What Could

Possibly Go Wrong?

US National Debt Tops $22 Trillion

Of course, at some point the market will finally start focusing on America's long-term - and very much unsustainable - debt picture as the CBO has warned year after year.  

When it does, and when there is another major selloff in stocks, US Treasurys will no longer be the "safe haven."  

If and when that happens, that will be the signal that the time to get out of Dodge has finally arrived.

 DYI

Estimated

Medicare Expenditures

By 2028

1.2 Trillion per Year!

The Facts on Medicare Spending and Financing

• Medicare spending was 15 percent of total federal spending in 2017, and is projected to rise to 18 percent by 2028.

• Based on the latest projections in the 2018 Medicare Trustees report, the Medicare Hospital Insurance (Part A) trust fund is projected to be depleted in 2026, three years earlier than the 2017 projection.

• In 2017, Medicare benefit payments totaled $702 billion, up from $425 billion in 2007.

• As a share of total Medicare benefit spending, payments to Medicare Advantage plans for Part A and Part B benefits nearly doubled between 2007 and 2017, from 18 percent ($78 billion) to 30 percent ($210 billion), as enrollment in Medicare Advantage plans increased over these years.

• Average annual growth in Medicare per capita spending was 1.5 percent between 2010 and 2017, down from 7.3 percent between 2000 and 2010, due in part to the Affordable Care Act’s reductions in payments to providers and plans, and to an influx of younger beneficiaries from the baby boom generation aging on to Medicare, who have lower per capita health care costs.

• Medicare per capita spending is projected to grow at an average annual rate of 4.6 percent over the next 10 years, due to growing Medicare enrollment, increased use of services and intensity of care, and rising health care prices.

DYI:  It is conservatively estimated that by 2028 Medicare alone will consume 1.2 trillion dollars per year.  In its current state this is a stand alone program – self funded by payroll taxes similar to Social Security.

 

Medicare brings in around 261 billion dollars per year the shortfall is by redeeming their trust fund.  This redemption does not change the overall deficit when redeemed for payment by the Treasury through incoming revenues.  Of course this soaks up tax revenues forcing additional [unless there is a surplus] borrowings for all of the other programs.  Simply put this is a bit of accounting slight of hand as these trust fund certificates are only IOU’s back up by nothing as the money was long ago spent.

When 2028 arrives only 9 years from now those IOU’s will all be redeemed and the world will see budget deficits just for Medicare alone of 939 billion!  Add on to the insane spending from both parties the world will easily see close to 2 trillion dollar deficits!

If anyone believes the Fed’s can immediately add almost 1 trillion dollars per year along with all of the other non stop spending without interest rates moving up, at an ever accelerating rate – is deluding themselves.  There is zero public talk in Congress, President or the main stream press [to any significant degree] to deal with this looming deficit busting monster.

As this approaches markets will begin to anticipate this calamity, at first very slowly, unless they see any resolution will accelerate closer the day of reckoning arrives.  With stocks and junk bonds trading at nose bleed levels these asset categories could easily fall up to 65% to even possibly 85%!  When Mr. Market will sense this is anyone’s guess as it is not determinable but make no mistake it will happen.

Don’t think this is a problem of biblical proportion?  I’m making a mountain out of a mole hill?  Remember the downturn of 2008 to 2011 was primarily in the housing sector and the assorted banking frauds.  All told around 3% to 5% of our economy principally centered in California and Florida.  That clipped the stock market 50% plus.  Today the entire health sector is a whopping 21%!

Job losses will be in the millions with unemployment soaring to the 20% plus level.  It’s an odds on favorite that the headlining money centered banks will fold up like a cheap tent in a mild breeze along with multiples of scores of publically traded corporations.  Anywhere from 80 to 100 million people will lose everything and when that happens a sizeable number will resort to violence as possibly 25% end up hungry and homeless!

Think the cop on the beat is going to show up to work when his paycheck bounces?  Not a chance.  Governments; Federal, State and especially local, for all intent, will cease to operate to any real degree.

