Where is the “Suze Orman” of Barack Obama?

A few nights ago I saw Suze Orman on TV in her famous show that people are calling to ask her if they can afford buying certain things and I thought to myself, “Where is the Suze Orman of Barack Obama?  Who is the person that tells our President that he can or cannot afford something, even if he wants to very badly?”

To a very true extent, I believe that our President is behaving exactly like the typical lower-income American that had driven himself into debt beyond anything reasonable.  When it needed to buy a house he couldn’t afford he took a sub-prime mortgage, when he wanted a new car or a new TV set he just took the next available credit card offer.  To me It’s funny that people ask themselves how come so many Americans drove themselves into such personal debt and how come Saving rates are so low, when really you shouldn’t look further than the first American, the President.

When banks and insurance companies failed The President bailed them out (with money he doesn’t have), when car companies failed he did the same thing. When it wasn’t enough he even poured more money on the car industry by offering the “Cash for Clunkers” ridiculous program.  When mortgage companies failed he bailed them out and on top of that he is going to pour Trillions into changing the health care system.  All of that in a time that the country is in deep debts, high unemployment, low saving rates and a growing trade deficit!

I mean, what would Suze Orman say to a guy that calls her show and says he wants to buy a new car and remodel his house while he is Jobless and can’t pay his existing bills?   Is there any chance that Suze would tell him: “Sure, go ahead, just enter the closest bank and take another loan” ?

Ofcourse these problems would seem to be solved by pouring money on them, but only for the very short term.  The fundamental problems that America face are way beyond this or that stimulus can solve.  Many American industries and General perceptions need to be Reset.  That’s the only way to solve these issues.  America needs to produce more and reduce its Trade deficit (That’s equivalent to a jobless individual to find a Job maybe even a job it wouldn’t aspire to).  Industries that are not competitive enough needs to be let go.  The Financial industry needs a well deserve shake-out otherwise Wall-street will never lose its ridiculous bonus habits. American need to be encourages to Save more, not to Spend more.  Interest rates should increase in order to reduce incentive for Cheap borrowing and gambling on other’s people money like the Real-estate industry and others had enjoyed for so long. Only by Saving more and disciplining ourselves should we be allowed to buy the new toy, not by taking another loan and hoping things will be better in the future.

I think the President know all of that, but as a man of tremendous hope, he believes that his administration and the smart people around him will know in time how to turn the wheel around and make more revenue. He really believes that by “Investing” today in some of these industries things will look better and America would grow its productivity and reduce its trade deficit so will be able to pay its future debts.  But my believe, and experience shows otherwise, Making money is so much harder than Spending money.  In order for America to make money and change its trade deficit cycle, a totally different attitude is needed and the Governments’ spending spree is a step to the wrong direction. Barack Obama’s “Investing” in our economy, is merely throwing good money after bad money into an economy that needs a fundamental reset.

Unfortunately, I believe this deepen the problem dramatically.  Because the only way out of such a growing debt hole is by doing something that an individual cannot do which is printing money legally.  The Government would not be able to pay its future debt obligations and instead of being honest about it with its creditors and filing for a bankruptcy, it will just pull a trick and print more money.  When things will be really messy and no lender will be willing to lend More money to an already deep-into-debt America, it will choose the easy way out and the one with the less bad reputation than bankruptcy and print the needed money amounts.  Unfortunately, printing money is equivalent to bankruptcy as anyone who holds a US dollar today is actually holding a debt note of the US Government and when more notes are printed than the value of each note diminishes.

So, does anyone of my readers know Suze Orman? Can we forward her this post? Will she stand up and tell the Government “Enough is Enough”?

The new “Cash for Clunkers” program is the dumbest idea I have ever heard

For those of you who do not know what the Cash for Clunkers program is here is a brief: In general the US Government is willing to Sponsor about 3500$-4500$ of a discount towards buying a New car for anyone who is going return their old car(Clunker).

