Canada drops their Penny, so should America

Canada has made the decision to do away with its puny penny coin, loved by some but an annoyance to many, will be withdrawn from circulation this year because it costs too much to make and is a pecuniary pest, the government announced on Thursday. Ottawa said the penny retained only one twentieth of its original purchasing power. It costs 1.6 cents to produce each one cent coin and stamping out the penny will save around $11 million a year.

Other nations have either ceased to produce or have removed low denomination coins the list includes Australia, Brazil, Finland, Israel, the Netherlands, New Zealand, Norway, Sweden, Switzerland and Britain. The Royal Canadian Mint will stop distributing penny coins to financial institutions later this year. As the coin slowly disappears, prices for cash transactions will be rounded up or down to the closest five cents. Non-cash payments such as checks, credit and debit cards will continue to be settled to the cent.

Many Canadians consider the penny more of a nuisance than a useful coin. They often store them in jars, throw them away in water fountains or refuse them as change. Financial institutions face increasing costs for handling, storing and transporting pennies, over time the penny has become a burden to the economy. "There are 30 billion pennies in circulation and every year they are minting more. It was just one of those no-brainer slam dunks. It's a place where we can save money," said legislator Pat Martin, who has long campaigned for the penny to be abolished.

PLEASE TAKE THE TIME TO READ MY POST CONCERNING THE AMERICAN PENNY
 from: Monday, January 23, 2012

The Penny Doesn't Make Sense!

Let it be decreed that the penny when weighed and measured is found lacking. A horrible little thing with no redeeming value. A blemish on the face of America, costly to produce, no friend to the environment, wasting America’s  resources while sapping our productivity. It cost our country billions of dollars,  year after year, this amount of waste is no small thing
           
Coins are designed by the government  to be a simple and efficient medium for the exchange of goods and services. For many years there has been discussions about discontinuing the penny which has become obsolete because of its minuscule purchasing value. The debate against continuing the penny is overwhelming, anyone still supporting it most likely has not given the subject much thought or is simply resistant to change, “the penny doesn't make sense".                                                                                      
 Not only does the government plan to continue making the penny it issued four new versions in 2009. It is not the job of the well paid employees of the treasury  to create collectibles or to pander to small segments of the population by designing coins commemorating or recognizing minor events. At a time that America is reviewing its environmental policies we could also attack the penny for all the energy used to make, transport, and distribute this useless coin
.

The penny is a perfect example of our governments inefficiency and waste, and the cost is a burden carried by business. If an employee is paid $12.00 an hour they receive twenty cents per minute. Business simply cannot afford to pay an employee to handle and count pennies, the cost of the labor exceeds their value. According to the “citizens to retire the penny” it cost the Country one hundred million dollars a year to produce the penny, and more then $15 billion dollars annually is wasted just in handling cost.

Small things matter, if our politicians can’t get this right how can they ever deal with important issues like health care . A nickel for your thoughts, how do we bring the penny to a end? Don’t expect the government to do the right thing in a land and world so self-centered, indifferent, and focused on pandering to those who fear change. We need creative ideas to bring about the penny’s final demise, any suggestions? 

Lie of the DAY!

I have been thinking about this take off on my blog for sometime, this is a heading that will hopefully allow me to capture some of the most blatant untruths being spread. I hope to highlight some of the misstatements, and spin, and lies. May I shed a bit of light on the sweet and subtle ways  we are influenced in our fast moving culture, a culture  that has little time to look back, thanks for reading.


               March28,2012------This morning at 8:30 durable goods for February were released and broadcast on Bloomberg television, they were slightly less then spectacular. Bloomberg made a point of saying the figures were having little immediate effect on the market as the Dow lost over half its gain within two minutes, the Dow futures fell from up 36 points to dead flat by 9:00.
               If the figures came in better then expected the information would have repeatedly been flashed and "in your face". I saw little but at 9:04 the changing banner at the bottom of the screen reported (Durable goods rise 2.2% in February. Topped 3.0% Est.)------------oh a sweet and subtle mistake!