Until the price fixing and monopolies are dealt with; just as was done before during the robber baron age will the Medical Industrial Complex be slain.  No new legislation is needed.  100 year old laws are on the books – Robinson-Patman, Clayton, and the granddaddy Sherman Anti-Trust Acts if applied aggressively will quickly restore competition to this industry dropping prices from 65% to 90%!  Bringing back to its historical share of the economy at 6%!  Unless that happens and soon Caty bar the door America is in for a ride of titanic proportion.

DYI

Water Everywhere

Not a Drop to Drink!

A Water Crisis Is Growing In A Place You'd Least Expect It

DYI:  A surprising well done in depth article by National Public Radio [NPR] regarding the crumbling infrastructure for water centered on America’s Great Lakes Region.  After decades of degenerating economic performance – commonly called the Rust Belt” – water authorities have had to increase payments to residents and businesses from the lowest in the nation now to highest to rebuilt their infrastructure.  Obviously the poor and retired on Social Security have been affected the most with  scores of individuals daily have had their water cut off due to delinquency.        

DYI

Bubble

News

Next Stop: Recession!

We've enjoyed years of "recovery" since the Great Financial Crisis by literally papering over our problems with newly-printed money, instead of addressing their root causes. 

Despite more than a decade of an "all-hands-on-deck" propping up of the financial markets, all the central bankers have to show for it is the widest wealth gap in history coupled with stagnant wages. 

Depending on which OECD country you live in, you can take your 'official' inflation measure and multiply it by either a 2x or 3x to get the true rate. 

For example, in the US we’ve been told that inflation is running at just under 2% for years. In reality, it’s been trucking along at closer to 4% to 6% (for rural and urban dwellers, respectively). 

DYI:  Damn straight we are supposed to believe BLS’ distorted inflationary numbers going on decades.  A case can be made inflation is running even faster than two or three times than the so called official reports.  The Chapwood Index is made up of 500 items all the way from the mundane such as toothpaste to purchasing a home and everything between.  Depending on your location inflation has been running between 8% [Phoenix, Arizona] to 13.2% [San Jose, California] averaged over the past 5 years.   

A recession lies dead ahead. An even though recessions are an inevitable part of the economic cycle, and it's been uncharacteristically long since the last one, we've been operating as if the current "recovery" will last forever. We're woefully unprepared for what's coming. 

The third credit bubble of the new century is breaking down just like its predecessors did. Except this one is the largest and most universal in history. 

But worst of all?  The public has lost faith in our institutions and political bodies after having been so obviously, comprehensively and repeatedly lied to over the years.

 DYI:  How many more lies will the American public endure before they completely refute anything this out of control Federal Government attempts to peddle.  The best illustration is all of these staged faked mass shootings [Department of Homeland Security DRILLS] that are being billed as real by the ever lying main stream press.  All this in an attempt to hoodwink our school systems to purchase CCTV Networks, metal detectors, bullet resistant glass windows, scanners and an assorted security services all for the benefit of those corporations selling this unnecessary equipment; effectively placing our children in prison like conditions.  Bankers who are routinely fined despite criminal activity yet no one ever goes to prison or the Medical Industrial Complex that has now institutionalized price fixing and has moved from local monopolies to regional.  The list is almost endless for lies and corruption.          

It’s kind of hard to ask people to embrace shared sacrifice during tough times after the political and financial elites greedily lined their own pockets at the expense of everyone else during the good days.

DYI

Increase

Earned Income Tax Credit?

DYI:  In today’s current income inequality environment what is needed is expansion by a dramatic amount the Earned Income Tax Credit Program [EIC].  This would have the immediate effect of reducing poverty.  How would this be payed?  By increasing EIC significantly all Federal poverty programs such as SNAP [food stamps] and Housing Urban Development [HUD] would be discontinued freeing up billions.  Plus end Federal minimum laws as this will increase employment dramatically even for those with marginal job skills.  By dropping this cost for business many employers would find it profitable to establish long term training programs.  Future employees would be able to earn while they learn.

Just a quick thought!  What’s your opinion?

