Archive for category business

Why Not Run $1 Trillion+ Deficits?

This is why: Analysis: High-yield and U.S. debt at risk if Japan repatriates.

The United States now stands at the brink of a debt crisis. The Obama Administration has embraced the Keynesian model of recession intervention: stimulus. This embrace has not been merely a handshake, but rather a full-on bear-hug.

The recent tragic and devastating dual natural disasters in Japan, resulting in a frightening dual environmental and public health nightmare highlights just one of the many reasons to keep public debt under control.

The article linked above may be a bit confusing if it is the first of its kind that you have read, but permit me to summarize it.

Japan owns a great deal of public debt from sovereign nations around the world. It has invested heavily not only in quickly developing nations such as Brazil, but also in the United States. As the article states, Japan holds nearly $7,000 billion ($7 trillion) in external assets; $890 billion of which are debt obligations of the United States.

With the need for Japan to recover from a $180+ billion disaster, it is quite likely that Japan will be pulling funds back into the country out of investments that it has from around the world. Even if Japan doesn’t proceed with this course of action, it’s almost a certainty that it will be a minor or non-existent partner in funding our debt for the near future until its rebuilding is complete.

All of that to say this: there is one less major investor for the United States to count on in the near future.

Who will be taking up the slack in United States debt purchasing during Japan’s recovery phase? Right now it’s anybody’s guess.

Should national tragedies affect other key investors in U.S. debt–China–it could lead to large scale issues here in the States. The loss of consistent debt purchasing by Japan will not be an easy pill to swallow, which makes it all the more necessary for the United States to get its financial house in order.

One issue President Obama hasn’t yet had to deal with so far during his Presidency is a lack of financial backers around the world. The United States has always been an excellent investment for countries around the world; a huge economy with huge resources. The U.S. cannot run huge budget deficits without someway to pay for them. Sure the United States could just print all of the dollars that it needs to pay its financial obligations, but at some point inflation takes hold and the printing press must stop. The only other way to meet it financial obligations is to borrow money from other countries.

Adding $1,000+ billion deficits every year for the foreseeable future has always been scary, but what happens when one (or more) of your best ‘customers’ doesn’t shop at your ‘store’ anymore? Not good.

–the civil commentator


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Apple? Greedy? Yep.

From Geeky Gadgets: Publishers Speak Out Against Apple’s New App Store Subscriptions.

I find it curious how Apple has gained such a sterling reputation with the liberal ‘in’ crowd. Apple is a huge company that is definitely looking out for its stockholders. The best way for a company to look out for its stockholders is to try every way possible to turn a profit–a.k.a. be greedy. Oh, and by the way, where’s that iPad, iPhone, iPod made? Yep. China.

The sourced article above highlights for you that Apple, despite being the preference of ‘open-minded’ people all over the world, is just as greedy as Microsoft, Exxon-Mobil, BP, Wal-Mart, et al.

Oh, and another thing: Rush Limbaugh loves his Apple products, too. Shouldn’t that send some Apple users running to the recycle bin with their MacBook Air’s, iPad’s, and iPhone’s?

Just remember folks, just because a company turns a good profit doesn’t make them evil. Furthermore, just because a company turns a ridiculous profit doesn’t make them evil, either.

So welcome to the ship Apple-junkies! You’re feeding the capitalistic beast just as much as the rest of us.

–the civil commentator

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Survivor: Mobi Islands

Another one bites the dust!

Microsoft Rescues Nokia Rescues Microsoft | ConceivablyTech.

With Symbian out of the picture, the smartphone platform playing field has now been pared down to four players (in alphabetical order):

Windows 7 Mobile

Who will win the battle? At this point it’s anyone’s guess. With HP making a huge marketing push for webOS, along with the news that the devices will be Enterprise-Ready off-the-shelf, some of the existing platforms may have some stout competition.

I guess we’ll see…

–the civil commentator

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EPA to Regulate Milk Spills Just like Oil Spills

File this under, You’ve Got To Be Kidding Me!!!

From Yahoo! News: EPA to Regulate Milk Spills Just like Oil Spills.

Just another example of the runaway train that is the EPA. If this doesn’t make you sit up and take notice, then we’re in trouble.

–the civil commentator

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Theft By Inflation

Inflation Always Steals the Benefits of Devaluation.

This is a very interesting article that I hope you will take the time to read. It will detail for you why our currently weak dollar will work against us as Americans and why a strong dollar will enable us to come out of the doldrums we are currently experiencing.

That being said, the process to strengthen the dollar is not an easy or pleasant one. It will involve pain and though the American people can deal with pain, they rarely let politicians keep their jobs when they experience it. Therein lies the dilemma.

The availability of cheap money, like the ridiculously cheap money that Americans have access to now and have become accustomed to, is a result of extremely low interest rates. Cheap money doesn’t just mean low interest rates, it also means low value. There are a number of methods to raise the value of the dollar, but the primary method available for use by the Federal Reserve is raising interest rates.

