My High Dividend Stocks Blog http://myhighdividendstocks.posterous.com Most recent posts at My High Dividend Stocks Blog posterous.com Mon, 29 Oct 2012 10:58:02 -0700 Keynesian deficit spending madness http://myhighdividendstocks.posterous.com/keynesian-deficit-spending-madness http://myhighdividendstocks.posterous.com/keynesian-deficit-spending-madness

I will begin writing about high dividend stocks again after a little vacation.  I’m going to concentrate on non-US high dividend stocks.  But until then check out this interesting, short article on GDP growth.

Government deficit spending was the only reason the US 3rd quarter GDP grow went up.  This is a recipe for disaster.

http://reason.com/blog/2012/10/29/3rd-quarter-gdp-growth-due-to-government

Of course, GDP is a made up Keynesian number that really makes no sense, but it is widely believed and followed by the public at large.  This article explains the inherent fallacies that make up the GDP number (C+I+G=Baloney http://mises.org/daily/4482 )

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Mon, 17 Sep 2012 15:57:35 -0700 Marc Faber: Fed's QE Forever is Ludicrous; No Country Has Become Rich From Consumption http://myhighdividendstocks.posterous.com/marc-faber-feds-qe-forever-is-ludicrous-no-co http://myhighdividendstocks.posterous.com/marc-faber-feds-qe-forever-is-ludicrous-no-co

Marc Faber is dead on in this short article.  He points out that if money printing solved problems, then Zimbabwe would be an economic powerhouse.  If running huge deficits worked, then Greece would be the most successful European economy.

The Keynesian in charge of the central banks around the world are madmen.

Her is the short article from Marc Faber:

http://www.bi-me.com/main.php?id=59324&t=1&cg=4

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Tue, 11 Sep 2012 17:33:31 -0700 Your First Step into the World of Bitcoins; An Excellent Primer. http://myhighdividendstocks.posterous.com/your-first-step-into-the-world-of-bitcoins-an http://myhighdividendstocks.posterous.com/your-first-step-into-the-world-of-bitcoins-an

The Wall Street investing game is rigged against you.  The theft of customer funds after the MF Global bankruptcy should have you worried about the safety of your brokerage account assets.

http://tinyurl.com/MFGlobalTheft

There is a new currency that you can buy to thwart the efforts of the Federal Reserve and the Wall Street banksters.  Do you have some of your investments in bitcoins?  Do you even know what a bitcoin is?  If you answered no to these two questions, then you had better read this concise, non-technical explanation of the bitcoin ecosystem:

http://blog.bitinstant.com/blog/2012/7/5/a-business-primer-on-the-bitcoin-ecosystem-erik-voorhees.html

You can listen to the article while driving in your car here:

        <!—Start of SpokenText player à

        <script type=”text/javascript” language=”javascript”>

               var recordingUrl = “http://www.spokentext.net/members/Gorbash91/A_Business_Primer_on_the_Bitcoin_...”;

               var width = “100”;

               var height = “20” ;   

        </script>

              

        <script type=”text/javascript” language=”javascript” src=”http://www.spokentext.net/display_player.php”></script>

        <!—End of SpokenText player à

I will be writing more about bitcoins in the future.  I’ll discuss how many of them that there will ever be, how they can be secured, and how much it costs to convert your national currency into bitcoins.

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Tue, 04 Sep 2012 21:28:43 -0700 The Importance of Saving Money http://myhighdividendstocks.posterous.com/the-importance-of-saving-money http://myhighdividendstocks.posterous.com/the-importance-of-saving-money

South Park clip inspired by MF Global and other legal thefts:

http://www.southparkstudios.com/clips/222624/the-importance-of-saving-money

Don’t put your hard earned savings into the common brokerage accounts.  Consider putting some of your savings into bitcoins.  Learn more at www.weusecoins.com .

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Thu, 23 Aug 2012 11:57:26 -0700 Why California and Other State Pensions are Just Like Social Security. http://myhighdividendstocks.posterous.com/why-california-and-other-state-pensions-are-j http://myhighdividendstocks.posterous.com/why-california-and-other-state-pensions-are-j

The California government employees pension fund (CalPERS) is caught in a war between the current government workers and the retired government workers.  It is the biggest pension fund in the USA and its problems are typical of all government pensions.  It has overpromised and it is underfunded.  This is not going to end well for California state retirees, current government employees, or California taxvictims.

CalPERS Defends Pension Benefits While Risking Losses

By James Nash - Aug 19, 2012 10:01 PM MT

The California Public Employees’ Retirement System, the largest U.S. pension, is defending government workers against criticism of their benefits even while it risks losses as municipalities, faced with rising retirement costs, file for bankruptcy.

Pension funds like to buy bonds because fund managers believe that bonds carry less risk than stocks.  Therefore, CalPERS is a large buyer of municipal bonds.  It bought Stockton and San Bernardino municipal bonds.  It probably bought Greek bonds also.  Why not?  The knuckleheads running this fund lost almost a billion dollars on Enron and WorldCom bankruptcies (http://www.treasurer.ca.gov/publications/actions.pdf).  The $290.8 million at stake amount to one-tenth of one percent of the funds assets.

The $239.1 billion fund is the largest creditor in bankruptcy cases filed by two California cities, Stockton and San Bernardino, since the end of June, with a total of $290.8 million at stake.

Current government workers in Stockton and San Bernardio account for 0.7% of CalPERS total contributions.

Increasing retiree obligations are straining budgets of cities across the Golden State, still grappling with income- and sales-tax revenue reduced by the longest recession since the Great Depression. The two bankrupt cities represent 0.7 percent of employer contributions to CalPERS, according to actuarial statements. Still, others may follow if judges relieve them of pension commitments, said Karol Denniston, a bankruptcy lawyer at Schiff Hardin LLP based in San Francisco.

“The briefs that have been filed by the insurers are interesting in that they’re arguing that CalPERS should be treated like any other creditor,” she said by telephone. “CalPERS is going to argue that they’re a different kind of creditor, in that they hold the money in trust for the retirees.”

Stockton, a city of about 292,000, about 80 miles (130 kilometers) east of San Francisco, and San Bernardino, with 209,000 residents, about 60 miles east of Los Angeles, both cited rising employee retirement costs as factors that drove them to seek court protection. A third community in bankruptcy, Mammoth Lakes, hobbled by a legal judgment, owes CalPERS $4.2 million, according to its filing.

Stockton Precedent

“Where this is so important is that we know Stockton is going to be precedential,” Denniston said.

CalPERS is a Stockton bondholder (they are playing the role of the northern European bankers) and Stockton is in serious financial turmoil (they are playing the role of Greece).