It is wrong for so many reasons, that I decided to make a list of the top 10:

1. The Government is destroying perfectly valuable property. As a part of the plan, every such returned clunker is mandated to be destroyed by the dealership so it can never be used again on the road. Does it make sense to destroy perfectly working cars which can still be in service for many more years? Does this sound right? Is in it like throwing away perfectly valuable resources?
2. The Government is encouraging people to get deeper into debt. People who currently have no debt on their existing cars will take loans to finance a new car in order to cease this limited opportunity of a Government giveaway. Does that sound right? Should the Government encourage Americans to go deeper into debt? Isn’t this exactly the same story with the sub-prime mortgages that encouraged people to take loans beyond their means?
3. The Government is encouraging Spending money. Even regardless to debt, should people with the means spend their savings on renewing their car fleet instead of saving it for a rainy day? Aren’t there more important things that the average American should save towards? With all the un-employment and uncertain economy, shouldn’t Americans be more Frugal at the moment?
4. The Government is destroying a whole market segment of cheap cars. Every student or colleague graduate who used to buy his/her first car for 500$-1000$ will not have such opportunity anymore as no one who owns such a clunker will ever sell it for less than 4500$. The Government had artificially intervened in a free market of car prices and has raised the bar. If I had such clunker today I would never sell it for less than 4500$ as I would have waited for the next time I buy a new car and might get a 4500$ discount.
5. The Government (Now a shareholder in GM and Chrysler – see one of my previous blog) is acting in preferring the car industry profits over other industries’ profits. Maybe the next stage would be for the President to add a big billboard on top of the Whitehouse so he can also contribute some free advertising to the Car companies? Is this fair to other industries?
6. The Government is increasing the trade deficit. As most of the car companies are based abroad, does it really make sense to encourage Americans to buy more cars and by that sending most of these dollars overseas?
7. The Government is rewarding the people who were less environment-friendly.  One of the program rules states that if your clunker has a higher MPG than a certain threshold you are not entitled for such subsidy. Does that make sense? Those of us that were environmentally-conscious in the past and bought a car that wasn’t polluting should be punished and those who bought a polluting car should be rewarded?
8. The Government is manipulating the numbers for creating a short term hype. Ok, so we will have one month of a spike in auto-sales but then what? At the end of the day this artificial spike can only help for as long as they run this program. This program doesn’t change the problematic FUNDEMENTALS of the car industry. When this program will be exhausted there will be a crash in auto-sales. This will happen in about 1-2 months…
9. The Government is not telling the truth about the impact on environment. This program is marketed as Green effort as it helps replacing Low MPG cars with more efficient MPG cars. It sounds right but if you’ll check the numbers you’ll see that the cost of this program is tremendous and the actual impact on the environment is negligible. This is going to make less than 0.1% of difference on the total US CO2 emissions. So why cheat and market it with a Green twist?
10. The Government is wasting our money. It is taking 4500$ (!) from the tax payer and GIVING it away to some idiot who is giving the Government back a 500$ clunker. No wonder that in the first week the entire 1B$ was exhausted and now the house is about to approve another 2B$ budget for this matter.

Now you tell me, is it fair that tax-payers will sponsor a 4500$ ticket for people that have a 500$ clunker? Isn’t it nuts? Who exactly will be paying off the Government 3B$ debt for this? Our kids? Our grandkids? Is it fair that our kids will need to pay off a debt to sponsor someone’s new car?

CNN Headline: CNN is monitoring the Iran and Michael Jackson situations. WTF?

In the last few days the media and the world is totally in shock about Michael Jackson’s death.  I can’t understand why.

I agree that MJ was a genius when it came to his performing capabilities.  Probably one of the top performers this world have seen.

But other than that, he was a very troubled man.  He abused drugs for many years and behaved in a very strange way in many aspects. He had changed his look through numerous plastic surgeries. He had a few questionable controversies about kids abuse (which I believe weren’t true).  He has been treating his own kids in a strange way by covering them up with vales and dangling his baby over the balcony.

Hero? For me he was no hero.  A hero for me is far more than a good singer or dancer. It someone to look up to. Someone that does something with his life, with his talent, with his success. Someone that uses his life to make it an example for others to follow, to learn from.  MJ was no example for me.
Shocking death? How can anyone say they are shocked?  Everybody knew he was a nut-case. Everybody knew something was very wrong with him just by looking at his distorted face.  A shocking death is when someone totally healthy suddenly dies.
Tragedy? I believe that everyday tens of thousands of more tragic  incidents happen around the world.  Every healthy person that dies in a car accident is a bigger tragedy. Every young person or kid that dies for no reason with all of his life in front of them is a bigger tragedy.

I am just amazed how people think like a crowd and how immediately when someone famous dies it becomes so popular to glory him.  Two weeks ago no one was interested in MJ. None of his “so good friends” went forward and try to rescue him from his addictions, and now such “friends” are in deep a grief.  What a joke.

