Tuesday, June 20, 2017

When History Is Rewritten The Truth Is Lost

Somewhere between fake news and the passing of time in a world where being politically correct trumps honesty is the place where we are slowly rewriting history. We often get it wrong or later are told we did, so no wonder we are confused. The fascinating chart below shows how beliefs morph or can shift over time. It seems that when speaking of who defeated Hitler the answer depends not whom, but rather when you ask. This change of view reflects how over the years and decades a subtle campaign to convince people America was largely responsible for defeating Hitler in World War II  has been effective in overshadowing the role Russia played.

Views and Opinions Morph Over Time as History Is Bent And Rewritten
The vivid example above shows that following the war a storing majority of the people of France credited Russia for defeating Hitler and the German war machine. Russia was indeed a key factor even though the Soviets didn’t play much of a role in France’s liberation, relative to the US and Britain. By 1995 and 2004, however, the French had changed their minds and were crediting the US as the biggest contributor to victory in Europe according to survey data from the French Institute of Public Opinion. The reason for this is probably due to Russia having a diminished role in the world compared to the influence America wields.

The Truth Can Be Both Ugly And Harsh
The removal of Civil War statues across the nation is in a way a reflection and symbol of the movement to rewrite history. A favorite example of mine concerns the economy and whether the policies of President Franklin Roosevelt brought the Great Depression to an end or if the onset of war was really the catalyst for growth. Another issue is how history views individuals such as Edward Snowden and whether they are labeled as a hero or goat. How we look back and catalog the past is a most curious thing. Often it is a case of the truth be damned, let us not look too closely to facts but redefine the images to fit our liking. Thanksgiving in America gives the impression the Indians welcomed the white man to his land.

How we remember the past is not carved in stone. Betamax was a technology that was superior to the VHS that resulted in its demise, VHS has since been sent to its grave by DVDs. The reason I bring up the often forgotten Betamax technology is that most people now assume VHS was the best viewing system and that is what won the consumer over and as time goes by this idea will solidify. This is another example where history as  George Orwell reminds us, is written by those who claim victory and truth is often cast aside in an effort to give the impression of righteousness. This is a popular skeptical viewpoint about history that has been expressed several different ways:
       What is history but a fable agreed upon?
 History is a set of lies agreed upon.
     History is a set of lies that people have agreed upon.
These cynical adages have been linked to several major figures but more important is we try to remember the message they convey. The gap between reality and perception can at times be very large. The fact people see and hear what they want to only adds to this problem, and it is a problem that seems to be occurring with greater frequency. That is the logic behind the saying, "be careful or reality will bite you in the ass." When we ignore reality we create a situation where we can be blindsided and caught totally off guard.

This leads us to the question of motives and whether someone lurks behind the curtain pulling our strings. To paraphrase the comment of a reader on another blog; There are, of course, good conspiracy analysts and bad conspiracy analysts, just as there are good and bad historians or practitioners of any discipline. The bad conspiracy analyst tends to make two kinds of mistakes, which indeed leave him open to the Establishment charge of "paranoia." Secondly, the bad conspiracy analyst seems to have a compulsion to wrap up all the conspiracies, all the bad guy power blocs, into one giant conspiracy.

While attitudes and views change over time the idea "truth is fungible" can be disturbing and bends the definition of truth beyond recognition but in a world of fake news truth often is placed behind perception. It would be wise to question everything assuming there are several power blocs trying to gain control and influence both government and society. The efforts of those struggling for our hearts and minds may sometimes be in conflict with other such groups and sometimes working in alliance. Whether the intent is sinister or not when history is rewritten something important is lost and that is the truth. When future generations reflect upon the economics and politics of today it will be interesting to see their take on events.

Sunday, June 18, 2017

No Tents Put Up For Fathers Day, Says It All!

Crystal, crystal, crystal-ball who's the fairest of them all? No tent for Fathers Day says it all! While children old and young will go about throwing out accolades and praising their fathers the day pales when placed up against its rival which is mothers day. Sure Fathers everywhere will get calls from children who they may seldom see, some will call out of love, some out of respect, some out of guilt, and a slew of other reasons and others will not call at all.

Mothers Day Even Includes Special Breakfast Outings 
Mothers Day is an occasion that by far garners much more attention than the tribute to fathers. More money is spent on gifts and flowers for mothers. Extra attention tends to be showered on those who generally were more responsible for raising us during our early years. The fact is in many ways this is the way it should be and the way many men prefer. In truth, a child is fortunate to have either parent or someone to care for them and very very lucky if they have both.

The role of being a parent is not an easy one and often is cast upon people without much notice or at a time they do not choose. Society does little to prepare the children that are having children for the task before them and it is a shame. Without a doubt as both fathers and mothers mature and look back most harbor regrets because they had not made a greater effort in raising and preparing their young during the important formative years. This extends to issues such as being far too strict or just as bad being far too lenient, in some cases, it simply comes down to not spending more time with a child. 

Tent or no tent relationships between parents and children can be difficult, however, if you have anything positive to say today is the chance to do so and know if not taken that life being unpredictable we never know when that opportunity might be lost. As a footnote, like many kids when young my siblings and I wondered why there was no special day designated as "Kids Day." As an adult I now understand what I was told when I was busy failing to appreciate my good fortune of few responsibilities, every day is kids day.  

Tuesday, June 13, 2017

Polarized America Taking Course Of Least Resistance

brucewilds.blogspot.hk / By: Bruce Wilds

Washington DC Is Where Deadlines Go To Die
A recent article pointing out little is getting done in Washington already needs an update. It honed in on the fact that while the doors are open it seems Washington remains "closed for business" and nobody has seemed to notice or care. It is surprising the lack of moving forward on a positive agenda to address some of the nation's ills has not had a negative impact on markets. Our stock markets have continually made new highs as the economy struggles with multiple issues and faces an uncertain future. Even escalating tensions throughout the world and the threat of war has proven not to matter to markets as much as the flow of newly printed money and the expansion of credit from central banks across the globe.

The gridlock evident in government has done little to slow the advances of stocks on Wall Street because in the eyes of those buying stocks the promise of solutions is proving as good as the real thing. Investors seem oblivious to the reality no intelligent plans has been written or are moving through the halls of Congress. The fact is little progress has been made on healthcare reform and we cannot cut taxes while increasing spending at the same time without exploding an already massive national deficit. Just as remote as a "fix all for healthcare" is the likelihood of a tax plan being signed into law anytime soon that will simplify or solve our budget woes. The odds of getting a complicated tax reform bill through a polarized and divided Congress are nil. 

Expect Congressional Hearings To Produce Diddly-squat
Ironically the one thing both Democrats and Republicans can agree upon is the importance of avoiding the real work of addressing the problems plaguing America. It is difficult to argue with the fact America's capital is locked in a dysfunctional mindset. Anyone who thinks the nightmare known as Obamacare is well on its way to being repealed or replaced by a "better plan" is delusional. Other than a celebration and photo-op when legislation passed the House little of substance is in the works. Sadly, the House bill was declared dead on arrival when handed off to the Senate and it is probably just as well because it did little to halt or resolve the misery caused by the soaring cost of healthcare.

