James Petras Giving a Controversial Shot at Some Facts

James Petras article is controverisial, no question, I think it should be read by as many folks as possible.
The facts cannot be denied -and they are in teh right context- nor "demagogued around" as some might try.
One can agree or disagree with his exposure of events, but there is one constant, it is the truth all around his esay.
His comments are based in the present events.
His exposure is candid and his comand of a good penmanship demostrates us how little we do to assert reality. We have become sheeps at large, his challenge is to stop radicalism and start looking at a better view of humanity and its interactions and accept the facts, it is time for a reinassance of questioning power.

Enjony it !!!!


The Ascendancy of Finance Capital: Record Profits and Rising Authoritarianism
By James Petras
Mar 30, 2006, 08:19

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No sector of the US economy, in recent years, can match the rate and size of profit which have accrued to the biggest financial institutions. For the first quarter of February 2006, Goldman Sachs (GS) broke Wall Street records by reporting new profits of $2.48 billion dollars (annualized at over $10 billion dollars). Earnings were up 64% over the same period last year (which was also a very lucrative year). Return on equity rose to 38.8%, topping the record for a top investment house. Total revenues rose $10.3 billion dollars. GS has had record earnings in five of the past nine quarters (Financial Times (FT) 3/15/2006, p 1). Morgan Stanley reported a 17% increase in net income to $1.64 billion dollars for its first quarter in February 2006. Revenues rose by 24% compared to 19.7% last year. Lehman Brothers reported a 24% increase in profits in the first quarter to Feb. 2006 to a record $1.1 billion dollars. Revenues increased 17% to $4.5 billion dollars. Bear Stearns (BS) joined the dance of the billions of Wall Street, reporting first quarter profits of $514 million dollars; earnings were up 34% from the year earlier. BS new revenues grew 19% to $2.3 billion, while return on stockholders equity rose 20.1% in the first quarter of 2006. The combined profits of these 4 banks total $5.73 billion dollars for the quarter November 2005 - February 2006, or $22.9 billion annually - and that does not include the profits for three of the top 5 banks (Citigroup, JP Morgan and Merrill Lynch) whose quarter runs January to March 2006, which are expected to have equally high returns, doubling the new profits to over $12 billion dollars for the first quarter and increasing profits to nearly $50 billion for 2006.

No other sector of the economy can boast such high rates of return, nor can any top seven enterprises even approach the record profits. The banks draw their biggest profits in facilitating the concentration and centralization of capital (dubbed "mergers and acquisitions"), charging lucrative fees for "advising" and underwriting bonds to fund the mergers and acquisitions. The second source of profits is speculating, including debt trading, betting on global equity markets - especially in energy where Goldman and Morgan "have been making a fortune in recent quarters".

While US consumers, demagogic politicians and anti-war activists have blamed the oil producing countries, they have entirely overlooked the big speculative banks in pushing up the price of oil.

The key political point is that the driving force of the most important economic sector - services - in the US is the financial sector, the one least engaged in productive activity, meaning production of goods and services for the population. Moreover its high profits, the astronomical bonuses and income of its leading elites, and its role in promoting the concentration of capital play a major role in increasing income inequalities. The costs they impose on enterprises for their "services" contribute to indebtedness which in turn leads to massive layoffs, reduction in health and pension benefits, as part of the "advisory" messages of the implicated banks.

In addition to their speculative activity, the banks have become significant equity holders in non-banking sectors. They play a major role in cutting labor costs as a route for maximizing short-term profits as the expense of long-term investments in research and technology. Finally the most lucrative and dynamic source of speculative profits is in overseas expansion, particularly in Europe and especially in Asia. For example, Lehman Brothers announced in mid-March 2006 an "aggressive expansion in Asia. While overall revenues were up 17%, overseas revenues rose 30%, while Asian revenues rose by 67%. David Goldfarb, Chief Administrative Officer stated that Asian expansion was Lehman's "number one priority". All the major banks have or are in the process of securing beachheads in the banking sectors of China and India Financial imperialism is becoming a major vehicle for market-driven empire building in the 21st Century.

Finance Capital: Political Power and Economic Policy

Financial capital wields enormous power over government economic policy through its direct representation in the controlling body of US monetary policy via the President and Executive Board of the Federal Reserve. The key explicit criteria for the appointment of the President of the Federal Reserve is the "confidence", close ties and solid relations which the candidate has with Wall Street. The same criteria are applied to all the key economic appointees, including Treasury, Commerce, World Bank and International Monetary Fund. Long time Federal Reserve President Greenspan was highly respected and lauded not for his abysmal economic performance but for his favorable policies to Wall Street Bankers. Under Greenspan's Presidency, the US economy de-industrialized, accumulated huge trade and budget deficits and went through two speculative bubbles (information technology and savings and loans). He presided over an economy which reached unprecedented levels of public debt - doubling in five years. Greenspan's backing of Bush's tax cuts for the rich (income, capital gains etc) contributed to the huge budget deficit and widening inequalities. His policy of low interest rates fueled the speculative bubbles at the expense of productive investments. His backing for unregulated capital (dubbed "globalization") led to the re-location of US multi-nationals abroad (many of whom export to the US and led to huge trade and balance of payment deficits. Yet all these policies which led to the disastrous state of the national economy, created extraordinarily favorable conditions for the domestic and international expansion of finance capital, as well as the concentration and centralization of banks into ten controlling units.

Wall Street's impact on the economy and social structure can be best illustrated by examining New York City - its center of operation. The distribution of assets in New York City is among the most unequal in the world. Slightly over 1% of the population control over 80% of the assets - comparable to land inequalities in Guatemala and Brazil . Secondly, Wall Street is closely tied to real estate capital in New York , and both were instrumental in raising property values and rents, leading to the destruction of over 500,000 manufacturing jobs over the past three decades. Most of the former industrial properties were "redeveloped" to provide office space for finance related activities and high end housing for wealthy financiers. New York Senator Schumer, a notorious backer of Wall Street, leads the US in scapegoating China for the loss of manufacturing jobs, ignoring the essential role of finance - real estate in deliberately destroying the manufacturing sector in New York City . Of course, the demise of manufacturers in New York city was not only due to finance capital; the local garment capitalists and the trade unions were also partly responsible. The former relied on low-wage labor to compete - a losing proposition against China - instead of upgrading its technology, computerizing design and production and specializing in high-end products. The trade unions (International Ladies Garment Workers Union - ILGWU, later re-named UNITE) reinforced the failed cheap labor strategy of garment bosses, by discretely allowing de facto wages to fall below the minimum wage and what was stipulated in collective bargaining contracts. No doubt the ethnic-class differences between the six-figure salaried Jewish labor bosses and the low-paid Asian and Latino workers and the common class-ethnic positions of the labor bosses and the manufacturers facilitated these failed policies: loss of manufacturing competitiveness and loss of jobs for workers.

Finance Capital and the War in the Middle East

Finance capital was until recently predominantly made up of white Protestants and Jews. In the most recent period, Wall Street's ethnic and religious base has broadened as corporate capital has taken over from family-owned banks. Nevertheless among the new generation of upwardly mobile speculators, there is a pronounced disproportion of individuals of Jewish origin, who are not necessarily religious or involved in Jewish or Israeli communal activities, fund raising or politics. Nevertheless a significant affluent minority of prominent Jewish banking and real estate millionaires are active in financing and promoting Israeli policy either directly or through the key pro-Israel lobbies like AIPAC and the President of the Major Jewish Organizations. These lobbies have been in the forefront of promoting the Iraq War, a boycott or military attack on Iran and the ethnic cleansing of Palestinians. The political muscle of this minority of Israel-First wealthy Jewish financiers is not countered by any countervailing organization by other Jewish financial bankers or for that matter by Gentile, Muslim or Hindu financial tycoons. Through the political use of their wealth, strategic location and high status, this minority of politically active financiers is in a position to establish the parameters and policies of Middle East policies vie their dominant role in funding political parties (especially the Democratic Party), candidates and congressional representative.

The Jewish and Gentile critics of the war deliberately exclude the role of the minority of wealthy Jews and their political lobbies in shaping US policy in the Middle East by focusing on the US and overseas oil companies ("No blood for oil!"). There is an abundance of evidence for the past 15 years that:

1.2.3.4. A thorough search through the publications and lobbying activities of the oil industry and the pro-Israel lobbies over the past decade reveals an overwhelming amount of documentation demonstrating that the Jewish lobbies were far more pro-war than the oil industry. Moreover the public records of the oil industry demonstrate a high level of economic co-operation with all the Arab states and increasing market integration. In contrast the public pronouncements, publications and activities of the most economically powerful and influential pro-Israel Jewish lobbies were directed toward increasing US government hostility to the Arab countries, including maximum pressure in favor of the war in Iraq, a boycott or military attack on Iran and US backing for Israeli assassination and ethnic cleansing of Palestinians.

The most striking illustration of Jewish power in shaping US policy in the Middle East against the interest of Big Oil is demonstrated in US-Iran policy. As the Financial Times notes: "International oil companies are putting multi-billion dollar projects in Iran on hold, concerned about the diplomatic standoff (sic - US economic-military threats) over the country's nuclear program" (FT March 18/19, 2006 p.1). Despite the fact that billions of dollars in oil, gas and petrochemical contracts are in play, the pro-Israel lobby has influenced Congress to bar all major US oil companies from investing in Iran . Through its all out campaign in the US Congress and Administration, the US-Jewish-Israeli lobby has created a war-like climate which now goes counter to the interests of all the world's major oil companies including BP, the UK-based gas company, SASOL (South Africa, Royal Dutch Shell, Total of France and others.

The myth of "war for oil" is circulated by almost all the major progressive Jewish intellectuals and parroted by their Gentile followers, who are in word and deed prohibited from mentioning the AIPAC word in any public meetings or manifestos. The power of the minority of politically active Jewish financiers in the pro-Israel lobby is spreading far beyond the area of US foreign policy into the cultural, academic and economic life of the US. Three major events immediately come to mind.

In New York City, a major theater production of the life of Rachael Corrie, an American humanitarian volunteer murdered in the Occupied Territories by an Israeli Defense Force soldier driving a bulldozer, was cancelled because of Jewish pressure and financial threats. The theater admitted that the cancellation had to do with the "sensitivities" (and pocket book) of the issue to Israel-Firsters. The pro-Israel lobby's defense and support of a minority opinion in favor of Middle East aggression is now extending its authoritarian reach into undermining the basic freedoms of American to free and open expression.

