Wednesday, November 26, 2008

(Garlic) Sage Duck

Not since Howard T Duck said, "No duck is an island." have I heard such sage advice from a fowl.

With the Bush administration, the wacky congress, and those loons in the federal reserve, it's about time we get back to some elementary economics.

The following two video clips are halves of the same where Uncle Scrooge explains to the triplets the importance of circulation, inflation, investing... Simple concepts we seem to forget when we see so many mouths at the troughs. This money is simply being printed. Over and over again, it is rolling off of the press with nothing more to back it than that which is already backing the current stash.

You and I cannot do this. If I charge out my bank account so every dollar is backing a particular debt... everything is tied up with the amount of IOU's floating out there, and my buddy asks me for a ten spot... I can't just tell him okay and devalue my other obligations. I can't reduce the value of all my other debts by a penny to I can 'invent' $10 out of thin air. Why is this okay from the fed? They are essentially reaching into every bank, pocket and sock drawer and clipping the corner off of every dollar in circulation, the more dollars you have, the more dollars they have to clip. They take these corners and tape them together to invent this bailout money.

And just why are we bailing these companies out in the first place? The amount of small businesses in the US which go bankrupt in the year, in aggregate, equate to more of an unemployment problem than would the auto industry. These are people who are held back from the inside by antiquated business models, from the left by the mandates of the unions (like mandatory man-hours per car which stifles the very ingenuity by which these companies were founded), and on the right by the EPA, DOT, congress, and other government bureaucracies thinking the constitution somehow empowers them to tinker with the free market system.

By the time we get to Obama's "spreading the wealth around", the current administration (congress included) will have so devalued that wealth it won't be worth spreading.

This has got to stop, guys.

Watch the vids. Even if only for nostalgic reasons, it's humorous to see a $64 car note referenced.

I was talking to C tonight after watching this and I asked him a few questions...

If you take a quarter and spend it on a small toy, what have you got years and years from now? A broken toy. If you take a quarter and put it in your pocket, what will you have years and years from now? A quarter. If you, and your friends, let's say 100 of you, all took your "one quarters" and put them together to start a business, like a lemonade stand, and you own 1/100 of that business, 1 perCENT of each dollar of profit, then when that business makes $25, you get? A quarter. If you and your friends work hard and grow that business so it earns $100 profit, you get 100 cents, or four times the original quarter you put in it.

So the fog is lifting. He's starting to understand this concept. It's new to him... it was new to me at least once. I could see it working in him though. We talked about how a business is not unlike a plant and with the right care and nutrients it can grow big and strong. But if you don't know what you're doing with a business, it will end up like daddy's cucumbers outside in the garden... not worth the money you spent on the seedlings, or just plain dead.

Ok... well I've got to get some sleep. I'm fighting sinuses and I've got a big flag football game tomorrow with the guys from church before our Thanksgiving meals.

Have a good night and a very happy Thanksgiving everyone!

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