Stockton is trying to become the first American city since the 1930s to use bankruptcy to force bondholders to take less than the principal they’re owed. The city will need approval from a federal judge in Sacramento to impose any cuts on creditors.

In an Aug. 2 statement responding to insurer Assured Guaranty’s objections to Stockton’s bankruptcy filing, CalPERS general counsel Peter Mixon argued that the interests of pensioners should trump those of other creditors.

Mr. Mixon’s comments are designed to elicit emotional support to CalPERS predicament by claiming that the public employees are not in a position to evaluate credit risk.  CalPERS fund managers are responsible for evaluating municipal government credit risk.  CalPERS fund managers had proven themselves to be as stupid as the northern European bankers that lent money to Greece.

“The obligations owed to the public workers of the city have priority over those of general unsecured creditors including bondholders,” Mixon wrote. “Unlike insurance companies, policemen, firefighters, and other public employees are not in a position to evaluate credit risk of their employers.”

Even as it defends its standing in the Stockton case, CalPERS is working to counter the notion that pension costs are a significant factor in current and potential municipal bankruptcies.

‘Not Fair’

“It’s not fair to scapegoat public employees and pensions for the financial woes of our cities,” Rob Feckner, the chairman of the CalPERS board, wrote in an Aug. 8 op-ed in the Sacramento Bee. Feckner is an executive vice president of the California Labor Federation, which represents 2.1 million unionized workers, about half of them in government.

So, what then are the real causes of current and potential municipal bankruptcies?  Not unsustainable pensions with rising costs.  Oh, no.  I couldn’t be that.

“The real culprit is the economy and housing market, along with financial decisions made by city officials,” he said. “Pension costs are a small piece of the budget.”

CalPERS’ position contradicts the realities facing many municipalities, said Chris McKenzie, executive director of the League of California Cities. Reducing pension costs is the top priority this year for the Sacramento-based organization, McKenzie said by e-mail.

Rising Costs

“Cities statewide have seen pension costs rise to the point that they are no longer viewed as sustainable,” McKenzie said. “Soaring pension costs are a serious concern.”

While pension costs are roughly 10 percent of most city budgets, municipalities need flexibility to deal with them when revenues slump, said Dan Pellissier, president of California Pension Reform.

CalPERS is a ponzi scheme just like Social Security.  It is obligated to pay the pension to the retirees, but they also know that city/county/state budgets will be destroyed by rising pension costs.  Current workers in the ponzi scheme must be courted and reassured that the ponzi scheme really isn’t a ponzi scheme.  The current workers are needed to pay for the retirees.  That’s why CalPERS representatives are talking out of both sides of their mouths.

“It’s ironic that CalPERS is defending a system that is placing an unsustainable burden on employers’ budgets,” Pellissier said in an interview in Anaheim, California, where he spoke at a CalPERS forum on pension legislation. “CalPERS has to find out a way to work with government agencies that have overpromised benefits based on contribution rates that have been artificially low.”

So we learn that the municipalities are the source of 14 percent of CalPERS income annually.  As CalPERS investment returns fall short of their assumptions of 7.5% rate of return they will demand higher contributions from current workers to “save the system”.  Eventually, the retirees will get screwed when the younger California voters outnumber them.  This will take a while, but it will happen.

More than 1,500 cities, counties and other units of government pay into the fund, according to a CalPERS fact sheet. Such employer contributions accounted for $7.5 billion, or less than 14 percent of CalPERS’ total income in 2010-11; most of the income came from investment earnings.

Investments Return

CalPERS, which posted a 1 percent return on investments for the year ended June 30, has about 72 percent of the assets needed to pay long-term obligations to retirees, spokesman Brad Pacheco said.

CalPERS claims to have 72 percent of the assets it needs to keep the ponzi scheme going (based on false assumptions to begin with).  But let’s assume Mr. Pacheco is correct.  Where is CalPERS going to get the other 28 percent of assets that it needs to keep things going?  Its going to get it from the current workers in the form of higher contributions.  The more municipalities that go bankrupt; the more CalPERS doesn’t have enough assets to cover the current pension obligations to retirees.  This is exactly the same problem as Social Security and Medicare, but on a state level.

Even if the three bankrupt cities withheld their entire payments due to CalPERS, it would not “move the needle” on the pension’s funded status, Pacheco said in an e-mail message.

Robert Udall Glazier, a CalPERS deputy director, said leaders of the fund view cities’ financial distress “with great concern.”

“These cities,” he said, “are our partners in providing services and a better quality of life for Californians.”

Let me translate: We need the money from the current city employees to make up for our poor investment performance and growing pension payouts.  If the stock market doesn’t do what it did from 1982-2000, then we’re screwed.  If the Federal Reserve prints trillions of dollars and the banks lend it out, then there will be massive inflation which will destroy the asset value of all these bonds we’ve bought from the Greeks – Ahem! I mean cities.

The Stockton bankruptcy case is In re Stockton, 12-32118, U.S. Bankruptcy Court, Eastern District of California (Sacramento).

To contact the reporter on this story: James Nash in Los Angeles at jnash24@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

The good news is that the State of California, the counties, and the cities will not be able to afford all the stupid government spending and regulations that they have put into place.  There will be more freedom once they go bankrupt through visible default on their welfare obligations.  That is good for individual liberty.

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Wed, 15 Aug 2012 11:04:50 -0700 Stay away from European Equities and Why. http://myhighdividendstocks.posterous.com/stay-away-from-european-equities-and-why http://myhighdividendstocks.posterous.com/stay-away-from-european-equities-and-why

MarketWatch commentator Charles Sizemore wrote an article that says that the German government’s actions are key to the future of the Euro and the Eurozone.  He’s right about that because Germany is the most solvent of the EU nations, but he has way too much faith that the German government will come to the rescue of the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) governments.  My comments are in red.

http://www.marketwatch.com/story/heres-what-keeps-me-awake-at-night-2012-08-14?dist=countdown

Aug. 14, 2012, 12:01 a.m. EDT

Here's what keeps me awake at night

By Charles Sizemore

September 12, 2012. This is the date that may ultimately decide the fate of the euro zone.

It has nothing to do with Greece, Spain, Italy or any of the other problem children of Europe. No, it is Europe's stern school mistress Germany that holds the fate of the currency zone in the balance.

On Sept. 12, the eight justices of Germany's constitutional court will meet to decide the legality of the euro zone's rescue fund or, more accurately, the legality of Germany's participation in the bailout fund under the German constitution. Should Germany back out due a court veto, it's difficult to see the euro surviving the crisis of confidence that would follow.

The German government can’t afford to bail the PIIGS out forever.  The PIIGS have social welfare programs that are still growing.  There is no “real” austerity going on.  The PIIGS simply cut back on the rate of growth and call that “austerity”.  They will be back for more handouts.  The German Constitutional Court knows this.

