Posts Tagged ‘Economics’

Collapse of the European Union – An Insider Perspective

One of the advantages of being a professional scientist is you meet people from all over the world. In the lab this week we have a visitor from Italy.

Me being me I was curiuos about the speculation seen here about the demise of the Euro. I had a previous post in which I predicted it would die off due to all the bailouts. This appears to not be the general thought in Europe. They will want to keep it but they are thinking that what would be best is some intergovernmental controls on what other folks can do.

Interestingly they want to take the same approach as is done here in the United States. One country fifty states.

Odd how they like our approach of 50 pseudoindependent govnerments with one unifying group at the top. INDEPENDENT states with some control of what goes on between them. NOT one massive thing at the top dictating all.

They like the model. I wonder what they think of our modern day execution of that model.

I shall try to find out and get back to my faithful readers.

The European Union and Bailouts

Let us not forget that debt issues with nations are not new. Many countries of used debt as a way to finance various things, wars, roads, etc. Never before in history has it been used as a method of sustaining the ‘normal’.

I think we need look no further than Europe to see our future if we don’t adjust the steering on the ship that is the United States. There are talks now about several other countries needing bailouts. The first after Greece and Ireland being probably Spain. They are having some really bad budgetary problems and they are just hoping that deep spending cuts will fix it. Deep spending cuts normally means more people on various forms of ‘assistance’ which is a different budget column no one ever cuts. I’m sure Spain isn’t counting for what will be the increased spending there and in my opinion as a result will be asking for a HUGE bailout from the rest of the EU as they all share a currency (the Euro).

The issue is normally when a country gets in this predicament they just cause inflation therefore the money is worth less than it used to be and the level of debt doesn’t seem so bad. We are toying with that here in the US (doubt me? Wait six months then let’s talk). Here is the problem….Germany….They are the biggest bank account over there to go take from and bail out other countries. The challenge is they aren’t in THAT great a shape on their own. So after bailing out Greece and Spain what happens? I think the Euro as a currency will go away, or stupidly the US will try to bail out all of Europe.

Now that being said what happens next? The world resorts back to gold? I’m really not sure what happens next but it doesn’t appear like it will be pretty economically speaking. What I am saying is that as the world economy becomes more and more connected we may not be out of the recession woods just yet. I think it gets worse before it gets better due to lack of economic leadership that makes sense anywhere. When I say makes sense I mean like as in a world that understands ENORMOUS debt is BAD!!!!


Financial Advisors – Huh?

I tune in to talk radio often. If you listen on Saturday or Sunday there a wide array of financial advisors on the radio. The conversation is always the same.

How much do you make?

How much have you saved?

Do this…(Usually followed by call my office and become a client).

Somewhere in there they say debt bad, savings good.

Do they not understand the point is to try to teach people things not just instruct?

I have managed my own portfolio for a while. I will say this….With a little bit of homework on your investments beating the market isn’t difficult.

Mutual funds can tie the market, some even beat it and that works if you want to invest and hide your head in the sand. But if you like taking care of business yourself here is my advice. Read 4-5 books, do your homework on each company and go for it. I a mere scientist made over 80% last year and am up over 30% this year.

Financial advisors by the way usually charge either enormous hourly fees so if you make money or not they don’t care…Their other option is a percentage of every sale if you made money or not.


Atlas Shrugged, Ayn Rand and Who is John Galt?

So I finally finished this book.  I am not sure what can be said about it that hasn’t been said before.

I could describe the story line but everyone else has.  So here is my take or thoughts on it.  The book goes to a few extremes.  I don’t think every thinking person would leave many are too passionate to do that.  However if they did the world would crumble.  I do know a bunch of people too timid to make a decision now so that was kind of interesting to me.

I do however think one thing about this book that I think is probably new.  It should be REQUIRED reading for any person wanting to hold the office of Mayor or higher in Government Service.  If not this book at least a look at the underlying philosophy of it or something near it.  I am not saying that one should get preachy that is where everyone screws up.  It just shows what can happen at the various extreme positions and perhaps get people to not be that deep into any of those extremes.

Atlas Shrugged Ayn Rand

I have been reading Atlas Shrugged by Ayn Rand.  I am maybe 150 pages away from finished.  I have to say it is a good book, not bad.  Its well written (although she could have used an editor and the author is looooooong winded).

I agree with various people.  You can probably go through the current administration and assign some of the characters in the book to various people in the administration and come close.  But I think you can probably say that of the last three administrations.  Maybe not to the extreme that is happening today but it probably works.  That’s the good point to the book.

I have always wondered what would happen if the hard working folks ever left and decided to stop.  I think the book captures it well of the consequences of that.

It is a good book, it probably works for our time and the last 20 years.  More extreme as we go forward in time which is kind of the point of the book…