Tuesday, December 15, 2009

That dreaded "I" word...

Yes, INFLATION. Anyone alive in the Jimmy Carter era just visibly shuddered (I know I did)... What about inflation? Well, the Fed has kept rates incredibly (artificially?) low in order to spur on the "recovery" (again in quotes due to the low rate of job creation) and certain sectors have experienced rising costs. The Producer Price Index (PPI) is up, which would typically bring us a rate increase--ditto for consumer goods and energy pricing. SO if Inflation is coming (or is already here as some say) we would typically see the Fed raising rates after this week's meeting. What's that mean to you and me? Well, things seem to be improving relatively quickly, except for jobs, though there was a small drop in November's unemployment numbers. While energy prices are up the price of oil and gasoline has dropped recently. In essence there are a lot of positive things happening (even increased consumer spending was reported!) but there is still a 'wait and see' feel to our nation. I don't think anyone will feel comfortable while jobs are still getting slashed (which will continue into 2010 per many Economists) and until this health care fiasco is sorted out (put it this way--if you were a small business owner, would you be hiring right now with the uncertainty of being in business with the possible changes on the horizon?). Likewise, we have a long way to go despite all the 'dog and pony' shows going on about banks. There are few modifications taking place and the ones that are proceeding aren't helping to stop the flow of foreclosures. And to add to the misery, we STILL have at least a year of adjustable rate mortgages 're-setting' (possibly two) due to the large numbers of 5/1 ARM refinances that happened... well, just over 5 years ago. So what of inflation? If things keep improving and (as noted in several postings) if we continue 'printing money' the Fed will HAVE to raise rates. Will the struggling economy be able to take that shot? As always, time will tell :) Good luck, God Bless, Be safe... Bo

Monday, December 7, 2009

Why the IRS should go away!

I have always noted that I am a fan of the "Fair Tax" as it levels the playing field for ALL Americans--Bill gates would pay the same tax rate on a Ferrari as I would pay for a gallon of milk, not to mention people who hide their income and don't pay their 'fair share' (to coin a Liberal catch-phrase). Spare me the details about the working poor being penalized as you probably haven't read the bill (someone correct me, was it HB 5 or 25 or something??) and don't understand the REBATE they would receive... But I digress. If you are a FAN of the IRS (or even if you aren't), please read this article of the IRS and how they managed to pour salt in the wounds (acid?) of a hard-working American. God Bless this family and I pray that their ordeal is over. Are YOU next?