Source: http://marginalrevolution.com/marginalrevolution/2012/05/how-savage-has-european-austerity-been.html

Americans are no strangers to debates over constitutionality. The 5-4 decision to uphold the Obama administration’s health care overhaul was one of the biggest headlines of 2012. But the German debates are a very different animal.

There are two competing clauses in the German constitution. One declares Germany to be "a democratic and federal state" with power determined "through elections and other votes."

This would seem to preclude Germany from granting control of its budget to an EU watchdog or obligating the German state to bail out euro zone neighbors; the judges have already questioned whether such transfers of sovereignty are permissible.

But then, the German constitution also calls for Germany to strive for a "united Europe," which would be presumed to include some degree of fiscal union. In effect, the fate of Europe depends on which clause of the German constitution the justices decide take precedence.

When clients ask me "what keeps you up at night," this is it. I fear that lack of German commitment could cause the entire European project to unravel.

This obviously doesn’t keep him up at night because he says later in this article that he is long European equities.  He’s so worried at night that he has an overweight allocation to European equities.

If the German court finds the bailouts unconstitutional, then Germany would have to amend or even rewrite its constitution in order to participate — which would require a referendum. And how likely does that sound?

The German voters will not support an amendment to their constitution that signs them up for a permanent bailout of the PIIGS.  Only the German politicians are eager to tax the German people for the money.

Even if a charismatic leader were to convince German voters that constitutional change is the right thing to do, these things take time, and time is a luxury that Europe doesn't have at the moment.

Now that I have sufficiently scared you, I should point out that I do not see the German constitutional court torpedoing the bailouts. They know what is at stake, and they don't want to be responsible for the death of the European project.

The German Constitutional Court knows what is at stake.  They know that the PIIGS will be back for more, and more, and more.  They know the Euro is in serious danger and  will likely die anyways, so why drag Germany down with it.  The court members have not staked their careers and legacy on the idea of the United States of Europe.

I am comfortable being invested in European equities, and Sizemore Capital has an overweight allocation to European equities in its Tactical ETF and Sizemore Investment Letter portfolios.

Charles Sizemore is a Keynesian investor and is going to lose a lot of money for himself and his clients if he believes that the Euro can be saved by Germany and the ECB printing press.  The Euro would have been saved already after 23 summit meetings if it could be.  There is no way to stop the PIIGS from defaulting if they don’t implement drastic government spending cuts.  Look at the voter backlash in Greece.  The voting population doesn’t want austerity.  The Greece voters want the free handouts from the northern European countries like Germany and Finland.  It can’t go on forever.

Still, investors have to consider the "what ifs" when they put capital at risk, and it makes sense to keep a little cash on the sidelines — just in case. It wouldn't be the first time that ideology trumped pragmatism in a high-profile court case.

A growing number of Greek citizens are putting their money in German banks so that it is out of the country if Greece exits the Euro.  Some are converting it to Bitcoins to escape a possible devaluation in the event that Greece leaves the Eurozone before Germany or Finland.

If we get a selloff in the days leading up to the court's decision, I would view it as a buying opportunity. But if the German court strikes down the bailout facility or attaches so many conditions as to make it unworkable, I recommend that investors consider selling all European equities and all but your highest-conviction core American positions as well. Because at that point, the probability of a full-blown meltdown on par with that of 2008 becomes uncomfortably high.

Let’s assume that the German court approves of the bailout facility and attached so few conditions to make it completely workable.  This will only slightly delay the day of reckoning for the Euro.  Again, the PIIGS have not changed any social welfare policies that go them into the unsustainable mess.  There is no real austerity (drastic government spending cuts).  So, they will be back for more bailouts, but the next time it will be time for the Germans and other northern Europeans turn to pay up.  What happens to the European stocks at that point in time?  They go down.  Why do they go down?  Because saved capital will be diverted from equities to taxation or the buying of PIIGS and European government bonds.

Stay away from European equities and Mr. Sizemore’s investments.

Disclosure: I own no equities at this time.

This commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities.

Disclosure: Mr. Sizemore is long European equities.

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Tue, 07 Aug 2012 07:29:40 -0700 Why the US Government Is Going Bankrupt http://myhighdividendstocks.posterous.com/why-the-us-government-is-going-bankrupt http://myhighdividendstocks.posterous.com/why-the-us-government-is-going-bankrupt

http://www.youtube.com/embed/mSYy3ZYOfgQ

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Mon, 30 Jul 2012 11:26:09 -0700 Austerity is not Discretionary http://myhighdividendstocks.posterous.com/austerity-is-not-discretionary http://myhighdividendstocks.posterous.com/austerity-is-not-discretionary

This is the most important article from a high level Washington insider in years.  David Stockman is the former Reagan Budget Director and Congressman.  He resigned because the congress refused to cut spending and Reagan went along with them.  Here is the wikipedia entry on him http://en.wikipedia.org/wiki/David_Stockman.  He discusses the future of the US economy in terms of the coming US sovereign debt crisis.  The Keynesians have created the mess and they will not get us out of it using the same failed methods.  Ignore the implications of this interview at your own peril.

http://www.caseyresearch.com/cdd/david-stockman-austerity-not-discretionary

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Fri, 27 Jul 2012 12:24:19 -0700 TIP OF THE WEEK: An Open Letter to Warren Buffett http://myhighdividendstocks.posterous.com/tip-of-the-week-an-open-letter-to-warren-buff http://myhighdividendstocks.posterous.com/tip-of-the-week-an-open-letter-to-warren-buff

Warren Buffett is a genius investor but an economic ignoramus.  He has been paraded around by statists in government for his willingness to be taxed more.

This is a excellent article on why Warren Buffett should stop acting like a guilt ridden billionaire who wants the government to raise taxes on everyone.  It explains in very clear terms why Marx’s exploitation theory is complete wrong and why capitalism has improved all individuals standards of living.

http://mises.org/daily/6134/An-Open-Letter-to-Warren-Buffett

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Tue, 24 Jul 2012 10:37:00 -0700 The Soveriegn Debt Crisis in Europe and What It Means to Your Investments. http://myhighdividendstocks.posterous.com/the-soveriegn-debt-crisis-in-europe-and-what http://myhighdividendstocks.posterous.com/the-soveriegn-debt-crisis-in-europe-and-what

European Union bureaucrats are fessing up that the Greek government still can’t pay its bills.

http://www.marketwatch.com/story/us-stocks-fall-on-greece-debt-restructure-news-2012-07-24

This news tanked markets in the US.  Anyone who is surprised by this news has not been paying attention to the sovereign debt crisis in Europe.  This crisis is going to get worse when Greece gets bailed out for a second or third time.  Portugal, Italy, and Spain will be back for more bailouts of their own.  Where will the money come from.  The European Central Bank will print Euros.  The money will go to the Northern European banks who will be scared to lend it, so they will buy more bad debt of the PIIGS.

