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June 4, 2006 at 6:11 AM in reply to: Financial book review – “The Creature from Jekyll Island – A Second Look at the Federal Reserve” by G. Edward Griffin #26161
powayseller
ParticipantThe Dollar Crisis makes arguments about our falling dollar based on hundreds of data, charts, and tables from the Federal Reserve, Census Bureau, IMF, World Bank, HUD. Almost every sentence in that book has a footnote. Every single sentence he writes is backed up with data.
Ahead of the Curve is also filled with charts, so I could see for myself the correlation among the items the author claims. The author maintains a website, so his charts are updated as the government releases more data.
Is the book mentioned above data-driven? Does he show charts of home prices before and after the subsidy? Charts of the amount of M3 increase, inflation, housing increase, so we can see the correlation? How does he get his information? Did he work at the Federal Reserve, interviews? If all this is answered, then I would definitely like to read the book.
“After 60 years of subsidizing and regulating the housing industry, how many young people today can afford a home? Tinkering with the laws of supply and demand, plus the hidden tax called inflation to pay for the tinkering, has driven prices beyond the reach of many”
The Federal Reserve 1% interest rate experiment made homes unaffordable. Before this low interest rate, which stimulated demand and raised prices, young people were buying homes with 20% down.
ParticipantInteresting…if the Millionaire authors wanted to prove their point, they should take 1000 20-somethings with and without the Millionaire traits (B or C college students, high SAT scores, frugal, no need to show-off with money, save, budget regularly, live below their means). Follow these people over 30 years, and keep track of their net worth. Then they would know if the traits truly are predictors.
For immediate data, they should have looked at non-millionaires and determined if there are overlapping factors. Do both groups have high SAT scores and mediocre college grades? Then they can do that probability stuff, like r-squared, and calculate how much of the wealth is coincidence, vs. linked to those traits.
One premise of the book does make sense: the more you live below your means, the more you can save and the greater your net worth.
I found it interesting that they didn’t ask the millionaires about personal satisfaction. What is the point of being a millionaire if you’re so frugal, you won’t even take your wife out to dinner? Some of those people are just nut jobs. What is the link between net worth and happiness? Well, there isn’t one. Ever see the photos of those beaming poverty-stricken people in 3rd world countries? So the whole millionaire thing doesn’t impress me.
Personally, I want enough money that my husband can stop working if and when he chooses. Just some financial security, so we can support ourselves while still on this earth.
What good is all that millionaire money? I find that I worry about money more, now that I have more. I should be more peaceful about it, but am more worried. What if I lose it? That’s always on my mind.
ParticipantAuctions and foreclosures are not good deals yet. The minimum bid is the market rate.
My landlord, who is a RE mogul for 20 years and has investments all over the country (and Mexico too), said foreclosures are “nothing”.
In auction deals, you cannot inspect the property. What if it is trashed? What is the foundation is unstable, the roof leaking? How will you know? Can you at least get the tax lien, mechanics lien status? Get a title report?
Why does a city auction a house? Wouldn’t a lender do it? Does the city have an unsatisfied lien on it?
I’m sure they are required by law to advertise it in the paper within a certain timeframe prior to the event.
ParticipantI agree with you PD about the importance of reducing reliance on fossil fuels.
Did you read his post from yesterday, where he was at the GM dealership and the place was dead?
The car dealers will be among the first to see the fallout of the rising interest rates and difficulty in taking equity from homes. All those new cars your friends and neighbors are driving are courtesy of their home ATM, and the wealth effect. Now that that’s over, you won’t see as much.
My daughter noticed last fall, that she was no longer seeing her friends’ parents drive up in new cars. We used to regularly see cars with the dealer license plate. That is now a rarity.
I can’t wait to see the earnings reports from the car dealers. Expect Q2 2006 to be the beginning of a long decline.
Participantdavelj, if you don’t feel it’s worthwhile to spend 4 minutes to make your point, then I don’t feel obliged to take your point seriously, since I have no basis on which to determine if what you say makes any sense.
Furthermore, why would you make a point, say you don’t have the time or patience to explain it, but then expect me to spend several hours and money to obtain and read the book? You expect me to spend more time on validating your point than you do?
So if you could backup the premise made in the thread you started, I would be grateful and very interested in what you have to say.
Participanths, interesting point. And you’re a military wife, too. How does your husband feel about the US foreign policy? Did he go willingly into any combat?
I always said that the president who wages war should put his own life on the line. He should challenge the other leader to a sword fight.
Then the war is decided by only one life lost.
If it’s that important, let him go too. Napoleon did that. He fought with his troops.
What does China think about Iran and their nuclear ambitions? Why are they not worried about it? Do they just want to sell the bomb making material to Iran, do they want to keep negotiations open to buy oil, or do they think it’s not a threat?