It could be argued a polarized America has joined a polarized world in taking the course of least resistance and that is to do nothing. It appears most of the developed countries across the world are in exactly the same boat. Recently completed and upcoming elections hold little promise that things will be sorted out soon. For all the babbling commentaries of what the elections in France and Britain mean going forward, they simply reflect the fact that much of the world remains polarized. Populations seem split between the struggle to change course or move forward on autopilot. This situation is not new, this is not the first time in history we have faced polarization, however, with events occurring at an increasingly faster rate things seem a bit more pressing and even dire.

Trump Has Rolled-back The Obama Agenda
Thank goodness for the distractions that allow us to take our eyes and minds off the business of making the necessary structural reforms to move forward. The recent testimony of FBI Director James Comey following his being fired by President Trump can be considered one of those distractions. While few Americans were love struck over Comey this has stirred up a hornet's nest and energized Trump's critics. Throw in a bit of outrage over Russia logically wanting to sway our election and you have a real brouhaha. Only so many hours exist in a day and when they are spent or wasted in speculation the bottom-line is if nothing is getting done, Washington might just as well be closed for business. This means events will unfold with little real guidance.

It is difficult to believe the productivity of Washington could drop any lower than it has, however, as our elected officials busy themselves with calling for further investigations and making promises of getting to the bottom of  "this" America moves forward on autopilot. The flavor of the day is same as it was yesterday and the year before, nothing has changed. The politicians and Washington elite continue dithering away their time as well as the money of the American taxpayer and even that of future generations. With matters under control and having completed his strenuous first 100 days in office President Trump continues with his agenda which should result in more of the same. So far President Trump's big accomplishment has been to rollback many of the decisions made by the previous administration and too many voters this is hardly a reason for celebration.

With the days of "Hope and Change" firmly behind us and we are firmly on the path towards making America great again, unfortunately, the message has fallen on deaf ears when it comes to our elected officials in Washington. Tonight I will raise my glass and toast the cynical and skeptical Americans scattered across this great land for again they are well on their way to being right about how nothing really gets done until the last minute and secure in knowing that any time or thing that offers Washington the option of delay will be exercised. A final though as I get ready to post this article, I think many Americans are beginning to realize this may be as good as it gets.

Wednesday, June 7, 2017

America Is Still Trapped In The Box Bernanke Built

 brucewilds.blogspot.hk / By: Bruce Wilds

The Economy Is Hooked On Cheap Money
As Fed Chairman, Ben Bernanke painted both himself and the Federal Reserve in a corner with a policy of loose and cheap money. Today Yellen and the Federal Reserve with an inflation target of 2% continue to please those gambling that not fighting the Fed guarantees profits. As many Americans are forced to pay higher prices I wish someone would let the Fed Chairman know we are already there. Any thought that inflation is not higher has to be from the false illusion created by lower payments due to low interest rates, this is a one off and will not continue. Today America and the world are boxed in by a policy that is increasingly hard to escape.

Loose Monetary Policies Lead To Poor Decisions
America continues to import around five hundred billion dollars worth of goods from other countries every year than it exports and those who export to us are dependent on America continuing to buy these goods. We have a giant trade deficit, add to that our massive government deficit and it is easy to see that we are living far beyond our means. This means that Janet Yellen and the Fed at some point will have to begin pondering an exit strategy and how they can remove the massive stimulus that the economy has come to expect. Sadly, little has been done to address our structural problems and make America more competitive, growth will be thwarted unless these and other issues are dealt with.

Both Bernanke and Yellen failed to make any serious efforts in pushing the government to take the necessary reforms needed to move the economy forward. What started as a program to support and prop up the economy has morphed into the main driver of economic data. Between the low-interest rates that continue to force investors into high-risk assets in search of a positive return on their money, and money being pumped into the system, the markets have become distorted and disconnected from the economy. The idea that the money will continue to be forced into the sky high equity market is flawed. What was seen as a short term and temporary measure to prop up and boost the economy has become the new normal.

National Debt Exploded Under Obama
The Fed remains trapped in a corner, with higher interest, mortgage rates will rise. The low-interest rates that have discouraged savings and encouraged people to take high risks have also caused people to take on more debt for things such as automobiles. In the end, this does not lead to a healthy economy, but rather a story that will end in tears and regrets. When interest rates rise, as they will have to do at some point, the economy will slow, the value of these risky investments will decline, and these investors will be hurt. Also as a double whammy, interest payments on the public debt will rise, increasing the budget deficit, which exploded during the Obama years. 

If all the money dumped into the economy would suddenly change direction and rush into hard assets, the shift would be devastating to our struggling economy because inflation would soar. This thought also raises other questions, what can we define as a hard asset, what is really available, and in what quantities? This may be where inflation raises its ugly head. An unknown and surprising fact about inflation is how fast it can take root. With such a shift, interest rates would move higher and investors would flee government bonds. The crash of the bond market and what many have called a Bond Bubble will become a reality. Coming up with a plausible exit strategy and making it work are two different things.

Almost a decade ago when Ben Bernanke started us down the path of quantitative easing and artificially low-interest rates a great deal was made of his having studied the great depression era. His claims he had the answers as to how we could avoid a large amount of financial pain and dodge creating a situation such as has played out in Japan and been described as the "lost decades" garnered much support. Central banks across the world have made deflation the bogeyman that allows them to rationally embraced the easy money policy and continued it even though it has not resulted in the economic growth that was promised. It should be noted that cross-border money flows and other such investment vehicles have made this all a bit dicey and forced us to ask if speculative bubbles are being created, keep in mind if you have to ask if it is a bubble it probably is.

Footnote; Allan H. Meltzer, a distinguished monetary economist and historian and a longtime professor of economics at Carnegie-Mellon Institute, died in early May at the age of 89. Meltzer was born in 1928 is viewed by many economists as America’s foremost expert in monetary policy. In recent years his mood has been troubled, he has been quoted as saying “We’re in the biggest mess we’ve been in since the 1930s,” and “We’ve never had a more problematic future.” Below is an article in tribute to Meltzer that presents some of the reasoning behind his concern over current economic policy.

Wednesday, May 31, 2017

Stagflation Most Probable Scenario Going Forward

 brucewilds.blogspot.hk / By: Bruce Wilds

Stagflation Is An Ugly Probability
The odds of stagflation eroding and gradually destroying the buying power of the average consumer in coming years is more likely than many people realize. Too many people little difference exists between stagflation and inflation, however, the distinction or difference is that stagflation is often linked to times of economic slow growth. The idea that inflation cannot exist in a period of slow growth is a myth that many people believe, this may soon be proven false. A great deal of what something is worth is related to where people actually put their wealth. The sectors or areas of the economy that savers and investors deem safe are more important than most people realize.

Price stability or even minor deflation should not be a major problem but due to the fact we seek to move upward and ever higher adds to the idea the 2% inflation target deemed as a desirable rate by most central banks is the economic sweet spot. The concept a little inflation is a good thing appears to be based on the idea it adds to the illusion of overall economic growth. This arbitrary number or target also gives central banks far more flexibility in defending a policy that results in printing fiat money (currency which derives its value from government regulation or law rather than backed by any commodity) as well as deficit government spending.