I would stay out of the stock market until this sovereign debt crisis has run its course.  You will know it is over when stock prices drop 40% - 60% from their May 2012 highs of about 13,000 on the Dow Jones Industrial Average.  Well run companies with fat dividend yields and decent balance sheets like Safe Bulkers (SB) can have their stock price cut from $6.00 per share down to $2.50 per share like in 2008-2009.  Safe Bulkers fell precipitously from its 2008 IPO price of $19.00 per share down to about $2.50 at the height of the financial crisis.

Image001

I’m spending my time during the sovereign debt crisis analyzing stocks to find the best ones to buy in the aftermath and at what price.  This crisis will take a long time to unravel.

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Wed, 18 Jul 2012 21:38:07 -0700 Do you want to know what is going on in Europe? http://myhighdividendstocks.posterous.com/do-you-want-to-know-what-is-going-on-in-europ http://myhighdividendstocks.posterous.com/do-you-want-to-know-what-is-going-on-in-europ

Nigel Farage explains the insanity going on in Europe in two minutes.

http://www.youtube.com/embed/TN_1mF-3JTI

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Thu, 03 May 2012 20:10:38 -0700 Shipping Industry Current Ratios and The Erosion of the Current Ratios Since the 1930's. http://myhighdividendstocks.posterous.com/shipping-industry-current-ratios-and-the-eros http://myhighdividendstocks.posterous.com/shipping-industry-current-ratios-and-the-eros

I’m always looking for high dividend stocks with earning power and strong balance sheets.  I consider a dividend yield above 6% to be a high dividend stock.  To see why read this: http://bit.ly/6percentDIV.  But don’t let that article distract you.  The focus of this article is going to be on the balance sheet measure known as the current ratio.

There are many measurements of strong balance sheets.  A company’s current ratio is one such measure of a strong balance sheet.  The current ratio is the company’s current assets (usually cash, equivalents, and accounts receivable) divided by its current liabilities (those are liabilities due within one year such as accounts payable and the current portion of the long term debt, etc.).

One of my favorite companies is Safe Bulkers (SB).  They are a dry bulk shipping company.  Unfortunately their current ratio has dropped in the last few quarters.  It currently stands a 0.73.  The father of value investing, Benjamin Graham, consider a current ratio of 2.0 the minimum for investment.  He wrote that back in his book Security Analysis in the 1930’s.  Safe Bulkers current ratio seems really low.  That made me wonder how all the other shipping companies compare.  Here is what I found:  (Note - The size of the bubbles represent the company’s market capitalization in millions of dollars.  For example, Knightsbridge Tankers has a market cap of $303 million.)

Image002

Here is a table with most of the largest publicly traded shipping companies used in the graphic above:

Company

Ticker

Market Capitalization (Millions of dollars)

Current Ratio

Dividend Yield

Kirby Corp.

(KEX)

$                          3,710

1.48

0.00%

Golar LNG Limited

(GLNG)

$                          2,920

0.41

3.13%

Teekay LNG Partners

(TGP)

$                          2,700

0.58

6.44%

Teekay Corp.

(TK)

$                          2,490

1.00

3.51%

Alexander & Baldwin

(ALEX)

$                          2,230

0.99

2.44%

Seacor Hldgs.

(CKH)

$                          1,960

2.59

0.00%

Golar LNG Partners

(GMLP)

$                          1,350

0.49

4.85%

DryShips

(DRYS)

$                          1,310

0.78

0.00%

Ship Finance Intl.

(SFL)

$                          1,060

1.11

8.85%

Seaspan Corp.

(SSW)

$                          1,030

2.74

4.30%

Navios Maritime Partners

(NMM)

$                             901

1.12

10.60%

Costamare Inc.

(CMRE)

$                             832

0.61

10.64%

Diana Shipping

(DSX)

$                             650

9.00

0.00%

Frontline Ltd.

(FRO)

$                             488

2.45

3.38%

Safe Bulkers

(SB)

$                             475

0.73

8.65%

Danaos Corp.

(DAC)

$                             444

0.40

0.00%

Navios Maritime

(NM)

$                             384

1.47

6.38%

Overseas Shipholding

(OSG)

$                             359

2.44

0.00%

Knightsbridge Tankers

(VLCCF)

$                             303

7.30

16.09%

Intl. Shipping Corp.

(ISH)

$                             150

1.30

4.88%

Box Ships

(TEU)

$                             147

0.96

13.17%

Star Bulk Carriers

(SBLK)

$                               53

0.62

6.26%

The average current ratio of the shipping industry is 1.84.  If you throw out the highest and lowest current ratios, then you get 1.56.  So the average of the industry by either measure is below what Graham considered acceptable.  That is interesting.  What was the ratio of the shipping industry in Graham’s day?  Fortunately for use he produced a gem of a table in his 1937 book Interpretation of Financial Statements which I’ve included here:  The 8 companies in shipping had an average current ratio of 3.7.

Image006

I have a sickening feeling that almost every industry nowadays will have an average current ratio below 2.0.  My hypothesis is that decades of Keynesian MBA finance grads have abandoned saving money to ensure financial resilience in a bad economy (like 2008-2009).  Keynesians hate savings because they believe that it causes consumer spending to go down and therefore the economy goes down.  If you want to learn more about this, then read Henry Hazlitt’s The Failure of the New Economics available free from www.mises.org.  He’s got a whole section on the faulty logic of Keynes’ “Paradox of Thrift”.

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That’s all for now.

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Sat, 14 Apr 2012 07:42:00 -0700 You Can Plainly See That the Emperor Has No Clothes. http://myhighdividendstocks.posterous.com/you-can-plainly-see-that-the-emperor-has-no-c http://myhighdividendstocks.posterous.com/you-can-plainly-see-that-the-emperor-has-no-c

The Keynesian economists that make up the Federal Reserve Board of Governors are clueless and blind.  They did not see the Panic of 2008 coming, yet they claim that they see recovery and good times ahead now.  Don't believe them unless you belive this.

You will have ample opportunities to buy high dividend stocks with earning power and strong balance sheets cheaply in the next two years.

Be seeing you!

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Tue, 03 Apr 2012 16:19:23 -0700 SF FED Bank President thinks several trillion dollars in so-called stimulus is not enough http://myhighdividendstocks.posterous.com/sf-fed-bank-president-thinks-several-trillion http://myhighdividendstocks.posterous.com/sf-fed-bank-president-thinks-several-trillion

Bloomberg Businessweek ran this online article today about SF FED President, John Williams, comments on the need for more dollar counterfeiting.

http://www.businessweek.com/news/2012-04-03/fed-s-williams-sees-need-for-strong-stimulus-to-boost-recovery

My comments to the article are in red below.