And as for the time this is getting in the media is just ridiculous.  There is a HUGE event happening in Iran, maybe a change of history.  Tens of brave young people are killed every day or so in the street of Iran and CNN is putting MJ and Iran in the same level.  Are they out of their minds?

I hope for MJ that he will get some peace now, for all the great joy he had given people through his talent, he certainly deserves it and apparently couldn’t get this kind of peace here on earth.

Only in America, Portfolio tracking services don’t support holding foreign currencies

I have recently diversified my financial position by holding more than one currency. Because many experts believe that the US Dollar might lose its value compared to other currencies, because the Government dollar printing, I have decided to be more averaged among multiple foreign currencies.

And here is the funny thing.  When I tried to enter these new foreign currency holdings into my Google Finance Portfolio, I’ve learned that they don’t support such option!  I guess that according to Google, one can hold ONLY US Dollars….

I was a little shocked and went to check other services like Yahoo Finance and Morningstar and ALL of them don’t support holding other currencies other than the US Dollar.

And here is the Sad thing. I guess that what it really means is that American Investors don’t need such a basic feature cause they don’t hold other currencies…. I really hope nothing catastrophic will happen to the US Dollar… (Look here: http://peterschiffchannel.blogspot.com/2009/06/collapse-of-dollar-is-inevitable.html )

A question to the citizens of this world: Can you afford a Nuclear Iran?

As an Israeli I wanted to send this question to citizens of other nations: Can you afford a Nuclear Iran?

Many people want to believe that this is a problem of Israel only so let me explain what I believe it means for you:

1. The risk of independent terror organizations getting Nuclear weapons:

It is a known fact that Iran is the lead force in supporting terror organizations.  Over the last decade, Iran has been sponsoring fiscally and morally numerous terror organizations, equipping them with weapons and vital know-how for conducting terror acts against innocent civilians.  Clearly, Iran might also share (or sell) such developed Nuclear weapons to independent terror groups.  This will present a new reality in the world as it will be the first time that such Weapons of Mass Destruction will not be in the hands of Governments only but at the hands of independent terror groups that might decide to use it based on their own agendas.

Will you sleep good at night knowing that Iran have sold a bomb to Al Qaeda?

2. The risk of other countries race to nuclear weapons, either developing it internally or buying it from Iran:

Nobody will have the moral right or the capability to restrict other countries from developing nuclear capabilities as well.  If only for the just argument that they need it for self defense and deterrence of a potential attack.

You might think: “so what, there are a handful of countries that have nuclear capabilities today, what difference would it make if a few more will have it?” but this is a very wrong assumption.  The existing countries that hold nuclear capabilities today are far more stable than the next wave of countries that will ask to acquire such capabilities.  All countries in the Middle East will want to have such.  Obviously spreading such technology to other countries will increase the risk exponentially.  And how exactly will we control its spread then?

Will you sleep good at night knowing that Chavez from Venezuela have bought a bomb from Iran?

3. The risk of Iran invading its neighbors for gaining control over a  hungry-for-oil world:

The amount of oil in the neighboring countries like Iraq, Saudi Arabia and Kuwait is so large that similarly to Saddam Hussein invasion to Kuwait, the Iranians might decide one day that it’s their oil.  I know it sounds far-fetched today but Iran was in a very bloody war with Iraq for more than 7 years partly over oil, and the more oil will become a scarce resource in the world so will their interest to claim it becomes higher.

How would you have felt if the Gulf war took place while Iran has such nuclear weapons?  Would they have sat quietly like they did in the Gulf war?

4. The risk of a different logic:

You might think to yourself that “like in the cold war when there was a clear deterrence for both the USA and the USSR, both understanding that an attack will immediately spark a counter-attack, so will Iran be afraid to attack other countries as it commits a suicide act”.  But this is also a false belief.  Iran is a country controlled by religious extremists.  Having a supreme Religious leader which is only subordinate to God and is above the law is something totally unpredictable.  His spiritual beliefs may contradict any western logic or common rational.  If He or his successor might believe that it’s God’s will, he will commit suicide happily for the sake of a spiritual, religious agenda.  A small example of this irrational logic is a threat letter that Ahmadinejad sent to President G.W.Bush on May 2006 suggesting him to convert to Islam.  Nothing to compare with the Russian mindset in the cold-war.

5. The risk of an unstable regime/dictator:

Not to speak about a situation by which Iran might have an internal revolution?  Can anyone predict what would a falling dictator do in his last day of power, seeing the end nears and feeling that he loses control?  He might use such weapon out of desperation only to re-shuffle the political scene….