The second example of the growing tyranny of the pro-Israel minority over our civil liberties is the virulent campaign waged by all the major Jewish publications and pro-Israel organizations against a well-documented essay written by Professor Walt of Harvard and Professor Mearsheimer of University of Chicago critical of the lobby's influence on US Middle East policy. From the ultra-rightwing Orthodox Jewish Press (which claims to be the largest "independent" Jewish newspaper in the US), to the formerly Social Democratic Forward, to the Jewish Weekly , all have launched together with all the major Jewish organizations, a propaganda campaign of defamation ("the new Protocols of Zion", "anti-Semitic", "sources from Neo-Nazi websites.") and pressure for their purge from academia. The Jewish authoritarians have already partially succeeded. Their press releases have been published by the mass media without allowing for rebuttal by the academics under attack. Harvard University has demanded the identification of the Harvard Kennedy School be removed from the paper. The financier of the professorial chair (in his name) which Professor Walt, as academic dean, occupies at the Harvard Kennedy School, is no longer mentioned it in his publication. Ultra-Zionist Professor Dershowitz and his fellow Harvard zealots call into question their moral and academic qualification to teach. Both in the United States and France , legislation is being prepared to equate anti-Zionism with anti-Semitism and to criminalize as a 'hate crime' the free expression of outrage over Israeli atrocities and any criticism of the Lobby's control of US Middle East policy. In the US , the proposed legislation would take the form of withdrawing federal funding from any academic institution where the policies of Israel are criticized. As yet there is no organized opposition in the US by Jewish or Gentile academics or journalists to this erosion of free expression or a defense of the integrity of the two critics of the Lobby. There is no group of Jewish investors or financiers willing to fund a civil rights campaign in defense of free speech, academic and artistic freedom, to counter the minority Zionist financial elite. It is business as usual.

Some Myths and a Few Insights: Capitalism and War

In addition to the myth of the "war for oil" there are several facile misconceptions:

Myth 1) - the dominance of financial capital leads to war: There is no evidence that financial capital performs better under war time conditions than in peace. In fact recent history demonstrates that 'crisis' provokes market volatility and sudden disruption which prejudices important financial 'bets' even as other benefits. Most of financial profits accrue from mergers and acquisitions with tend to increase due to competitive market conditions - not wars. The financiers who support war do so for their own personal-ideological reasons, ethnic identification and usually do so via ethnic-affiliated organizations not through financial associations. Thus the big contributions by a minority of Jewish financiers to the pro-war Zionist lobbies have less to do with their class affiliation and more to do with their identification with Israel First organizations.

Myth 2) - While financiers are a major funding source for the bellicose pro-Israel lobbies and their congressional spokespeople, they are a minority among Jewish investment bankers, whose prime concern is maximizing the earnings of their banks and hence their incomes, and engaging in many non-Jewish social cultural and professional activities. Over half do not even marry within the Jewish community.

Myth 3) - Many writers cite polls which suggest that most Jews, like other Americans now oppose the Iraq war. The fact remains however that they are not willing to criticize the pro-war Jewish lobby or to mention Israel 's involvement in precipitating the war through its occupation of Palestine .

Myth 4)- The pro-Israel lobby is just like many other lobbies. The Jewish pro-Israel lobby is uniquely powerful because it commands a vast network of grass roots organizations,150 full-time functionaries in Washington operating under discipline and commitment to a foreign power, Israel . Moreover the lobby is financed by wealthy individuals in highly lucrative growth sectors (such as in the banking sector). Thirdly its long established reputation of threats and rewards to recalcitrant and to loyal Congress people, executives and opinion makers makes it an extraordinary and dangerous lobby.

Conclusion

The ascendancy of finance capital and its influence over US economic policy has had major, largely negative, consequences for the US economy, especially our living standards, external accounts and budget. The deregulated financial markets have led to record profits for Wall Street but it has also led to a series of speculative bubbles, which have bankrupted millions of retail investors.

The loss of US industrial competitiveness is largely the result of the transfer of capital from productive innovations which increase competitiveness to speculative activity several times removed from the actual production of goods and services. "Derivative" and "Hedge funds" now equal the size of the US economy at $12 trillion dollars a financial collapse waiting to happen. Financial capital in its most advanced stage of derivatives is based on bets on bets on bets which have vastly increased the likelihood of economic collapse even as it widens the chasm between bankers and wage earners.

The political power of finance capital has been exercised in the realm of economic policy and executive appointments; it has not been directly involved in formulating or benefiting from the war policies. However it has been compatible, supportive and benefited from its close ties and relations with the militarist policy elite in Congress and the Executive. The relation is mutually supportive. The Executive deregulates financial markets, lowers taxes, cuts social spending, appoints Wall Street friendly Federal Reserve Presidents, and in exchange Wall Street supports the imperial war ministers in the Cabinet and in Congress.

Investment banks have been deeply involved in recycling Arab petroleum funds and engaging in large-scale mergers and acquisitions in the Middle East, while a minority but deeply engaged Jewish financiers have funded the pro-Israel lobbies pushing for a more bellicose US policy toward the Arab and Islamic world.

Wall Street's position on the erosion of democratic freedoms has ranged from ambiguous to authoritarian. While backing the Administration's Patriot Act, they opposed the blocking of Dubai 's purchase of US port terminal management. While an active minority backed the banning of the Rachael Corrie theater production and funds pro-Israel organizations attempting to purge academics critical of Israel , the majority look on with indifference.

Rising authoritarianism and lucrative financial profiteering are compatible with the ascendancy of finance capital.

Unideal Observers

Unideal Observers

CEO Hiperpay Debate and Outrage

The big debate and outrage that is should not be. If laws are proper and decent.
CEO's pay and Board of Directors deaf ears from owners proposals, who are screaming for lower pay will be hear if fair laws are put in place, but politicos, specially those of the Great Oily Parties own their alligance to who they are on lease for the present time. The great corrupters group of industrialists. The Atlanta Journal Constitution has small caption on their editorial side with the title " The Robber Baron Of The Week." Something that it might help to chenge the tide of this pay abuse if more newspapers, TV, radio will start to follow suit of the AJC.

By now, most people are agreeing about CEO’s pay has taken a path of no return with an arrogant stance of super-individuals who happen to be salaried, but hey! that is not more or less than the rest of us believe how things should be. We are encourage to behave in a nationalistic environment in a Darwinian line of thought with the big eat small or else and greed is good, or once a week soul scrapping of six of sin, when it should be all the opposing sin one day and sanctified the other six.

Now, the solution to the absurdity of CEO’s pay is simple, tax all salaries equally and stop subsidizing with tax payers money the salaries of CEOs.
What I mean by that is simple. The CEO’s pay is tax deductible to the corporations and that includes the top three C’s of the company, so ultimately is a political problem, and is up to the legislators to act and the voters to demand change from their legislators.
The taxpayers actually are the ones subsidizing the salaries of the top dogs at corporations.
The solution is simple tell your elected officials to introduce legislation to eliminate this tax break and pilfering of people’s assets.
Not a complicated issue.
If options granting is the problem, make the options taxable at the present stock value to the corporation, and let the Board of Directors explain to shareholders why they are paying taxes when they can actually save the corporation money with decent competitive salaries.
Today those CEO’s salaries are indecent.
The solution to get them in line is easy, let’s get this indecent situation in line.
We all need to talk about it and if choose stand up, you can write or speak with your elected officials, tell them they should eliminate the tax break for CEO’s salaries as a corporate benefit. Get all salaries at present tax value like everybody else, and that should include options taxed at present stock value.
Not a difficult thing to do, one less tax law.

Gosh if we could eliminate around 500 laws a year instead of writing 500 laws a year.
We all should know that 95% of the laws written are to provide less than 5% of the population some economic incentive –aka wealth transfer from poor to rich- and the other 4% are patches to old laws and 1% are social laws as the Patriot Act which was not read by 99.5 of those who vote it for it.
Doing nothing and apathy brings you these situations.

Dr. Razavi's Good to Know Info

Dr. Razavi's Good to Know Info

The Grand Oily Parties aka GOPs

What GOP Stands For
The Grand Oily Party

What the other party stand for
No synonym, thus stands for nothing
But behaves the same than the above party

When the present President was elected all voters identify him as an oil man, with not a single profitable company under his tenure.
A baseball team owner- it is in question who actually owned anything, with questionable track record.
Now, he had a clear path of family relations to rulers with power. We must call those fellows “who is who” ruling the planet inner circle.
Among those in the family inner circle is the famous “Prince Abdullah Bush” -as is known in the Bush family the Ruling Prince of Saudi Arabia, James Baker of Carlyle group (a money group that milks your taxes) a superb family friend and the lists goes on and on of no so lovely good fellows.
Most of the Bush friends come from the industrialist ruling power, great propagators of dictatorships, as the present President put it “ it will much easier for me if I was a dictator” a Freudian slip or a wish, you judge. But his present government circle led by VP Cheney should be of no doubt of the tendencies and techniques to government and the purposeful Orwellian language use should be a clue for their clear intents.
You will not find many middle class Americans “a la” Dennis Kucinich-like people in that circle of this powerful crowd but they befriend dictators but not elected officials that have real democratic popular process. This must be another clue.
There is a natural reason for such inclinations of power. Power is the natural brother of greed as such, people, who are alike joint their greed in purpose.
But the point is not who is on the list, but how great of a job has done delivering to its friends and constituency.
A few leaders around the planet, have indebted their national wealth to redistribute it among their constituency and trump the future of the rest of the people as this administration has done. It is the largest wealth transfer ever in the history of humans, there is not other phase in the earth records that one can take the proportions of wealth transfer taking from the poor and give to the powerful and rich as this past 5 years. No in vain you see all over articles about how the been rich is the fastest growing group, and the wealth of the richest 50000 families has growth at a rate of 14% annually for the past ten years and the wealth of the individuals in the country as a whole as grown at less than 0.5%. See the Census Bureau for this data from The Federal Reserve.
And the most interest thing is how the wealth transfer has occurred. For most people lower taxes are though out to be a good thing and in fact they are if they are applied properly. The nature of taxes needs to evolve to be a continues debate, but what taxes should be not is a tool to exploit the less vocal groups in society that want to live in peace and those who live in political apathy. That is what this government has done. But the Grand Oil Party and the other political ruling party, are not much different, one party does it unapologetically (GOP) and the other (?) has to compromise from all angles using demagoguery a little more but the result usually is the same.
The bottom line is simple. The Grand Oil Party knows how to deliver to the rich and the other one knows who to deliver to the rich quietly and with much less propaganda.
If you really feel like do something, check out your local politico list, show up at your local political party meetings of all sides and give them your piece of mind. It is not difficult and it creates opinion. If you feel more like a couch potato, well, expect more of the same, but while you are in the couch, write to your opinion to your local paper.

How is your CPI "baby"

www.fed.gov

Is your CPI 3.5%? If not go figure it out.

This condition does not require medicine, but it is very important for your wallet and your investments.

The Federal Reserve and the Government continue to release data showing that Inflation and the Consumer Price index are at a low in the range of 3.5%. Is that the truth and the numbers are a reflection of something? The fact of the reporting on those numbers is as fictional as a novel. The Federal and Government around the planet interpretation of inflation and Consumer Price Index have nothing to do with people’s economics, and that is what they suppose to reflect, the people behavior and capital cost with the median of spending habits in mind. Basically, reflect the increase in costs in people’s expenditures.
Is your inflation and CPI at 3.5%?
Most likely your real and most of Americans CPI is in the range of 7% and in some cases if you have kids your personal CPI could be as high as 25%.
You might wonder why the government will cook this numbers, as if they were Enron. Simply put if it is a devil agreement of economists to keep it quiet and those who control government. If they announce the real CPI, people will realize that their salaries will have to increase, pensions will have to be adjusted, labor contracts, you name it, the impact will be across the board and it will be a positive welcome to the most disadvantage people in society. Since when, any government will provide the most disadvantage people with anything unless it requires a fight. It will be a first.
Well, the only way to learn what is your real CPI is to have a control of your income and expenditures, but that will be too much to ask.
Simply look at the most direct needs of people data from the Federal Report:
Housing: up 18%
Gasoline and other oil derivatives: 32%
Food and staples: up 11%
Schools (colleges): up 12%
Decent Clothing: up 14%
Medical Costs: up 19%
Salaries up: 0.7 %
So if you are in the red by the end of the month. Maybe you need to start recording your expenses and income. As next step, bring those numbers to your elected people attention at the next town meeting. Who knows maybe the next your heard is that Congress is asking questions about how the CPI is calculated and salaries are up more than 0.7% or you keep losing ground every year it passes.

