
enough small business proformas to know one thing, and that is projecting
growth or lack thereof forward beyond 12 months I will be wrong. This is why we no longer see companies
like Kodak film and Blockbuster videos around.
From my past blogs you learned that our government was
stepping into the markets beginning around December 22, 2018 with the “Plunge
Protection Team” (Act passed March, 1988) comprised of banks and our Federal
Reserve.
I watch the most noted market, the DOW Jones most every day,
and several times per day. Some
days I can distinctly tell when the Plunge Protection Team enters the
markets. It will happen on a
downturn day. It is noticeable
when there is a sell-off and then a rebound in the market at a certain point,
and then another drop to exactly that point again with a rebound; a tell tale
sign as to what is happening. It happened this past week at 25,000. A normal downturn never corrects
exactly on a certain figure. To
track this, go to Google (I use Google voice) and enter “price of the DOW Jones
average”. It will give you pricing
in current time.
For now, the government and President Trump are protecting
the downside to stock markets. We
will see what happens in the future.
Be careful with your investing, and staying in a cash
position won’t hurt you. You may
think you are losing “opportunity cost”, but a person is remaining liquid. This week, Christine Lagarde, the
Finance Minister for the International Monetary Fund, gave warning. The world growth has slowed much more
than expected. We watch China
dropping from an 8% GDP to 6%, because they are not selling as much
abroad. Europe is in a financial
mess, joined with the others in the European Union like France, Italy, Spain
and Portugal. In Britain, they
can’t seem to get their act together for a recognized and approved exit from
the European Union. Not much is
said about India, the second fastest growing economy, but I am sure it
parallels Asia to some extent.
Here in the US we had a couple successful quarters of growth
last year in the 4% range ending the year around 3.5%. Now, we are hoping for 2.5% and heading
lower. If that parallels past
inflation over the years, it shows no growth.
I hope you learned something from this blog, or at least
found it somewhat interesting.
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