Does the presidential elections influence the stock market?

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How strong is the U.S. economy?

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Insider trading - does not apply to Politicians

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Occupy Wall Street

I do believe the "Occupy Wall Street" movement has authenticity.  However, as you can see from this lively clip, the participants simply have no idea "what" to protest or "who" to protest against.

Here, Peter Schiff, representing the wealthy1%, trys to communicate with the participants who seem to think that paying more taxes will solve our unemployment, unequality and other economic issues.

As Peter Schiff tells them, why would he work hard every day just to keep 30% of his income, while 70% goes to taxes. Moreover, he also presses them on how many people they have personally hired and created jobs for.

While they protest that taxes should be higher, they should protest high "government spending." While they protest at Wall Street, they should be protesting in "Washington, D.C."

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USA vs. China

Jim Rogers has an interesting insight as to what a trade war may look like with China.  The bill that was recently passed by the senate, regarding the Chinese manipulation of their currency, gives the Department of the Treasury the authority to impose sanctions on China.

He also discusses several courses of action the Chinese Government can take if the USA decides to impose sanctions.  The Chinese Government could:

1. Stop purchasing US Government Bonds
2. Sell US Government Bonds

These options above could send interest rates through the roof and/ or devalue the US dollar.   

The United States Government should be working on ways to make it easier for domestic companies to compete internationally, instead of passing legislation that may possibly invoke an international trade war.

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Government regulations are not the answer

The United States government have been extremely busy the last few years writing bills to regulate our society.  In the clip, Congressman Ron Paul suggest that a free market will help decide what products consumers demand, not government regulations. 

These regulations have become such a burden on small business in the United States, it makes it easier for foreign competitors to sell at a lower cost.  In a free market, the taxpayers would not have bailed out any of the companies that made incompetent, and in some cases, fraudulent decisions.  The majority of the companies that received money from the government would be out of work.  Companies that made smarter decisions would be able to pick up the pieces from the bankruptcies and gained market share.

I can't think of many industries in which the government interfered and made it better.  See the following examples:

1. Car industry - bailed out several auto manufacturers, and none are in a better situation.  GM is on the verge of bankruptcy (again)

2. Banking - The US government tinkered with loan provisions for banks, which basically forced banks to loan money to unqualified people, which led to a massive amount of foreclosures.  The US government is now suing these banks to recover the amounts lost from these loans. 

3. Healthcare - The recent legislation passed will soon be taken up with the United States Supreme Court.  I am hopeful it will be ruled unconstitutional.

4. Postal service - Postal service recorded a net loss of $8.5 billion the last fiscal year, and $3.8 billion for the year before.

5.  United States Government budget - our government officials continue to run the country on a budget deficit of close to $1,000,000,000,000 a year.  Our total debt for our country is now over $14,000,000,000,000.  The politicians cannot operate on any type of budget, which is why they shouldn't be allowed to run any business in the free market.

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The Federal Budget and Family Budget

I recently read a letter written by a Louisiana attorney regarding the US Federal Budget to put the recent budget cuts into the proper perspective.  Please review the breakdown below:

• U.S. income: $2,170,000,000,000
• Federal budget: $3,820,000,000,000
• New debt: $1,650,000,000,000
• National debt: $14,271,000,000,000
• Recent budget cuts: $38,500,000,000 (approximately 1 percent of the budget)

In order to put these figures into amounts we can relate too, he removed eight zeroes from each figure and pretended it was the household budget for a fictitious family.  We will refer to them as the "Jones" family.

• Total annual income for the Jones family: $21,700
• Amount of money the Jones family spent: $38,200
• Amount of new debt added to the credit card: $16,500
• Outstanding balance on the credit card: $142,710
• Amount cut from the budget: $385

The amount cut from the annual budget was not exactly significant.  These figures do not tell the us the entire story, due to entitlements that are not included in the above figures.  Social security and medicare will drastically increase the debt figures to an amount completely unsustainable. 

The burden of these disastrous decisions fall onto the 52% of Americans that pay annual income taxes.  The politicians do not seem to act a fidiciaries for the American public.  The only way to keep elected officials accountable to vote them out of office.  This can be an extremely difficult task, if they have excellent fundraising, or a constituent base that is satisfied with their politician.  Politicians are not forced to make sound financial decisions, as long as their are bringing home federal money and projects to their home state.

I firmly believe that if we were to force our politicians to operate as a business, with the taxpayers being the shareholders, the U. S. governement would not have annual budget deficits or an enormous amount of overall debt.  We should not expect anything less from our government officials, than they expect out of business owners.

I recently heard an interview on CNBC with my elected congressman, James Lankford.  He was praising the recent debt increase saying it was a victory for the American people.  If the figures above are remotely accurate, I don't see how the new debt ceiling increase can be viewed as a victory for anyone.  If borrowing more money that can't be repaid is the ultimate goal, then we will definitely be the victors.  However, if we are concerned about our future as a country, and the liabilities we are leaving to our children, the recent debt ceiling increase is an absolute embarrassment, and should be rescinded immediately.

If you do not know how your representative voted on this bill, please check it out.  If you are not pleased by his or her vote, I would urge you to send a note to Washington DC to let them know we are not happy with the "so called" changes.

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