Trees as Asset

One of my last investments is in a do good, feel good, make money investment that gets little publicity, it is called: high value trees.

After reading a few books about generational wealth preservation I found that they are a few consistent investments to have in your aim to preserve assets, and that included trees. I found the idea very compelling a basic to follow.
Basic things are not that difficult to apply but difficult to have broad market appeal. The example I used in the "billionaire donut."

Everybody knows that the number one creator of wealth is business ownership.
But most people decide for employement and leaves ownership aside, thus most becoming limted salary dependands. In that case the probality for wealth and education with substantial (100 million or more) assets is reduced to 1 in 1 million.
But the average person goal for money is more modest at one million to five million dollars by retirement age.

The magnificent thing is that not accounting for the value of their houses, 2 of every 100 of Americans have at least one million in assets.
The next stepping stone to wealth will be if you are part of the present elite the haves and the haves more as Presdent bush called his base. Those are CEO's, large private owners basically 40,000 or so familes who control 72% of the total wealth. That's makes it easy to drop a shoe.

For me, to get to the average goal is where trees come to play.

The number one investment on preservation of wealth is hard assets, and trees are as hard as it gets. Blommberg Wealth Manager Magazine called high value trees the perfect asset for wealth growth.

My next important consideration is tax savings.
The assumption gave me a series of class assets to consider that appreciates and do not pay taxes while they increase in value.
For most of us, the imminent asset is real estate. It is the asset that most people held as primary residence. In this class the next investment that holds value is commercial investments and third is land between driving distance of growing areas. The past years with declining dollar value and low interest rates, we have created a new high in returns for real estate. Those forces pushing prices might not hold true for the next twenty years. The caveat here is that if the dollar continues its decline and the Federal Reserve decides to change stance in interests and starts a new reduction period it might allow the bubble to continue but the probability of that is nil, and the most probable is real estate might not appreciate above inflation. Real estate needs stabilization in prices. After it stabilizes from present prices and a new pool of new prospective owners will get rebuild, unless the growth of new immigrants and nativity rates are not encouraged.
The second asset that appreciates and does not get taxes while grows is wood in the form of trees.
Corporations might gain concession from governments to harvest and this will fail in the above business creation category.
For individuals the next most profitable way to invest is to own a parcel of good land, preferably buy land that allows the growth of endangered species of high valued trees, and fully managed, the alternative will be to find larger company that will manage and buy the harvests as the trees grow. The average growth of a well managed tree farm can be as high a 15% and as low as 5%. The median growth is more common and that is around 9% for tropical woods.
The obvious constant here is time. Most individuals who invest in managed tree farms should expect slow, very slow, a really very slow process of getting returns. But you can count that a well managed farm with average tree growth in the range of 8% after 13 years can become a very compelling investment.
As of today is difficult for individuals in the US to invest in small amounts in this kind of asset class, it is mostly reserved for the people or organizations with at least $5000 start up and more. The ideal would be to have register shares on these investments at value of around $10 with no dividend distributions. I am not sure if the cost of trading the shares will make it valuable enough, but I am considering is learning from companies in Holland, Sweden and many other countries in which investors have access to shares of sustainable profitable tropical rain forest investments.

Follow up to CEO Health Care

by Jon Kamp
Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)--The federal government proposed stiff Medicare reimbursement cutbacks for heart products like pacemakers, defibrillators and stents, but the cuts may be softened before a new rule is officially determined later this year, clouding the potential impact for affected companies.
The U.S. Department of Health & Human Services' Centers for Medicare & Medicaid Services late Wednesday proposed sweeping changes in a 1,200-page report on reimbursement rates for hospital impatient procedures. The changes are targeted at closing reimbursement loopholes used by specialty hospitals and trimming overall costs. The proposals are expected to be implemented in October.
The reimbursement cuts proposed for some of the hottest and most lucrative heart devices in the medical device sector were steeper than some on Wall Street were expecting. Proposed changes for orthopedic products like replacement hips and knees, on the other hand, were surprisingly moderate.
The proposed reimbursement cuts would hit coronary devices that are major revenue drivers for companies like Medtronic Inc. (MDT), Boston Scientific Corp. (BSX) and merger partner Guidant Corp. (GDT), St. Jude Medical Inc. (STJ), Johnson & Johnson (J&J) and others. The products include implanted devices that control heart beats and stents, the tiny mesh tubes used to prop open arteries.
The proposed reimbursement cuts for stents top 30%, Morgan Stanley analyst Glenn Reicin estimated, while the proposed cuts for implantable defibrillators top 20%, he said.
Despite the severity of the cuts, it's not yet clear exactly what impact the companies with heart products will feel going forward. According to Reicin, investors have already priced in expectations for heavy cuts, and even if "radical changes" do make it through a long period of haggling and commentary, they may effect hospitals more than device companies.
"We think it is unlikely that these changes will modify purchasing and demand characteristics of medical devices," Reicin said in a research note late Wednesday. "Hospitals have traditionally had little leverage in reducing device costs."
Some companies with a major stake in cororary devices were down in premarket trading Thursday. Boston Scientific recently traded down 3.7% at $21.35, St. Jude was recently down 4.3% at $35.25, J&J was recently off 18 cents at $57.69 and Medtronic was recently down 1.3% at $50.39.
If the proposed changes are really damaging for hospitals and utilization, "we think that changes will be scaled back and have little likelihood for implementation," Reicin said.
In a note early Thursday, Leerink Swann analyst Jason Wittes concurred. "There is room for negotiation, and the final codes will likely be less dramatic," he said.
Bank of America analyst Glenn Novarro noted some of the proposed changes "were far worse than expected," and suggested a potentially more damaging impact for affected companies. In a research note late Wednesday, Novarro said the cuts "would serve as a significant negative" for medical device stocks if enacted.
The impact was much less dramatic for major orthopedic companies, as the only sizable reduction was proposed for spinal procedures. Among major orthopedics firms, Zimmer Holdings Inc. (ZMH) recently rose 1.5% at $66.50 in premarket trade and Biomet Inc. (BMET) gained 1.6% at $38.75
Morgan Stanley has an ownership stake in Biomet, St. Jude and Boston Scientific. The bank has had an investment banking relationship with Guidant, Medtronic and Biomet.
Bank of America or an affiliate has an ownership stake in Guidant and Medtronic, and the bank has had a banking relationship with Boston Scientific, Guidant, Medtronic and St. Jude.
-By Jon Kamp; Dow Jones Newswires; 312-750-4129
jon.kamp@dowjones.com

PayWatch:

Insurance CEO Drives Down Everyone’s Care but His Own
by James Parks

When William McGuire retires as CEO of UnitedHealth Group, he won’t have to worry about his health care. His contract requires the insurance company pay for lifetime health care for him and his wife. Not that he really even needs help paying for health care: As of Dec. 31, 2004, McGuire had $1.1 billion in unexercised stock options and cashed out more than $114 million in stock options during 2004.

So why is McGuire working overtime to lower the quality of care for working Americans?

McGuire is a big player in pushing for health savings accounts (HSAs)—employment-based programs in which consumers pay for their own health care through accounts established with a set amount of money available. President George W. Bush has made such accounts a cornerstone of his so-called health care reforms.

McGuire and others are peddling HSAs as a way to cut back on health care costs—but in fact, consumers would bear the cost burden. In an HSA, consumers would face a minimum of a $2,000 deductible for a family, but as high as $10,000 in some cases—before their coverage actually kicks in.

While working families likely won’t benefit, big employers like UnitedHealth Group will because they can shed current health care costs by shifting workers into high-deductible plans.

In sum, HSAs will lower health care quality and raise premiums by increasing out-of-pocket expenses for workers, cause employers to shift costs to workers and encourage families to give up preventive care, which would increase the likelihood of serious illnesses.

McGuire also has the fourth highest pension deal among corporate CEOs, according to the newly released AFL-CIO Executive PayWatch, with a retirement package worth $5.1 million. Meanwhile, his 55,000 employees—like other employees across the nation—have no legal right to retiree health care coverage or pension benefits.

Meanwhile, UnitedHealth Group is one of the insurance companies that received quick federal approval to be the first Medicare drug discount card providers when Bush’s Medicare reform took effect.

Coincidentally…McGuire raised more than $100,000 for the Bush campaign.

The New Robber Barons

The New Robber Barons
By PETER ROST
The U.S. Department of Labor claims we have an unemployment rate of 4.9% According to "the Economist," however, the true unemployment rate in the U.S. is over 8%, or 12.6 million Americans. The difference is due to the fact that the U.S. Government doesn't count people as unemployed after six months without a job


I recently joined the ranks of our many unemployed citizens. The termination of my employment as a Vice President at Pfizer was subject to intense media interest, partly due to the fact that Pfizer notified the press before they informed me.

Contrary to press reports, however, I have received no severance payments and for the first time in my life I am eligible for unemployment benefits; $13,078. At this annual income level my family of four would actually fall below the federal poverty level,quite a difference from a year ago when my salary was over half a million.

I'm also uninsured for the first time in my life and I have to pay the full price for drugs, just like 67 million other uninsured Americans. Contrary to many others, however, I do have a choice. In accordance with federal COBRA law, I was offered the opportunity to continue my health care coverage for 18 months. There was only one hitch; I had to pay $15,269 per year to receive this benefit. I decided that with an income of $13,078 that didn't make sense.

Clearly the system we have today isn't just broke. The system is utterly and completely sick and our weakest citizens are paying the price, every day. And while I have belatedly been forced to share some of the experiences of our poor, uninsured, and unemployed, my situation doesn't even start to compare with people with no resources, no voice, nowhere to go and no one who listens to them. For those citizens we have something that's called the Government; a government that is supposed to look out for the people who can't look out for themselves, but instead focuses on "pay to play money."

Today's system is built on greed. Greed is defined as an excessive desire to acquire or possess more than someone needs or deserves. Greed is not a corporate executive who builds an organization such as Microsoft, creates a lot of jobs, and happens to get rich. Greed is to become CEO for a drug company such as Pfizer, be responsible for a stock price drop of 40% over his five year tenure, twice as much as the AMEX Pharmaceutical Index, secure a $80 million retirement package while firing 16,385 Pharmacia and Pfizer employees, and get a 72% pay increase to $16.6 million as his reward.