Federal Reserve Bank of San Francisco President John Williams said the central bank must continue to act “vigorously” to boost the economy and sustain labor market gains.

Let me translate, “Tenured technocrat with a lifetime pension  who didn’t predict the financial crisis of 2008 now knows what to do.  The Fed should create a lot of money out of thin air.”

“We are far below maximum employment and are likely to remain there for some time,” Williams said in the text of remarks given today in San Diego. “Under these circumstances, it’s essential that we keep strong monetary stimulus in place. The recovery has been sluggish.”

The US is comprised of individuals.  There is no “we”.  That is collectivist commie-speak.  Immoral, unconstitutional minimum wage laws prevent employers from hiring labor at market rates.  Socialist unemployment welfare provides a incentive not to work for some individuals.  He’s right since no legislators are proposing abolishing minimum wage laws and they aren’t trying to abolish unemployment welfare.

Monetary stimulus is code word for creating trillions of dollars out of thin air and giving it to large banks who will buy some government bonds or store it at the Federal Reserve as excess reserves (earning 0.25% interest from the FED).  They will not loan it into the economy, so the so-called recovery will remain sluggish.

The policy-setting Federal Open Market Committee on March 13 maintained its pledge to keep interest rates low through at least late 2014, noting improvements in employment while also saying “significant downside risks” remain. Still, policy makers saw no need to roll out new easing measures unless growth faltered, minutes of last month’s meeting showed today.

The FOMC is not keeping interest rates low.  The commercial bankers are keeping interest rates low.  Normally the FED controls the FED Funds Rate which is the rate that commercial banks charge each other for overnight loans to meet legal reserve requirements.  But these aren’t normal times.  The commercial bankers have $1.6 trillion in EXCESS reserves.  They aren’t lending to each other overnight because they are to the stratosphere will extra reserves above the legal limit.  This make the FED Funds rate drop to near zero.  The FOMC is pretending that they are in control of that interest rate.

The significant downside risks include European recession brought on the the sovereign debt crisis.  The other risk is a Chinese recession brought on by Keynesian, mercantilist policies of “stimulus”.  The Chinese government has been printing yuans to keep up with the Federal Reserve stimulus.  This keeps the exchange rate between the yuan and the dollar near constant, but it also creates price inflation and discontent inside China.  Chinese banks have been lending the newly created money into their economy which expands the money supply even more due to the fractional reserve banking process.  So they have to slow down or they will experience hyperinflation.  The decrease in the rate of monetary expansion will show many so-called investments (think about their real estate and constrution boom) to be malinvestments.  A recession will ensue.

Recent data signal a strengthening U.S. recovery, with an improving labor market encouraging consumers to spend more in the world’s largest economy. The unemployment rate has fallen to 8.3 percent, its lowest in three years.

The economic data is Keynesian by nature.  The author is talking about the recent 2%-3% gross domestic product estimates for this year.  The GDP is a bogus number because Keynesians think that government spending adds to the economy.  It takes money away from savings, investments, and consumption in the form of taxes.  The money that could have been used by consumers and investors is then wasted by pensioned bureaucrats and politicians to buy votes.  The GDP is measured in dollars; therefore, FED money creation “stimulus” makes it go up even though there are fewer goods after the bureaucratic waste.

The real unemployment number is much larger somewhere in the range of 14% - 17% when you count people who want to work full time, are able to work, or are dropped from the unemployment rolls after their benefits run out.

“Unfortunately, the kind of moderate economic growth I expect won’t sustain such rapid progress” in the job market, Williams said. The time to begin tightening monetary policy is “still well off in the future,” he told students at the University of San Diego.

The real unemployment problem is not going away fast enough despite three rounds of so-called stimulus.  So what is needed is more stimulus.  Years and years of printing dollars will do the trick.  It worked so well in 1920’s Germany, Hungary after WWII, South America, the former Yugoslavia, and most recently Zimbabwe.

Williams forecast economic growth of 2.5 percent this year and 2.75 percent in 2013. The unemployment rate will remain around 8 percent at the end of 2012, and is likely to be about 7 percent at the end of 2014, he predicted, according to the prepared remarks.

If the FED prints money, then GDP will rise.  But individuals will be poorer because each dollar will have less purchasing power than before thanks to the inflation of the money supply.  The problem will be worse if the banks decide to expand lending.  More money will be created.  GDP growth is a lie to make you think you are becoming more prosperous when you’re actually getting robbed.

The unemployment will drop because of all the reasons I gave above.  Less people will be working in 2013 and 2014 than are working now in 2012.

‘Stronger Recovery’

“I’m encouraged by recent signs of a stronger, self- sustaining recovery,” Williams said. “I’m especially glad to see that the economy is adding jobs at a pretty decent clip. Still, we have a long way to go.”

The pretty decent clip is less than the number needed to keep up with population growth.  He was clueless in 2008.  He is clueless now.  But he makes good money and has a FED pension.  There are no negative sanctions awaiting him is his optimism is misplaced.

U.S. stocks extended losses today and Treasuries fell as minutes from the FOMC’s last meeting showed central bankers are holding off on increasing monetary accommodation unless the U.S. economic expansion falters. The Standard & Poor’s 500 Index of stocks lost 0.7 percent to 1,409.42 at 3:14 p.m. in New York, retreating from an almost four-year high.

Investors are disciples of Keynesian economics also.  They are sad when the FED hints that they won’t print as much money as Wall Street investors estimated.  They sell some stocks when they are sad.

Government bonds are in a bubble.  They are not safe, but they are touted as safe by Keynesian educated financial advisors.  Are Greek bonds safe?  These people thought so two years ago.  They continue to be wrong.

“A couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below” 2 percent, according to minutes of that meeting released today in Washington. “Most participants did not interpret the recent economic and financial information as pointing to a material revision to the outlook for 2013 and 2014.”

Keynesian central bankers believe in free lunches.  There are no free lunches.  The negative effect of their past and future money printing is ruinous price inflation followed by the Greater Depression.  Plan accordingly.

Consumer spending in February grew 0.8 percent, marking the biggest gain in seven months, Commerce Department figures showed March 30. Manufacturing growth accelerated in March, according to the Institute for Supply Management’s index released April 2.

Individuals need to save more money.  When you save you forego consumption.  You accumulate capital that can be invested in producing capital goods.  Capital goods product consumer goods.  Capital goods increase the supply of consumer goods.  A large supply of consumer goods usually leads to a drop in consumer goods prices.  You get more goods for less dollars.  Your standard of living goes up.  Keynesians hate this.  They think that there is a paradox of thrift.