For years savers have poured a great deal of their savings into paper promises such as pensions, bonds, stocks, and such. Using a slew of faulty methods to compute inflation we are constantly informed consumers are not losing a great deal of buying power, however, these methods often underweight important necessities and overweight the cost of televisions and other electronic gadgets that are falling in price. Even low-interest rates feed into this false narrative. If you want a better picture of what is actually happening focus on the replacement and repair cost that occur following a storm or other natural disaster. 

Venezuela Is Poster-Child Of Economic Chaos
When it comes to economic policy it seems, sustainability is put on the back burner and the goal is just to create growth tomorrow, or in other words, full speed ahead. Our leaders find strong allies with the lobbyist who grease the wheels of commerce. A society where consumers conserve, reducing waste, and any talk of austerity usually conflicts with the goals of lobbyist hell bent on creating growth at any cost. In many cases, austerity measures have been associated with public protest and claims of a significant decline in the standard of living. The argument by contemporary Keynesian economists that budget deficits are appropriate when an economy is in recession encourage governments to try to spend their way out of trouble.

What we should be asking is if current policies are really creating tangible and solid growth and question if they are sustainable over time. Those touting the destructive force of deflation often use Japan as an example of what we should avoid at all cost. It could be argued that the so-called "lost decades" that Japan has experienced is the result of other factors rather than the country not adding enough stimulus. The fact is after its massive bubble burst Japan never really faced its demons and chose to keep alive zombie banks and companies coupled with increased competition from China as it began to export low price goods to America as well as dreadful demographics are all contributors to Japan's problems.

We should remember that Japan's economy is driven by exports this alone makes it a far different animal than our economy. In truth Japan has not fallen off the face of the earth as its real estate and other markets fell back to reasonable levels. Until now because of their low interest rates the yen has been a favorite of those playing the carry trade game and is still seen by many as a safe haven currency. The problem they now face is at some point because of the governments unsustainable deficit the world will at some point declare the yen as worthless and the inflation they have sought for so long will wash over them  taking with it much of their buying power.

Footnote; The articles below link to issues related to this post.

Monday, May 29, 2017

Mosul's Transformation Into A Pile of Rubble

brucewilds.blogspot.hk / By: Bruce Wilds

Mosul Has Become A Scene Of Destruction And Carnage
Mosul's transformation into a pile of rubble filled with the bodies of dead civilians nears completion. The destruction of Mosul continues, and as the end nears we are now seeing Mosul back in the news. Several of the news reports center around how victory is near at hand, this may be so we are prepped for the celebration and ready to give credit to those who are bringing ISIS to its knees. Over the Memorial Day Weekend on Face The Nation, Defense Secretary James Mattis made it clear, containment is not enough the goal is total annihilation and humiliation so that nothing will rise from the ashes of ISIS.

Mosul and the surrounding area in northern Iraq had in the past housed about two and a half million people. Since being occupied by the Islamic State of Iraq and the Levant in June of 2014 many people have fled. Knowing that to stay was to risk your life and the lives of those with you the population today has declined to around two hundred thousand.  Adding to the woes of civilians that remain trapped by the fighting or afraid to flee are reports from U.S. based Human Rights Watch that Iraqi Kurdish fighters battling the Islamic State have unlawfully destroyed Arab homes in scores of towns and villages in what may amount to a war crime, in short, your potential liberators may not be your friend.

The good news is that when the operation began to liberate the city of Mosul and eliminate the last bastion of ISIS in Iraq things were moving faster than many people had anticipated according to Prime Minister Haider al-Abadi. Still, problems continued to surface slowing the advance, such as a wave of car bombs sent by the Islamic State group. Iraqi special forces Maj. Gen. Sami al-Aridi said, "there are so many civilian cars and any one of them could be a bomb." As Iraqi forces try to advance further into Mosul these suicide car bombs have taken a toll. With Islamic State militants even deploying armed children in Mosul’s Old City as means to bolster the impression they are still in control it is obvious many more civilians will die before this is over.

 Civilians, As Well As ISIS Fighters, Are Being Killed
Clearly, the once great and ancient city of Mosul will be reduced to nothing more than a pile of rubble. Mosul shares this fate with many other cities in the region that have become war zones. Within the slowly shirking kill zone, it is not difficult to imagine 100,000 or more of the innocent people trapped within the city killed as troops seeking to eradicate the last of the estimated four to six thousand ISIS fighters go about their task. Death often occurs rather indiscriminately in such places and is dealt out to both civilians and combatants. In this case, civilians will be used as human shields increasing the toll and carnage. 

As for how those many tens of thousands of civilians who fled fighting near Islamic State-controlled Mosul last week many are now stranded outside the city without basic humanitarian assistance. The situation became so desperate near the end of last year it was reported that army officers began distributing rations meant for their soldiers and buying extra supplies with money out of their own pockets. We have seen this all before, when the smoke begins to clear a campaign will develop to raise massive amounts of money to rebuild and set things right but until then it is suffering and death and nothing we do will change this reality of war.

An article written in the middle of November 2016 pointed out that a matter that merits our attention has become merely a footnote lost in the noise of daily news, these are the events taking place as Iraqi troops and a coalition of anti-ISIS forces try to retake Mosul. Even though they are in different countries both Mosul and Aleppo stood in the path of total destruction destined to be wrecked by the forces of war. Aleppo was of course further down this path as we have seen in the photos that have become far too common. These photos depict the total devastation and death modern warfare brings upon those caught in its way.

It should be noted the Mosul offensive began in mid-October 2016, in the days leading up to the American Presidential election, at the time the offensive was expected to last weeks, if not months. The media reports were spun to let us know a forthcoming victory was in the offing, it seemed this was done to assure voters American foreign policy has not been a dismal failure. The fact is Mosul should never have never fallen. The blood and treasure wasted and spent in Iraq are in many ways a reflection and the legacy of intervening where you don't belong. When this campaign is over victory will be declared but what exactly will we be celebrating?

Monday, May 22, 2017

Catalyst Of Our Economic Demise Yet To Be Determined

brucewilds.blogspot.hk / By: Bruce Wilds

Catalyst Yet To Be Determined!
Time has a way of revealing certain realities but does so at its own choosing. It is important that we remember the power of time, it controls us rather than the other way around. During certain periods of our lives the clocks often seem to be moving at their own pace. As a child the special days like Christmas approached slower than a turtle in peanut-butter, however, vacations had a way of slipping by far too soon. The fact that events seem to advance unevenly reinforces the concept of lag time where the effect is not rapidly apparent and the idea that at times we see life passing before our eyes. Time is a powerful force and will at its leisure remind us we are not in control, all things come to an end and so will this market and the economy it has wrought.

The book that I authored several years ago focused on how mankind has by way of its advancements constructed a world in which we are rapidly moving ever faster into a future that we only partially control. This brings me to the crux of this article and that is the catalyst of our economic demise remains in question. Over the years many articles have been written speculating on what will be our downfall and when we will stumble yet we have bumbled our way forward. A patch here and a patch there has allowed the flawed economic system the world has cobbled together to continue with the help of an emergency action every now and then. But has it been luck, cunning or skill that has brought us to this point?