According to the New York Times average worker pay has remained flat since 1990 at around $27,000, after adjusting for inflation, while CEO compensation has quadrupled, from $2.82 million to $11.8 million. Our CEO's are in a position in which they can basically use public companies as personal piggy banks. And this is perfectly legal as long as they get someone else to sign their check. Meanwhile, the federal minimum wage has remained at $5.15 an hour since September 1, 1997. In fact, after adjusting for inflation, the value of the minimum wage is at its second lowest level since 1955.

At the same time, the pharmaceutical industry spends over $100 million on lobbying activities to stop lower drug prices, according to the Center for Public Integrity. There are 1,274 registered pharmaceutical lobbyists in Washington, D.C. and during the 2004 election cycle, the drug industry contributed $1 million to President Bush. For an industry that makes $500 billion on a global basis, spending one million on a president or $100 million on lobbying is pocket change.

This money was well spent. It stopped legalized import of cheaper drugs and instead we got a new Medicare drug program. This $720 billion law includes $139 billion in profits to drug manufactures and $46 billion in subsidies to HMOs and private insurance plans. The program has been such a disaster for our poor that at least twenty-four states have enacted emergency measures to ensure access to medications in the last couple of weeks . That's what a million dollars buys in Washington.

So how could this happen? The answer is simple. The American democracy has been stolen by our new class of Robber Barons--the CEO's of our big corporations. A political system dependent on charity from rich men in hand-tailored suits with $100 million retirement packages is no democracy. It is a kleptocracy. It is not what our founding fathers envisioned.

But we have the power to change this; to free our corporations from sticky-fingered CEO's, to free our elected representatives from "pay to play money" and to free our people from all these tyrants. We have the power to be free, at last.

Can we change this? Can we build a new future? I believe that we can. I believe this because we live in a country that could rid itself of slavery, a country that finally allowed women to vote; a country that has come a long way in the short time since the civil rights movement began. But early on, each of those incredible changes was fiercely opposed by those in power, and none took place without great sacrifice. To free our corporations from sticky-fingered CEOs, to free our elected representatives from "pay to play money," and to free our people from these tyrants is going to take sacrifice and time. Perhaps a long, long time. In short, it will require a second American revolution. And I believe that one day it will happen.

The Mobs

The Mobs against the President

At the present time, President Bush has the lowest popularity rankings of its presidency, at the same time the last two events: the port deal and the immigration debate are taking another toll in the negative side.
I wonder if they will be only two events of this kind, public outrage with the UAE Port deal and the immigration reform (claims for action) are just examples of mob-brat behavior, in today’s globalized markets and WTO courts, there is a price for promoting special protectionism.
The UAE will not bring this to the WTO but the shareholders of BO that approved the deal might pull a recourse for compensation.
The president is getting criticized from all flanks. The fact of the matter is, in both cases the position of the President is correct, even if the brat-mobs decided the opposite.
In the port case: if it is not good for UAE to run ports in the same should reciprocal for US companies running foreign ports. For that matter, any other national foreign strategic interest businesses run by american corporations will be question in the near futere. Check Point software had to pull out of buying a software company this week, it seems that we are in a roll.
Many American corporations are engaged in running vital foreign government infrastructures, and it should not be surprising to see the same policy used by congress to those american corporations. The idea that it will not be used by other countries against American corporations running critical operations in those nations is just pollianish.
The port case will thread water because in the most likely scenario, the UAE will be offered to calm the waters with some other alternative to the direct investment in BO, including tax payers funded loans for infrastructure in Dubai City or other similar preferential action.
The mob posturing can be justified by sheer blindness in the face of free markets and global trade. This posturing falls in all merits of decent behavior.
Teh question is: are we for fair trade or we are protectionist at convenience.
USA claiming flag around the planet will have one more caveat: you can instill fear in others but eventually protectionism will be use in kind and fair trade dialogues.
The immigration situation falls within the same merit the fair trade doctrine. In this case, the solution is far simple and there is only one beneficiary that is the present tax payers.
Clearly there is racism involved in the debate, but if NAFTA has done something is to impoverish its members in all Latin American countries. The rpesent has a culprit and that is NAFTA and its proponents, that happen to be the same Congress we have today lynching inmigration.
The failure of leadership from the US and Mexico in lifting people's standards to deter mass iunmigration has failed. Poor standards of living has created a larger problem that was promised to be resolved with NAFTA. It turns out that the deal of NAFTA benefited again the same crowd of the super connected plutocrats.
By now, borders with Mexico and Canada need to be eliminated. Free flow of merchandise and people will deliver some of the promises of NAFTA and instead of racism and xenophobia and market protectionism.
Instead of introversion and bully attitudes, evolution is in the direction of integration and assimilation. Mob idiocy is not a recipe for success.

It's worse, way worse, than it sounds.

The trade deficit's deep bite
A $225 billion U.S. trade deficit means we're deeper in the red than 20 years ago and sinking fast. Among the impacts: A lower standard of living for all of us in the years ahead.

By Jim Jubak

It's worse, way worse, than it sounds.

Which is pretty frightening, since it certainly sounds really bad.

On Mar.14, the U.S. Bureau of Economic Analysis announced that the broadest measure of the U.S. trade deficit grew to $225 billion in the fourth quarter of 2005. That marked an increase of 21% from the $185 billion deficit in the third quarter of 2005. And the quarter's results drove the deficit for all of 2005 to $805 billion, a new record.

The current account deficit -- defined by economists as the combined balance on trade in goods and services plus income transfers between the U.S. and the rest of the world -- increased in the fourth quarter to 7% of U.S. gross domestic product (the most common measure of the U.S. national income). For all of 2005, the deficit was 6.4% of GDP.

In 1985, when the G7, then the club of the world's seven largest free-market economies, pushed through a major devaluation of the U.S. dollar in the Plaza Accord, the current account deficit was a mere 3.5% of U.S. gross domestic product. The good news is that the world is a lot more tolerant of a massive U.S. deficit with the rest of the globe than it was 20 years ago. The bad news is that we're running a lot deeper in the red than we were in 1985.

So how can I say that the news is actually worse than it sounds?
First, because if you look at the long trends driving the deficit numbers, they're still picking up steam. The momentum is running very strongly against the United States, and when you're talking about reversing the course of something as big as the U.S. or the global economy, momentum counts.

Second, because the deficit has become so large that there isn't any silver bullet that will let us get out of this hole painlessly and quickly.

And, third, the demographics of an aging world say that our creditors are going to need the money they've lent us not too far down the road in order to support their own retirements.
Depressed yet? Wait, I'm just getting warmed up.

Overseas investors buying U.S. assets
Let's take a look at the most ominous trend in the 2005 numbers.

Unlike the trade deficit, which just measures the difference between what we export in goods and services and what we import, the current account deficit also includes international flows of investment income. That's worked to the benefit of the United States over the decades since World War II because we've built up quite a big portfolio of overseas investments from real estate to ownership stakes in foreign companies to holdings of foreign bonds that pay income to the U.S. owners of those foreign investments. For all of 2005, that income flowing into the U.S. came to a whopping $466 billion, up 24% from 2004.

But for years, overseas investors have been buying our assets faster than U.S. investors buy foreign assets. In 2005, for example, U.S.-owned assets overseas increased by $492 billion, while foreign-owned assets in the U.S. increased by $1,293 billion. (Or $1.29 trillion, if you prefer.)

And as you'd expect, the faster growth in foreign ownership of U.S. assets has gradually increased the amount of income that overseas investors receive from the United States. In the fourth quarter, the income flow actually turned against the U.S. We sent $2.4 billion more in income overseas than we received. That was a shift from the $4.9 billion income surplus in favor of the United States in the third quarter of 2005, and only the second time EVER (or at least since there have been decent records) that income from investments has been in deficit for the United States. In 2004, the surplus from income was more than $30 billion. From 1980 to 1985, the annual average was above $30 billion, and from 1980 to 2004, the smallest annual surplus was $4.3 billion in 1998.

So the shift from surplus to deficit in the fourth quarter is a big deal. It quite probably marks the end of a long period when flows of income into the United States from U.S.-owned assets helped offset deficits in years when U.S. imports exceeded U.S. exports.

Trend is accelerating
A turning point like this is just the beginning of an accelerating trend. It's extremely likely that the income deficit will continue to grow for years to come, because foreign investors are increasing their ownership of U.S. assets -- an increase of $278 billion in the fourth quarter -- faster than U.S. investors are buying overseas assets -- an increase of $43 billion for the quarter.

And ownership of an asset today creates a stream of income for a lot of tomorrows.
A shift from an income surplus of $30 billion to the income deficit of the $10 billion or so some economists project for 2006 isn't much help if you're trying to balance an annual current account deficit north of $800 billion. But it becomes positively devastating if you add this trend to other trends now working to push the current account deficit higher in the years ahead.

Look at oil, for example. In 2005, the United States imported $176 billion in crude oil at an average cost per imported barrel of $46.78, according to the Census Bureau. Our trade deficit with OPEC (the Organization of the Petroleum Exporting Countries) came to $92 billion. That's less than half our huge deficit with China in 2005 of $202 billion, but it's still a significant part of the $805 billion record deficit in 2005.

And there's certainly a good chance that the price of that oil -- and hence the size of the U.S. trade and current account deficits -- will climb in the years ahead. On the same day that the fourth-quarter current account numbers hit the news, the president of OPEC said the organization's new price target was between the upper $50s and the lower $60s per barrel. That's a huge jump from the last announced price target of $22 to $28 a barrel.

There's an unfortunately long list of similar trends that are working to continue to push the U.S. current account deficit higher. The size of the U.S. surplus in agricultural products has been falling as U.S. consumers eat more specialty and out-of-season products from around the world. Higher U.S. interest rates will increase the income flowing to the overseas owners of U.S. financial assets. And so on…

But you get the idea.

No magic fix
It would be comforting to believe that this huge problem can be fixed by a single, simple act. That's why our politicians are so fond of "solutions" such as forcing China to revalue its currency, the yuan, so that Chinese goods become more expensive. Or of rhetorical solutions such as "The U.S. can grow its way out of this problem by making U.S. exports more competitive."

Well, when you're running an $800 billion current account deficit, "it don't work like that." In many categories, Chinese goods are so much cheaper than the alternatives and so embedded in the global supply chain that making the yuan more expensive would, for some painfully long period, just increase the profits of Chinese manufacturers and the size of the U.S. trade deficit with China.

And our chances of growing our way out of this mess? Since U.S. exports make up such a small percentage of the U.S. economy, exports would have to grow by 70%, Paul Ashworth of Capital Economics has estimated, to eliminate the deficit.
A slew of solutions
In truth, it's going to take the combination of a lot of different "solutions" to get us out of this fix.
Yes, we should work to increase U.S. productivity, because that will drive U.S. exports higher -- and because high U.S. productivity growth, relative to the rest of the developed world, will continue to attract the overseas investments that we'll need to finance our deficit while we dig ourselves out of this hole

Yes, we should put pressure on China to take down barriers in its markets that prevent U.S. companies in fields such as financial services from doing more business in China. And we should demand that the Chinese adopt adequate rules protecting intellectual property. Add that to some appreciation in the yuan, and the trade deficit with China will shrink. Gradually.

Yes, we should do everything we can to encourage economic growth in the rest of the world. The U.S. can't continue to pull the global economy -- even with strong assists from China and India.