DYI

The 

Real Game of Missing Money

DYI:  Top notch video from Solari.com highlighting massive fraud in our government to the tune of 21 TRILLION dollars!  We are being systematically looted straight into poverty!

DYI

Housing

To Rent or to Buy

That is the Question!

The Lowest Price to Rent Ratio Markets in the US at the End of 2018

Other than your personal situation, the price to rent ratio is the most important factor which you should investigate when deciding whether to buy a home or rent a place to live in. A low price to rent ratio market means that it is financially sound to buy rather than to rent.

DYI:  The reason for purchasing at a low price to rent ratio as this will alleviate on a total basis your cost of insurance, taxes, and the ever present maintenance.  Simply put this will place the odds – with all other potentialities being equal – that you will not over pay.

     

Conversely when renting at a high price to rent ratio your landlord – whether they know or don’t – is actually on a total basis of cost subsidizing his tenet.  As much as the owner would like to increase the rent to overcome those costs there is a limit to increases relative to prevailing incomes of his tenets.  If the rent increases are above the prevailing wages of his customer base when the property is between tenets it will take longer and longer to place a tenet thus dropping the overall profit [or even creating a loss].

Basically, the price to rent ratio is a real estate metric which tells homebuyers, renters, and real estate investors (i.e., landlords) whether property prices or rental rates are relatively higher in a certain location. The price to rent ratio is easy to calculate: you just have to divide the average property price in your local housing market by the average annual rent.

Price to Rent Ratio Formula:

Price to Rent Ratio = Average Property Price/Average Annual RentPrice to Rent Ratio = $427,700/($1,440 x 12)Price to Rent Ratio = 25

 Low price to rent ratio, i.e., 15 or below: 

Price to rent ratio of 15 or below is considered low. For renters and homebuyers, this means that it is relatively cheaper to buy a property in a certain market rather than to rent there. So, if you have the necessary cash for a down payment and have figured out the rest of your financing in such a market, go ahead and buy a home.

 Moderate price to rent ratio, i.e., between 16 and 20: 

If you live in a location where the price to rent ratio is between 16 and 20, it most probably is wiser – financially speaking – to rent a property rather than to buy a home. This is what most real estate professionals recommend anyway.

DYI:  The real estate professional the author from Rentberry is referring to is someone who specializes in rental properties.  Your real estate agent does NOT meet those criteria.  If you ask an agent when the best time to buy or sell is always now especially through the agent doing the talking as their income is dependent upon commissions.  This is not a slam against agents; you need to know their motivation then use them for your benefit.  They are very helpful once you find a property that meets your criteria in weaving you through the task of purchasing.

High price to rent ratio, i.e., 21 or above: 

High price to rent ratio markets are those where this number equals or exceeds 21. In such a place, it makes most financial sense to rent and not to buy as properties are just too expensive compared to the rental rates.

DYI:  I’ve seen in the past such as the Eastern Seaboard and crazy town California with price to rent above 35!  Once at that level any economic downturn of consequence any property bought at that level, on an after inflationary basis, will be at a loss.  If due to a job loss and you have to relocate hence attempt to sell the property default then becomes a real possibility.  Or attempting to rent out the property just to break even is very difficult in recession let alone just getting a qualified tenet.  Over paying especially your largest dollar purchase for most of us mere mortal middle class folks make will have severe consequences to your economic future.

On a personal financial basis the well thought out rule of thumb is to never buy a property greater than 2 times your income.  An individual or couple with a combined income of $50,000 per year should not purchase a house greater than $100,000.  I know right then and there you will tell me I’m out to lunch as most areas in the country are much higher.  Self made millionaires will tell you that the size of one’s net worth are inversely proportional to the mortgage size that is held.  Bigger the mortgage; smaller the net worth.  If your local area housing is less than 15 times rent and you limit your search to properties less than 2 times income the property will be a joy instead of an endless money pit!

 DYI

Illinois

Economic Death Spiral? 

Illinois a national outlier when it comes to losing residents

Illinois lost nine residents per 1,000 in population in 2018, third only to Alaska (-14.6) and New York (-9.2). Hawaii and Rhode Island rounded out the nation’s five-worst losers of residents to outmigration. 