The paradox of thrift goes something like this: saving is good unless everyone does it; if they do then the economy crashes.  Keynesians can’t think straight.  They don’t follow the money.  Where do you usually put your savings.  Answer: in a bank as savings or into the stock market.  What does the bank normally do with your deposit.  Answer: it loans it out to entrepreneurs trying to make profits producing and selling capital goods or providing consumer goods.  So how exactly the saving prevent the creation of more capital goods and consumer goods in the economy?  Keynesians don’t have an answer except, “Don’t save.  Spend money now to help the GDP numbers.  Even better spend money you don’t have now.  Go into debt to spend now to help the GDP numbers.”

Williams, 49, is a voting member of the FOMC this year. He became the San Francisco Fed’s president in March 2011 after two years as its director of research.

You will not find any prediction by this man between 2005 and 2008 warning you of a financial crisis.  His research was bought and paid by the FED to tout the FED.  The FED is your enemy.  He will vote to ruin your purchasing power.  Buy some gold coins if you don’t have any yet.

To contact the reporters on this story: Aki Ito in San Francisco at aito16@bloomberg.net; Caroline Salas Gage in New York at csalas1@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Wed, 28 Mar 2012 13:20:19 -0700 Medical Fascism in America http://myhighdividendstocks.posterous.com/medical-fascism-in-america http://myhighdividendstocks.posterous.com/medical-fascism-in-america

Marketwatch ran this article yesterday.  There are more like it on the internet today.  Medical fascism is alive and well in America.  My comments are in red below.

March 27, 2012, 1:39 p.m. EDT

Justices show split over health-insurance mandate

High court adopts ideological stances on purchase requirement

By Russ Britt, MarketWatch

LOS ANGELES (MarketWatch) — Supreme Court justices appeared to be split along ideological lines after hearing arguments over whether U.S. citizens should be made to buy insurance — the central issue in the health-care-reform debate — in a second day of hearings Tuesday.

Obamacare is medical fascism.  Fascism occurs when government regulates corporations to such an extent that they are just arms of the government with the illusion of private property rights.  Government is telling medical corporations and insurance companies how to run their business and it is forcing the individuals of society to buy it.  This is sickening and tyrannical.

Blog reports from The Wall Street Journal and other sources, however, indicated that there may be two swing votes in Chief Justice John Roberts and the court’s perennial ideological straddler, Justice Anthony Kennedy.

President George W. Bush nominated Chief Justice John Roberts in 2005.  He filled the vacancy left by the death of William Rehnquist.  President Ronald Reagan appointed Justice Anthony Kennedy in 1988.

Reports showed that the court’s liberal bloc, Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan, were arguing in favor of the 2010 Affordable Care Act and its so-called individual mandate during the two-hour debate.

I wonder what portions of the US Constitution the liberal judges were using to support their arguments for the 2010 Medical Fascism Bill?

Meanwhile, conservative appointees to the high court were strongly challenging those who were supporting the requirement that all U.S. citizens be insured. Solicitor General Donald Verilli faced rapid-fire questioning from Justices Antonin Scalia and Samuel Alito in the latter half of the two-hour argument devoted to the question.

What were the Solicitor General’s arguments for forcing U.S. citizens to buy health insurance?  What part of the US Constitution

Throughout the debate, the Journal’s blog indicated that Ginsburg, Kagan and Breyer came to Verrilli’s defense several times as the law faced skeptical questioning from the more conservative justices.

Ginsburg argued at one point that the decision by an individual not to buy insurance affects others. But Scalia and Alito questioned that. Alito contended that the law forces young, healthy people “to subsidize services that will be received by somebody else.”

Individuals make billions of decisions everyday not to buy millions of products or services marketed to them worldwide.  Their decision not to buy affects others, but so what?  Producers of goods and services must persuade individuals to buy their goods voluntarily.  They must make them a better deal.  They must serve customers desires or they will go bankrupt.  Is everyone obligated by government force to buy goods and services that they don’t want just because the seller of the good or service might be affected?  This is lunacy.  Justice Ginsburg absolutely abhors a free market.  Hasn’t she affected red robe makers by not buying their red judge robes and wearing a black robe instead.  Should the government force her to buy red robes instead of black robes be she is affecting them.  If they do, then now the black robe clothiers are affected.  She is a Marxist in supreme court justice’s clothing.

If there is no individual mandate, Ginsburg also said, it would force the price of insurance higher. Scalia countered that’s no different than buying a car; if fewer people buy cars, that could force up prices.

Supreme court justices have no concept of economics.  Politicians enact laws prohibiting free and open competition amongst producers.  The existing producers lobby the politicians to enact barriers to entry for new competition.  This reduces the supply of healthcare while increasing the price of healthcare.  Cartels are bad for consumers of healthcare.  Consumers get high prices and crappy healthcare.  What is needed is the elimination of government involvement in healthcare.  Large profit margins will attract entrepreneurs to invade the existing healthcare market to provide better healthcare than is currently available from the healthcare cartel.

Roberts wondered whether the requirement to buy health insurance is the same as forcing individuals to prepare for other types of emergencies, according to Journal posts. Later, he said the requirement to buy insurance could open the doors for Congress to require the purchase of other types of goods in the future.

 “All bets are off,” Roberts remarked.

It is immoral to force an individual to allocate his life, liberty, or property to the purchase of goods that he has already voluntarily decided not to purchase.  How would the justices like being forced to cross train for a triathlon three hours per day so they can stay fit and not affect the healthcare systems’ costs which “affects others” who pay the taxes that pay for the healthcare system?

Verrilli has responded in most instances by framing the issue around market regulation, which is something that Congress can oversee under the Constitution’s interstate-commerce clause. The clause gives Congress the power to regulate markets. Virtually all individuals are or will become part of the health-care market, he has argued.

The interstate-commerce clause does not give the congress the power to regulate markets.  It was supposed to prevent states from enacting tariffs that would keep commerce from being “regular”.  See Judge Andrew Napolitano’s more eloquent explanations here: http://tinyurl.com/bp47ny3 .  Statists of both parties had use this clause to justify regulation of everything and anything.

Kennedy said Verrilli needed to answer a “very heavy burden of justification” to show how the Constitution authorizes Congress to require that individuals buy insurance or pay a penalty. At one point, Kennedy commented that the mandate changes the relationship between citizens and the government “in a fundamental way.”

If you really want to see the legitimacy of the US Constitution or any constitution destroyed, then read Lysander Spooner’s “No Treason: The Constitution of No Authority” essay from the 19th century.  Spooner was an abolitionist in the late 19th century.  http://en.wikipedia.org/wiki/No_Treason

But both Kennedy and Roberts grilled Paul Clement, the attorney arguing to strike the mandate on behalf of 26 states.

