Glenn, I love your current issue. Wonder why I didn't get it as an e-newsletter? We were away for the holidays, but I did not see it come in. Thanks for writing your newsletters Elizabeth Davis
I think the things you see are obvious. I also look at what will happen if we continue to neglect the Earth and rely on technology to conquer it instead of cooperating with it. I also see risk, looking internationally, at a possible "act of war" type EMP or general hacking of computers to inactivate things like the electric grid. There are also unpredictable natural events of such kinds, too. It is important to trust in God, no matter what happens, but that does not mean that we just sit down without thinking or acting. Wish I were closer to you; would love to once in a while just talk with you. Elizabeth
Right on!!! My personal opinion is that arable land is the best investment. (I don't have any.) Bitcoin etc is useless if we have something like an EMP and all the computers go down. Gold is fine, but one can't eat it and it is difficult to access if stored overseas so the government can't steal it. Your analysis, though, is absolutely precise. Thanks for writing it.
As usual you have nailed it with your article on the Fed and money printing. We are playing with Monopoly money.
As for the mask issue. I've stopped wearing one regardless of where I go. Funny, stores seem more interested in my money than my lack of wearing a mask. Amazing...
Glenn: I agree with your premise that the government is the driving force behind "inflation". It isn't that people have too much money as Ole Two-Shot is quoted as saying recently. If that is true, I must have missed the line for getting my share of too much money. That most definitely isn't a problem in my household.
Let's put it in concrete terms. If there are only 1,000 applies available in the United States for consumers to purchase, what do you think the price of an apple would be? $100? $1,000?
Now suppose there are ten million apples for sale in the U.S. What do you suppose the price of a single apple would be? Dollars are a commodity just the same as apples or pork bellies. The larger the supply, the lower the unit cost. Congress just authorized spending 7 trillion dollars. What do you suppose that does to the money supply. Those 7 trillion dollars don't even exist as paper money. They are merely zeros and ones in a computer somewhere.
The SSI contribution of the employer on $15 an hour is $1.135. His Medicare contribution is double what it was at $7.50 an hour minimum wage. His workers compensation insurance coverage is based on payroll, so in all likelihood, it will double. Do not think that worker's compensation insurance is a bagatelle. I spoke to an engineer whose company did offshore work on drilling platforms. He informed me that his company's worker's compensation rate was 100% of payroll. I exclaimed that he must be mistaken. He replied that he wished he were but it was 100% of payroll. I probably don't need to say it, but offshore platform workers earn very good money. They earn every penny of it though. Think what a $15 an hour minimum wage will do to the compensation of off shore platform workers. It will drive their wages even high than ever. Wonder why gasoline is so high? Not only the platform workers will get significant wage increases but so will the refinery workers as well as the truck drivers. Let me give you a real concrete example. Sixty-four ounces of ice cream not so long ago was $1.99. On sale it was $1.49. Today 52 ounces of ice cream in what looks like the same size container but it 12 ounces smaller costs $3.99 and on sale this week, I bought ice cream, 52 ounces for $2.49 a container.Trader Joes orange juice used to be a half gallon for $3.99. It now is 52 ounces for $4.99. When the new minimum wage of $15.00 an hour is in general force it will probably be $6.99 for a 48 oiunce container. Don't think the minimum wage doesn't affect folks making more. If Joe the sweeper who has just graduated from high school gets $15 an hour for sweeping the floor and dumping the trash, don't you think the cashier, the stockman, the store manager will all campaign for higher wages? Come on, if Joe who doesn't know "Sic 'em" from "Come here" is getting $15 an hours, as store manager who used to get $20 an hour before the minimum wage got doubled certainly should get $40 or $50 an hour. Think that won't affect the cost of what used to be a half gallon of orange juice?
I have to disagree with storing gold off shore. If the world economy collapses, Australia won't allow gold shipments out of the country. The US won't allow gold shipments into the country. Sure people smuggle dope though the mail all the time but do you really want your gold nest egg to have to be smuggled into the country for you to have access to it? If you buy gold or silver, make sure you have it in your hot hands. Make sure it is from a reliable dealer and put it in items that have a known value, Canadien gold coins are a sure source. US gold coins also. South African cons, and even our BFFs the Chinese Panda are a known value. I personally would stay away from gold unless you are one of the folks Ole Two-Shot was talking about and have too much money. The value of a Panda is quite high. You probably won't be spending that much money in one spot after an inflationary depression. I think silver is a more reasonable investment for folks in my economic bracket. Hopefully you wouldn't be buying 350 loaves of bread, but more like one or two. How are you going to take change if all you have are Pandas or Maple Leafs?
Keep up the good work, Glenn. People really need to get interested in economics.
In France, we've a minimum wage since 1950 (SMIG, then SMIC from 1970). Right now, it's value is €10.48 / hour, i.e. $11.86. Sounds a lot, isn't it ? But many, many people, from truck drivers to bricklayers, cooks to factory workers, get the SMIC and not more, whatever hard or important their job is. And when the trade unions complain, the bosses say : "You get the SMIC, so what ?".