In contrast, 22 states netted resident gains from other states. The biggest winner in the nation was Nevada, which added 15 residents for every 1,000 it had in population in 2018. Idaho, Arizona, South Carolina and Colorado rounded out the nation’s best performers.

DYI:  The State of Illinois with chronic population loss eventually will end up with abandoned properties.  Currently they are in the trend of lower housing costs that are purchased by those of lesser income; as this spiraling down continues more and more of the residents income levels – those remaining in Illinois – will drop into the poverty level.  Unless the State of Illinois finds the political will to deal with their vast problems and their 300 pound gorilla – Chicago metroplex – they will continue to spiral down at an accelerating rate.

For those of you who are young and looking for employment opportunities the opposite end of Wirepoint’s chart are the States to try your luck.         

In contrast, 22 states netted resident gains from other states. 

The biggest winner in the nation was Nevada, which added 15 residents for every 1,000 it had in population in 2018. Idaho, Arizona, South Carolina and Colorado rounded out the nation’s best performers.

DYI

Faked

Moon Landings!

1. Multiple use of sets and backdrops

2. No impact crater from landing craft. There is never a burn print under the lunar lander, nor is there any dust/dirt on the landing pod feet, as if it was just set down gently onto a stage.

3. Landing craft looks like a piece of junk made up of tent poles, canvas and duct tape. Photo AS11-40-5922 close-up of the Apollo 11 Eagle is classic, looks uncannily like cardboard, construction paper, scotch tape and wires.

4. No stars on any pictures - astronauts argue over whether they saw stars or not.

5. Forensic picture evidence proves multiple light sources and cross hair check anomalies.

6. Astronauts caught faking earth pictures on movie "A Funny Thing Happened On The Way To The Moon" http://www.aulis.com/jackstudies_5b.html

7. NASA engineer admits the 1960's technology is "lost" that would allow us to repeat the journey today in the 21st century.

8. NASA engineer admits humans can not travel through the Van Allen Belts.

9. The fuel required to make a journey of 237,000 miles there and back plus orbit of moon plus landing and taking off from moon would require a huge tank bigger than the rocket.

10. The space suits (designed by platex bra co.) could not keep astronauts from boiling or freezing temperatures.

11. The space suits were flexible whereas in reality they would needed to have been inflated (like the Michelin man)

12. The picture of earth from the moon has proven to be photoshopped (cropped).

13. Video evidence of cables pulling an astronaut up after falling.

14. Hilarious fake phone call to the moon by President Nixon. Note: 1969 - no mobile phone technology invented, yet within minutes after "landing" on the moon the astronauts can set up telecommunication channels?

15. Camera can film moon take off remotely from earth?

16. All the NASA telemetry data lost?

17. All the original video reels lost?

18. NASA took charge of all "live" feeds. Television companies could only film from a NASA monitor.

19. Video of the moon take off looks ridiculously amateur.

20. Astronauts were supposedly covered from head to toe with moon dust after driving the moon buggy. This dust would have contaminated the electrics inside the craft.

21. So-called Moon Rocks have been found to be petrified wood.

22. No clear pictures of evidence of Apollo remnants left of the moon despite huge telescopes available.

23. The listed equipment supposedly in the Apollo lunar module would have taken up three times more space than the craft could accommodate. They even fitted in a Moon Buggy!

24 Why move in slow motion on the moon? Given the astronauts were lighter with less resistance, they should have moved faster! Slow motion at exactly 2.5 slower than normal speed was to create "otherworldly feel"?

25. According to NASA all the original technical details and blueprints for the lunar modules are lost!

26. How did air conditioning system in the Lunar Module work without... air!

27. Manually focusing a 1960's camera in a clumsy spacesuit with the camera attached to the spacesuit chest has been proven to be impossible, yet the astronauts created perfectly composed and framed shots.