Raising the interest rates in a slow or stagnant economy can have deleterious effects on both the economy itself, and on the mood of investors in the stock market. Raising interest rates tends to slow economic growth because companies and individuals aren’t able to borrow money to make their money stretch. Companies and individuals can’t borrow money to make capital investments or buy gadgets without having to give up making more capital investments or gadget buying in the future.

This is why the economy and the stock markets don’t like to see the Federal Reserve raise interest rates. They fear that it will exacerbate an already delicate recovery, and that’s why money was made ‘cheap’ beginning as early as 2001 and remains ‘cheap’ to this day.

Money was made cheap during the recession of 2001 and the subsequent distress on markets after the attacks of September 11th. We as a country never grew up and weaned ourselves from this cheap money; and as such we have come to rely on its utility in our economy.

Until such time as we are willing as a country to accept some economic pain or until such time as the Fed is forced to raise interest rates or risk economic collapse; dollar weakness and its harmful effects will have reign on our economy.

–the civil commentator

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U.S. Air Force – Made in China?


Wall Street Journal: China Eyes U.S. Defense Contracts.

Call me crazy, but doesn’t this seem like a bad idea? This headline immediately struck me as odd and made me uncomfortable, but the mere fact that China is attempting to win U.S. military weapons contracts means that it’s a possible for foreign companies to supply the United States with military arms and technology.

I did a little looking around on the web to find information on foreign suppliers of U.S. military equipment. It’s easy to find information about U.S. companies that supply military equipment to countries around the world, but it’s a great deal more difficult to determine if the United States imports any of its military technology and equipment. After a bit of scouring, I found this article from the New York Times from 2005:

High-Tech Industry in Israel Goes From Bust to Boom.

This article is only speaking to the resurgence of the Israeli technology industry and happens to mention that one company based in Israel supplies the United States with some of its night-vision technology. So although this article is by no means an expose of U.S. military weapons suppliers; the fact that even one company outside the United States–albeit an ally–supplies the U.S. with some of its military equipment would seem to indicate that this practice is not prohibited.

China is not outwardly hostile to the United States, but it’s been widely reported that they routinely make attempts to compromise U.S. military secrets through electronic means. Given this fact and based on their aggressive monetary policies they certainly cannot be considered an ally.

It should be obvious, but it’s in the best interest of the United States to prohibit the awarding of military contracts to foreign suppliers from hostile countries. For our own security, an outright ban on military imports from foreign countries altogether should be considered; but for some reason, I don’t see such legislation getting too much traction in Washington.

China’s ambitions to get into the military exports business in the United States may end up coming down to a game of chicken between the United States and China. We need their cheap and efficient industrial machine, and their investment in our debt. They need our voracious appetite for cheap products. The past few administrations haven’t been all that keen on playing tough with the Chinese and neither has the current one. For our own safety and security, this is one time when the U.S. needs to man up. Stay tuned.

–the civil commentator

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HP takes on Microsoft…oh and Apple, too


From HP CEO Apotheker: “the [new webOS] hardware is ready”

In their upcoming event, “Think big. Think small. Think beyond.” HP is obviously trying to take a bite out of the Apple stranglehold on the cool-tech market. It’s really not much of a stretch to say so, especially when HP CEO Leo Apotheker tells his audience, “… get rid of your iPhones and iPads.”

In my extensive research I have found that possibly one of the larger implications of HP’s webOS event is a shot across the bow of Microsoft’s enormous software ocean-liner.

Sure, HP is saying that they want to take on Apple. Apple currently owns the market in terms of portable, interchangeable technology with the symbiotic relationship between all of its products; but what is webOS if not an eventual competitor to the Microsoft suite of operating systems?

The world is going smaller and more portable. People don’t want to have to unplug this and then plug into that. They want to click here to move something there. They want to put down their smartphone, pick up their tablet, use that to find their media, click an icon and display it on their TV.

Seriously, can it really be said that Windows Mobile is the same thing as iOS? On the other hand, it can easily be said that webOS is the same thing as iOS (don’t freak out, I know they’re not the *same* thing). If the consumer computing world is migrating away from the desktop model, then Microsoft is quickly losing a large portion of its market-share; and based on what was revealed at the 2011 Consumer Electronics Show (CES), Microsoft is lagging behind.

I don’t think that Microsoft is in any danger of losing it’s dominance in the office; but when it comes to what people start using when they leave the office, the future is most certainly in doubt.

Microsoft has no interest in *only* being in the business of providing office products. We all know how that has turned out for Big Blue.  IBM is still a major player; but does anybody still call they’re PC an IBM-compatible? So you can be sure that Microsoft won’t take this assault lying down. Rest-assured, however, that with the webOS platform being one of the big three mobile-consumer computing platforms; it must certainly be on Microsoft’s (and Apple’s) mind that HP isn’t content to just make hardware. They want a share of the whole enchilada.

So February 9th, here we come. Look out Microsoft…oh, and Apple, too!

–the civil commentator

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