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When Apple announced their latest product, the iPad, I scoffed at the name (which quickly became the bunt of so many jokes) but decided to give them the benefit of the doubt and watch the Keynote address to find out more about this revolutionary device. To be honest, it left me feeling disappointed.  Revolutionary?  It’s basically just an over sized iPod Touch!  I was convinced that it’d be a major flop and had no desire whatsoever to purchase it.  I already owned a Sony eBook reader for my eBooks, along with 2 iPhones, an iMac, Apple TV and a Macbook Air.  I saw no place for the iPad.  I figured that Apple would have a really hard time convincing people to replace their Kindles and eReaders for the iPad.  I was wrong.  As always, the magical Steve Jobs has somehow done it again.  He’s created yet another must have product.  As time went on, the more I learned about iPad along with the positive reviews flowing in from those using it, I became convinced that I needed one!  But I still had a couple of doubts.  When they advertised a battery life of 10 hours I thought ”yeah right! Under lab conditions while in a fridge with the contrast all the way down and WiFi turned off!”  Actually, people are reporting getting 11-12 hours of use on a single charge!  And they claim to be continuously using the device for apps, web surfing and reading books.  That’s 1 for Apple, 0 for the critics!  But won’t using the device for extended reading cause eye strain compared to the eInk on the Kindle and other readers?  Nope!  Independant tests have shown no conclusive evidence of reduced eye strain reading on an eInk screen.  Turns out that it’s more of a sales pitch than a reality!  In addition, iPad has a sensor that automatically adjusts the screens brightness based on the surrounding ambient light!   iPad 2, critics 0!  Then I saw how I could still read my existing eBooks and Kindle books from my iPhone on the iPad, along with downloading any other eBook (say from my local library) in the ePub format.   My biggest beef with the Sony eBook reader is the crappy and buggy software that comes with it.  Plus the fact that I have to plug it in via a USB cord to transfer books.  With the iPad, I could do this through the familiar and easy to use iTunes interface and do it wirelessly!  As I explored the other possibilities with iPad, I decided that I could likely sell my MacBook Air as well!  I could eliminate 2 devices and replace them with the iPad!  Not only that, I’d get a longer battery life using my iPad over the Macbook Air!  I didn’t see a need to wait for the 3G version to come out as I can tether via WiFi to my iPhone and use my existing 6GB/mo 3G data plan instead (my phone’s always with me anyhow!)  So I went onto eBay and placed a bid on a 16GB iPad with the case and a 2 year Apple care plan.  Brand new.  I won!  I ended up paying $20.00 more than I would have paid in the store, but still cheaper than what they’ll likely charge in Canada when you consider most other apple products in Canada have a 10% premium plus 12% tax on top of the sale price.  It should arrive next week and I must say I’m more than a little excited.  Will I be able to get by without my laptop?  I think so but time will tell.  The windows Remote Desktop app will allow me to access our company servers so I can use all of the software I currently need.  Most of my documents are stored in the cloud so the storage capacity doesn’t concern me either.  No camera or USB, but I don’t need them on this device anyway!  I’ve got an iMac for that! 

What are your thoughts on the iPad?  Do you plan on buying one?

 The US Congress cast an historic vote on healthcare this last Sunday.  With it, we’ve witnessed further dismantling of the Constitution and unprecedented expansion and reach of the Government.  The legislation doesn’t address the real reasons access to healthcare is a struggle for so many – the astronomical costs.  If costs were lowered, more people could afford to pay for what they need out of pocket.  Instead, the Government is going to force millions of Americans to pay even more in mandating that they buy insurance.  Anyone found guilty of the felony of not being a customer of a big and greedy health insurance company will be issued a fine from the IRS.  To enforce this rule, they’ll need to hire some 16,500 new IRS agents to police these new mandates! 

This bill is so blatantly unconstitutional and contrary to the ideals of liberty.  Nowhere in the constitution is there anything approaching authority for the Federal Government to pursue this.  The founding fathers must be rolling over in their graves seeing that all US citizens must buy a product from certain government approved companies.  What’s more, the costs of healthcare are still going to continue to spiral out of control as the new legislation does nothing to address the costs.

The US have just added another trillion dollars to their debt, plus the cost of hiring and further expansion to run and enforce these new programs.  How do they plan to pay for this?  By taxing those with incomes above $200k ($250k per family) a little more?  That won’t cover the full cost, regardless of what they’d like you to think with their Robin Hood story.  The reality is that they’ll do what they’ve always done and monetize the debt by increasing the money supply (printing money).  This is just one more nail in the coffin for the once free and great nation that used to be the envy of the world.  Maybe Ayn Rand was more accurate in her predictions that even she knew in her novel “Atlas Shrugged”?! 

As the majority of working Americans see their incomes, net worth and purchasing power further erode, there’ll no doubt be a revolution and long overdue house cleaning.  The weeds of Government must be cut back to allow the free market economy to flourish once again and restore the power where it belongs - in the hands of the people!

