Welcome!

Posted on November 11, 2010 by

Liberty Insight is a discussion of economic and social issues from a liberty-minded perspective. We aim to show why a free society- with a limited government that follows the Constitution- brings people together and improves the quality of life for all. We also aim to help people protect and build their wealth in extraordinary economic times.

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Liberty Newswire – 3/21/2012

Posted on March 21, 2012 by

[The Liberty Insight Newswire is an aggregation of what we consider to be important financial and political news and commentary from across the web.]

This week’s newswire includes “Big Brother” in Italy and America, boomerang babies, the real reason for high gas prices, and a peek into the future of municipal defaults.

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Italy to Launch Skynet Tax Collection System After 197% YOY Borrowing Increase
Sovereign Man, March 21, 2012

Governments worldwide will never cease in their quest for power and thirst for milk cow,  err, taxpayer money. The latest Big Brother news comes from Italy who has devised a plan to automatically track everyone’s spending habits to make sure they are in line with the taxes they pay. While you’re at it, take a few minutes to peruse the Sovereign Man website.

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Three in 10 young adults live with parents, highest level since 1950s
Christian Science Monitor, March 15, 2012

More and more college grads are living with their parents. That’s not necessarily a bad thing; just a sign of the times. With few job prospects and high student debts, it make sense that many young people are being frugal and foregoing independence for security and cheap rent. Although, with households consolidating, it’s not a great sign for this housing recovery the media keeps telling us about.

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The Rising Price of the Falling Dollar
Forbes, March 19, 2012

Many Americans are concerned with the rising prices at the gas pump. But as Charles Kadlec points out, it’s not that gas prices are rising; it’s that the dollars used to pay for that gas are falling. While rising prices for gas and other goods hurts consumers, we all pay an even higher price for our falling dollar in the loss of our freedoms.

[Editor's note: Charles Kadlec, who happens to be my friend Ben's father, is also the founder of the website Community of Liberty. If you like Liberty Insight, I'd recommend checking it out.] 

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Municipal Defaults – Already 21 in 2012 – Another Blow for Bond Insurers
Insurance Journal, March 20, 2012

In the fall of 2010 Meredith Whitney gained a lot of new haters when she stated on 60 Minutes that, ”there is not a doubt in my mind you will see a spate of municipal bond defaults … you could see 50 to 100 sizable defaults, more. This will amount to hundreds of billions of dollars worth of defaults.”

When her prediction didn’t come true in exactly one year the haters crowed with glee. But now it seems that muni defaults are rising steadily. It seems that the pressure buildup from years of recession, shrinking tax revenues, growing pension deficits and bloated budgets can only be kicked down the road so far.

This article highlights some of the early 2012 defaults, but seems to suggest that everything is A-OK because the cities are only defaulting on the “insured bonds” so the insurers will pay the bond holders. That’s nice of those bond insurers. Let’s hope they don’t catch on and start raising their rates and adding protective clauses to the policies.

[Editors note: Don't worry; I don't spend all my time pouring through the pages of Insurance Journal to find good articles. I frequent several economic and political news aggregators to find interesting articles and pass on the best of the best, with some added perspective, to Liberty Insight readers.] 

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Obama Executive Order: Peace Time Martial Law!
BIN, March 17, 2012

Some people believe that laws are created by Congress with signed approval by the President. How quaint. That’s so 20th century. Today, the President just writes an executive order which gives his executive branch departments authority to write and enforce whatever laws, rules and regulations they see fit. These “laws” are almost never repealed and these departments only grow in size, scope and number.

The latest “National Defense Resource Preparedness” order grants federal agencies the power to commandeer resources even during peace time. The article includes the full text of the order (although like all government documents it can’t be fully read without the full federal registry at your fingertips) so you can read it and decide for yourself if it’s an essential preparedness measure to protect our country or something more… what’s the word?… fascist?

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The Greek Bailout in 3000 Words or Less

Posted on February 28, 2012 by

-Reuters

Unless you’ve been living under a rock, you know that Greece is in a bit of a pickle. You’ve probably seen videos of riots, read headlines of an on-again-off-again Greek bailout, maybe even spent a few minutes contemplating how the situation in Greece may affect you. If you haven’t, I don’t blame you.

I, myself, have spent way too much time reading news about the Greek bailout, reading analysis of news about the Greek bailout, and analyzing that analysis of the Greek bailout, in an attempt to figure out what it all means for the global economy. I’ve been meaning to weigh-in, but with contradictory news coming out seemingly hourly, I’ve been hesitant. Now with a bailout deal officially agreed upon (for the time being) it’s time to present Liberty Insight’s take on the Greek bailout.