Yes, U.S. consumers have to spend less and save more. The odds are that it will take a painful slowdown in the U.S. economy to produce the "spend less" result. Higher U.S. interest rates would go a long way toward creating that spend-less environment and encourage U.S. consumers to save more as well. Part of the U.S. savings "problem" is a result of the negative real interest rates that Alan Greenspan engineered to keep the economy from deflating after the popping of the tech stock bubble in 2000. But certainly, no rational economist expects people to save when banks pay 1% and inflation is 2%.

Yes, those of us who live in the U.S. are looking at a reduction in our standard of living. We've used borrowed money to live beyond our means, and the bill is coming due.

And most of all, we need to follow the first law of holes: When you find yourself in one, stop digging. We need to adopt policies on energy, government budget deficits, health care and education that won't put us even further in hock while we're trying to work our way out of this deficit.
We don't have an endless amount of time to take these steps. Japan, a major funding source for the U.S. current account deficit, is one of the most rapidly aging societies in the world. Japanese savers will need to keep more and more of their money at home to pay the costs of that aging. The Chinese, another society of savers, have only a relatively small window of opportunity for putting aside the money they'll need to pay for their own retirements and health care in a society virtually without pensions or health insurance.

All this may sound very abstract to you. Global problems do seem far away from the everyday tasks of getting the kids to school or paying the doctor.

So in my next column, I'll talk about how the U.S. trade deficit and the budget deficit in Washington have already put the squeeze on your future.

The Kingdom of Idiocy

The latest award winning idiotic behavior comes from an irresistible out loud clamor opposing the deal, by a foreign company holding trust from the UAE, controlling the ports operations in three major US cities.

This hypocritical posturing is the most idiotic behavior posed by politicos, media and other irrational morons in a long while.

Let’s start by looking at the radical and biased news reporting that emanates from FoxNews. Coincidentally, Fox News parent company News Corp happens to have as majority share-owner a corporation named Kingdom Holding Company. This holding company is led by Prince Alwaleed Bin Tabal, an articulate and brilliant individual who runs the Saudi Royal family trust. At the same time Fox has become the number one media outlet of disinformation, dispersing lies, baseless commentary, ran by a radical right wing apologist, and with a corporate parent manager named Rupert Murdoch, who is an expert at democracy manipulation and election media intoxication.

Kingdom Holdings also is the largest shareowner in Citibank. By now we all know that Andrew Weil, was “asked to retire” as CEO because his runs with regulators and the large sums of fines accumulated by its operation and other penalties. Among the things that brought such fiasco to Citi where: allowing Citibank to launder dirty money of drug trafficking from Mexico’s Carlos Salinas de Gortari ,former president of Mexico, who is personal friend of Robert Rubin –Present Chairman of Citibank and secretary of the Treasury under Bill Clinton- and great friend of the Bush family as their are friends and "brothers" with the Royal family of Saudi Arabia.
Today Carlos Salinas de Gortari is exiled in Ireland and has a vacation home in Dubai. The list of irregularities at Citibank is so long that it took two truck loads to move the files with evidence of misbehavior. The latest nightmares for Citi are around the on going investigation of Pinochet, Argentinian president LaRua laundering charges of public money under "advice" of Citi or the Osama Bin-laden family bank accounts. If you worry who moves containers in which port, better start to worry about who allows the money to move around to finance the deals.
Other mundane things Kingdom Holding are involved include, luxury Hotels as the Four Seasons, hey, leave no bed unmade in your way to Washington, the Plaza Hotel in NYC, Samba Financial Group the largest financial group in SA or the grandiose Hotel George V in Paris.

So why the present attack to the UAE and not Saudi Arabia?

It is a convenient attack falling in the lap of the President. Moreover, it is an attack based on racism and islamophia, this is not far away from other phobic behavior and biases used to twist politics and the herd’s brains. The illegal Mexican border crossing, of latest headliners, events that for 200 years were accepted as common, got a reprieve thanks to the infatuation of the "media" with the gaffe of the UAE.
In the kingdoms of idiocy the herds move in sync.
You can blame it on the President and his crony plutocrats with absolutist behavior but do not forget to put most of the blame in the Congressional crowd on election day, who were the ones who started all this sell-off, from the fascists driven republicans to the reactionary right wing democrats.
Attacking the sale-off to foreign companies of key strategic operations is old news and misplaced after so many years of foreign ownership of key assets.
"Dud" all these things go against the Party of Davos.
It is difficult to resist all this enjoyment thanks to the Kingdom of Idiocy.

US focus on risk

US focus on risk 'poses threat to economy'
All Financial Times News

Michael Chertoff, the US homeland security secretary, has warned that emotional responses by Congress to security issues, such as the recent flare-up over ports, threaten to damage the nation's economy.

"We do not want a regime in which we are so focused on risk to the exclusion of all else that we lock everything down and we destroy our country," Mr Chertoff told the FT. In his first interview since congressional opposition forced Dubai Ports World to divest the five US terminals it obtained through its acquisition of Britain's P&O, Mr Chertoff said Congress underestimated the progress made by the Bush administration in promoting port security.

While conceding that more work was needed, he stressed that the administration had to focus on "intelligent security" in a way that "doesn't burn down the village in order to save it".

In the wake of the ports controversy, some lawmakers have argued that all cargo containers entering the US should be inspected. But Mr Chertoff said such a move would be "tantamount to shutting the ports down".

"Anybody who is thinking about that ought to go to their local port community and ask the longshoremen how they feel about losing their jobs, and Wal-Mart and Target about how they feel about losing goods coming in," said Mr Chertoff. "There would be a tremendous negative side-effect."

Mr Chertoff said he was surprised the US business community had not been more vocal on the ports dispute and other homeland security issues that could hurt their companies.

"The business community...doesn't really get as aggressive as I would imagine that they would be on issues that really strike at the heart of their interests," he said. "Every business has employees. If there is anything people care about...in politics, it's employment."

"If I were in the shipping industry, the maritime industry, the cargo industry. I would be concerned about measures that would strangle business and put workers out of work in this country."

Asked whether the administration should shoulder the blame for the congressional backlash over the ports deal, the security chief replied: "There are times when, if we were quicker in explaining what we do, we might avert a certain amount of heartburn." Sometimes the hard thing to anticipate was "when the reaction is not based on the facts necessarily but based upon some emotional reaction."

On whether the administration's constant warnings about terrorism were making the public overly sensitive to security risks, Mr Chertoff said: "We have to have alertness and care but not hysteria or anxiety?.?.?.?We don't want to build a system that smothers us as a society, whether it is civil liberties or our economy."

Mr Chertoff, who faced calls for his resignation following the administration's dismal response to Hurricane Katrina last year, declined to say whether he had considered stepping down. "For me to quit just because the going got rough was not what I think is my responsibility," he said.

Why the Rich Get Richer

http://finance.yahoo.com/columnist/article/richricher/2844?p=1
by Robert Kiyosaki
Investing: Assets That Are Lifeboats in a Shaky Future

*Another great piece by Kiosaki. If you have not read his books and follow his columns at yahoo finance, I wil suggest you do, take a minute and buy his books and read them with time to grasp his message, the books and the subscription are worth every single penny many times over. His views are unbiased and well thought out with timing of good decissions on his side.

Investing: Assets That Are Lifeboats in a Shaky Future
by Robert Kiyosaki
Tuesday, March 7, 2006

As retirement nears, millions of Baby Boomers are scrambling for deck chairs on the Titanic. For about 30 years now I have been watching a major financial disaster developing. Its contributing factors include the shaky financial foundations of Social Security and Medicare, compounded by most Americans' lack of financial education and entitlement mentality.

As a result, my investment strategy is to get out of anything that's "paper with ink on it." I explain what this means and what investments I favor later in this article.

Speed and Agility Will Win the Day

But first, let me discuss the iceberg known as Financial Excess, which I believe lies before the SS U.S.A. In the last three decades, we as a nation have only increased our excesses, accelerated our mistakes, and mismanaged America's wealth. Turning the ship's wheel at this time -- hard left or hard right -- will do no good. It's too late.

So it's not a good time to be captain of SS U.S.A., or the skipper of SS Big Mutual Fund or SS Pension Plan. In the coming years, I believe big will not be better.

Instead, for many of us, it's better to be a small, disciplined investor. I believe speed, financial education, and maneuverability will prove to be better than size. It'll be far better to be in a well-stocked lifeboat than be treading water with millions of pensioners and laid-off workers, many with their party hats still on.

Why so pessimistic? Well, I would rather be known as a realist. Most of us are aware of the problems ahead. Some are:

1. A pervasive entitlement mentality.

It's not just the poor who are expecting a government hand out. Everyone from senators to farmers and retirees expect it, too. Unfortunately, this problem is not an issue for my generation, the Baby Boomers, but will fall squarely on the shoulders of the children and grandchildren of Baby Boomers.

2. Social Security is a small problem when compared to Medicare.

As of 2004, Social Security was a $10 trillion off-balance-sheet liability. Medicare is a $64 trillion liability. The Social Security fund will begin to run in the red around 2015. The Medicare fund is already operating in the red, a situation that started in 1992. The combined $74 trillion off-balance sheet IOU to Americans is more money than is available in all the stock and bond markets of the world. This means life or death will be determined by your wallet, not your doctor.

3. A lack of financial education.

Many people do not know such basic realities as:

A 401(k) is not a retirement plan (it's a savings plan).
Bonds aren't safe.
Saving money is risky.
Why mutual funds have such low returns.
What is inflation.
Why workers are taxed more than owners.
Why pensions are disappearing -- legally.

People know there's a problem, yet they continue to do the same things. Today millions of people have trillions of dollars riding in the stock market, their homes, savings plans, and bonds -- financial assets that worked in the past but probably won't work when the SS U.S.A. hits the iceberg.

Investing in Tangible ValueAs an investor, I'm investing against the U.S. dollar. Let me be clear: I'm not investing against the U.S. -- America is a rich, productive country. But our dollar is toast. Those who have followed my articles know that in 1971, our dollar stopped being money and became a currency, a piece of paper with ink on it (see "Why Savers Are Losers").

In my opinion, that means getting out of anything else that's "paper with ink on it" -- anything backed by the full faith and confidence of the SS U.S.A. That means I'm very suspicious of stocks, bonds, savings, and mutual funds, especially if they're U.S. dependent. Although I love real estate, I'm suspicious of any piece of property that doesn't generate cash flow today. I don't invest in future appreciation of real estate -- not today, at least.

Today, I invest in assets with tangible value, especially assets that go up in price as the dollar's purchasing power sinks. Today, I have large positions in gold, silver, and oil.

For the small investor, I believe buying silver coins is a safe bet. As the dollar drops, silver will hold its value or go up. I don't recommend buying coins for numismatic value (rarity). A friend has his son buy one silver dollar a week instead of saving money in the bank. As I write this, that's worth about $12 a week. He keeps the coins in a safe-deposit box. It's not big investing -- but it's a great habit.

In today's economic environment, it's better to save silver than to save paper with ink on it, and that includes cash, mutual funds, stocks, and bonds. If it seems unpatriotic to short the dollar and other forms of U.S. paper, then buy a few U.S. silver and gold coins. While I'm bullish on America, I've been very bearish on our dollar for years.