Conclusion:

Stopping Iran from building a nuclear weapon is a very tough job.  Israel cannot do it by itself and thinking that its only Israel’s problem is not only naïve but also foolish.

If the citizens of the world are not going to act soon, they will need one day to explain their children why they chose not to act in time.

Is the drop in Housing Prices a bad thing?

It is clear today that because of cheap credit, too many people have taken sub-prime mortgages in the past decade to buy houses they couldn’t really afford

It is also clear that such buying spree of houses have pushed housing prices to artificial record highs. Obviously such high prices shouldn’t have been reached in the first place as they are based on phony mortgage-money that never really existed

Now that all of this phony ponzi-scheme collapses and house values plummet, the true value of houses comes to light

— But what I don’t understand is why everyone is so concerned about this, and why does the Government interfere with the free markets, trying to block such housing value drop by offering cheap mortgage rates, supporting Fannie and Freddie and pushing banks to approve loans

I actually think it’s a good thing and that the Government should not interfere at all.

You see, if the Government would not interfere and would let the free markets play themselves and let house values drop to the place they should be, eventually more Americans would be able to afford them at these new prices. You see, some of the same Americans that took phony mortgages to buy overly-priced houses in the first place would be able then to buy such houses at a nominal, more reasonable price.

Isn’t that a great thing for Americans, to buy a house they can actually afford?

But why can’t the Government see this? Why does the Government interfere (again) to support an artificial bubble of high priced houses that nobody can afford? What’s bad with making these houses more affordable to more Americans?

The Day that America changed

What happened today is that the US Government, headed by President Barack Obama, has decided to Invest 30,000,000,000$ of its people money in GM, a BANKRUPT company!

What private investor would invest 30B$ in a company that goes Bankrupt? I guess that because the answer is “There is no such crazy investor in the entire world” then the US Government volunteered to be that investor. Make no mistakes, Barack Obama has decided to take Americans money and Invest it, making all Americans into Shareholders in a failing auto company.

Let me give you a small lesson in Logics.

Fact 1: Toyota (or any other car manufacturer in the US for that matter like Ford, Honda, Chrysler, Tesla…) is a direct competitor of GM in the Auto industry.
Fact 2: GM = United States Government. (The US government as of today holds 60% of GM shares)
Therefore: Toyota is now a direct competitor of the United States Government.

Is that Fair for Toyota or any other car company to be in direct competition with the US Government?

And more than that, as:

Fact 3: The US Government = is really representing the US people.
Therefore: The US people are now a direct competitor of Toyota.
Therefore: Should US people, as newly shareholders of GM now prefer to buy a GM car over a Toyota car in order to support their investment in GM?

Is that Fair to Toyota or any other car company in the US to be in a direct conflict of interest with the US consumers?

- And as for the tax-money that is collected from such car companies like Toyota and Ford, is it Morally fair that it will be used to fund a competitor? Does Toyota pay taxes to bail-out GM?

- And what about saving other Car companies that might fail in the future. Would it be fair NOT to bail them out if they will need help?

- Or for that matter, why not any company, why only car companies?

- And as for the Other Millions of individuals that have lost their jobs lately in Other failed companies, why didn’t the US government bail them out? Shouldn’t their companies be bailed out to spare their jobs? Are they less important that the GM workers? Is that morally fair to them?

- And wouldn’t the US Government be now in a conflict of interest regarding any future decision regarding the automotive industry? I mean, let’s say for instance the US Government will decide not to bail-out the next failing car company, wouldn’t such company claim that it is done because the US Government has already an interest in GM? I mean every decision will now be biased by definition, no?

Mr. President,

I believe that more than just a very bad financial decision, this is also a very MORALLY WRONG decision, towards all tax-paying Americans, all other car companies, all those that lost their jobs and totally contradict the spirit that brought this nation to greatness. I strongly believe it contradicts the constitution itself….

The Master will become the Slave

A vicious cycle is going to happen.

1. All Starting by the current US government deflating the value of the dollar by trying to reverse the situation and therefore printing and borrowing more money.