When it comes to the economy we are not talking about a well-oiled and designed machine and in the end, we may find that it is not really completely under the control of those who have been placed in the driver's seat. At any rate, many scenarios exist as to how one or more missteps may lead to the collapse of this rather fragile contraption. As for taking a hands-off approach and allowing markets to find their own way, that time is long gone and that ship has already sailed. Over the years central banks across the world have become so deeply involved in manipulating and distorting markets they are at a point where true price discovery no longer exist. On occasion, I dust off an article that I feel hit some important cords and do so now.

Let the chips fall where they may is a figure of speech which means, "What happens happens" or "Let the imminent events unfold." This metaphoric term dates back to the 1800s and alludes to chopping wood,  "chips" refers to chips of wood. This phrase uses the image of a person chopping wood and letting the chips fly everywhere instead of trying to be neat and chop on one side so they'll fall in a pile. It implies the woodcutter should pay attention to the main task of cutting logs and not worry about small chips. It is often joined to a statement that one should do what is right, such as, "No matter what the consequences, I'm going, to tell the truth about what happened and let things and events unfold as they may.

A Huge Number Of Chips
It has become abundantly clear that when it comes to the "economic chips" the powers that be have no intention of letting them fall where they may. However, several factors determine just how much influence can be applied to the how current economic policies unfold. Continuing with the metaphor of "falling chips." Things like the size of the chips, the rate or speed at which they fall, and the number of chips in the air may make them uncontrollable. My point is we could find ourselves up to our neck in chips in a blink of an eye and in the middle of an economic tsunami, all bets are off as to how successful efforts to stem a catastrophe might be. We should expect that during the final stage of a global shakedown events will be uncontrolled and become very wild.

Many people have come to accept the fact the world might soon witness a major shift in the value of one investment over another as investors seek firmer ground. Derivatives, currencies, plunging stock prices, air rushing out of a bond market bubble, how debts are structured, and the timing or direction from which problems arise are all factors that must be considered. Investors are constantly reminded that investing involves risk, investing in foreign markets is subject to additional risk including currency fluctuations. This means we face the loss of principal or capital, however, year after year of climbing markets tends to make people complacent. What many people don't realize is no matter what they invest in or how safely they think they have salted away their wealth or savings risk is always lurking.

The question remains how best to prepare for a economic meltdown. Values constantly change and the unfortunate situation of having your wealth in the wrong place at the wrong time can be devastating, the inability to access your funds can make the situation even more dire. It could be said that in some ways all of us are involved and playing this game whether we are aware of it or even want to be included. Another concern is the economic overlords have the power to change the rules and when this happens it generally is not to benefit you or me. During times of economic chaos, you can only hope you will not be one of those thrown under the bus. With much of the world facing down a road paved in promises that are economically unsustainable, it is likely many will be broken. Pensions and other payments granted to us in our later years are the kinds of promises that are at risk of not materializing or being cut.

How Will The Dominoes Fall?
Much of how things play out revolves around the issue of debt a subject of great importance to both lenders and borrowers, and again timing can mean everything when determining whether a creditor will totally default or force a lender to suffer a major write-down of their expectations. Debt is generally set to be paid over time and a balloon payment coming due at a time when money is difficult to borrow can be the kiss of doom. Inflation or deflation, as well as a big shift in interest rates, may determine the true winners or losers in this brutal game.

I contend the amount of money and free currency (able to move around and be deployed) actually standing or remaining after the next major economic meltdown begins will be the determining factor of whether inflation or deflation is indeed the flavor of the day. A person may think they are wealthy or have real wealth, but will they be able to tap into it and move it about? Often "paper wealth" is merely a promise of future value. Many people would be shocked at just how little in the way of tangible assets many very wealthy people own and to find much of the wealth people own is on paper, and this is full of risk. What is often missing or overlooked is tangible fully paid for items and things that are likely to hold their value and in the direct possession of the owner. People tend to avoid tangible assets in their control because they are often inconvenient or need to be insured.

Going forward we find the size of the chips, and the order in which they fall is both unpredictable and does matter in determining how an individual's wealth is affected. The story of the gold miner who labored for years then gave up and walked away set things up for the next young lad who started in to hit gold in days and strike it rich highlights that being right is not always enough, the value of tenacity should not be underestimated, and timing is crucial. A bit of luck is also helpful in a world that has become a giant casino and our economic future often a game of chance, at stake, is just how much of our wealth we as individuals can protect. When we talk about contagion it is easy to imagine the dominoes falling, but have no doubt the direction they fall often determines which if any will remain standing. Expect both luck and caution to play a big role on our individual fortunes as we move through the financially violent period before us.

Friday, May 19, 2017

Owning A Tesla Could Suddenly Become Uncool

brucewilds.blogspot.hk / By: Bruce Wilds

Tesla Crashes Have Drawn Much Attention
Enough about Tesla being worth more than Ford and all the other automobile producers that have many times its market share. Current supporters of its value even go so far as to claim it is really a tech company masquerading as an automobile company. It should be noted that J.P. Morgan analyst Ryan Brinkman welcomes margin improvements at Tesla and the reiteration of Model 3 timing, but said execution risks remain. He rates the stock underweight with a $190 price target, up from a previous $185. I and many other market watchers see both of these numbers as far too high.

In a note Brinkman recently wrote, “We continue to be cautious relative to the potential for a slower than guided start to Model 3 assembly, and newly believe that the potential for Model 3 pre-orders cancellations may increasingly become a point of investor concern.” Nothing tarnishes a brand faster than producing a lemon or product that becomes synonymous with failure. I hate to tell Tesla lovers that owning a Tesla could rapidly become uncool if when rolled out the Model 3 fails to live up to the high expectations many of those placing orders have for the car.

Model 3 May Fail To Tantalize Or Underwhelm
Tesla has repeatedly tried to lower expectations and reiterated that the model 3 is a downgrade from the model S but many of those on the waiting list may not fully comprehend exactly what this means. Do not rule out the possibility that once the aura surrounding Tesla leaves, reality may wash over those so eagerly awaiting their new toys and a main driver of sales vanish. In a world where few cars sporting the Tesla nameplate exist the car remains a novelty that garners the owner a bit of notoriety. So far the attention gained has been positive, however, if it were suddenly to turn negative not only would many owners lose a bit of bounce in their step but the value of their cars could drop like a stone.

As this is written we are forced to wonder just how much of a downgrade the model 3 will be and how it will be received. Many questions still exist as to whether its roll-out will be on time or delayed by a series of glitches and problems that often plague new models. If the actual car fails to tantalize buyers or leaves them underwhelmed it could be all over. One is born every minute refers to a fool or sucker.  There's a sucker born every minute" is a phrase closely associated with P. T. Barnum, Buying stock in Tesla is the same as going to a casino, it will end with you being most likely a goat rather than a hero. Remember the companies Musk is involved with have been on the government dole.

Like many high-flyers before him, Elon Musk has a history of promising more than he can deliver which investors and the market has chosen to ignore. I have written several articles about Musk and Tesla not because I'm wowed by either but because they are both poster children of a market which I feel has discoupled from reality. Do not be surprised if looking back someday in the future we view Tesla's stock which continues trading at incredibly high multiples as a reflection of our historically low-interest rates and the luck of being in the "QE moment" rather than the company's financial success. Bears and those that doubted if the company could hold together ironically have pushed up the stock adding to the image that Musk lives a charmed life.

In the past, I and many others have pointed out the uphill battle Tesla is fighting and the many obstacles that could derail its success. In May of 2015 David Stockman wrote; In a world saturated with excess automotive capacity and dominated by some of the most formidable engineering, manufacturing and marketing organizations on the planet—Toyota, BMW and Ford, to name just three–There is no way that an amateurish circus barker like Elon Musk will ever make a profit selling electric vanity cars to the 1%. Stockman went on to state, You might describe Tesla as $30 billion of capitalized hopium, but that would be too generous. In an honest free market, Tesla would have long ago been carted off to the chapter 11 junk shredder.

Oh, how sweet and challenging the auto industry is, like a fickle mistress it has those in its grasp always on their toes or they will suddenly find themselves crushed by their overconfidence. A marvelous example is how Ford in the 1950s ambitiously rolled out the car everyone was waiting for. Unfortunately, their ambition gave birth to the Edsel, whose name became synonymous with abject corporate failure and while the nascent brand was killed in 1959, its legacy lives on. The Edsel's short history makes a fascinating cautionary tale for anyone in business–not just the car industry. In the end, the name of Elon Musk may be added to a long list of bold men herald and declared to be "gods gift to business," only to find they flew too close to the sun only to crash and burn.

Footnote; The link below is to a prior article that is an overview of Elon Musk and Tesla Motors. It gives some of the background story behind their rise to prominence.

Tuesday, May 16, 2017

"It Will All End Badly" - A Tribute To The Late Allen Meltzer

During April of 2016, I wrote; We should not wait until someone is gone to salute them in tribute. Life is finite and at some point, we should acknowledge we are nearing the end. Allan H. Meltzer, a distinguished monetary economist and historian and a longtime professor of economics at Carnegie-Mellon Institute, died last week at the age of 89.  While he had a long and productive life I only wish Allen had lived long enough to have seen he was right on what has been happening since 2008. An older lady often told me "she no longer bought green bananas" as a way of saying she recognized this truth. In that spirit, I'm writing about a person born in 1928 that while viewed by many economists as America’s foremost expert in monetary policy is little known by the masses.

In the middle of 2013, I wrote "It Will All End Badly" where I stated that what I like about numbers is that when they are not jockeyed, jerked around, and falsified they tend to tell the truth. Continuing on this thought looking down the road the numbers do not work, this is where Meltzer enters the story. Allen H Meltzer is recognized for his wisdom and achievements in economics. Meltzer is a professor of political economy at Carnegie Mellon University and a visiting fellow at Stanford University's Hoover Institution. He is also the author of the three-volume “A History of the Federal Reserve.” For over 25 years he was the chair of the Shadow Open Market Committee, a group that meets regularly to discuss the policy of the Federal Reserve. Back then his mood was troubled “We’re in the biggest mess we’ve been in since the 1930s,” he has been quoted as saying “We’ve never had a more problematic future.”

People have been forced into riskier assets because of low-interest rates.When interest rates rise, as they will at some point, the value of these risky investments will decline, and these investors will be hurt. Making things worse is the fact that interest payments on the public debt will rise increasing the budget deficit which has grown massively in past years. It is clear that prices in some sectors of the economy have been rising rapidly and major distortions exist within the marketplace. When the large "too big to fail" banks like Goldman and Bank of America report they made profits in the market on roughly 95% of trading days in 2012 we have to raise an eyebrow. This is an indication that the game is manipulated as no trader is that good.

Even back in 2013, Meltzer had not been a fan of recent economic policy for some time, in a Wall Street Journal opinion piece on June 30, 2010, titled "Why Obamanomics Has Failed" Meltzer wrote about how uncertainty about future taxes and regulations was the biggest enemy facing future economic growth. He goes on to say that the administration's stimulus program has failed. Growth is slow and unemployment remains high. The president, his friends, and advisers talk endlessly about the circumstances they inherited as a way of avoiding responsibility. Two overreaching reasons explain the failure of Obamanomics. First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions. Second, the administration and Congress have through their deeds and words heightened uncertainty about the economic future.

Meltzer went on to say that most of the earlier spending was a very short-term response to long-term problems. Part of the money financed temporary tax cuts, this was a mistake because it ignores the role of expectations in the economy. Economic theory predicts that temporary tax cuts have little effect on spending. Unless tax cuts are expected to last, consumers save the proceeds and pay down debt. Another large part of the stimulus went to relieve state and local governments of their budget deficits. Transferring a deficit from the state to the federal government changes very little. Some teachers and police got an additional year of employment, but their gain is temporary. Any benefits to them must be balanced against the negative effect of the increased public debt and the temporary nature of the transfer.

Peter Schiff says, printing money is to the economy what taking drugs is to a drug addict. In the short term it makes the economy feel good, but in the long run, it is much worse off. What was once the "long run" or "distant future" may be getting very near. Soon the dollar and the American economy will be nearly dead. I recently reviewed a book I read years ago, in his book "A Time For Action" written in 1980 William Simon, a former Secretary of the Treasury tells how he was "frightened and angry".  In short, he was sounding the trumpet about how he saw the country was heading down the wrong path. Looking back, it is hard to imagine how we have made it this long without addressing the concerns that Simon wrote about so many years ago. Back then it was about billions of dollars of debt, today it is about trillions of dollars.

Returning to Allen Meltzer he penned a piece that appeared in the Wall Street Journal in May of 2014, in the article Meltzer gives his take on where the economy is headed. I highly value his opinion, not only because it is based on his long developed work and studies, but he seems to have far less motivation to lie than many of those currently involved in forming policies today. Meltzer wrote;

     The U.S. Department of Agriculture forecasts that food prices will rise as much as 3.5% this year, the biggest annual increase in three years. Over the past 12 months from March, the consumer-price index increased 1.5% before seasonal adjustment. These are warnings. Never in history has a country that financed big budget deficits with large amounts of central-bank money avoided inflation. Yet the U.S. has been printing money—and in a reckless fashion—for years.
    The Obama administration has run huge budget deficits every year, which, together with the Bush administration, has amounted to $6.7 trillion from 2006 to 2013. The Federal Reserve financed almost $3 trillion of these deficits by purchasing Treasury bonds and notes. The Fed has also purchased massive amounts of mortgage-backed securities. Today, with more than $2.5 trillion of idle reserves on bank balance sheets, there is enormous fuel for greater inflation once lending and money growth rises.

    To avoid the kind of damaging inflation the U.S. experienced in the 1970s and early '80s, the Fed could raise interest rates, including the interest it pays banks on reserves, inducing banks to hold most of the $2.5 trillion of reserves idle. But interest rates high enough to discourage borrowing and lending would likely send the economy into another damaging recession.
    Fed Chairwoman Janet Yellen recently admitted that the central bank doesn't have a good model of inflation. It relies on the Phillips Curve, which charts what economist Alban William Phillips in the late 1950s saw as a tendency for inflation to rise when unemployment is low and to fall when unemployment is high. Two of the most successful Fed chairmen, Paul Volcker and Alan Greenspan, considered the Phillips Curve unreliable. The Fed's forecasts of inflation ignore Milton Friedman's dictum that "inflation is always and everywhere" a result of excessive money growth relative to the growth of real output. 
    The Fed focuses far too much attention on distracting monthly and quarterly data while ignoring the longer-term effects of money growth. The country's present dilemma originated in 2008 when the Fed properly and forcefully prevented a collapse of the payments system. But long before idle reserves reached $2.5 trillion, the Fed didn't ask itself: What can we do by adding more reserves that banks cannot do by using their massive idle reserves? The fact that the reserves sat idle to earn one-quarter of a percent a year should have been a clear signal that banks didn't see demand to borrow by prudent borrowers.
    The Fed's unprecedented quantitative easing since 2008 failed to lead to a robust recovery. The unemployment rate has gradually declined, but the main reason is that workers have withdrawn from the labor force. The stock market boomed, bringing support from traders, but the rise in asset prices of equities didn't stimulate growth by inducing investment in new capital. Investment continues to be sluggish.
    And some side effects of the Fed policies have had ugly consequences. One of the worst is that ultra-low interest rates induced retired citizens to take substantially greater risk than the bank CDs that many of them relied on in the past. Decisions of this kind end in tears. Another is the loss that bondholders cannot avoid when interest rates rise, as they have started to do.
    Accumulating data from the sluggish loan market and the weak responses of employment and investment should have alerted the Fed that the growth of reserves and the low interest rates haven't been achieving much. Similarly, the Fed should have noticed in recent years that instead of a strong housing-market recovery, not many individuals were taking out first mortgages. Many of the sales were to real-estate speculators who financed their purchases without mortgages and are now renting the houses, planning to resell them later.
    Most of all the Fed years ago should have recognized that the country's economic problems weren't arising from monetary factors. Instead of keeping interest rates low to finance deficits, the Fed should have explained that costly regulation, increased health-care costs, wasteful spending and repeated threats to raise tax rates were holding back the recovery.
    Broadly speaking, the Obama administration has pursued a course the opposite of that taken by the Kennedy and Johnson administrations in the 1960s (and the Reagan administration in the 1980s). Kennedy-Johnson enacted across-the-board tax cuts: Promoting growth came first, redistribution later. By putting redistribution first and sacrificing growth, the Obama administration got neither.
Ironically, despite often repeated demands for increased redistribution to favor middle- and lower-income groups, the policies pursued by the Obama administration and supported by the Federal Reserve have accomplished the opposite. 
    When the president campaigns in the midterm election, he will talk about the relative gains by the 1%. Voters should recognize that goosing the stock market through very low interest rates, not to mention the subsidies and handouts to cronies, have contributed to that result. We are now left with the overhang. Inflation is in our future. Food prices are leading off, as they did in the mid-1960s before the "stagflation" of the 1970s. Other prices will follow.

This post is not only in tribute to Allen Meltzer but to make clear that just because we have muddled along putting band-aids on our economy does not mean that we have done anything but postpone the day of reckoning, and in many ways, we may have made it far worse. The time the Federal Reserve has bought for the country to come to terms with its many problems has been squandered at a great cost. While many people say the economy is getting better others like me who are involved in business on Main Street all across America say this is not true and that an ugly reality is only being masked by the easy money and deficit spending policies we have today. While it is difficult to time when certain events will unfold it is clear the direction we are moving in.

Monday, May 15, 2017

Washington Might Just As Well Be Closed For Business

So Little Being Done It Might As Well Close
While the doors are open it seems Washington remains "closed for business" and nobody has seemed to notice or care. This could be one of the reasons the stock market has continually made new highs as the economy struggles with multiple issues and faces an uncertain future. Seriously, even this could not explain wall streets disconnect economic reality, however, it is difficult to argue with the fact America's capital is locked in a dysfunctional mindset. Anyone who thinks Obamacare is well on its way to being repealed or replaced by a "better plan" is delusional. Other than a celebration when legislation claiming such a feat passed the House little of substance is in the works.

Just as remote as a "fix all for healthcare" is the likelihood of a tax plan being signed into law anytime soon that will simplify or solve are budget woes. This has done little to slow the advances of stocks on wall Street because in the eyes of those buying stocks such a deal is in the bag. They are oblivious to the reality no intelligent plan has been written or is moving through the halls of congress. The fact is we cannot cut taxes while increasing spending at the same time and not explode an already massive national deficit. The odds of getting a complicated tax reform bill through a polarized and divided congress are nil. In fact, most of the developed countries across the world are in exactly the same boat and upcoming elections hold little promise that things will be sorted out soon.

Trump Heads Off On Multi-Nation Trip
Thank goodness for the distractions that allow us to take our eyes and minds off the business of making the necessary structural reforms to move forward. The recent firing of FBI Director James Comey by President Trump can be considered one of those distractions. While few Americans were love struck over Comey this has stirred up a hornet's nest and energized Trump's critics. Only so many hours exist in a day and when they are spent or wasted in speculation the bottom-line is if nothing is getting done, Washington might just as well be closed for business.

It is difficult to believe the productivity of Washington could drop any lower, and while our elected officials busy themselves with calling for further investigations and making promises of getting to the bottom of this America putters along on autopilot. The flavor of the day is same as it was yesterday and the year before, nothing has changed. The politicians and Washington elite continue dithering away their time as well as the money of the American taxpayer and even that of future generations. With matters under control and having completed his strenuous first 100 days in office President Trump is about to head off on a global fly about to meet with various world leaders which should result in more of the same.

The days of "Hope and Change" are behind us and we are firmly on the path towards making America great again, unfortunately, the message has fallen on deaf ears when it comes to our elected officials in Washington. Tonight I will raise my glass and toast the cynical and skeptical Americans scattered across this great land for again they are well on their way to being right about how nothing really gets done until the last minute and even then if delay is an option it will be exercised. To top things off tonight as I get ready to post this article the White House has gone into damage-control mode after a report that Trump revealed classified information in a meeting with Russian officials last week. Ironically this may be as good as it gets.

Friday, April 28, 2017

China Still Adding Liquidity To System At Record Pace

In a world where money flows across borders at the press of a button, it doesn't matter which major central bank is adding money to the system the effect is the same. Today money printed and injected into the economy of any country drives markets higher across the world by distorting demand and prices. The fact is China has continued to add liquidity to their economy at a record pace and the liquidity China injects into its system spills out into the global economy, the money leaking out of China bolsters and lends credence to the illusion all is well both in China and across the world reinforcing the narrative economies are beginning to gain traction.

The figures and economic data China reported for March and Q1 showed the first back to back GDP acceleration in seven years. "The rebound in retail sales growth was particularly important as it indicates that consumer spending remains strong," said Rajiv Biswas, Asia-Pacific chief economist at IHS Markit in Singapore. The data fractionally beat expectations across the board as investment picked up, retail sales rebounded and factory output strengthened, following record credit growth and a fresh rebound in China's property markets. It should be noted an increase in Chinese housing prices which many people see as a housing bubble is a double edged sword and not necessarily something the government is glad to see. Not only do these increases make housing unaffordable but they also tend to cause leveraged speculators to enter the market.

China's Credit Growth Far Outpaces Growth In GDP
Returning to the issue of cross-border money flows it must be noted newly printed money and liquidity printed and released into the Chinese economy quickly affects distant markets. This reinforces what other central banks across the globe have been doing for years. Taking turns one after another countries have added fuel to the global economy in an extended rolling process determined to deflate the effects of their previous credit excesses.

This means when Japan announces a new stimulus package or easing, markets across the world rejoice and move higher in unison. Those who doubt the power of cross-border money flows need only look to Vancouver Canada which has been forced to implement a foreign buyer tax in an effort to halt the rise in housing prices inflated by "hot money" from China. Toronto's housing market has also gone crazy with prices soaring 33% from the prior year. Recently CBC reported Ontario's Liberal government will slap a 15 percent tax on home purchases by non-resident foreigners and will expand the province's existing rent control system to cover all tenants. The wave of speculation has caused landlords to raise rates and distorted expectations of future prices this has broad implications for the housing market going forward.

China's Money Supply Soared From $10 To $24 Trillion
According to Bloomberg the better numbers coming out of China make the problem of excess leverage look a little more manageable, at least as long as factory reflation stays strong. Stronger consumer consumption contributed 77.2% to growth in the first quarter, this points to progress in further rebalancing the economy away from exports and the old industrial growth drivers. The data was of course followed by a bit of optimism and spin as Bloomberg noted, the chief greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong said, "for the first time in the recent years, China starts a year with a strong headline GDP. Thanks to strong investment and property, the economy is performing well."

Because of China's Q1 expansion we have seen producer prices soar, this validates in the minds of some market watchers the ongoing global "reflation" trade. As industrial output picked up courtesy of soaring credit many people continue to brush aside the fact this additional liquidity temporarily mask huge problems within the country. Over the years the credit growth in China has far outpaced growth in the GDP and with each wave of new money into the system less growth has been created. It seems much of the new money has been used to pay interest on past debt that has already formed or in speculating on which existing assets will rise in price and when the government creates policies to end speculation it fuels the desire for wealth to flee the country in search of better investment opportunities.  

While the economic data out of China was welcomed by many investors we must recognize China's relentless credit pump continues set on high. It was reported the broadest measure of new credit rose more than estimated last month amid strong growth in shadow banking. Aggregate financing grew 2.12 trillion yuan ($308 billion). This means for the first quarter, total social financing reached a new record high 6.93 trillion yuan. At current exchange rates, China's credit creation in Q1 totaled to just over 1 trillion US dollars. This is equal to the size of Mexico's economy and well above last year's first quarter total. With this in mind, concerns continue to mount that China's growth is merely the result of relentless credit expansion and at some point, this debt-fueled model will break and the system collapse under its own weight.

Sunday, April 23, 2017

Central Banks Massive Incursion Into Buying Stocks

 brucewilds.blogspot.hk / By: Bruce Wilds

One indication of just how messed up and flawed the global markets have become is reflected in the way central banks across the world are now buying stocks. This has become a part of their response to correcting the forces of past excesses. Their incursion into this bastion of the free markets signals we have entered the era where true price discovery no longer exist. The central banks are often viewed as price insensitive buyers so this incestuous influx of money is in some ways the ultimate distortion. This is especially true when the markets are not deep enough to accommodate the size of these purchases. Over the years global currency reserves have grown and this has increased pressure on central-bank managers to diversify them moving from being a liquidity manager to focusing on investment management but with this comes risk.

A recent article in the Wall Street Journal details the reason behind why central banks are buying stocks. There are several forces driving this. Part of it is a hunt for higher returns, because of negative rates, nearly $11 trillion, or roughly one-quarter, of global fixed-income assets yielded below zero at the end of 2016, according to Bank of America Merrill Lynch. This means some are investing a bigger share of their growing foreign-exchange reserves in equities, corporate bonds, and other riskier assets while others are doing so merely to prop up their stock market in an effort to create a wealth effect hoping it will cause consumers to feel better and go out and spend which will propel the economy forward. This should not be confused with buying  foreign currencies or with quantitative easing programs, under which central banks like the Federal Reserve have already bought trillions of dollars worth of assets to boost growth and inflation.

China Is Adding Huge Amounts Of Liquidity
While the QE programs of the European Central Bank, Bank of England and Bank of Japan have been involved in buying riskier assets each with the currency that they themselves print this it taking things to a new level. One thing I found telling is a statement in the article that many central banks are hiring outside managers to handle the nontraditional assets in their portfolios. It went on to claim this presented an opportunity to a financial industry struggling with stagnant revenue growth but this in not the job of central banks. I find this frightening because the stock market and financial sector has already far out preformed Main Street.

All this feeds into speculation or can even be interpreted as a confirmation the stock markets are indeed rigged and that any fall is merely a signal for them to rush in and buy more. Doing so accomplishes two things, it bolsters and supports current holdings while reinforcing the image markets are climbing higher because our economic future is getting brighter. All this comes at a price and leaves many economy watchers wondering where this leads. This was apparent in a comment made by a reader on another site who looked ahead and questioned the end game of this intervention. When the central banks own all or a majority of stocks will they begin to appoint new management working under their control?

Buying Both Stocks And Bonds Japan Masks Reality
One thing is clear, the central bank's large foray into stock ownership represents more than just a moral hazard and in many ways, it paves the way for a liquidity crisis in our future. Much like the negative interest rates of recent years this action takes us further down the path towards a "liquidity trap," a term that can be baffling and difficult to understand. This term has been used by Allen Greenspan and a few others, it represents a huge problem for the economy. It can have several components, but sooner or later all of them feedback into a loop that disrupts the flow of credit and impacts the real economy. 

The tip of the spear may turn out to be the currency markets where each day trillions of dollars slosh back and forth as traders fight for even a fractional move in their favor. Consider how destabilizing currency swings can be it is easy to see how they could obliterate the global economy. We must remember officials in less-developed nations where large currency reserves sit often use the printing press to buy foreign assets and at the same time cheapen their currency. Some developed central banks such as the Swiss National Bank often accumulate foreign reserves precisely because they want to keep their currency from getting too strong, which would harm exporters and weaken prices. This helps support my theory that for some time the big central bankers are busy manipulating currencies so they trade in a narrow range that will not rock the boat.

Over the years the central banks appear to have taken turns in rolling out injections into their economy's and each time their actions have spilled across porous financial borders carrying markets in one direction or another. This continues to desensitize markets to reality. This creation of stimulus in one form or other by major central banks is their answer to correcting past excesses, simply put they still are struggling to deflate credit bubbles they allowed to form in the past. Japan is viewed by many as trapped in such a situation following a massive credit bubble in the early 1990s they have attempted time and time again to shake off a hangover that has manifested itself in deflation and slow growth. By not addressing the real cause Japan's government and the BOJ now find they are forced to buy both bonds and stocks at an alarming rate just to reassure the Japanese people all is well.

Today China by all measurements is facing the mother of all credit bubbles and addressing it with the same failed policy's we have seen before. This is where I point out any false market can be viewed as a bubble that cannot survive. Simply put, at some point the return on loaning money to banks, governments, and others is simply not worth the risk! Bastardizing the stock market so that it no longer reflects true price discovery will eventually mean investors will begin to perceive it as just another false scheme that is held together only by promises made by a government they can no longer trust. Why do you want to invest or loan money if most likely you will never be repaid or repaid with something that is totally worthless? When this happens the only safe place to store wealth will be in "tangible assets" and the central banks will be left printing fiat money that nobody wants.

Thursday, April 20, 2017

Euthanasia Opens Path To A Dignified Death

 brucewilds.blogspot.hk / By: Bruce Wilds

Few people paid attention when a recent change in the law made it easier to obtain a physician's help in ending your life in Canada and many of those who did take note voiced concern or even outrage. One of the most controversial issues and something that is seldom discussed today is the matter of people having the right to determine when they want to die. This includes both society not only respecting that right and allowing it to take place. Most people would prefer to live a long life, but not too long. In coming years do not be surprised to see more people embrace the attitude that there is nothing wrong with a dignified death after a long life. What is far beyond those markers is the right for total determination, possibly the reason the first idea is taboo could be it might open the floodgates and allow the idea of total determination to edge towards acceptance. 
Hospice Care Is Widely Accepted, Euthanasia Is Not!

Clearly, the mores of America and our culture are rapidly changing this can be seen by the capitulation of those who only a decade ago thought that gay marriage and gays in the military would never become accepted. Sadly ideas like euthanasia and even discrete breastfeeding in public still drive many Americans crazy. Weather you agree or disagree with the idea of euthanasia it is destined to become a major social issue in coming years. In part this is linked to the economics of extending the lives of the elderly and the great cost of doing so.

With people living longer and technologies ability to extend a person's life well beyond where they feel it has any "real quality" the issue of euthanasia will not go away. A big problem with the Universal Health Care model in the United States is that we have a much more death-averse and drug-centric mentality than any other nation working such a system. Americans, generally, expect to receive the latest advances in life extension therapies and life-enhancing drugs. A completely different ideology will have to be established in the relationship between our population and the medical community for this to function in a cost effective way. Accepting death as part of the natural order would go a long way in solving many of the problems. I contend that a person of reasonably sound mind should have the right to say, "I have had enough! End my life Now!"

In the United States, with its culture of optimism and its religiosity, many people want to postpone dying at any cost often including that of pain. Why religious people tend to feel this way is unclear. For some Christians, dying in pain is welcomed or at least endured because it makes them feel closer to Christ. Others believe that the decision as to when a person dies is reserved to God, this is the stated basis of the official Catholic position that sees suicide as a mortal sin. But not all Americans feel that way and many people who are suffering acutely, anticipating suffering acutely, or find themselves lonely or depressed may want to die. Watching an elderly loved one die in pain from an incurable illness or watching a life cut short without notice can bring many issues into focus. The last few grains in an hourglass always seem to rush by faster, we should never take for granted how many good years we have left.

Confronting our own mortality sooner rather than later is conducive to living a better and more balanced life, mortality influences our values and feelings about everyday life. Recent opinion polls show many people want laws changed to allow people to get medical help to die. The word "euthanasia" was first used in a medical context by Francis Bacon in the 17th century, it refers to a painless and peaceful death, during which it was a "physician's responsibility to alleviate the physical sufferings of the body." Physician-assisted suicide is now legal in Belgium, Colombia, Luxembourg, the Netherlands, Switzerland, and several U.S. states (Montana, Oregon, Vermont, and Washington). It is quasi-legal in France and tolerated in a number of countries in which it continues to be illegal. Where euthanasia is allowed checks and balances exist to protect against coercion and decisions make by a person depressed or not of sound mind.

Teaching and thinking about death without heavy religious connotations often sheds more insight onto life and strips away illusions of one's immortality. Current governments laws are in conflict with the changing views of many citizens. Some people who want to die commit suicide, but others do not out of fear that their attempt will fail and leave them even worse off than before, or because they lack confidence that they can kill themselves discreetly and painlessly. Suicide also carries a huge social stigma, because of the public character of a suicide one cannot dispose of one’s own corpse. People who want to die often shy away from committing suicide because of these issues. Even if one argues that by their inaction they actually are choosing to live many would be far better off if they could deal with their problems in an open way.

Suicide Carries With It A Stigma And Possibility Of Failure
In the case of physician-assisted suicide, the "stigma cost" of suicide is reduced or disappears, because if a person who wants to die is allowed to chose a lawful form of medical “treatment,” this signals that suicide is acceptable at least when a physician oversees the act. The religious people whom I mentioned will not be assuaged; but religious people shouldn’t be permitted to impose their sectarian values on others, including both religious and non-religious people, who do not share the abhorrence that some religious people feel toward suicide.

The biography of distinguished federal court of appeals judge Henry Friendly reports that he committed suicide in his 80s because, suffering from a variety of ills that were not disabling and did not prevent him from doing his judicial work, he was afraid that he would become disabled and when that happened he would be unable to end his life though desperately eager to do so. If able to pre-arrange a painless physician-effected death to occur when he reached a specified stage of disability, he would not have killed himself when he did. I use this example because this man was not considered a "flake or unhinged" but what most of us would consider normal. One thing is clear and that is even where the decision to end your life is available it is limited and governed so that a person can't just walk into a clinic and end it all without some thought and while in a one-time deep state of depression.

In my opinion, we will sooner or later willingly or be pushed into excepting euthanasia partly because of the rising cost of caring for the elderly. Expect the debate to continue, however, allowing euthanasia and even physician-assisted suicide could improve many lives by reducing apprehension about the future and at the same time eliminating much of the fear and stigma surrounding it. Euthanasia is in many ways an option to how people can end their pain, torment, or loneliness and can be a less costly one than killing oneself unaided. To me this is a non-issue, the government should not enter this area of individual autonomy and freedom of choice. It is amazing almost incomprehensible that society accepts putting an animal to sleep as a humane way to end its pain but refuses the same to the more advanced animal said to possess the quality of self-determination that we know as man.

Footnote; Your comments are welcome and encouraged. It should be noted a similar version of this post appeared on my blog on December 17th, 2013. Below is an article that focuses on how the young will be burdened in the future by having to support the older Americans that have been promised so much. Do not be surprised if the young come to embrace euthanasia.

Footnote #2; It appears this issue is becoming more important in China according to the Bloomberg following article.        http://www.bloomberg.com/news/articles/2015-02-11/do-not-resuscitate-china-s-elites-push-for-a-better-way-to-die-i61al0i2

Footnote #3; In the "believe it or not" column I submit that even using the term, "euthanasia" on some sites will throw your comment into the "awaiting approval" area where it is then disallowed. I have found this to be true even on media that is supposedly open to different ideas such as the PBS Newshour.