Ignoring The Obvious

The present prevalent intended behavior of ignoring the obvious is as much ideological, hypocritical, arrogant, abusive, ignorant as it is an exercise of self-denying reality.
Those who intend their behavior to ignore the obvious usually are driven by short term greed with corrupt moral guidance.
Those who acknowledge the obvious, they should bring their energy to the front at first, we all must try to educate deniers of the obvious to the reality of the obvious.
Second, if the effort is futile we must defy their ignorance by imposing the reality in front of them by using rational means.
This could mean participating in local dialogue with elected officials, writing letters to news papers or even taking the courageous step to run for any elected office.
The obvious today is the research results of weather change and its consequences.
When Warren Buffet starts to postulate weather change as a rational variable to increase liability insurance rates, then, we better start paying attention.
Warren Buffet’s action and insurers, in top of the thousand of researchers that are raising the flags on weather change warnings, it is something we must stop be indifferent, and take positive and serious actions to change our present path and act on the recommendations of experts, but we cannot stand still and continue this route if we want to have an livable planet as legacy for our future generations.
Anyone with kids should start to take the responsibility of leaving a better earth to the next generation. A better hearth than they encountered, but it seems that this is not going to happen if the apathy we are experiencing in the subject is not addressed.
The consequences of weather change and ignorance are starting to be too obvious to ignore as hurricane Katrina proved in the Mississippi and Alabama, or the heat wave in France that killed 12,000 two years ago, or the Monsoon patterns of past years that are killing thousands every year, or the long rain patterns in areas that are too populated to be safe to reside, and societies are not really to confront human disasters.
We might think the news of glaziers melting, might not have clear impact on us today, but they do. We might think that change on concentration of pollutants from the US, China and India are not changing heat air patterns and destroying defenses for sun heating pattern in the soil. Scientists are crying out loud saying these patterns changes are dangerously serious and very real.
I am not sure if all the negative and doom and gloom is as hard and bad as it is stated.
I know one thing, scientists are the ones who have made their lives to study this planet, and most of us only hold biased opinions and we are not the ones to be debating the science presented with overwhelming data. If erring in the side of prudence has made great leaders, our present leaders denying the obvious on weather change are plain cowards by walking away of their responsibilities and the future generations for not acting with prudence and pro-actively addressing the necessary changes to bring earth back to balance.

The numbers behind the lies

Economist John Williams says ‘real’ unemployment and inflation numbers -- figured the old-fashioned way -- may be two or three times what the government admits. Here’s why, and what it means for Social Security.

By Bill Fleckenstein

Fun with numbers.

Corporate America likes to play that game, the better to boost stock prices. Folks might be surprised to learn that "Governmental" America also plays the game in its compilation of macroeconomic data. Beneath the surface are undesirable, sobering consequences for us all.

Last weekend, the always-terrific Kate Welling published an interview with an economist named John Williams. It will be available on the free portion of her "pay" site via this link starting March 11. This article is the first one that I have seen in which all the flaws in the government data, pertaining to the Consumer Price Index, unemployment, Gross Domestic Product, etc., are disclosed in one piece by someone who's been following the data for a long time. Start investing with $100.

I have been aware of nearly all the statistical tricks used by the government since they were implemented. Nonetheless, seeing them collectively described in one article is incredibly sobering. Having said that, there is a bit more "black helicopter" insinuation and fewer data points than I would like to see in an article such as this. However, the main points are the math that most folks need to know, but likely do not.

Once you read it, think about it and understand it, you will see why so many thoughtful people -- like Jim Grant, Warren Buffett, Marc Faber, Bill Gross, Fred Hickey and Paul Volcker -- have grave concerns about the future of the dollar (due to the macro imbalances that exist today).

In fact, reading this article, you will conclude that there's no way out, short of running the printing presses. The problem with that end game: At some point, foreigners will revolt. One can only hope that, somehow, there will be a way out. But without an understanding of the issues, folks will have no way to react as events unfold, and adjust their assets as we get more clues as to how all this will play out.

Thus, I would encourage everyone to print out the article and read it as many times as necessary, in order to gain a full understanding of the issues. Since we don't know at what rate some of these problems will start to impact the markets, all we can do is be prepared -- by having our insurance policies (in the form of the metals and foreign currencies), and then being alert to signs that the beginning of a chain reaction may be under way. Meanwhile, to pique folks' interest in the article, I'm going to take the time to provide some "Cliffs Notes" here.

Jobs data don't count the down-and-out
Williams starts by discussing the headline economic data: "Real unemployment right now -- figured the way that the average person thinks of unemployment, meaning figured the way it was estimated back during the Great Depression -- is running about 12%. Real CPI right now is running at about 8%. And the real GDP probably is in contraction." (By "real," he means calculating the data the way they used to be calculated, not as inflation-adjusted.)

He then explains how the employment data are compiled, noting that 5 million chronically unemployed people are not included in the statistics. In fact, there are seven or eight different employment statistics. One called U-3 is the official one. The broadest one, U-6, currently shows unemployment as running around 8.4%. As he explains, the one that's the most historically consistent is running around 12%.

On the Potomac: Reverence for reverse-engineering
Williams differentiates between two data-manipulation practices. One is "systemic manipulations, where methodologies are changed." That's done in order to align the government's view of the world with the world, i.e., make things look better than they are. The second practice is out-and-out fudging of the data to produce whatever result is desired. Williams describes instances where various administrations have literally reverse-engineered the data to achieve that result (though politics is not the main purpose of the article).

For those not familiar with "substitution," he explains the practice's evolution in the CPI calculations. The concept of substitution was a concoction of Alan Greenspan and Michael Boskin, who basically argued that if one item were too expensive, consumers would substitute that with a cheaper one. Williams' response: "The problem is that if you allow substitutions, you aren't measuring a constant standard of living. You're measuring the cost of survival. You can keep substituting down and have people buy dog food instead of hamburger. It happens. But that's not the original concept behind the CPI."

That ticking sound? Social Security
Williams says that the government's motive in all of this, if there is a motive (of the government collectively; don't picture a group of men cooking up something in a back room), is its desire to put a favorable spin on all the data.

Another motive? Transfer payments like Social Security are indexed to the CPI, and they would be far higher if the CPI were accurate. In fact, says Williams, if the "same CPI were used today as was used when Jimmy Carter was president, Social Security checks would be 70% higher." That's seven-zero.

Though Williams doesn't get much into hedonics, he does talk about the inflation-understating impact of geometric weighting versus arithmetic weighting in the CPI statistics: "Geometric weighting ... has the 'benefit' that if something goes up in price, it automatically gets a lower weight, and if it goes down in price, it automatically gets a higher weight."

Then for the ticking time bomb: Social Security. The proceeds from withholding do not go into a lockbox or trust fund. They are spent, thereby reducing the size of the stated deficit. More importantly, he notes that the government's accounting for the deficit doesn't include any accruals for Social Security or Medicare liability.

In fact, if that were done and the government used GAAP accounting, the deficits for 2003, 2004, and 2005 would each have been around $3.5 trillion. That's a trillion, not billion. In 2004 alone, the deficit on an accrual basis would have been $11.1 trillion, due to a huge one-time spike for setting up the Medicare drug benefits. In essence, as he points out, we're piling up additional liabilities in an amount roughly equivalent to our total GDP every three years.

Lots of these imbalances have existed for some time, and they haven't mattered. Such macro problems only matter when they matter. Once that point in time is reached, events have a way of swiftly getting completely out of control -- which is why one has to understand the nuances and be alert for potential signs of chain reaction, as I mentioned earlier.

Charge that Maybach to my imputed income
Returning to the subject of GDP, Williams illuminates a wrinkle that I had not known about, called "imputations": They are "an outgrowth of the theoretical structure of the national income accounts. Any benefit a person receives has an imputed income component. If you're a homeowner, the government assumes that you pay yourself rent on your house, so that's rental income. ... Imputed interest income, for instance, accounted for 21% of all personal interest income in 2002, and was growing at an annual rate of over 8%. Meanwhile, fully 62% of total rental income that year was the imputed variety."

He goes on to point out that folks really aren't doing that well, which is why their incomes aren't growing, which is why they've borrowed money. And that's why understanding the housing ATM is so important -- because as that sputters to a halt, folks will be stuck in the same place they were before (which precipitated the borrowing, i.e., not enough income growth). Only now, they're going to be stuck with incremental debt of their own creation.

What festers underneath the data
Next, he strings together the stock-market and housing bubble, for a summation of where we are: "When that (stock) bubble burst (in 2000), without a foundation of strong income growth, or a financially sound consumer, it triggered a recession that was a lot longer and deeper than the government would have you believe.

"In fact, I contend that what we are in now is a protracted structural change that goes back to the beginning of that 2000 recession, which eventually may be recognized as a double-dip downturn. We did have some recovery in 2003, but in 2005, you started to see signs of a downturn in a variety of leading indicators that I use."

That's not so far off from what I believe. In other words, if you really looked at the data and understood them, you'd see that what appears in the headline numbers is nowhere near what the real supporting data show. Our financial condition is a ticking time bomb. What none of us knows is when it implodes.

Bill Fleckenstein is president of Fleckenstein Capital, which manages a hedge fund based in Seattle. He also writes a daily "Market Rap" column on his Fleckenstein Capital Web site. His investment positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy, sell or hold any security. The views and opinions expressed in Bill Fleckenstein's columns are his own and not necessarily those of CNBC or MSN Money.

Did You Miss Something

Making substantial amounts of money is an “asymmetric advantage” derived for the understanding of its innate characteristic. Money today is fiat currency -meaning, there is nothing but “will” behind the currency- with no real value except the cost of the paper is printed.
Most of the wealth created in the past 25 years has been accumulated by a very small amount of people using “asymmetric knowledge” using a Noble Laureate term.
I am not Nobel Laureate, thus, in my words it s called ripping of the assets of citizens using corruption as main tool.
Today, leaders all over the word and I mean all over, no excluding America, after individuals gain power, in business, policing or policy, there is a sudden hidden act of lowering on their standards of decency.
Greed must be an Ok action when you act alone in a forest, but it is not such good behavior when you have to fund schools, paved the streets we must walk or tax others.
By now, there is a large sense that something is amiss in the way we are living. The most clear is the mental state of global fear. In some cases this fear is well found. In other cases fear is government induced, by direct actions or use of media. From the reporting words of African killer bees to the next assassin in the making.
One constant realization by individuals is, as each fear accumulates, the way to act freely is reduce proportionally as fears increase.
By now, it should be not secret that citizen participation and leaders behavior via institutions and representation is at the same level of Louis XV, King George, Franco or Mussolini. Comparing T. Blair primer of England to King George is not that difficult, nor it is to equate most other present leaders to some other abusive leader.
From an exuberant greedy investor point of view oppression of citizens is the best investment decision can be made, because it is very easy to corrupt leaders with money. Those Russian billionaires moving around the planet are part of the pudding, Chinese communist billionaires -if sounds weird- are growing, or CEOs billion dollar packages in capitalist efficient markets are examples of citizens idiotic approach to accountability and participation.
Idiocy is not an uncommon treat that benefits abusers. Today, losing citizens freedoms via democracy is nothing it has happen out of the blue. When US Today reports that America has lost democracy, (US Today 2/28/06 last page section A)it is not something to shrub off the shoulder calmly and keep it the prevalent social apathy.
It is known of social scientists that people react to fear and are willing to give up their rights in fear of losing something bigger. Scientists also know that after the lose of rights occurs, it is not likely for citizens to regain their freedom of fearless behavior and their rights continue to deteriorate over time in a manner it is not perceived as alarming. That is the real alarming turning point, and I think many we think we have turned the danger point.
From a speculator point of view the capacity to corrupt leaders with money is and advantageous situation, in front of the rest of people, with not access to capital. This is understood to apply all humans. There is a wonderful study done by three retired generals of the Israeli secret service in which they quantify the amount of money need it to bribe a politician depending the action demanded from the individual. After a few years negotiating labor contracts I learned that it take very little money to buy people.
Today, democracy has lost its freedom and eventually those who sold it to the highest bidders will regret their actions and its consequences.