2. At some point the dollar value will drop like a rock.

3. Then the Chinese will understand that their dollar reserves are deflated and try to get out of their dollar holding by using it to buy real assets around the world, buying metals and other basic commodities, as well as real assets in USA, as well as shares in the top 500 public companies in the USA. This Chinese dollar sellout will even intensify the dollar drop in value. Because the Chinese will not want to impact their own dollar holdings by selling much of it, they will do it quietly, buying anonymously more and more assets, which will make it very hard to track, but one day we will wake up to a new reality in which the Chinese government will become the new landlord of American top assets, or basically the new landlords of America.

4. There will be a very high inflation in America, the dollar will be worth much less. everything will cost a fortune and salaries will stay low.

5. The American people will need to move from service industries to manufacturing, but this time, they will get a small wage working for a Chinese owner, something very hard for us to adjust.

6. America will become the new China of cheap labor, not allowing the people to enjoy all the luxury but rather work for keeping them alive.

15-20 years from now, looking back into history, it will be seen that a combination of:

a. Decades of hard-working Chinese, saving their incoming dollars by their government, making the people save as much as possible while getting more and more American manufacturing outsourced to China,

b. And at the same time a corruption of American society, making it into an “Obese” mentality created by two factors:

i. The US Credit concept that allowed Americans to live beyond their means, with the option to borrow and re-finance at any point, both at the individual level as well as the corporate level and at the government level,

ii. And the prevalent of the social concept of consumerism that saving is bad and spending is what defines us as Americans,

have created a situation that the Master(Americans) became the Slave(cheap Chinese laborers) and the slave became the master. because the Master(Americans) have Borrowed money from the slave(cheap Chinese laborers) to buy his cheap services for years and now when it is time to pay back the loans, the slave comes to claim the Master house as a payout.

Unfortunately, this will be intensified by the current US administration that deflates the dollar even further. The new administration should have tried to stop the crisis at the last minute by doing Only three things: (i) Letting the markets take care of themselves, including letting large corporations to fail (ii) Reversing the spending and start saving both on a national level as well as encouraging individuals to save on a personal level, And by (iii) Start manufacturing more and giving private entrepreneurs incentives to manufacture more in the USA. But instead the US administration will continue to borrow and print money to artificially reduce the pain in the short term on expense of America’s long term future. The truth is that the administration is expected to do this by its voters as no nation has ever been in such a situation before and therefore nobody really knows what should be done. What American do want now, is a quick pain relief so instead of dealing with the real problem we take the shortcut pain-killer and let the CANCER grow ten times in size.

It’s like laws of physics, there cannot be something out of nothing. There cannot be a way for a government to take us out of a hole (debt we took for so many years) by borrowing more money. In order to climb out of the hole we need to roll up our sleeves and climb, but as you may know, for an Obese it is very hard to climb…..

A personal letter to God

Thank you God for my life.
Thank you for this world, and for the state of Israel.
Thank you for the miracle of my body, and for your endless patience.
Thank you for all humans and the opportunity you gave us, to be partners in your creation to do good.
Thank you for the smallest detail that we tend to forget to thank you for, and for the largest forces that are so obedient.
Thank you for all you have given me, especially for my family and the people around me.
Thank you God for your belief in me and for the success you have given me.
Thank you God so much,

Always yours,
Oren

Final moment of Truth

Probably the most influencing movie scene I have ever seen was at the end of the Schindler’s list. It is at the end of the war when Mr. Schindler stands in front of all the Jewish prisoners he had saved from extermination, and suddenly realizes, that he could have done more to save a few more people. He, who have done so much and saved so many is ashamed and embarrassed for all these that he didn’t save. He says: “oh, I could have done more, I could have traded my car for another few lives, and this pin that I’m wearing, I could have got one more live for that”. To me this is a sheer enlightenment as I believe we are all going to feel the same one day. One day, when we will return our soul to god and stand in front of him, no matter how righteous or good-doers we believe we are today, we will have a hard time looking in the mirror and ask ourselves: “why?, why didn’t we do more for more people. We had the means; we had this life and this body; we had the freedom of choice. Why didn’t we use it better for the world and its people? At least for those that were close to us, why didn’t we do more?” This feeling of Shame and Miss is going to be very unpleasant and I think that if we’ll think about it enough today, we might do more today, while we are still here in this world and have the freedom of choice. And like in the movie, when Schindler’s assistant, Itzhak Stern(Ben Kingsley) is comforting Mr. Schindler for this horrible feeling, telling him how much he did do for all these people that he saved, so will the Angels in heaven comfort our soul, reminding us of the good actions we have done while we were alive.

if you haven’t seen the movie, go see it today. If you saw it already, see it again!

And please, Do one good thing today…