December 16, 2013
- The “income inequality” crowd: Not socialists, just fools, a reader suggests
- Too poor to profit from the Fed, too rich to avoid the “fools”: What to do?
- A Santa Claus rally, or a celebration of Bernanke’s imminent departure?
- Google becomes a military contractor: Byron King’s profitable backdoor play
- The new wrinkle to New York’s RV trend… a new way to skin drivers without their knowledge… criticizing the lifestyle choices of others (!)… and more!
“Didn’t Jesus say, ‘The poor you shall have with you always’?” a reader inquires.
Our brief foray last week into the subject of “income inequality” prompted some curious preaching-to-the-choir responses. For the record, words to that effect show up in three of the four Gospels.
“There has been and always will be a top 1%, 10% and 20% of income earners,” writes another reader. “Without knowing who they are, it’s just numbers — big deal. Forty years ago. Bill Gates and hundreds of thousands of others were not on that top income percent list!
“I find it’s just a class envy cliche overused mostly by people who only wish they were in that top income percent club. It’s wrong to call these ‘experts’ socialists, communist or any other label. There are just fools.”
No argument here. The problem is the “fools” have half a mind to redistribute some of that income — maybe yours. And it’s not good enough to tell them to shut up and go away because everyone’s income is climbing, just not always at the same rate.
After all, a rising tide lifts all boats, right?
That was undoubtedly true in America for much of the 20th century. It is no longer true in the 21st.
As Marc Faber writes in the current Gloom Boom & Doom Report, “If I were to look at the average family income, excluding capital gains, adjusted for inflation between 2002-2012, it is clear that 90% of these families experienced a decline in real income and another 5% experienced hardly any gains.
“In fact,” he goes on, “it is shocking that only 0.1% of families achieved substantial gains in real incomes. Yet I find it hard to believe that it is because of these 0.1% that the rest of the population suffered.”
As so many of the “fools” believe… heh.
“A more logical argument,” Dr. Faber goes on, “would be that the Fed’s monetary policies have failed to boost the real incomes of most people, but have had an enormously favorable impact on just 0.1%, or the ‘1%’ as they are commonly referred to.
“In fact, I would argue that the Fed is fully responsible for the fact that 90% of U.S. families have had declining real incomes (inflation adjusted) over the last 10 years or so (as money printing raised the prices of energy, food, education, transportation, health care, insurance, etc.) and have experienced a decline in their net worth. After all, it was the Fed that repeatedly and deliberately created and continues to create bubbles, which benefit only a minority, while hurting the majority.”
If you fall anywhere between the best-off and worst-off categories on the above chart, you’re under assault from all sides.
You’re not rich enough to substantially benefit from the Fed’s machinations… but you are rich enough to be targeted by the “fools” — the redistribution crowd of academics and politicians and Warren Buffett.
With that in mind, we extend our final invitation to an event that could help you defend yourself from this assault. With almost no effort on your part, you could take on a “second job” that substantially gooses your income. My boss, Agora Financial publisher Joe Schriefer, has been doing it for close to five years.
Tonight at 7:00 p.m. EST, he’ll conduct a live demo showing you exactly how he pulls it off — raking in as much as $405 in only five minutes. “You’ll see everything on my screen — and exactly what I’m doing. You’ll see the cash show up immediately in my account. You’ll even see me spend my instant payout on gifts — just to prove the money is real.”
Then you’ll learn how to put the strategy to work for yourself.
It costs nothing at all to look in on this live demonstration. And if you can’t make it at 7:00, we’ll have a rebroadcast at 10:00 p.m. EST. All you need to do is sign up for access: Here’s where to go.
Stocks are rallying for no obvious reason as a new week begins. Every major index is up at least three-quarters of a percent as we write. The S&P sits at 1,788.
The Federal Reserve’s Open Market Committee begins two days of meetings tomorrow, climaxing on Wednesday with a “policy statement” and Ben Bernanke’s last press conference as Fed chairman. (Aren’t you feeling all tingly?)
In the meantime, traders are chewing on a mixed bag of numbers:
- Industrial production: Up 1.1% on November, the biggest one-month gain in a year. This index, maintained by the Fed, is now higher than it was before the “official” start of the 2007-09 recession
- Flash PMI: This early read on manufacturing in December is nearly unchanged at 54.4; 50 is the dividing line between growth and contraction
- Empire State Manufacturing Survey: The Fed’s measure of factory activity in New York state is essentially flat, as it’s been throughout the fourth quarter. New orders are shrinking.
Gold is firming a bit from its close on Friday, to $1,242. Silver is within spitting distance of $20 again, at $19.84.
Google has joined the military-industrial complex.
The company just acquired Boston Dynamics, makers of the world’s fastest running robot — among other items developed with funding from DARPA, the Pentagon’s research arm.
“Among the creations to crawl, jump and gallop from its labs,” writes the Financial Times, “are Big Dog, a four-legged robot that can clamber over uneven terrain such as snowy forests, even when assailed by kicks from its makers, and Cheetah, which claims to hold the record for the fastest legged robot in the world, running at more than 29 miles per hour.”
It’s called “Big Dog,” but it looks like a mutant insect…
Exactly what Google plans to do with its new acquisition, it’s not saying. “The future is looking awesome!” tweeted Andy Rubin, the Google exec overseeing the firm’s most far-out ventures, including the much-touted self-driving car.