Article from www.ThecomingDepression.net

State Controller John Chiang issued a stern warning Friday about California’s cash reserves, telling legislative leaders and Gov. Arnold Schwarzenegger they must act on nearly $9 billion in budget cuts the governor is seeking by March — or the state will run out of cash to pay its bills. — Denis C. Theriault Mercury News
Without making those cuts — which Chiang says will pump $1.3 billion into the state’s checking account — California would be broke by April 1, no fooling.

The state wouldn’t climb back to what’s considered a safe level of cash on hand, $2.5 billion, until later that month, when tax revenues are expected to begin flowing into Sacramento.

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California is the US version of the “canary in the coal mine” for intelligent “small L” liberal voters about what inevitably happens to jurisdictions that:

1.Heavily progressively tax the earning middle class, and wealthy massive government spending and wealth transfer to the throngs of undeserving amongst the poor.
2.The thinkers, inventors, workers, earners leave, and take their businesses, taxes, skills, and job creating productivity with them.

Depending on the study and the year the study was done, California is placed somewhere between 5th and 10th as the largest economy on the Planet. California’s economic activity accounts for 13% of the entire United States yearly goss domestic product (GDP). Many other states are teetering on the same edge of insolvency as California. Florida and Arizona to name two.

Worlds largest economies: 1. United States 2.China 3. Japan 4. India 5. Germany 6. Britian 7. Russia 13. Canada

Although the list changes order from time to time the players are the same. The bottom line is that the U.S. is in serious financial trouble because the world is fast learning that “greenbacks” don’t really taste that good and provide no nutirtion whatsoever.

Americans are going to have to face the fact that governments have, like all of us do, two ways of getting rid of the deficit: earn more (ie. raise taxes) or spend less (ie. cuts to services). Those are the only means at their disposal. For the voting public, cuts to services are easier to bear than more taxes. Inevitably, taxes will have to increase in the US.

Another California yard sale?

California, the 7th largest economy in the world — larger than Canada’s — is bankrupt. Maybe a garage sale is a “feel good” idea but, if they are going to get their deficits under control people are going to have to take cuts to services and wages the likes of which they have never seen before.

Maybe next they’ll try a State wide Bingo to see if that helps. The bottom line is that ruthless cuts to their standard of living is the only thing that is going to reverse the mess they are in.

California’s tax revenues took a steep hit when the US economy melted down during the sub-prime mortgage fiasco. Investors , including the very affluent, lost billions in investments. California used to derive about one-quarter of its tax revenues from the very wealthy. When their incomes were cut in half by the investment market crash, the amount of taxes they paid was also cut by half. This meant California lost about 12.5%, or one-eighth of its total state tax revenue. Imagine losing one-eighth of your income and the resulting changes you’d have to make.

Californians, and their central banking overlords, are the ones responsible for their budget woes. The State is a classic example of the duality of the modern citizen: demanding services while refusing to pay taxes. California used to have an outstanding public education system and now it is one of the worst in the US. When Prop 13 was enacted, limiting property tax increases, the voters simply did not consider what the results would be: they just looked at their rising property values — partially because of the expectation that housing prices would keep going up because of central banking practices — and lower tax bills while cheering their lungs out.

The problem predates pretty much every administration most people could name. The State has been heading for bankruptcy for 30 years as they desperately attempted to find ways to fund the services people demand. The use of illegal labour simply exacerbated the problem as the exploited employees over burdened social services. It is comical how there is a large chunk of the population willing to enjoy the benefits of society but only accepting the need for taxes grudgingly.

California, the ultimate entitlement state, is a crippled and drooling giant relying upon massive importation of water, electricity and illegal labour to continue their ruinous path. Residents of the state largely live in their own dreamland, the structure of which depends on their location. California is the land of the pre-W Bush Republican and the bleeding heart Democrat with seemingly little middle ground. When the time comes to “rule by proposition” the swing voters love to show how liberal they are and also how much they hate taxes. The unfunded mandate is standard in California.

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“While our current cash condition is marginally better than it was one year ago,” Chiang wrote to leaders, “it is still precarious.”

Even with the budget cuts, the state’s cash reserve would still be far below that cushion in March and April.

To that end, Chiang is calling for an additional $2 billion in cash-flow “solutions.” Looking at previous cash crunches, that could mean some payments, like income tax refunds, would be delayed for a few weeks to keep the cushion intact.

“Call it overdraft insurance,” said H.D. Palmer, spokesman for the state Finance Department. He stressed that officials are still huddling over specific solutions.

If the budget gridlock lingers all the way to July, then IOUs could come back into play.

Related posts:

1.California budget already bankrupt 10 weeks after passage California Budget Is Already in the Red 10 Weeks After Passage Oct. 10 (Bloomberg)…
2.California’s On Way To First Failed State It sure seems like California is insolvent. Today we heard that Arnold Schwarzenegger has…
3.US Posts Biggest Fall In Tax Revenue Since 60s By CONOR DOUGHERTY State tax revenues in the second quarter plunged 17% from a…

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The Fed’s “Exit Plan” Is Just Another Secret Gift To Wall Street

The Fed is planning to detail its “exit plan” this week, the WSJ says.  This exit plan is the means by which the Fed will gradually reverse the tremendous stimulus it is still pumping into the economy and financial system.