About Abu Ghraib – that was just a few people acting out of line. If someone at IBM raids the petty cash drawer, do we say that all technology companies hire thieves? The men and women of the military are 99% honorable, hard working, patriotic. I just feel bad that they have to leave their families for so much, and that they make their living occupying other countries and killing people. That is bad karma. You cannot tell your creator you killed those Iraqis because your president asked you to. That’s not a good reason. Now if those Iraqis came here and attacked us, I’d say we should fight back. But why do we always have to be the ones to invade, to start a war? PD, do you defend this? I’m curious why anyone thinks this is good. Just trying to learn…
ParticipantI believe the causation is education of parents causes kids to do better in school. Mother at home causes kids to feel more secured and loved. Every kid beams when his mom comes to help in the classroom, goes on fieldtrips, picks him up from school. This is for the emotional nurturing. It’s important that people make the proper choice in a mate so they can give their kids a life with 2 parents under one roof. Having an intact home is not chance, it is a result of making healthy choices.
Studies show that children raise by moms, without a dad in the home, are much much more prone to problems with drugs, violence, dropping out of school. It’s a big social problem. I dug up all the studies once to send to a friend, who seemed to think her ex-husband was disposable to her kids.
I did not come from an intact home either , but my kids have it better than I did. They have both mom and dad, with mom being home for them. How much better can life be for a family?
davelj, I’m certain your mom was an excellent role model, and she raised you well and you felt loved by her. There are always exceptions.
ParticipantThe Millionaire Next Door is based on statistical questionnaires and interviews. The premise is simple: live below your means, spend less than you earn. What is pop culture about that?
It makes sense that a plumber or A/C shop owner don’t try to live the lavish life. Being content in a lower-class working neighborhood, they keep their expenses low, reinvest their profits in the business, save, are frugal. This all makes sense. Not to you? You think these people got rich by chance?
June 3, 2006 at 2:19 PM in reply to: Financial book review – “The Creature from Jekyll Island – A Second Look at the Federal Reserve” by G. Edward Griffin #26144ParticipantSounds good, I’ll look for it.
Even if our monetary system is not ideal, it could continue working for another 100 or 200 years.
Remember people shorting homebuilders in 2004? Warren Buffett shorting the dollar in 2005? Excesses can take long to correct, and we can lose money by being wrong in their timing.
Another thing we must remember is that even if we have another great depression, we will work our way through it. This country is full of talented and creative individuals. When called on to buckle down, work hard, save, and forget about get-rich-quick-schemes (real estate, stocks, lottery, being the next American Idol), we can pull through to the next economic boom.
California is another problem. About 20% of Californians don’t have a high school degree. Christopher Thornberg said education is the biggest problem facing our state, and the one getting the least attention.
ParticipantI love America, and the American people. I distrust the government. Perhaps the occupation of other countries benefits the USA, otherwise, why do they do it?
I also used to think that the US invades countries for their oil. Iraq had switched to selling oil in euros, and the US made sure that was reverted back to selling in dollars. Yet, why don’t we invade Nigeria or Venezuala, oil-rich countries? Or other African nations, which have lots of oil and other minerals? They would be so easy to plunder. It seems the US is more interested in controlling the Middle East. Is oil the only thing the US government wants? Or is it helping Israel?
Regarding Israel, Iran, Iraq, Afghanistan, I am amazed how dry and barren those countries are. Perhaps that’s why Jesus went there, to bring some hope to such a desolate place. In the movies I’ve seen filmed on location in those countries, and other footage, there isn’t a tree, shrub, flower, or even weed in sight. Those countries are too dry even for weeds to grow. They are not pretty at all. I would not want to live there in all that dry desert. Why do people fight about such a barren land?
I wonder if the military really support the goverment foreign policy. I admire their patriotism, but wonder if they are blindly following. Perhaps the military personnel should ask Bush what their companions died for in Iraq. I can understand dying to defend our country, but why die for invading another country? That isn’t noble. Why are the brave men and women in the military doing this? Do they know something we don’t?
In any case, I don’t feel safer from terrorism attacks by the administration foreign policies. It seems we are more vulnerable, because instead of working with other countries, we take the tactic of bossing them around, and making more enemies.
This is the foreign policy statement, “You Englad can have nuclear weapons, but you Iran cannot. We decide who gets to have them, but we will keep them for sure, in case we need them to put you in line. We decide if your leaders are appropriate. We don’t care if you like them or not. If we don’t like your leaders, we may invade and overthrow them. If anyone gets in our way, all options are on the table. That means nuclear as well. This is why we need our nuclear weapons, so we can intimidate you to do what we say. And our allies? Don’t need ’em. We can go it alone…” Isn’t that what Condie Rice is really saying?
I don’t know if a nuclear Iran is a problem. In world history, only the US has used nuclear weapons. Perhaps the US is the country which should not have them. Since they have a precedent of using them. After all, the other countries have shown restraint.
ParticipantWhy does the US have military presence all over the world? I appreciate a military which defends us, but it seems we do more offense than defense.