“The day of the last warrior” is how our military-tech expert Byron King describes the trend toward robotics in warfighting. “I’m talking about an America that no longer sends significant numbers of troops overseas.”
As it happens, last week, Byron recommended a company in the same space to readers of his Military-Tech Alert — one with similar origins to Boston Dynamics, emerging from the cradle of MIT in the early ’90s.
Already, the Pentagon has deployed thousands of this firm’s robotic devices to help disarm the infamous “roadside bombs” that killed and maimed countless U.S. troops during the early years of the Iraq war. The same devices also proved useful at ground zero of the Fukushima nuclear plant in Japan — where the radiation could have killed a human being in only 20 minutes.
Nor are the developers resting on their laurels. “Right now,” Byron explains, “the system is mainly designed to protect operators whose robots malfunction or manage to tip over and lose radio contact. Until now, one of those situations meant the operator could get the robot back online only by actually going over to it and righting it.
“Of course, if the robot is under fire, handling a live bomb or exploring a nuclear zone, its operator could be at extreme risk.” The next generation of these robots will have the ability to right themselves and “stand up” again — no human intervention necessary.
The Boston Dynamics deal with Google is already sending shares of this firm zooming up today, but for the moment, they’re still under Byron’s buy-up-to price. For access to Military-Tech Alert — including all of Byron’s lucrative cybersecurity plays — look here.
“Why is this ugly piece of junk here?” cried New Yorker Gretchen Berger, fed up with an RV parked in her neighborhood.
“It just sort of creeps me out that somebody is living in a parking space, and this may give rise to other people thinking that it’s a cheap way to live on the Upper West Side, where the rents are high. Is Manhattan going to become a trailer park?”
You might recall our amusement last month that some New Yorkers are getting around crazy-high rents and housing prices by living in used RVs. The tone of the Los Angeles Times article we spotted was sympathetic to the plight of the frugal folk and their ingenious solution.
Not so with a New York Post piece published yesterday. “Motor homes have invaded the Upper West Side, sparking fear in the hearts of residents worried their well-heeled haven could fast be transformed into a low-rent campsite.”
For his part, the rabbi who owns the “ugly piece of junk” is unapologetic: “I’m in way better shape than the people who are renting closets,” says Steve Blumberg.
New York housing made affordable: Rabbi Blumberg’s 1984 Chevy Pathfinder…
But as long as Blumberg keeps moving each day, the neighbors can’t complain. City ordinances forbid leaving a mobile home on a city street for more than 24 hours. “Enforcement is typically complaint-driven,” according to the Post. “Fines start at $115, the NYPD said.”
“I have a friend here in Florida who drives a car hauler for a living,” a reader writes with a new entry for our “new taxes and weird fees” file.
“He has to use the toll roads daily. His truck has five axles…always has, always will. Yet SunPass (the entity that oversees the automatic billing on the Florida toll roads) randomly bills him for having anywhere from five-11 axles (each axle costs additional money to use each toll station).
“SunPass did the usual tap dance once they were exposed, but agreed to go back three months and adjust after the state senator overseeing transportation in Florida got involved.
“It doesn’t amount to a lot of money at any single toll station… maybe a dollar. But you can hit up to a dozen of those stations crossing west to east through Orlando, times how many thousands of trucks a day, times 365 days a year. Lawyers are beginning to get interested. We’ll see how it goes.
“I don’t know if this is happening anywhere else aside from Florida, but it would not surprise me. It could be happening with cars as well, since most people just reload their accounts when they empty out without questioning how much each transaction cost them.
“I thought of you guys and your continuing series on how government is coming up with new and unique ways to jam their hands deeper into our pockets. Apparently, fraud is now an acceptable tool for them to use.”
The 5: Yikes. Can’t take anything for granted; if you have an E-ZPass or other kind of toll transponder, it pays to check your transaction records on the website.
“I don’t feel sorry for her,” a reader writes of Deborah Sponder, the woman from Miami whose case study we cited several times last week. As a reminder, she makes about $250,000 a year and told The Associated Press, “Between rent, schooling and everything — it comes in and goes out.” She’s paying tuition for her three college-age kids.
“This person,” the reader says, “has made a choice to pay for the college education of her three children — a choice many of the 99%-ers cannot afford to make. (And she is probably sending them to a university, not a community college.)
“Hopefully, the children appreciate it and prosper. A lot of parents can only afford to let their college-bound kids live at home for free and let the kids figure out how to pay for college. If she ends up broke because she didn’t save enough for herself, it is her own fault. She can beg her kids for help then.”
“Assuming she is talking about money and not her recreational activities,” adds another reader, “she could do better by cutting the allowances to the three college-attending children.
“Their educations would be well served by learning how to economize. Keeping up with the Joneses is a fool’s errand. I do just fine on about 1/20th of her income.”
The 5: We get the point… although we’re scratching our head at how some of our readers have figured out how everyone else should allocate their earnings.
Cheers,
Dave Gonigam
The 5 Min. Forecast
P.S. We, on the other hand, make no judgments about how other people allocate their earnings… as long as the money’s earned honestly.
If you feel like “the money comes in and goes out” and wouldn’t mind giving your income stream a little turbocharge, this is our last chance to remind you to tune into the live online event hosted tonight by our publisher Joe Schriefer. He’ll show you how to rake in up to $405 in merely five minutes.
It starts tonight at 7:00 p.m. EDT, with a rebroadcast at 10. Participation is absolutely free; all we ask is that you sign up in advance.