Getting rich is simpler than you think

The Basics
Getting rich is simpler than you think
By Harry Domash

Blend three ingredients -- a paycheck, discipline and time -- and, you, too, can be a millionaire. It's not always easy, but it's simple. And you have no excuse not to do it.

Here is the single most important thing you will ever hear about investing: Getting rich is simple.

Not easy, but simple.

And here is the second most important thing you will ever hear about investing: You have no excuse not to do it.

Only three ingredients are needed: income, discipline and time. Chances are, you already have two of them, income and time. All you need to do is add the third, discipline. And armed with the following knowledge, that key third ingredient may be a lot easier to find.

Here's how it works: Say you start with nothing, invest $500 (of your income) a month (a healthy discipline), and let your money ride (over time) in diversified investments. Long term, the stock market returns at least 10% annually. Assuming a 10% return, you’d have $102,000 after 10 years, $380,000 after 20 years, and $1.1 million in 30 years.

Here's a similar scenario: If you start with a nut of $50,000 and add only $250 per month, you’d have $180,000, $516.000 and $1.4 million after 10, 20, and 30 years, respectively. All this happens through the power of regular investing and a simple-but-powerful concept called compounding.

Compounding
What is compounding?

Compounding is the reinvestment of the interest you receive from the money you set aside. For example, if you invest $1,000 and earn 10% interest on your principal at the end of each year, you'll get in $100 interest at the end of the first year. If you reinvest that interest, the second year you would start with $1,100, and thus would earn $110 interest. If you stay with it, you’d more than double your money every eight years.

“Compounding," Albert Einstein said, "is mankind’s greatest invention because it allows for the reliable, systematic accumulation of wealth.” Einstein was a smart man. But you hardly have to be a genius to make this concept work for you.

The real magic of investing comes when you combine the surprising power of compounding with continuous and regular investments -- in other words, discipline.

The best way to make these continuous investments happen is by setting up an account with a broker or mutual fund that automatically deducts a fixed amount from your bank account every month. “Automatic” is the operative word here. Trust me, if you don’t set it up that way, it won’t happen. Instead, you’ll end up pouring money in when the market is soaring and skipping payments when it’s heading down. Eventually you’ll get discouraged and give up.

Dollar-cost averaging
The process of continuously investing a fixed dollar amount is called dollar-cost averaging -- a term that sounds much more technical than it is. Through dollar-cost averaging, you'll end up buying more shares when a stock or fund is down, and fewer when it’s up. For instance, say you’re investing $500 monthly in a stock trading initially at $50 per share; so the first time, you buy 10 shares. If the next month the stock moves up to $62.50 your regular purchase will net you only eight shares. However, if the stock drops to $41.67, you'll get 12 shares (not including any transaction fees).Start investing with $100.

It's easy to set up regular-investment mechanisms, thus harnessing the power of dollar-cost averaging. Mutual funds are the traditional way. But there are other outlets, as well, that allow you to apply the strategy with individual stocks or exchange-traded funds, which are baskets of stocks that identically track standard market indexes, such as the Dow Jones Industrial Average ($INDU).

Risk
Sure, investing in the stock market has risk. There’s always the chance the market will go nowhere for the next 20 or 30 years and you’ll end up no better than where you started. But there’s risk in everything, even CDs.

With CDs, your original investment isn't in danger. Most CDs are insured, and the federal government will step in and make you whole, even if your bank goes belly up.

But a problem crops up when something more sinister surfaces: inflation. At this writing, inflation, running at around 2%, is considered relatively benign. But is it?

Let’s do some math. Your real return is the interest you receive less the inflation rate. If your CD is paying 3% and the inflation rate is 2%, you’re only making 1% in real terms. If inflation takes off, say to 5%, your CD will probably be paying around 4%. In inflation-adjusted terms, you’ve lost 1%.

But it can get worse. Inflation hit 14% in the early 1980s. In such times, CDs and similar fixed-income investments don’t even come close to the inflation rate, meaning you’re losing serious money, in real terms.

By contrast, assets such as real estate and stocks tend to move with prices, and, over time, the stock market has outpaced inflation. For instance, in the 20-year period ending Dec. 31, 2001, the cumulative return of the market, as measured by the S&P 500 Index ($INX), was 1,606%, compared to 88% cumulative inflation over the same period.

What’s the point? Yes, there’s risk in investing in the market, but the odds are that continuous, regular investing combined with the power of compounding will make you rich.

The odds
If you count yourself a member of the “I want it now” generation, the idea of waiting 20 or 30 years to get rich probably sounds like a dumb idea.

Sure, there are faster ways to get rich. You could win the lottery, or pick the next Intel (INTC, news, msgs) or Wal-Mart Stores (WMT, news, msgs). But don’t quit your day job just yet. Your chances of winning big in the lottery run around 15 million to 1, at best.

Meantime, naturally, you would be sitting pretty if you had had the foresight to plunk significant cash into Intel or Wal-Mart 20 years ago. But consider this: You would have lost money if you’d picked Advanced Micro Devices (AMD, news, msgs) instead of Intel, and you’d be broke if you’d picked Kmart (SHLD, news, msgs) (which completed its merger with Sears Roebuck on March 27) instead of Wal-Mart. In both instances, your retirement plans would be history.

Here's the bottom line, like it or not: The fate of your retirement, your comfort in older age, probably lies in your commitment to the concepts laid out in the paragraphs above. For the vast majority of us, wealth creation is a slow and steady -- and powerful -- process. The tortoise almost always beats the hare.

It's not easy. But it's very, very simple.

At the time of publication, Harry Domash did not own or control shares in any of the equities mentioned in this column.

Give us the daily Money

I cannot and I do not want to provide financial advice to anyone. This is a dog eat dog environment in relation to money and investing. In addition who cares more than you about your hard earn greenback.
All, I will tell you here. I have done it, I am doing it or I will be doing it; today, tomorrow, in the future or never.

A few of my personal rules, some times I follow these strictly, sometimes I do not follow them at all, it depends how I feel that time of the year about rules. In either situation, I have discipline we cannot beat the market averages without discipline. You need to be bold, you need to be patient and you need to be ready to move from point A to point Z of your asset allocation.

Truth: all 229,000 money managers, recommending investing in open market stocks, never beat the major market averages for a period over 10 years.

Truth: money managers or investors investing in business beat the market averages 70% of time.

Truth: 90% of speculators -all stock holders are de facto speculators- lose money over the long haul -inflation adjusted- and average returns are below the commonly accepted average returns of 7%.

Truth: unmanaged indexes outperform 97% of all money and fund managers 100% of the time over a period of ten years in any given cycle. Thus, stop paying fees and look at a pondered basket of ETFs that are quantitatively managed as "powershares" in the Russell 2000, the SP 500, small cap, med cap and large cap stocks. I just keep adding $$ to the basket and my average is above 20% year over year. This allocation is never more than my taste for risk, and I can allow myself to take. Any one trying this should be willing to ride declines of 50% for some periods in the equity markets.
My allocation in this area changes over different economic times, sometimes I have less than 10% of my total allocation in non-dividend paying stocks.

Truth: dividend paying stocks over time beat eth market averages. I like them on my tax defer accounts, they are wonderful investments. I sell the asset if the indications are of NAV continued decline. I run a screen with focus on high dividend stocks and apply a calculation of value over a normal retirement investment target period with all dividends re-invested I will get a nice surprise.
I use www.bloomberg.com calculators and news.

As a build my 2007 target investments, I will post the information in www.marketocracy.com using fund symbols, which I will post here. Although, my returns continue to be gracious, by ranking myself against the top ROI kings -mutual funds and published money managers, I find myself in money bliss. I cannot guarantee that I will continue to outperform anything, nor anyone will be successful trying to replicate what I do. You might try it if you want, but be aware of the risks involved.
This is serious stuff. I am just one person doing one person thing for two persons.

Why the Rich Get Richer

http://finance.yahoo.com/columnist/article/richricher/2652?p=1
by Robert Kiyosaki
Finance Home > Why the Rich Get Richer > Why Many Aren't Securing Their Financial Future

Why Many Aren't Securing Their Financial Future
by By Robert Kiyosaki

Tuesday, February 21, 2006
Most people know they should invest, just as most people know they should watch their diet and exercise. Nonetheless, millions of people -- I estimate that 80 percent to 85 percent of Americans -- don't invest at all. What I mean by this is that these people aren't active investors.

An active investor is someone is someone who actually lives off their investments as opposed to wages from a job. My investments deliver a stream of cash flow every month, and I, like other professional investors, don't need a job.

It's similar to the difference between amateur and professional golfers: Amateurs may be very good players, but can they live off their golf game? A professional can withstand the heat of competition and has the mental toughness and the physical skills to create a stream of income.

At age 65, many amateur investors "turn pro" -- whether they like it or not. And that's a frightening thought.

In this article, I take a humorous as well as a more serious look at why people don't invest. A thank you to John S. Baen, Professor of Real Estate at the University of North Texas, for creating this list of why people don't invest -- even though they know they should.

Why People Don't Invest: 12 Humorous Reasons

1)They're already paying into Social Security.
2)Their budget includes $20 per week for lottery tickets, which is bound to pay off soon.
3)They believe that inflation means their money will grow.
4)Old people don't eat much anyway.
5)They sit at home waiting for the Publishers Clearing House van to pull up in their driveway and deliver their check.
6)Their money is safely buried in the backyard.
7)Their rich Aunt Melba will die soon.
8)Little Matilda is sure to make it big in Hollywood.
9)They can cash in their Dallas Cowboy collector glasses when it's time to retire.
10)Their dot-com stocks will come back to life.
11)They'll write a book and live off the royalties.
12)They plan on marrying a young wife/husband when they're 60 and depend on their financial support.

Sometimes we need a break from the seriousness of why we invest and take a moment to laugh a little...or maybe cry. Unfortunately, even though funny, this list contains many truths.

Investing for Cash Flow
The sad thing is: Many people think they're investors when they're not. Lots of people think their 401(k)s and IRAs, which have stock, bond, or mutual fund holdings, are investments, but I consider them savings plans. People with such retirement plans are what I call passive investors. They're simply "saving" for retirement.