The Bernanke bubble

Ride the Bernanke bubble

On March 26, 2012 an article by Cody Willard appeared on Market Watch, it was titled "Ride the Bernanke bubble". Willard mentioned some of the previous articles he has written like: Bernanke says "lets inflate the biggest stock market bubble in history" in July of 2011 and "Shut up and buy the tech bubble" on may 26,2011. Willard then fast-forwards to today. Where he points out that Ben Bernanke is again in the headlines and stoking up stocks. Some of today’s headlines, include:

Stocks Gain on Bernanke Comments U.S. stocks rose, rebounding from the year’s biggest weekly declines, after Bernanke said additional accommodative policies are necessary to create jobs. 
Buying into Bernanke rally U.S. stocks rise sharply Monday, rebounding from last week’s losses, after Fed chairman Ben Bernanke signals the central bank is committed to a monetary policy that’s helped buoy stocks for several years.
No Quit in This Market JAMES “REV SHARK” DEPORRE MAR 26, 2012 | 10:48 AM EDT  | 14 COMMENTS With the words ‘quantitative easing’ in the air, who knows how much higher the market can go.

Willard writes that this isn’t your grandfather’s or your father’s stock market. Basing our savings allocation and balancing our portfolios is not supposed to be an endless exercise in gaming the Federal Reserve. But the reality of our domestic and political economies has been revolutionized by changes in the underlying principles of what used to be our “markets”. He ask that we interpret what Bernanke has said to the various elements of our markets:

• Fast Money traders heard: “Ben’s got our back. Buy stocks.”
• Bloomberg economists heard: “The Federal Reserve Chairman is pushing the risk-trade again.”
• Investors heard: “Stick with stocks.”
• Grandma and Grandpa heard: “You will probably never find any safe interest-bearing account in your life again. Deplete your savings or find somewhere to risk your money and hope you get some gains.”
• Long-time unemployed and frustrated middle American heard: “You can forget about getting a job but Goldman Sachs needs 0% interest loans and balance sheet guarantees or things will get even worse for you.”

He goes on to say that we’re likely to continue seeing the stock market bubble right before our eyes because traders, investors, economists, grandparents, Goldman Sachs and even the unemployed and broke know that money is likely to chase stocks — tech stocks and other growth stocks in particular, because where else can you hope to catch the kind of gains that you’re likely to need to overcome the loss of value of your money as Bernanke continues to pump new money into the pockets of the worst banks.

The question of course now is — when does the tech stock bubble pop?  Willard goes on to predict that the bubble will probably pop when these bubble-inducing policies finally reverse themselves — which he claims will be too late to help mitigate the ultimate damage and losses to the economy that all bubbles have. But that’s probably not today’s worry and  from a broader perspective, it sure looks like the tech stock bubble that we’ve been investing for continues on track.


NOW FOR MY TAKE ON THIS BUBBLE------------- I agree with the fact that we are looking at a speculation bubble in equities and commodities driven by loose money, and the promise of even more. I think much of this is based on the desire to make everything appear well and stable. The one ugly fact that many investors choose to ignore is that money is concentrated and flowing towards areas where people feel they can cut and run quickly if the economy fractures and turns south. Investors are avoiding long term investments in less liquid assets like real estate, and what we might call the "real economy". People are buying paper and promises.

Bottom line Governments are running huge deficits and giving or, if you like loaning banks money for next to nothing. All the banks have to do to dip into this pile of freshly printed money is to agree to buy Government bonds at a slightly higher rate, thus guaranteeing  themselves a profit. Don't look to closely or it might look like some kind of Japanese style Ponzi scheme. The myth might be that one can move quickly enough not to be badly damaged if markets collapse, and it can occur, for the most flimsy of reasons, and at any time.

You Don't Know That!

He Was Not There, Don't Believe All You Hear!