As we’ve noted often over the past year, the Fed is in a bind.  During the financial crisis, it bought hundreds of billions of dollars of real-estate and other assets from banks to reduce mortgage rates and ease the pressure on bank balance sheets.  This, in turn, pumped hundreds of billions of new dollars into the economy, which has enabled the banks–and bankers–to make a killing over the past year.  The question is how the Fed can reverse this stimulus without killing the economy.

The idea behind giving the banks cheap money was that the banks would lend it to consumers and businesses.  Unfortunately, that hasn’t happened: Since the start of the crisis, bank lending has fallen off a cliff.  The banks are, however, lending to the Federal government, which needs to fund record deficits by borrowing more than $1 trillion a year.  The combination of the Fed’s desire to stimulate lending via cheap money and the government’s desire to stimulate the economy by running a huge deficit has made it a great time to be a bank: Banks can borrow from the government at artificially cheap rates and then lend the money back to the Federal government at higher rates, pocketing the difference.

And now it’s going to get even better to be a bank.

Why?

Because the first part of the Fed’s exit plan will reportedly be to increase the amount of interest the Fed pays on “excess reserves.”

Banks are required to keep a certain percentage of their assets in cash at the Federal Reserve.  Any cash above this required amount is “excess reserves,” and the Fed is currently paying 0.25% interest on these reserves.  The Fed’s exit plan will call for increasing this interest rate, to encourage the banks to keep more money in excess reserves instead of lending it into to the economy and thus expanding the money supply.

The idea here is that, by increasing the amount of money on account at the Fed, the Fed will reduce the amount of money that gets loaned out to businesses and consumers, thus forestalling inflation.  Increasing interest paid on excess reserves will also put off the day that the Fed has to start selling its real-estate assets back to banks, a process that might create taxpayer losses and raise mortgage rates, which the Fed is loathe to do.

Of course, in the process of increasing interest paid on reserves, the Fed will be paying banks even more not to lend.  In the process, it will be giving banks yet another way to take nearly free money from the taxpayer and give it back to the government at a higher rate–and then pocket the difference.

It’s a great time to be a banker.

Article Extracted from 

Texas Straight Talk

A weekly column

This past week we celebrated the end of what most people agree was a decade best forgotten.  New York Times columnist and leading Keynesian economist Paul Krugman called it the Big Zero in a recent column.  He wrote that “there was a whole lot of nothing going on in measures of economic progress or success” which is true.  However, Krugman continues to misleadingly blame the free market and supposed lack of regulation for the economic chaos.

It was encouraging that he admitted that blowing economic bubbles is a mistake, especially considering he himself advocated creating a housing bubble as a way to alleviate the hangover from the dotcom bust.  But we can no longer afford to give prominent economists like Krugman a pass when they completely ignore the burden of taxation, monetary policy, and excessive regulation.

Afterall, Krugman is still scratching his head as to why “no” economists saw the housing bust coming.  How in the world did they miss it?  Actually many economists saw it coming a mile away, understood it perfectly, and explained it many times.  Policy makers would have been wise to heed the warnings of the Austrian economists, and must start listening to their teachings if they want solid progress in the future.  If not, the necessary correction is going to take a very long time. 

The Austrian free-market economists use common sense principles.  You cannot spend your way out of a recession.  You cannot regulate the economy into oblivion and expect it to function.  You cannot tax people and businesses to the point of near slavery and expect them to keep producing.  You cannot create an abundance of money out of thin air without making all that paper worthless.  The government cannot make up for rising unemployment by just hiring all the out of work people to be bureaucrats or send them unemployment checks forever.  You cannot live beyond your means indefinitely.  The economy must actually produce something others are willing to buy.   Government growth is the opposite of all these things.

Bureaucrats are loathe to face these unpleasant, but obvious realities.  It is much more appealing to wave their magic wand of regulation and public spending and divert blame elsewhere.  It is time to be honest about our problems.

The tragic reality is that this fatally flawed, but widely accepted, economic school of thought called Keynesianism has made our country more socialist than capitalist.  While the private sector in the last ten years has experienced a roller coaster of booms and busts and ended up, nominally, about where we started in 2000, government has been steadily growing, because Keynesians told politicians they could get away with a tax, spend and inflate policy.  They even encouraged it!  But we cannot survive much longer if government is our only growth industry.

As for a lack of regulation, the last decade saw the enactment of the Sarbanes-Oxley Act, the largest piece of financial regulatory legislation in years.  This act failed to prevent abuses like those perpetrated by Bernie Madoff, and it is widely acknowledged that the new regulations contributed heavily not only to the lack of real growth, but also to many businesses going overseas.

Americans have been working hard, and Krugman rightly points out that they are getting nowhere.  Government is expanding steadily and keeping us at less than zero growth when inflation is factored in.  Krugman seems pretty disappointed with zero, but if we continue to listen to Keynesians in the next decade instead of those who tell us the truth, zero will start to look pretty good.  The end result of destroying the currency is the wiping out of the middle class.  Preventing that from happening should be our top economic priority.

 Article by Ron Paul