The law is patently unconstitutional since providing healthcare is not an enumerated power of congress in Article I Section 8.  Don’t these justices see the tyranny that is involved here?

Roberts noted that the government is simply trying to regulate the financing of health care, while Kennedy said all citizens are part of the health-care risk pool, according to the Journal’s blog.

During that portion of the session, Scalia and Alito reportedly did not challenge Clement, indicating they’re planning to support overturning the mandate.

Without the individual mandate, other provisions of the law could be struck down. The mandate places healthy people into the risk pool so that their costs can be shared with those of unhealthy persons.

But it is possible that the court will strike down only the individual mandate, leaving the requirement that insurance companies must offer coverage to any individual, regardless of his or her health history.

If you believe in voluntary exchange, free markets, and property rights; then you should see the immorality of forcing insurance companies to offer coverage to individuals that they would voluntarily choose not to insure.  People that don’t think that is right or who would want it any different way are free to pool their capital to start their own insurance company that makes its unique service proposition to their customers “We insure anyone regardless of their health history!”.  That company will be bankrupt in a short amount of time.

Insurers including UnitedHealth Group Inc. (NYSE:UNH)  and WellPoint Inc. (NYSE:WLP)  struggled on the day, down as much as 2%.

UnitedHealth Group (UNH) pays a paltry 1.17% dividend and WellPoint (WLP) pays a measly 1.64% dividend.

The court hearings took place as protesters from both sides of the health-care debate gathered outside the building. Among those calling for the overturning of the mandate was tea party-favorite Rep. Michele Bachmann, the conservative Republican from Minnesota who dropped out of this year’s presidential race.

Government pits people who would ordinary not interact or have conflict with one another against each other.  This is the lesson in the book/movie The Hunger Games.  Go see it or read it.

Separately, the nonpartisan Urban Institute issued a study Tuesday saying that 7% of all those under age 65 would be subject to the rule requiring the purchase of insurance.

The study says 87.4 million nonelderly Americans would be exempt from the individual mandate because of their low-income or undocumented status. Of the remaining 181 million Americans under age 65, an estimated 86% have insurance, the study says.

Develop a relationship with doctors and nurses in your local area who will be willing to work in the grey market of healing before the full force of medical fascism takes effect.

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Fri, 02 Mar 2012 22:03:31 -0800 Your Rotten Monetary Policy Is Destroying This Country by Ron Paul. http://myhighdividendstocks.posterous.com/your-rotten-monetary-policy-is-destroying-thi http://myhighdividendstocks.posterous.com/your-rotten-monetary-policy-is-destroying-thi Your Rotten Monetary Policy Is Destroying This Country

by Ron Paul

Before the United States House of Representatives Committee on
Financial Services, Hearing on 'Monetary Policy and the State of the
Economy,' 2/29/2012

Mr. Chairman, thank you for holding this hearing on monetary policy
and the state of the economy. I believe that now, more than ever, the
American people want to hold the Federal Reserve accountable for its
loose monetary policy and want full transparency of the Fed's actions.

While the Fed has certainly released an unprecedented amount of
information on its activities, there is still much that remains
unknown. And every move towards transparency has been fought against
tooth and nail by the Fed. It took disclosure requirements enacted
within the Dodd-Frank Act to get the Fed to provide data on the its
emergency lending facilities. It took lawsuits filed by Bloomberg and
Fox News to provide data on discount window lending during the worst
parts of the financial crisis. And it will take further concerted
action on the part of Congress, the media, and the public to keep up
pressure on the Fed to remain transparent.


Transparency is not a panacea, however, as a fully transparent
organization is still capable of engaging in all sorts of mischief, as
the Federal Reserve does on a regular basis. Ironically, one of the
Fed's more egregious recent actions, adopting an explicit inflation
target, was hailed by many as another wonderful example of
transparency. Yet if you think about what this supposed 2% inflation
target actually is, you realize that it is an explicit policy to
devalue the dollar and reduce its purchasing power. Two percent annual
price inflation means that prices rise 22% within a decade, and nearly
50% within two decades.

Indeed, if you look at the performance of the consumer price index
(CPI) under Chairman Bernanke's tenure, prices have risen at a rate of
2.25% per year. Many, perhaps even most, economists would consider
this a modest rise, an example of sober, cautious monetary policy.
Some economists of Paul Krugman's persuasion might even argue that
this is too tight a monetary policy. However, 2.25% is not too far off
from the Fed's new 2% target.


Now look at the performance of the US economy since February 1, 2006,
the date Chairman Bernanke took the mantle from Alan Greenspan.
Trillions of dollars have been wasted on bailouts, stimulus packages,
and other feckless spending. Millions of Americans have lost their
jobs and have lost hope of ever regaining employment. The national
debt has risen to more than 100% of GDP, as the federal government
continues to rack up trillion-dollar deficits, aided and abetted by
the Fed's policies of quantitative easing and zero percent interest
rates. And we are supposed to believe that a 2% inflation rate,
similar to what has prevailed during the worst economic crisis since
the Great Depression, is the cure for what ails this economy.

This explicit 2% target also fails to take into account that whatever
measure is used to determine price inflation, be it CPI, core CPI,
PCE, etc., will always be chosen with an eye towards underreporting
the true rate of inflation and price rises. Pressure will be exerted
on those calculating the price indices, so as not to alarm the public
when prices begin to accelerate. One need only look at what is taking
place in Argentina today, where the government publishes an official
CPI figure that is often less than half that reported by private
sources.

A similar situation exists in this country, where economists
calculating CPI according to the original basket of goods have
determined that price inflation has increased 9.5% per year since
2006, rather than the 2.25% reported by the government. Even the
government's own data reports price rises of nearly 7% per year since
2006 on such consumer goods as gasoline and eggs. Bread, rice, and
ground beef have increased by nearly 6% per year, while bacon and
potatoes have increased nearly 5% per year. This means that in a
little over half a decade, prices on staple consumer goods have
increased 30-50%, all while wages have stagnated and millions of
Americans find themselves out of work and without a paycheck. Of
course, government officials claim that price increases do not affect
the average American because they can always buy hamburger instead of
steak, or have cereal instead of bacon. But the American people can
see how they are suffering because of the Federal Reserve. The
government’s claims that the official statistics show no reason to be
concerned about inflation is Marxist – as in Groucho, who famously
said: "Who are you going to believe, me or your own eyes?"