Oh, to the confident and suave television and news commentators, politicians, and the experts that speak with such authority, I include the pundits and all the so called specialist, to you I  say, I'm skeptical and dubious. Even when you attempt to mask your bias and hide your agenda, I must often remind myself that, you don't know that. It is often not the message you put out, but how you project it. I can see you now, your head a bobbing and your arms moving all around, you state your case with such brilliance and force that often we are carried away!

This rant is in reference to all the pundits and so-called experts, about all the words that spew from their mouths, about the reams of material they write, and the large quantity of often misstated facts they put forth. Sometimes they even go as far as to tell us exactly what someone was thinking, for example, if a commentator states, "when Martin jumped he knew it was to his death", I ask, how do they know that? It is possible that Martin was an optimist and thought he could survive the fall or the light never came on. The fact is that when it comes down to what someone is thinking these authorities are usually speculating.

After they have used every line from "green shoots" and "edge of the envelope" they say, "that being said" and after "having said that" they often wow me with "just do the math" or "it is not if, it is when". A major pet peeve of mine is the mixing up of "millions and billions" of dollars when talking about money or cost. But what sends me over the top is the line often used by politicians and our so called public servants to justify some unsavory action, "it would have been far worse if we had done nothing". How do they know that? I beg to differ, but on more than one occasion I wish they had done nothing.

It seems that our society has been inundated by speculation and hype which in the end is a lot about nothing. Many people love to defer to the opinions and advice of so called experts so they don't have to think, of course, I don't know that for sure. When we look behind the curtain, we often find their background in the subject they are commenting on is weak and short, or clouded and blurred by bias. One thing I do know is that is not based on speculation or hearsay is that it would be a lot easier to tolerate these clowns if they were right at least every now and then.


Footnote; Instead of watching the talking heads speculate about who will run for president in 2020, yes I wrote 2020, you could concentrate on the definition of is! More below,
                    http://brucewilds.blogspot.com/2012/12/what-is-definition-of-is.html

Transportation Bill To Costly To Get Wrong

State and local governments always have their hand out for federal funds to repair, rebuild, or build roads to nowhere. It is no surprise that they are howling to get passage of a new and expensive transportation bill through Congress. It is also not a surprise that congressional leaders are pitching the bills as the hottest way to create and generate new jobs, many go on to talk about how America's crumbling and aging infrastructure needs to be upgraded, in my opinion both these issues are far over stated. Everything starts to deteriorate even before construction ends, nothing is perfect, but our infrastructure is not falling apart.

But does this massive outlay in new transportation projects really create new jobs? Many economist say that often what we see is merely a shift in investment and money that was creating jobs elsewhere diverted to the transportation industries. That means different jobs, but not necessarily additional ones. Investments in transportation infrastructure, if well designed, should be viewed as investments in future productivity, growth, and return dividends over time, unfortunately this money is often poorly spent. Many of the street lights along the interstate in busy areas remain dark at night from lack of bulb replacement or maintenance while we rush to add many more new lights at huge cost. While many small Airports struggle with few passengers and little revenue we pour money into upgrading them, choosing not to improve our poor air-traffic control system.

The question of job creation is relatively unimportant when compared to other significant economic benefits of maintaining and improving the nation's transportation system, such as enabling people to get to work and businesses to speedily move goods, say economists and transportation experts. But that hasn't diminished the jobs claims being made on Capitol Hill. "This legislation would put 2 million middle-class Americans back to work right away," Senate Majority Leader Harry Reid, D-Nev., said Thursday,  "Although our economy has gained momentum, there are still millions of Americans out of work. So it should be obvious why we can't afford to delay efforts to rebuild our roadways, railways and bridges," he explained.

With less than two weeks before federal money runs out for transportation projects across the country, a partisan showdown is developing between Senate Democrats and House Republicans over passing a new bill. The standoff, based on sharply differing views about the overall expense of the bill and how to pay for it, jeopardizes thousands of road and bridge construction projects. On Wednesday, House Transportation Committee Chairman said the House would soon pass a three-month extension of existing funding to provide time for negotiations over a longer-term bill. That idea was rejected by Senate Majority Leader Harry Reid, D-Nevada, who said House Republicans should accept a two-year, $109 billion bill that recently passed the Senate with broad bipartisan support.

"Millions of people depend on this highway bill that has passed the Senate on a bipartisan basis," Reid said. "They depend on it for their jobs. But it seems to me that the House has come to the conclusion, led by the House leadership, that they can't do anything unless they get a permission slip from the tea party." The problem is that many Republicans see the Senate bill as a "crap sandwich" that they're going to have eat if they can't come up with an alternative. Outside the Capitol, Heritage Action for America, a right-wing grassroots group, considered a "no" vote on the Senate bill a "key vote" in determining whether a legislator is sticking to conservative principles. Conservatives are worried about a "spending boondoggle," which reflects their general anxiety about a federal investment that is loaded with earmarks.

In the 1950s when President Eisenhower proposed plans to construct a Interstate highway System few Americans thought they would use the roads on a daily basis to get to work or go shopping. The idea was to  create a system that would allow goods, people, and the military to move quickly over long distances. It appears our roadways are a victim of their own success. After a few years of not driving on a long trip I hit the road and found many new lanes and upgrades have taken place, if the roads cannot handle the traffic it is only because the volume of vehicles has grown so large. Our goal should be to lessen the traffic and encourage off hour use rather then rush to add lane, after lane,  after lane.

The wing of the conservative party that wants to kill the Senate bill sees the legislation involves broader questions about federal spending, they are troubled by how Congress acted in previous years using earmarks and other special favors. This is as much about ideology as it is about transportation. Will the bill  survive? Is it a spending boondoggle? Is it too much like the previous highway bill? Is this the appropriate legislation for conservatives to use in waging their battle on big government? One thing is perfectly clear, we as a Nation do not have an endless supply of money to fund poorly crafted programs. If Congress passes a transportation bill they owe it to the American people to get it right.

Small Bussiness Under Attack

            Small business, with two to ten employees, are becoming an  endangered species in America. The family business once the backbone of this country is under attack from the unintended consequences of the many laws and mandates passed in recent years. Inspections, a plethora of permits, licenses, taxes, insurance requirements, and regulations make it almost impossible for a small business to open, compete, and operate legally. Big government has become toxic for small business.

            Few Americans risk capital, try to meet payroll, buy health insurance for their workers, try to create and innovate, lease an attractive site, maintain business licenses, observe myriad obscure regulations, compete with cutthroat competitors. While doing these task they are also asked to meet disability access standards, remain on call 24/7 for any business emergencies, and stay up late into the night trying to juggle interests of employees, business and community.

           Today only 2% of all Americans actually employ at least one non-relative employee. According to the Small Business Administration only 10% of Americans own a business and 80% of these are single self employed businesses. The remainder of Americans busy themselves with demanding jobs with higher than average wages, a full complement of generous benefits and frequent paid holidays. Most seek a definite work day without after hour calls.

           America has become not so much a capitalist society as a worker's society demanding socialist protections, this is why workers are not getting any job offers and America has lost its competitive edge.The owners of small businesses are burdened with spending countless hours trying to comply with the red tape rather than in earning a living. Though usually denied by government employees, jobs in Government often pay better and are less demanding while providing security and benefits that the private sector can’t match.

      It has been said that money is the mother’s milk of politics, this in many ways has been the Achilles heal of small business. The lobbyist that represent banks, big business and special interest have had their way  to the detriment of America and small business. They have shaped and crafted regulation that has shifted commerce strongly in their favor. As the stocks of large companies rise we are often oblivious to the names of local businesses that cease to exist. Even as many small businesses try to carve out a niche they can defend against the giant retailers down the street they must also compete against exploiters like Amazon that have no brick and mortar presence and avoid local and state sales tax.
                                                                                              
     The question of whether bigger is better is often debated as Wal-Mart expands across the land. The advantage of size allows for whole departments to specialize in dealing with Government regulations that have become the bane of the small businessman. The sad truth, while efficient in distributing goods these behemoths diminish cultural diversity and alter the fabric of society. The jobs they offer neither fulfill or excite, few people grow up filled with desire to work at a big box store like Wal-Mart or in a Amazon warehouse.

       My point is that small business and entrepreneurship were key in making America great, but beyond the Lemonade Stand of childhood  few Americans know anything about running a business. Running a business in America is complex and requires knowledge and smarts, if we want to create more jobs Government must encourage small business formation by slashing through the regulations, simplifying, and removing ,the burdens that make it so difficult. This is the only hope that for America to remain a land of opportunity.


Footnote; If you are interested in this topic, please read my recent post below. Other related articles may be found in my blog archive, thanks for reading, your comments are encouraged,
               http://brucewilds.blogspot.com/2012/01/small-business-endangered-species.html                                                                                                               
Footnote #2; A more recent post related to job creation and this subject can be found below,
                http://brucewilds.blogspot.com/2013/10/amazon-not-answer.html

     

     
                                                                         

Import Prices To Rise

History is said to repeat itself, but a better description would be to say it 'rhymes" In the 1970s America experienced a wage spiral that caused the cost of goods and services to soar. The inflation took hold in and formed a feed-back loop that was only broken when the then acting Federal Reserve Chairman Paul Volker to raise the interest rate into the teens, this slammed the economy into a wall bringing  about the a deep and painful recession  that finally crushed  inflation. Today the wage spiral is in China buy consumers in America are about to pay the price.

Over the last few decade China has grown to be the world’s largest manufacturing power, its output of televisions, smartphones, steel pipes and other consumer items surpassed America’s in 2010. China now accounts for a fifth of global manufacturing. Its factories have made so much, so cheaply that they have curbed inflation in many of its trading partners. But the era of cheap China may be drawing to a close.

Costs are soaring in China, starting in the coastal provinces where factories have historically clustered. Increases in land prices, environmental and safety regulations and taxes all play a part. The biggest factor, though, is labor. Recently an investment bank, released a survey of over 200 Hong Kong-based manufacturers operating in the Pearl River Delta. It found that wages have already risen by 10% this year. Foxconn, a Taiwanese contract manufacturer that makes Apple’s iPads (and much more besides) in Shenzhen, put up salaries by 16-25% last month.

For years companies in China have operated on razor thin margins while chasing growth. It’s not cheap like it used to be, and these cost will work through the system and eventually be passed on to consumers in the way of higher prices. This comes at a time when many Americans can least afford it, high unemployment and slow wage growth is a problem here at home. A weaker dollar would  make things even worse, but is quite possible, America has pumped trillions of dollars out into the world over the last several decades, this action has the potential to come home to roost.

 

tHE pOISON aPPLE

Is Apple All It seems?

How do they do it?  How does Apple remain the darling of so many Americans while stories continue to surface on how those they have contracted to make their products abuse their workers? The widespread criticism for its environmental and business practices would have caused major damage to the corporate image of most companies resulting in large protest outside their offices and massive boycotts of their products.

Not so with Apple, Fortune magazine named Apple the most admired company in the United States in 2008, and in the world from 2008 to 2011. Recently the Economist called it a "phenomena" and questioned if it was a "bubble." Apple's success even before this period was evident in its stock price. Between early 2003 and 2006, the price of Apple's stock increased more than tenfold, from around $6 per share (split-adjusted) to over $80. Since then it has soared well past $500 a share.

Apple's brand's loyalty is considered unusual for any product, but it is not just the technology, much of Apples success has do do with its marketing that has make it "super cool." Apple Store openings can draw crowds of thousands, with some waiting in line as much as a day before the opening. The New York City  "Cube" store had a line as long as half a mile. An opening in Tokyo was estimated in the thousands with a line over eight city blocks. In America the government and schools use taxpayer money to buy countless numbers of Apple products helping to carry Apple to the next level.

However Apple has a less tasty side that appeared in a 2006 report  written on working conditions at factories in China where the contract manufacturers Foxconn and Inventec produced the iPod. The article stated that one complex of factories that assembles the iPod and other items had over 200,000 workers, that lived and worked in the factory. Employees regularly worked more than 60 hours per week making around $100 per month and were required to pay for rent and food from the company.  This generally amounted to a little over half of the workers' earnings.

Workers in factories producing Apple products have also been exposed to n-Hexane, a neurotoxin that is a cheaper alternative than alcohol for cleaning the products. In 2010, workers in China moved to sue iPhone contractors over poisoning from a cleaner used to clean LCD screens claiming that they had not been informed of the effects. After a spate of suicides in a Foxconn facility in China that makes iPads and iPhones, workers were forced to sign a legally binding document guaranteeing that they would not kill themselves. In 2011 Apple admitted that its suppliers' child labor practices in China had worsened.        

So now the crux of the issue, why Apple, and for how much longer? To us not so enamored with the company we just don't get it. Add to the history of worker exploitation the fact that since Apple manufactures in China it creates few jobs in American. Is the typical Apple user so self-centered that they just don't care, or do they lust for the product so much that they bury and ignore their social conscience?  These consumers are even willing to pay higher prices to lock themselves into a closed system tightly controlled by Apple while open systems exist in the market place. Yes everyone loves a winner and success breeds success, but everything has its limits, it is only a matter of time before this apple begins to spoil.

Government Officials and Insider Trading

Something is seriously flawed  with Washington in that only recently a ethics bill passed the Senate that would ban insider trading by members of Congress. The bill also would require prompt disclosure of stock transactions by lawmakers and by thousands of officials in the executive branch of government. A 96 to 3 vote followed three days of impassioned debate in which senators tried to outdo one another in proclaiming their support for ethics in government. We should not ask why we would have to pass such a law, but instead  why was this "ever" allowed, and why did it take so long? 

The President called for passage of such legislation in his last State Of  The Union address. More than half of House members, including at least 100 Republicans quickly signaled support for it. A handful of lawmakers have tried for years to enact restrictions on stock dealing by members of Congress. Their efforts drew little support until new attention to the practice last year, coupled with election anxiety, prompted a flood of backing for the action at a time of intense public scrutiny of congressional ethics.

Worth mentioning is that Rep. Spencer Bachus (R-Ala.), who holds one of the most influential positions in the House, has been a frequent trader on Capitol Hill, buying stock options while overseeing the nation’s banking and financial services industries. Office of Congressional Ethics, an independent investigative agency, opened a probe late last year focusing on numerous suspicious trades on Bachus’s annual financial disclosure forms. It is no surprise that in the first case of its kind involving a member of Congress the investigators say that they have found probable cause to believe insider-trading violations have occurred.

One American citizen who may be less then impressed with this double standard that our politicians have enjoyed is Martha Stewart, if I were Martha I would be spiting up blood. According to the Security Exchange Commission in December of 2001 Stewart avoided a loss of $45,673 by selling all 3,928 shares of her ImClone Systems stock after receiving an inside tip from her broker, Peter Bacanovic. The day following her sale, the stock value fell 16%.

Stewart went on trial in January 2004 and later spent five months in Federal Prison. In a highly publicized five-week jury trial later in the year Stewart was found guilty of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators. She was sentenced and later went on to serve a five month term in a federal prison facility and a two year period of supervised release including five months of  home detention during which she had to wear an electronic monitoring device. Stewart also was forced to pay a fine of $30,000.

But the pain did not end for the "private citizen" Stewart, in August 2006, the SEC announced that it had agreed to settle the related civil case against her. Under the settlement, Stewart agreed to give up $58,062 (including interest from the losses she avoided), as well as a civil penalty of three times the loss avoided, or $137,019. She also agreed to a five-year ban from serving as a director, or any other officer role responsible for preparing, auditing, or disclosing financial results of any public company. 

To add more injury to insult in June 2008 Britain refused to grant Martha Stewart a visa to enter the United Kingdom because of her criminal conviction for obstructing justice. The old saying, "power corrupts, absolute power corrupts absolutely" describes the situation in Washington. Again those in power are the ones who benefit, while the rest of us remain victims of our system, we the people deserve better.

Fannie Mae, What are you doing?

In late February it was announced  that  Fannie Mae  is offering to sell nearly 2,500 foreclosed properties to investors as part of a new federal initiative to aid the housing market by selling off distressed properties in bulk. In my opinion it is an over complicated plan and nothing more then a political stunt to give the impression that something real is being done. With millions of  empty and foreclosed properties on the market this is not even a small step at addressing the problem.

The Federal Housing Finance Agency released details of a planned pilot transaction under which the government-controlled mortgage-finance firm will offer the properties for sale to investors in bulk, but require those investors to rent them out. Of the 2500 properties about 1,700 are single-family homes and more than 525 are condominiums.

A mix of tenant-occupied and vacant properties in Atlanta, Los Angeles, Phoenix, Las Vegas, Chicago and parts of Florida will be offered for sale. Edward DeMarco, the FHFA's acting director said "This is another important milestone in our initiative designed to reduce taxpayer losses, stabilize neighborhoods and home values, shift to more private management of properties, and reduce the supply of [foreclosed] properties in the marketplace."

A Treasury Department counselor for housing finance policy, said in a statement that the initiative would aid "neighborhoods that were especially hard-hit by the housing crisis and will help meet the rising demand for rental housing in many communities." Investors will be required to post a security deposit and sign a confidentiality agreement before they receive access to detailed information about the properties. Potential investors are being asked to demonstrate their financial capacity and experience and detail their plans for the properties, which must be rented out for a specified period.

 This policy is just wrong. What is the benefit over selling them off individually to the highest bidder and being done with it?  I feel the "required to rent them out" requirement reeked of bureaucratic overreach, I'm also troubled by the "confidentiality agreement" as well as buyers "detailing their plans for the properties", this leads me to believe that the highest bid may not be accepted. This has the potential for more then a little corruption! 

Record Imports Are A "Unsustainable" Problem

Many people that comment on Japans huge government deficit and debt fail to realize that for many years Japan sported a large trade surplus. This allowed its citizens to buy bonds and allows Japan to control its destiny, this is unlike America that borrows from China and other countries to fuel its spending. The presidents spokesman was on Meet The Press a while back and said, "The time for austerity is not today" he went on "we should look at cutting the budget as a long term goal but not today." As always, it is a case of kick the can down the road.

The idea that we need to get through this rough patch before tightening the purse strings has resulted in massive deficits. A country cannot run both a fiscal deficit and trade deficit, this is unsustainable. Recent figures from the Commerce Department showed that last month the overall trade deficit rose by 3.7% to $48.8 billion, up from a $47.06 billion figure for the month earlier. Imports rose 1.3% to a record $227.56 billion, boosted by demand for foreign cars and machinery. US exports grew slightly, by 0.7%, helped by the weak dollar, with records set for petrol, services and advance technology goods.

The widening of the trade gap was bigger than had been expected. For the whole of 2011, the US trade gap rose 11.6% to $558 billion, the highest since 2008. The economically important deficit with China for the year jumped to a record high $295 billion. The latest figures, and the exchange rate that China sets for its currency against the dollar, is likely to be discussed more at coming meetings. The Senate, controlled by the Democrats, recently passed legislation to try to force China to raise the value of its currency.

But let us get to the crux of the problem, you cannot go on year after year spending more then you earn. When coupled with huge government budget deficits the trade deficits weaken the dollar and drive America in direction of bankruptcy. Let me say it again "this is unsustainable."  It is a myth that we can "export" our way out of this mess, a myth spread by politicians preaching the "no pain" method of solving a problem. The simple answer is that Americans must begin to accept reality and cut back their purchases of foreign goods.