The only way to get out of a debt disaster without making hard choices about spending cuts or raising extra revenue via taxes, is to ruin your currency through inflation. The problem for politicians though, is that the U.S. dollar is the nicest house in a bad neighborhood, for now anyway. And the U.S. government can’t let that continue forever if they want to avoid an austerity reckoning. Inflation, for the most part, is how we regularly get out of debt as a country. “The post-WWII debt decline was partly due to strong economic growth, but mainly due to the government shafting bondholders … [Read more...]
Corporate Tax Migration No Surprise
You get a real clear picture looking at this map (from the Tax Foundation) on corporate income tax rates by state as to why so many businesses are moving, for example, from California to Austin, Texas. Businesses go to where they’re well-treated. For start-ups, meaning entrepreneurs, that means moving from state to state. For global players it’s moving from country to country. The latest hit to American business comes from Johnson Controls’ merger with Tyco International, headquartered in Ireland. The other real kicker here is it that JC had plenty of your (taxpayer) help to … [Read more...]
Corporate Tax Freedom
You get a real clear picture looking at this map (from the Tax Foundation) on corporate income tax rates by state as to why so many businesses are moving, for example, from California to Austin, Texas. Businesses go to where they’re well-treated. For start-ups, meaning entrepreneurs, that means moving from state to state. For global players it’s moving from country to country. The latest hit to American business comes from Johnson Controls’ merger with Tyco International, headquartered in Ireland. The other real kicker here is it that JC had plenty of your (taxpayer) help to … [Read more...]
Johnson Controls, Latest Corporate Inversion Refugee
It doesn’t take a brain surgeon to realize our treasonous corporate tax rate is bad for business. The latest hit comes from Johnson Controls’ merger with Tyco International, with headquarters in Ireland. The other real kicker here is it that JC had plenty of your (taxpayer) help to stick around. Johnson Controls Inc. was as patriotic as they come back in 2008, when the U.S. auto industry was teetering on bankruptcy and the Glendale-based maker of car parts knew it desperately needed help from U.S. taxpayers. The company's president at the time, Keith Wandell, didn't hesitate to ask Congress … [Read more...]
Punishing Corporate Taxes Drive American Business Overseas
It doesn’t take a brain surgeon to realize our treasonous corporate tax rate is bad for business. The latest hit comes from Johnson Controls’ merger with Tyco International, with headquarters in Ireland. The other real kicker here is it that JC had plenty of your (taxpayer) help to stick around. Johnson Controls Inc. was as patriotic as they come back in 2008, when the U.S. auto industry was teetering on bankruptcy and the Glendale-based maker of car parts knew it desperately needed help from U.S. taxpayers. The company's president at the time, Keith Wandell, didn't hesitate to ask Congress … [Read more...]
What Not to Do in 2016
In the February 2016 issue of Richard C. Young's Intelligence Report Dick Young wrote: This month, I have a master list of things you do not want to do in the New Year. In this regard, I asked our management company's E.J. Smith to put together a list of the no-no's that he, Matt, and I had been discussing in recent months. I have reduced the master list to a "baker's dozen." Enjoy and benefit. Do not use stop-losses. Why? Because you get taken out at the market's price (not your price), and then it's a guess when to get back in. Instead, focus on wise words from Vanguard founder Jack Bogle: … [Read more...]
An American Treasure: Richard Feynman
If you're a fan of the late physicist Richard Feynman then you're in luck. Over the weekend I visited Bill Gates' website: gatesnotes.com and found an absolute treasure: Thirty years ago I went on vacation and fell for Richard Feynman. A friend and I were planning a trip together and wanted to mix a little learning in with our relaxation. We looked at a local university’s film collection, saw that they had one of his lectures on physics, and checked it out. We loved it so much that we ended up watching it twice. Feynman had this amazing knack for making physics clear and fun at the same time. … [Read more...]
US$ Print til’ You Die
You would never believe it today, but there was a time when The New York Times' editorial board supported sound money. And the person writing sound money editorials against a proposed Bretton Woods agreement was Henry Hazlitt. Today the first name that comes to my mind when thinking about The New York Times and monetary policy is the “print til’ you die" economist Paul Krugman. Contrary to the Keynesian crowd, Hazlitt believed it was irresponsible to make the dollar a reserve currency, as good as “gold”, knowing full well there would never be enough gold to satiate government spending demand. … [Read more...]
Why Rollover Your 401(k)
You wouldn't be the first person to wonder who in the world comes up with these phrases: "Rolling over your 401k." As if investing isn't confusing enough, the wording is so bad you can't help but think about a dog trick. This is supposed to be serious stuff. Most of you corporate warriors that have a 401k, and are in or near retirement, have figured out what a rollover is by now. It's when you transfer your 401k contributions into an IRA. 401k Contributions Are Free Money I love the 401k as a savings vehicle. It's a great way to get free money from your employer. But it is lacking big-time … [Read more...]
Good ‘Ole Vanguard GNMA
When times are tough, Vanguard GNMA (VFIIX) is a friend you’d never dream of living without. Check out the action for GNMA for just the first few weeks of this year compared to that of the more speculative NASDAQ Composite Index (both rebased to 100 at 12/31/2015). I don’t need any more than this to prove the importance of counterbalancing, in other words diversifying your portfolio with less risky assets like Vanguard GNMA. Remember, one of the keys to your success as an investor is to be an i-n-v-e-s-t-o-r. If you’re sitting on the sidelines you’re missing the boat on some wonderful income … [Read more...]