The soldiers went into Afghanistan to find Bin Laden, and the others responsible for 9/11. But then it turned into the war in Iraq. Where is the link? Bush said he had to go into Iraw to get out the WMD. When they weren’t found, why didn’t he admit he made a mistake, and leave?
Why doesn’t Switzerland have a military? Why are the Europeans oppposed to American foreign policy? Why aren’t other nations siding with Ms. Condoleeza Rice about Iran’s nuclear ambitions?
Perhaps my disinterest in history serves me well. I don’t blame the past for today. I look at what’s before me today, and whether it makes sense.
I question why a country with the largest deficit in the world, a debtor nation, can really afford to wage war all over the world. I ask why those terrorists hate us so much. I know it’s our foreign policy, but not having studied it, I’m not sure why?
Why don’t we retrain half our military, to do R&D on alternative fuels, environmental improvements, technology products?
As far as generosity, it is American people, not the U.S. government, that is generous. After the tsunami, the man in charge of raising money was quite upset at the lack of money coming from the wealthy nations. I would like to see how much we spend to help in African nations, vs. what we spend to overthrow governments we don’t like.
I don’t think the US foreign policy is popular around the world, and I think it’s because of the dominance and meddling. Americans are more interested in watching Survivor than voting. We say we don’t like the war in Iraw, but don’t protest or write to the Congress to stop it. We’re just too lazy. Myself included. We don’t care, because we are unaffected by it.
Let Bush go back to Afghanistan to get that Bin Laden guy. Why is he so hard to find? And while he’s at it, get out of Iraq. He’s creating more instability there. Just wait though – Iran is the next target. Our budget deficit looks sweet now – just wait until you add Iran to the war costs.
PD, why are defending the war? What do you think it accomplished, and what can be gained? Why war in Iraq, and not in Nigeria? Don’t they need our help too?
Why spend money on fighting in Iraq, but not fighting AIDS? The war money could provide health care to every American. Isn’t that more patriotic?
Participantanxvariety – I subscribe to the Zeal Intelligence (ZI), the monthly letter, and the stock you mention is covered in the Zeal Speculator, the weekly service. However, since all their recommendations are listed on the last page of ZI, I picked it out to buy. But first I needed to know what a Nov 60 call means.
The Zeal newsletter explains that gold moves with the price of the dollar in Phase 1, but on its own in Phase 2.
I read Chris J’s newsletter, and he has his really cool charts analyzing gold, the US$, inflation, and more. He writes that in early 2005, we had a dollar rally, and gold went up. So he found that the US$ doesn’t create fluctuations in the price of gold. He finds gold is more related to inflation. You’ll have to sign up for the newsletter to see this. Does this jive with Zeal? Zeal says in Phase 2 of the gold bull, the dollar and gold are not correlated, but can coincidentally move together. It seems these guys would make the same entry point into gold, just looking from a different angle. Zeal is waiting for a return to the 200dma, while Chris is waiting for all his technical signals to line up. My guess is that they will select the same entry point.
ParticipantThe lead mining company is still in their list for June. It sold off in May because it came down 15%, but they re-established their position. I made the mistake of not reading the last page, and bought it based on the writeup and didn’t see the stop loss. So I own it without a stop loss.
I am surprised the oil stocks they found are so cheap, less than P/E of 9. I am going to buy a few. Oil is not going to get much cheaper. It may go down short term, pick up for July 4 driving weekend, go down, etc, but long term trends are up.
Participantasianautica said – When applying to colleges, I doubt they put that much weight in the school you graduate from but more on what your GPA is and what your SAT score is.
What matters is the environment. Mother at home, instead of working. Classmates who have mothers at home, so they are emotionally strong, value academics, pursue interests, have opportunities.
The higher test score schools attract the better teachers. More teachers apply to these schools, so the schools have their pick of staff.
Higher test score schools are a result of kids who come from “good” homes. Kids from educated parents are raised to value education. Since education is linked with income, you find that the higher test scores are in higher income areas. It’s not that poor people are less smart, but that their parents did not go to college, and are less likely to be support education for their kids, less likely to have caring parents, more likely to have a dysfunctional household.
My daughter, a student at Poway High, is surrounded by students who want to excel. It is cool to excel, do well in school. She tries to keep up with her friends: who can take the most honors and AP courses?
Is this the same way at Chula Vista High? National City High?
Again, the test scores are a measure of the types students that will surround your student. I care more that my daughter works hard and can solve problems, and be self reliant, than that she is the best student at her school. This is why we moved to Poway – for the environment of other like minded families.
Read The Millionare Next Door. Over 70% of them got Bs and Cs in college.
Going to Ivy League schools doesn’t increase your odds of having a happy marriage.
I think the mother at home in Mira Mesa is an example of what we should all strive for: kids and family are more important than status, and there is more to life than going to the “best” schools. These kids are going to be better off in the worst Mira Mesa schools, assuming mom at home spends time with her kids, than if she worked and they went to La Jolla Country Day.
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