Similarly, if you own your home and live in it, I don't consider it an investment. Without cash inflow monthly (and with money going out each month for mortgage payments, utilities, property taxes, insurance, and maintenance), your house is a liability, not an asset. It might become as asset -- if you rent it out for income each month that exceeds your expenses on it, or when you sell it and realize a capital gain.

Most professional investors invest for cash flow first and capital gains second, and, ideally, you want both (see "Investments That Pay Today -- and Tomorrow"). Rich dad told me many times: Investing for capital gains is gambling, not investing.

And remember: You don't need money to make money. Many of those people who don't invest cite that reason -- "I don't have the money to invest."

But there's OPM (Other People's Money) everywhere -- if you've trained yourself to see opportunities around you. How do you do that? Invest in your financial education. Learn how to spot good opportunities and how to turn a seller's problems into your profits.

Perhaps the best example of OPM is a bank as your real estate investment partner. They will loan you the lion's share of the money and allow you to take 100% of the tax advantages, depreciation, and capital gains.

Apart from a light-hearted look at why people don't invest, there are serious reasons for their inaction:

1. They have an entitlement mentality.
When the word entitlement is used, many people point an accusing finger to the poor and those on welfare. Yet, the sad truth is many people have an entitlement mentality. Starting with the President of the United States and working down, millions of people expect the government (or a business) to take care of them once their working days are over. This despite the shaky financial footing of Social Security and Medicare.

My rich dad believed we should all learn to take care of ourselves. I agree and believe it's about time our schools teach people to take care of themselves, rather than believe they're entitled to government support.

2. They lack vision.
Millions of people cannot see past tomorrow. It was Tolstoy who said: "The most unexpected thing that happens to people is old age." This year, the first Baby Boomers turn 60.

As an older Boomer, I hear many peers say, "I don't have to worry. I'll just keep working." They don't see that the day will come when their body cannot work anymore -- if they're lucky to live that long.
The cost of long-term care exceeds what most people earn today. For example, a friend pays over $6,000 a month to keep his mom in a modest facility -- that's more than most families earn monthly. What's going to happen when 75 million Baby Boomers start needing long-term care?

Today, I also hear young people blithely saying, "I'm still young." Whenever I have the opportunity, I remind young people that the Baby Boom problem is really theirs to finance.

3. Our school system doesn't teach us much about money.
"Go to school to get a job" is common advice. But that idea echoes the entitlement mentality, the idea that once you have a job, the company and the government will take care of you. It also reflects a lack of long-range vision. Today, we need to be educated about money beyond just "getting a job." We need to be educated for life after a job, after our working days are over.

The entitlement mentality and myopic vision stem from one place -- our schools and the lack of financial education in our educational system. It's time for our educational system to enter the 21st century and prepare people for the real world.

Author's note: Send me your top three reasons why people don't invest for inclusion in a future Yahoo! Finance column. Send them to: kiyosakionyahoofinance@richdad.com. Please use "Three Reasons" in your subject line and include your name, city/state/country and e-mail address.

When the Media Fails

http://www.washingtonpost.com/wp-dyn/content/article/2006/02/20/AR2006022000746.html
Investing a new energies is going to be the next internet boom and bust.....Do not read my lips read the Washington Post article headline and content.
As the article touts the new miracles in new energies. The middle of the report inserts a quote: "there is a deficit of $25 mil in investment and 36 scientist will be fire" go figure, it is all hyping all over again.
I will no ponder the reasoning of the process or the qualifications of the reporters, I take just the fact about the hypocritical approach titling the article and the reporting.
The new federal budget was approved with record expenditures, but 90% of all scientific research in the US got sliced or freezed, except war research, nuclear and NASA -project to go to Mars.
It is not new news that research and education for research is underfunded in America. The proof is on patents assigned. Worse, going forward is the decline in doctoral/reserach program applicants.
Today, 60% of all PHd's working the US are born in a foreign country.
The present state of nationalistic arrogance and blindness, is not the best position to claim a bright future.
If the Ayatollahs stiffle education, Christian zelots are doing the same, time to get a new enlightement.

The Blame Game

It is easy to blame some else for your problems, that does no remove the problem from being your own big problem.
That is what is happening with the US economy.
Yesterday, the new appointed Chairman of the Federal Reserve, Mr. Bernanke was grilled with questions about the upcoming reckoning day for the US economy.
As it was Mr. Bernanke fault that Congress controlled by industrialists, that includes all republicans and 90% of democrats, are running the biggest deficit in history and the most hypocritical behavior since Louis XVII France.
The US deficit is alarming to say the least, to compare, with half of the present deficit in percentage points to the economy, the present US deficit, the IMF and WB cut funds to Argentina and created the Argentina crisis. So imagine, we had the balls to go to Argentina to create the biggest economic disaster in Latin America that has created the biggest trend of animosity against the US and here we are today running twice the amount of deficits and external debt and calling it solid. Go figure who is going to trusts the US next.
Today, the IMF and the WB of the US are China and in far away second India. Our total ppool of lenders 2.3 billion people.
The trade deficits with China and the fact that China has become the controlling interest of US holdings, at the present pace China is creating as much power over US policy as the IMF and the WB has over the rest of poor countries.
If you think this is far fetched, read the transcripts of the congressional hearings on the economy and trade, some members of Congress Republican and Democrats are crying foul for the upcoming reckoning.
The decline of the US currency is the firsts signal, the dollar had to be devaluated because the buyers of dollars agree that it was not worth 50% of what it was selling. Do you think America is worth 50% less of what it was worth four years ago? Or your work should have 40% less value? For that matter anything in your live that you transact with dollars is worth 40% less today than 5 years ago. Not a material reality to forget. Check the value of the always mocked Canadian dollar, from where we buy our oil or the value of the English Pound from where we clear all our insurance money.
Sooner or later, and in terms of concrete dates runs between 10 to 25 years, the US will become a third tier economy, based on the fed own research, this reality is approaching. Are you ready for this reality?
If you decide to blame, you have no much room accomplish anything substantial.
The action driven blame game can start by getting rid of incumbents in Congress, usually dramatic change creates wealth. Find a challenger to any elected incumbent and volunteer or fund the individual even if you think philosophical is opposite to your views. Some times changes has very interesting outcomes.

New Federal Budget New Debt Record

The good news is that all the new federal debt records is all been done by self nominated fiscal conservatives. Can you imagine if they were not fiscal conservatives !!!! And the present budget does not include any of the major events that need immediate funding: War in Iraq and rebuilding the south Afganistan, Tajikistan, Sudan, etc. The actual debt will actually double the amount serve each American another $19,ooo or $280 more billion in new debt. In plain terms 3/4's of a trillion dollars, this way it looks smaller. I challenge you to write the number in a piece of paper and divided by the US population. Include illegals they pay taxes in most cases.
We need to thank those folks that save money and are willing to subsidize our mortgages, our leased cars, all our manufacturing, copiers, bananas, cereal, broccoli, gasoline/oil, plastic, basically every thing that you need to survive is been subsidized by: 1) The Saudis 2) China 3) Japan 4) Most western retirement plans 5) Africa natural resource explotation all exempted from supporting development where we exploit it.

Many are starting to get chills and worry asking themselves: will the Saudis bail out or the Japanese etc. No one is going to bail out of the Ponzi scheme.
Their leaders's debt to corruption is so large that they need every single apartment build in Manhattan to hide their country pilfered assets and they need US debt to robe their own country man to cover up their own con job.

We must get up every morning and send a few thanks in the way of the Saudis, whom with their magnanimous benevolence provide us with 15% of our present debt service. Consequently our above average standard of living.
We must thank the Chinese becuae their labor camps and exploited workers provide us with cheap everything except a few other thing no yet figure out, like housing. In the process the Chinese send us the savings of their citizens who in fact they save every month around 40% of their income so they can retire securely.
If they knew what we do with their pension money......
We need tot thank the Japanese who with a strong sense of dignitiy and dictatorial behavior buy our debt at rates unheard of in history of issuing debt. Which will be the equivalent of esxporting 70% of their savings to the great US go-go live style.

Hey, we must thank capitalism for the power to detroy their assets. As it did when the Japanese economy and US asset values where at sky high and the Japanese pensions bought the top US buildings and thanks to the magic of the federal reserve all those assets become a bargain basement and a buy back for US insures waiting for the next resale. The Japanese invested at inflated values, and lost and average of 65% in every single dealsince the 80's, all that pays for our party time.
So.....when you get up each moning, say a couple of thanks to our beloved debt buyers for such wonderful partnership. They work hard we party hard. Now, as action items of thanks:
Light a candle for Shinto and do a couple of claps. Fast one day in the name of Allah, so your tommy knows how some kids feel. Do five minutes of Tai Chi and let's hope that the Chianese continue to use labor camps for cheap labor as the nazi did. Finally, the Ruskies need to get back to the herd and buy back all those dollars they just sold, and for that, I suggest drink a double Spice Russian Vodka Martini.
I hope you plan some indulgent luxuries to celebrate all of them in unison after you are done with the single thank yous.
!!Viva la Deuda!!

Taketh or Giveth

My take on a couple of fervent religious things.
There is not question that many individuals with the name of Iosephus and variations of the present translation of the name Jesus lived in the area were the stories attributed to him in the Bible. We know that the present interpretation of the life of such individual has not much relation to historic documentation. We also know the Bible as we know it today was lastly compiled in ten principal and different formats. The earliest Catholic codification of texts was done by the Roman codification of popular texts of 325 which basically was a coordinated political project.
Its purpose was to control the Near East and undermine the control of the Judaic elites. Four more codifications and text alterations occurred when the Koran appeared. By 780 was understood and rightly perceived by the Christian elites in the Middle East, the Koran was as a serious threat to their control. The Koran competed with the capacity to incite blind passion, as the Christians were, and challenge the power of the elites ruling from Constantinople. Thus, initiating the next emergent need for a new codification of biblical texts -first time referred as such in 750 ad- to “create military enforcement of expansion and defense of power.”
The corruption in the western-Christian church organization was rampant it was in the verge of self-destruction.
It wasn't until new threats mainly from Martin Luther, the church’s own corruption, it basically questioned the Church of Rome own dogma. It forced the council Trent to be called with the emperor sending delegates to represent the crown rights and avoid a war of power.
The justification of the many deviant behaviors exercised under the bible scripts were stripped, all changes to counter attack the powers emanating from new threats, internal corruption and land ownership- and external from the Turks under the flag of Islam.
In the air was the full question of how to use the bible. In a rough translation from the Enciclopaedia Catolica reads "It was determined that the Bible should be interpreted according to the unanimous testimony of the Fathers and never misused for superstitious or deviant purposes. Nothing was decided in regard to the translation of the Bible in the vernaculars."
It should be obvious that all religious books and interpretations are human in purpose and destiny.
It makes the Bible another human crafted document for control of social behavior. Most religious dogmas if implemented in honesty create a leveled equalitarian societies of respect referred as Christian societies. It has nothing to do with present pervert interpretation of the biblical texts.
It wasn't until 1562 that most of the present behavioral doctrines were adopted. It is agree among philosophers of power, that religion is a useful social tool of control, as is control over dogma, education, health, policing, taxation and armed power supporting the elites to control and wage wars of expansion with the purpose of exploiting the conquered.