Why The Economic Stimulus Program Was A Big Scam

February 25, 2011 by · 1 Comment
Filed under: Economic News 

Economic Stimulus PlanIt has been just over 2 years now since the $787 billion economic stimulus plan passed and you have to ask yourself one question, did it do any good? Was spending all that stimulus money worth it? To answer that question you have to not only look at the things that are seen such as infrastructure improvements (roads and bridges) and additional welfare such as food stamps and unemployment, you also have to look at the things that are hidden. In other words you have to look at the things the money didn’t go to because it was instead spent on so-called stimulus projects.

Frankly, the economic stimulus plan was a big scam and did nothing to actually stimulate anything because of this one simple point – someone had to lose something, so others could benefit. That isn’t the way to run a prosperous economy. For the economy to hum along as it should, monetary transactions have to be a win win situation. Someone needs to receive real goods or services in exchange for a fair market payment of money or some other compensation. Before you start to say, but what about scams, what about mortgage fraud and overpriced lawyers and dishonest car salesmen that rip people off, I just want to say we’re talking about a simpler economic situation for illustration purposes. Simplicity will help us better understand why economic stimulus from the government can never really work.

Sure, there are anomalies in the form of these criminal elements and situations that are somewhat exceptions, but these exceptions should never be the basis of law and lawbreakers should be dealt with accordingly. It is never right to willingly break the law to enrich oneself to the detriment of others. Furthermore, existing laws and regulations must be enforced (unlike what happened in the Bernie Madoff case), but that is another discussion.

Since the staggering figures of nearly a trillion dollars are hard to comprehend, let’s simplify things and look at a much less costly example. Even though what I’m about to explain is only an infinitesimal fraction of the gigantic sums of money the government is dealing with here, the example will still work on a large scale so, put on your thinking caps and stay with me.

I’m going to use my wife and something that happened in her counseling business about a year ago. My wife came to her office one day, which is in another larger building, and found that her office door was locked. No big deal you think, but the problem is that there is no key to the door, so this is actually bad news. For the purpose of illustration and the only thing that is important right now is that what my wife owned was a door to her office that opened. That’s all, just a door that previously did open. That is important to remember.

Since the door was now locked, she obviously needed someone to open it and since it is a commercial grade door with a commercial grade lock, unless you are probably a criminal or a locksmith, you have a very slim chance of getting the door open. Rather than choose a criminal from the government, my wife chose the locksmith option and paid him $70 to open the door and install a new lock. The big question to figure out now is, was the economy stimulated in a win win situation? My wife got the door opened and she can now get into her office. The locksmith got $70 for his business to spend on some gas for his van, locksmith tools, an office manager, other business expenses and some profit to maybe go out for a cheap dinner with his wife. Everybody is happy and this is a good example of the economy humming along properly…or is it?

What did my wife get out of this situation? In the end, she got a door she could open and get into her office. Is there a problem here? Well yes, there kind of is. My wife already had a door she could open. She just paid someone $70 to give her something she already had. This is exactly where government economic stimulus programs go wrong because they are just moving money around, they aren’t really creating anything new.

Paying billions to people to be unemployed for an additional 99 weeks takes money out of the economy to finance new businesses that could hire those people. Additional unemployment benefits are a quick fix to what is certainly a desperate situation, but it is a horrible long term solution. What we don’t see in what government gets its big nose into is the same thing we don’t see in the example of my wife’s locked door, where the money could have been spent if it had not been spent on, as in my wife’s case, something she already had.

But the locksmith benefited, what’s the problem? The problem with my previous example and with all government stimulus is that there is a missing step that further stimulates the economy and that is critical. My wife could have spent that $70 on groceries for a week for her and myself and not only would have the local Publix store seen a benefit, so would have my wife and I. Publix would have had our $70 and we would have had a weeks worth of groceries instead of just a door that opened, which we already had.

So if you are thinking it isn’t such a big deal to help out the locksmith and pay him $70 to stimulate the economy, let’s extrapolate that out a little bit. I mean, we can afford that $70 loss and we moved commerce along a little bit, so why all the fuss? What if we just purposely locked the door, destroyed the key and called in the locksmith again, and then did it 100 times, or why not do it 1,000 times, wouldn’t that really stimulate our local economy? We would pump $70,000 into the local Central Florida economy and everybody would be happy. That is, except for us…

We would be just like the government in this example and we would be broke.

Do that last $70,000 example 11 million more times and you have the government economic stimulus program in a nutshell. The $787 billion had to come from somewhere and someone.

That someone, somewhere isn’t going away. One day, they will want their money back.

How to Safely Buy Gold Nuggets On eBay Part 2

February 15, 2011 by · Leave a Comment
Filed under: gold bullion 

This is part 2 of how to buy gold nuggets on eBay, read part 1 here. Yesterday we learned how to determine a safe transaction for buying gold nuggets

For the educated gold nugget buyers, you are probably well aware of the different things that you need to do in order to make the most of your transactions. However, becoming a knowledgeable gold investor does take a little bit of work for those of you who aren’t quite there. There will be a distinct difference in the nuggets that you find, including whether they are natural or man made, as well as whether they are pure gold or happen to have quartz or other minerals mixed in with them. Make sure the listing explicitly tells you this information, so that you don’t get taken advantage of.

You should also know the differences in the prices of gold. For example, a 1-2 gram nugget should average around $40 per gram, while $125 should get you 3-5 gram nuggets, and 6-7 gram nuggets should average around $250 apiece. This all depends on the varying price of gold and that can change on a day to day basis.

Also, the value of gold nuggets can vary based on the overall look of the nugget. Unusual and pretty nuggets might cost more, while ugly and less desirable ones will be cheaper. Take the time to make sure that you’re buying something that you are in full understanding of, so that there is no disappointment or dissatisfaction on your end. When it comes to an asset like gold, even if it is only a nugget, you still need to protect yourself and your investment.

How to Buy Gold Nuggets On eBay Safely

February 14, 2011 by · 1 Comment
Filed under: gold bullion 

Buying gold nuggets on eBay is a little different than buying gold coins on eBay. With gold nuggets there is no predetermined price and no face value as there is with coins. Plus there is also no definitive guide book so, the value of gold nuggets can be much more subjective. You have to know your stuff when searching for a purchase such as this.

One of the first rules of safety and security when shopping for anything on an auction site like eBay that can often lead to poor quality merchandise or scams perpetrated by individuals, is to be educated and prepared for whatever you are getting into. People are entitled to list their auctions on eBay at their own discretion, and they are more than capable of listing items inaccurately on purpose or by ignorance in order to get more money than they should for their items. You should be aware of gold measurements, gold quality and weights and sizes when you buy gold nuggets on eBay so that you can ensure that you’re getting exactly what you expect from your purchase.

Another way to ensure that you get a safe transaction on eBay is to make sure that you see a picture of the product. Believe it or not some people actually list items these days on eBay with no picture or a very low quality picture. A good picture of it next to a respective item, such as a dime, would be preferred. Many sellers have been known to list their items in a misleading way, so you should always be careful. For example, some will show a picture of the nugget next to a ruler. However, they’ll zoom in and only show you one number on the ruler, so that you can’t tell if the hash marks are ¼ inches or 1/8 inches. This doesn’t happen a lot, but it can.

You can also look at seller feedback to help you in your buying and investing endeavors. If a seller have hundreds of transactions and feedbacks and they, for the most part, are positive, then they probably can be trusted, but if there are lots of complaints, it is a fair bet that you want to stay away from them.

Come back tomorrow for part 2 on how to buy gold nuggets on eBay and keep watching the markets today.

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