28. Stanley Kubrick gave us many clues that the Moon Mission was faked in the film "The Shining" https://www.youtube.com/watch?v=9BsjRlT-8fc&t=501s

29. In one Apollo 17 shot (AS17-140-21370) the moon rover is shown still packed up, not yet unloaded, but there are clear wheel tracks going across the foreground of the entire photo.

30. Consecutive photos AS11-40-5862 and 63 show the lunar lander with different colored windows, different lettering on the United States sign, and a mysterious disappearing component.

31. Many consecutive photos supposedly from astronaut’s hand-held cameras are exactly the same, completely unmoved, to a degree only achieved by a tripod.

32. Buzz Aldrin in consecutive Apollo 11 photos changes from white gloves, to dark gray gloves, back to white gloves, and back to dark gray gloves.

33. There are many pictures which show moon rovers with no wheel tracks in front or behind them (as though they were set down into place) even though there are many footprints all around.

34. There are pictures of astronauts shown with footprints all around them, but no prints leading to or from where they are, as if they were lowered into place by wire.

35. The video from the Data Acquisition Camera mounted on the Apollo 11 starboard window and the Tripod Mounted TV Camera mounted outside both pan, tilt, reframe, and zoom supposedly while unmanned.

36. At 1/6th the gravity those astronauts should have jumped like the incredible hulk. One small step for man one giant lie for mankind.

37. The landing module hurtling back to earth traveling at over 17,000 mph would have burnt up, but parachutes slowed it down? Impossible.

38. Docking of two crafts in space travelling at 400 mph in 1969 with no computer technology? Impossible!

39. How can rockets get thrust in a vacuum? 

40. Contradictory testimony given by astronauts regarding the ‘naked eye’ visibility of stars and planets in cislunar space.

41. Contradictory testimony given by Gene Cernan and Alan Bean regarding noise levels on their final approach to the Moon.

42. How could flight director of Gerry Griffins stature be unaware of the existence of Velcro during the Apollo Space Project.

43. NASA engineer Kelly Smith, when speaking of the Orion program, asserts that the problems of radiation have to be solved before we can send people into deep space beyond low-Earth orbit.

44. Instead of setting up a telescope on the Moon that would give us a glimpse into the far reaches of the universe, they played a little golf.

45. Numerous Apollo 15 photo examples indicate an identical distortion grid – a projection screen at the distance of 100-120 metres from the front of the studio stage.

46. The astronauts landings came with remarkable ease! They were never taken out of their CMs helpless an/or powerless;  they jumped out of the capsules entirely unaided. What can explain such a surprising tolerance by the Apollo crews to the adverse effects of space travel?

The only possibilities are: either there was no prolonged exposure out in space, or the Apollo crews did not return from space at all.

47. Earth is much bigger than the moon so pictures of earth from the moon should be huge, not the same size as the moon we see every night.

48. Armstrong contradicts himself regarding the step from the last rung on the ladder to the moons surface as being 3 feet and then says it was 6 inches. Why?

49. The astronauts would not swear on the bible they went to the moon.

50. We supposedly went 7 times from 1969 to 1972 nearly 50 years ago but don't have the technology anymore to repeat the journey? Why is it so hard to get to the Moon nearly 50 years after Apollo?

2-1-19
Updated Monthly

Secular Market Top - Since January 2000

+118.0% Dow       

+240.1% Transports 

+155.7% Utilities

+84.2%  S&P 500

+78.5%  Nasdaq

+53.2%  30yr Treasury Bond

+354.7% Gold

+115.9% Oil
  +58.9% Swiss Franc's

    

From High to Low

+354.7% Gold

+240.1% Transports

+155.7% Utilities

+118.0% Dow
+115.9% Oil 

+ 84.2% S&P 500 

+ 78.5% Nasdaq  
+ 58.8% Swiss Franc's

+ 53.2% 30yr Treasury Bonds

December 1999 Shiller PE10 was 44.19               
August 2000 S&P 500 dividend yield was 1.11%  

Shiller PE10 2-04-19 is 29.94
S&P 500 dividend yield 2-04-19 is 1.97%
[Shiller PE10 & dividend yield is reported using data from the beginning of the month when I update.  It may or may not be exactly the first day.]

DYI