The Federal Reserve continues to keep interest rates low in the hopes
of boosting lending and consumption. But keeping interest rates at
zero discourages saving, particularly as the rate of price inflation
continues to rise. Why stick money in a savings account earning 0.05%
if it is guaranteed to lose at least 2% of its value every year? And
this is a guarantee, as the Fed has promised a 2% rate of increase in
price inflation, while also guaranteeing a zero percent federal funds
rate through 2014. Retirees living on fixed incomes, dependent on
savings, or on interest income from investments will see their savings
drawn down as they are forced to consume principal. Young people, hard
hit by the recession and struggling to find jobs, will fail to see the
virtue of thrift. Saving or investing is an exercise in futility, as
parking money in the bank or in CDs will guarantee a loss, while
investing in stocks, bonds, or mutual funds will net at best paltry
gains, and at worst massive losses in this continuing weak economy.

The longer the Federal Reserve keeps interest rates low and
discourages savings and investment, the more societal attitudes will
change from being future oriented to present oriented. The Federal
Reserve and its policies already served to stimulate and prioritize
consumption over saving, creating the largest debt bubble the world
has ever known. The extended zero interest rate policy only serves to
promote more consumption and debt now, eviscerating thrift and savings
– the true building blocks of prosperity. This present-oriented
mindset has become pervasive especially among politicians, putting the
government in dismal financial shape as Congressmen and Presidents
over the years have taken to heart Louis XV's famous saying: "Après
moi, le déluge." If the American people follow the same path in their
own lives, this country will be ruined. Capital will be depleted,
infrastructure will fall into disrepair, and the United States will be
a mere shadow of its former self. It is well past time to end the
failed monetary policy that encourages this mistaken preference for
cheap money now.

March 1, 2012

Dr. Ron Paul is a Republican member of Congress from Texas.

Original link at LewRockwell.com: http://lewrockwell.com/paul/paul794.html

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Mon, 27 Feb 2012 11:08:52 -0800 I tried to open a lemonade stand by John Stossel http://myhighdividendstocks.posterous.com/i-tried-to-open-a-lemonade-stand-by-john-stos http://myhighdividendstocks.posterous.com/i-tried-to-open-a-lemonade-stand-by-john-stos

http://www.creators.com/opinion/john-stossel/i-tried-to-open-a-lemonade-stand.html

Politicians add 79,000 – 80,000 three column fine print regulations to the Federal Register every year.  You think you are free – whoever told you that is a liar or clueless or both.

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Fri, 10 Feb 2012 15:01:04 -0800 TIP OF THE WEEK: The Federal Reserve Is Not Holding Down the FED Funds Rate, But I Know Who Is. http://myhighdividendstocks.posterous.com/tip-of-the-week-the-federal-reserve-is-not-ho http://myhighdividendstocks.posterous.com/tip-of-the-week-the-federal-reserve-is-not-ho

The Federal Reserve Is Not Holding Down the FED Funds Rate, But I Know Who Is.

Jason Brizic

February 10th, 2011

The Federal Reserve pretends to control interest rates through the use the FED funds rate.  http://www.federalreserve.gov/monetarypolicy/openmarket.htm

I see this all the time in financial articles.  Pick any of these articles (http://tinyurl.com/7vurwdx) and you will see moronic language like this:

“Federal Reserve officials said they expect short-term interest rates to stay close to zero "at least through late 2014." The Fed has been trying to give more explicit guidance on what it expects in the future as part of a broader move to greater transparency.”

The FED claims that it is holding this key interest rate low until at least 2014 using the federal funds target rate.  Here is the definition of the FED funds rate from its Wikipedia entry:

In the United States, the federal funds rate is the interest rate at which depository institutions actively trade balances held at the Federal Reserve, called federal funds, with each other, usually overnight, on an uncollateralized basis. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets.[1][2]

The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.

The federal funds target rate is determined by a meeting of the members of the Federal Open Market Committee which normally occurs eight times a year about seven weeks apart. The committee may also hold additional meetings and implement target rate changes outside of its normal schedule.

The commercial bankers (aka depository institutions) have decided not to loan out all the money the FED created for them during the bailouts of 2008-2009.  They are holding over $1.5 trillion dollars in excess reserves.

Therefore, they don’t need to make overnight loans to one another to satisfy the legal reserve requirements. These bankers are scared to make loans in this horrible economic environment.  I don’t blame them for being scared.  They have decided to park the money back at the FED and the FED is paying them 0.25% interest to store it for them.  This has caused the federal funds effective rate to drop to 0%. 

The FED could get the banks to lend the $1.5 trillion dollars into the economy by imposing a fee on excess reserves.  But that would create hyperinflation in the money supply and prices would rise over 100% in a few months.  The FED doesn’t want that to happen, so they pretend to be in control of the federal funds effective rate when the terrified bankers really are.  The bottom line is that there will be no economic recovery until bankers increase their lending.  That means we will experience a double-dip recession regardless of what happens in Europe or China.  I’m waiting for much lower stock prices to buy high dividend stocks with earning power and strong balance sheets.

For more tips, go here:

http://www.myhighdividendstocks.com/category/tip-of-the-week

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Fri, 10 Feb 2012 12:03:39 -0800 Economic Uncertainty http://myhighdividendstocks.posterous.com/economic-uncertainty http://myhighdividendstocks.posterous.com/economic-uncertainty

Are you paying too much money for stocks?  I see many companies that fund their dividends through additional equity offerings.  AGNC comes to mind.  Where do you think the proceeds are going in some of these high dividend stock equity offerings?  Here is a clue.

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Subscribe today for free at www.myhighdividendstocks.com/feed to discover high dividend stocks with earning power and strong balance sheets.

Be seeing you!

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Wed, 01 Feb 2012 16:01:15 -0800 Your Retirement Money and Trading Money Is Not Safe http://myhighdividendstocks.posterous.com/your-retirement-money-and-trading-money-is-no http://myhighdividendstocks.posterous.com/your-retirement-money-and-trading-money-is-no

Your retirement and trading (brokerage) money is not safe.  Register your stocks in your own name.  This means you need to get them out of “street name” registration from your broker.

The real scary aspects of the MF Global bankruptcy are becoming known to a wider group of people.  Some people are smelling the first wiff of smoke in the theater and are tiptoeing to the exits.  Don’t get trampled when the masses of individual investors see the flames and stampede in the rush to get out with some of their retirement money.

http://teapartyeconomist.com/2012/01/31/your-money-is-not-safe/

http://www.zerohedge.com/contributed/mf-global-customer-funds-were-not-vaporized-stanley-haar-takes-wsj-task

Even the congressional budget office (CBO) sees lower Keynesian growth rates coming.  This means a double-dip recession.

http://www.zerohedge.com/contributed/cbo-report-omg

There will be opportunities to buy high dividend stocks at value prices during the lows of the upcoming recession.

Subscribe today for free at www.myhighdividendstocks.com/feed to discover high dividend stocks with earning power and strong balance sheets.

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic