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March 22, 2012

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PRINTING; See mar 28th WSJ Opinion. 'U.S. Treasuries Sales Not So Unlimited'. Although the myth of limitless buyers for Treasuries was maintained by so high and mighty a figure as Mr Binder (ex FED V. Chairman);the article quotes a purchase share of 60% by the FED.

A PRINTING RACE TO WHERE? Now the Japanese have decided to enter the prining wars. Alarmed by the money printing by the EU, The US Fed and the Chinese Japan has decided to consider printing Yen to stimulate their economy. Meanwhile Bernake on monday hinted that the US must print more in order to keep the economy moving forward and offset the strong US dollar. It was the US Fed who rushed over to Europe and convinced the Germans and French that to save the Euro they must print money to bail out the losers (spenders). I remember when the peso was worthless, the lira worthless and the ruble worthless. How long can this money printing contest go on? Inflation will show up in other places than oil,gas and corn. Devalue the dollar and every American wage earner on fixed income(minimum wage earners,seniors and teachers) as well as many of the private employees working for benefits and to keep their jobs is making less and less each year in real income.
All my business life I have not enjoyed recessions but I have appreciated the effect they have of "cleaning out the trash" in American industries. Recessions get businesses and households back to reality: balanced budgets, austerity, planning and goals rather than fantasy. The strong devour the weak and America gets efficient. Recessions last 18 months. They are typically 6 months coming, 6 months at the bottom and 6 months going. Kind of like the common cold. They are part of economic life and to try and eliminate them with big spending, money printing,tax policy changes, subsidies, regulation, etc is to prolong them and bring the next one on sooner and have it become deeper the next time.Recessions in 73-75,81-83,91-93,01-03 were all about the same. But this one in which Congress has refused to stop stimulating, regulating,money printing and avoid austerity has now gone on for more than 30 months even though at times it feels like we are out of it. But, only because we cut payroll taxes, borrow and print enormous sums of money and subsidize the weak businesses to try and avoid the recession--to win votes. When inflation hits and the Feds raise interest rates to try and stop it the country will face issues it hasn't seen since Jimmy Carter. With the added burden of $20 Trillion in debt. STOP THE PRESS!

MORE ON THE SUPREME COURT'S DECISION---

Healthcare is the primary issue but border security is key as well because it will determine if the states have the right to judge that the Feds are not doing enough of a certain role and enhance it on their own without the Feds interfering. The voter identification issue will also be interesting as the electoral college system allows the states to cast their delegate votes based on the results of their system of voting. The national popular vote is meaningless. So, the court will have to decide what constraints or requirements the states can put on the voters allowed to cast votes within the state. Very interesting time for the courts and the country. As for healthcare there are lots of changes I would make to it but I do not know for sure the intention of the President’s strategy. It appears to most informed people that the President is trying to establish a system that in the long term will fail forcing the nation to a single payer system (Feds). And, many feel that he is betting that he can hold either the Senate or the White House and prevent a repeal. I think most of the nation would simply like to see the system replaced with a better one. Most people including leading Republicans: Rubio,Romney,Scott and even Perry are in favor of transportable coverage, no preexisting conditions and the kids extension on parents parts of the bill. However, most of us would have preferred a national pool for businesses. And, a separate system safety net for the uninsured. But, for me border control is a central part of the economic future of America. If we continue to allow the flood of Mexicans into the country then we will not be able to improve the schools, medical system or social security for those already here.

Establishing the rules for a safety net for uninsured is very challenging as it can produce an incentive to remain uninsured. Many young adults have come up with a strategy that allows one person to work more for the medical insurance benefits than salary while the other spouse works to maximize income. If the way to get covered for family coverage becomes stay uninsured or unemployed people will do it.

THE SUPREME COURT---will they actually study the issue or will they simply take political sides? If the Supreme Court justices divide politically then the nation's decision on Healthcare will come down to one person. Scary isn't it? Will the Supreme Court remember when the President scolded them publically in his State of the Union Speech and perhaps get even? Will they look at the unpopularity of the law with the population and vote with the majority? Or, will they decide based on the Constitution and the founding father's wisdom of States versus Federal powers? This is an interesting case because following right behind it comes the border states issue with border security followed by the Texas case on voter identification. In the next 12 months this Court will be asked to decide just exactly how much power the Federal Government should have over our individudal liberty and the powers reserved for the states.

Should Republicans gain control of the Senate and White House you can expect that the Court rulings will have an influence on the transfer of many of the Federal responsiblities on Education,Welfare,Transportation,Immigration control and Social Security/Medicare to the states. This may be the most important 12 months in the Court's history as they basically are being asked to decide if the USA is crossing into the European system on social protections or if the USA will stay committed to a looser association of states under the Federal System. Obama's crusade to make the better off member's of society sacrifice more for the benefit of the less well off depends not only on his reelection but also these rulings by the high court.

ROMNEY'S ADVISORS NEED A 'SHAKE';they are using the same losing team from '08; Combating the 'charged' emotions of 'O's desperation with 'generalities'. Jeb Bush better join the team as VP Nominee.
McCain utilized the talents of experienced leadership; the experience of about 6 campaign losses; and would not allow any mention of his oponents' history. Talk about the 'proverbial' conspiracy.
A 'Washington Times'columnist,who has taken up the mantle of Joe Arpaio,(as have most of the Worlds' newspapers) wonders if the Republicans have simply lost their 'fast ball'. They are allowing Arpaio to risk it all,alone. Romney had better provide his own inspiration; for he'll receive none from the House Leadership.
KEEP THE OATH

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