Glenn, I love your current issue. Wonder why I didn't get it as an e-newsletter? We were away for the holidays, but I did not see it come in. Thanks for writing your newsletters Elizabeth Davis
I think the things you see are obvious. I also look at what will happen if we continue to neglect the Earth and rely on technology to conquer it instead of cooperating with it. I also see risk, looking internationally, at a possible "act of war" type EMP or general hacking of computers to inactivate things like the electric grid. There are also unpredictable natural events of such kinds, too. It is important to trust in God, no matter what happens, but that does not mean that we just sit down without thinking or acting. Wish I were closer to you; would love to once in a while just talk with you. Elizabeth
Right on!!! My personal opinion is that arable land is the best investment. (I don't have any.) Bitcoin etc is useless if we have something like an EMP and all the computers go down. Gold is fine, but one can't eat it and it is difficult to access if stored overseas so the government can't steal it. Your analysis, though, is absolutely precise. Thanks for writing it.
Bitcoin solves this! $BTC
As usual you have nailed it with your article on the Fed and money printing. We are playing with Monopoly money.
As for the mask issue. I've stopped wearing one regardless of where I go. Funny, stores seem more interested in my money than my lack of wearing a mask. Amazing...
Glenn: I agree with your premise that the government is the driving force behind "inflation". It isn't that people have too much money as Ole Two-Shot is quoted as saying recently. If that is true, I must have missed the line for getting my share of too much money. That most definitely isn't a problem in my household.
Let's put it in concrete terms. If there are only 1,000 applies available in the United States for consumers to purchase, what do you think the price of an apple would be? $100? $1,000?
Now suppose there are ten million apples for sale in the U.S. What do you suppose the price of a single apple would be? Dollars are a commodity just the same as apples or pork bellies. The larger the supply, the lower the unit cost. Congress just authorized spending 7 trillion dollars. What do you suppose that does to the money supply. Those 7 trillion dollars don't even exist as paper money. They are merely zeros and ones in a computer somewhere.
The SSI contribution of the employer on $15 an hour is $1.135. His Medicare contribution is double what it was at $7.50 an hour minimum wage. His workers compensation insurance coverage is based on payroll, so in all likelihood, it will double. Do not think that worker's compensation insurance is a bagatelle. I spoke to an engineer whose company did offshore work on drilling platforms. He informed me that his company's worker's compensation rate was 100% of payroll. I exclaimed that he must be mistaken. He replied that he wished he were but it was 100% of payroll. I probably don't need to say it, but offshore platform workers earn very good money. They earn every penny of it though. Think what a $15 an hour minimum wage will do to the compensation of off shore platform workers. It will drive their wages even high than ever. Wonder why gasoline is so high? Not only the platform workers will get significant wage increases but so will the refinery workers as well as the truck drivers. Let me give you a real concrete example. Sixty-four ounces of ice cream not so long ago was $1.99. On sale it was $1.49. Today 52 ounces of ice cream in what looks like the same size container but it 12 ounces smaller costs $3.99 and on sale this week, I bought ice cream, 52 ounces for $2.49 a container.Trader Joes orange juice used to be a half gallon for $3.99. It now is 52 ounces for $4.99. When the new minimum wage of $15.00 an hour is in general force it will probably be $6.99 for a 48 oiunce container. Don't think the minimum wage doesn't affect folks making more. If Joe the sweeper who has just graduated from high school gets $15 an hour for sweeping the floor and dumping the trash, don't you think the cashier, the stockman, the store manager will all campaign for higher wages? Come on, if Joe who doesn't know "Sic 'em" from "Come here" is getting $15 an hours, as store manager who used to get $20 an hour before the minimum wage got doubled certainly should get $40 or $50 an hour. Think that won't affect the cost of what used to be a half gallon of orange juice?
I have to disagree with storing gold off shore. If the world economy collapses, Australia won't allow gold shipments out of the country. The US won't allow gold shipments into the country. Sure people smuggle dope though the mail all the time but do you really want your gold nest egg to have to be smuggled into the country for you to have access to it? If you buy gold or silver, make sure you have it in your hot hands. Make sure it is from a reliable dealer and put it in items that have a known value, Canadien gold coins are a sure source. US gold coins also. South African cons, and even our BFFs the Chinese Panda are a known value. I personally would stay away from gold unless you are one of the folks Ole Two-Shot was talking about and have too much money. The value of a Panda is quite high. You probably won't be spending that much money in one spot after an inflationary depression. I think silver is a more reasonable investment for folks in my economic bracket. Hopefully you wouldn't be buying 350 loaves of bread, but more like one or two. How are you going to take change if all you have are Pandas or Maple Leafs?
Keep up the good work, Glenn. People really need to get interested in economics.
In France, we've a minimum wage since 1950 (SMIG, then SMIC from 1970). Right now, it's value is €10.48 / hour, i.e. $11.86. Sounds a lot, isn't it ? But many, many people, from truck drivers to bricklayers, cooks to factory workers, get the SMIC and not more, whatever hard or important their job is. And when the trade unions complain, the bosses say : "You get the SMIC, so what ?".