Liberty Insight reads and summarizes all this crap so you don’t have to. So, without further ado, here’s everything you need to know about the Greek bailout. (Technocrats love using acronyms so I’ll try to spell them out as they are introduced.) Continue reading →

Posted in Economy, Politics | Tagged , , , | 5 Comments

Liberty Newswire – 2/10/2012

Posted on February 10, 2012 by

[The Liberty Insight Newswire is an aggregation of what we consider to be important financial and political news and commentary from across the web.]

This week’s newswire includes some excellent analysis from Chris Martenson and Charles Hugh Smith, the dirty secrets behind the recent rosy jobs report, more QE from across the pond, banks paying homeowners $35k to walk away from their underwater mortgages, and my (surprising) take on new online sales tax proposals. Continue reading →

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Liberty Newswire – 2/2/2012

Posted on February 2, 2012 by

[The Liberty Insight Newswire is an aggregation of what we consider to be important financial and political news and commentary from across the web.]

This week’s newswire includes California running out of cash, Europe rearranging furniture, a dose of reality for the housing market, and our latest $1T deficit. The real gem, however, is the final article which discusses a potential deal between Iran and India (and maybe China) to trade oil for gold- the implications of which are hard to fathom. Continue reading →

Posted in Newswire, Uncategorized | Tagged , , , , , | 1 Comment

The Silver Singularity is Near

Posted on January 27, 2012 by

Price, as they say, is determined on the margins. This is especially true for inelastic goods. If 100 Tickle Me Elmo dolls exist in Walmart on Christmas eve, and 100 people absolutely need to have them, you don’t have a problem. The price will be some reasonable markup on the cost of production. However, if one more person walks in fearing the wrath of his child if there’s no Elmo under the tree, Walmart can quickly turn into a war zone. In Walmart, this supply shortage might be settled by shoving and hair pulling. In a civilized market, this supply, demand inequity is settled with price. In the case of Elmo in 1996, some dolls were reportedly sold in after markets for $1500.

This is an important concept to keep in mind when evaluating the silver market. Silver is interesting because it is actually two different markets. On one hand, silver is a physical commodity that is used in industry or warehoused as physical savings. This market is rather inelastic on the supply and demand side as I will discuss in a bit. On the other hand is the silver derivatives market, paper contracts for silver, that set the spot price on the margins. The paper market is elastic and depends more on investor psychology than underlying fundamentals. Continue reading →

Posted in Investing | Tagged | 7 Comments

Liberty Newswire – 1/17/2012

Posted on January 17, 2012 by

[The Liberty Insight Newswire is an aggregation of what we consider to be important financial and political news and commentary from across the web.]

Nerd Alert version of the newswire. Or is it geek alert? I can never remember the difference. In any case, this week’s newswire discusses some pretty nerdy topics such as electronic circuits, the Federal Reserve Board, the derivatives market, and foreign Treasury bond purchases. Don’t fret, these articles are more interesting than they sound. Continue reading →

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Happy New Year and Predictions for 2012 (Part 2)

Posted on January 4, 2012 by

Happy New Year!!!!!

Part 2 of this post is the good stuff– where I get to make my bigger, badder, crazier predictions for 2012. You would think I would learn my lessons on making aggressive predictions after my virgin foray into the prognostication business last year, which I evaluated in part 1.

But as I said last year, for predictions to be worth anything, they need to be bold, original and based on reasoning. So, this year I proceed, undaunted, with some bold, contrarian, off-the-wall predictions for next year’s ridicule fodder. Continue reading →

Posted in Economy, Investing | Tagged , , , , | 2 Comments

Happy New Year and Predictions for 2012 (Part 1)

Posted on January 3, 2012 by

Happy New Year everyone! The first full year of blogging is under our belt here at Liberty Insight. It’s been a great experience and I’ve really enjoyed researching and writing  about the economy and political events. My goal for 2012 is write a bit more and to really crank up the pageviews for the site by leveraging the networking power of the interwebs. I hope you’ll help me by sharing articles you like through facebook, email, or however you like to share. Thank you all for reading and best wishes for 2012.

2011 was a another crazy year in the socio-economic landscape with the Arab Spring, the Tsunami and nuclear meltdown in Japan, a contentious debt ceiling debate in Congress, the killings of Osama bin Laden and Gadhafi, the sovereign debt crisis in Europe, and Occupy Wall Street, to name some hi(low)lights.  As crazy as 2011 may have been, in the words of Al Jolson, “You ain’t seen nothin’ yet.” I believe 2012 will be bigger, badder and crazier than ever- bigger protests/riots, badder economies, and crazier people. With that in mind, it’s time to make some big, bad, crazy, predictions for 2012.

But before we do that, let’s look back on the predictions I made for 2011 on this very site. Some were spot on, some weren’t even close. In general, they were directionally right, but I got a little carried away with the magnitude (or perhaps the timing, as only time will tell). It’s definitely a bit humbling to put a prediction out there and have it fall flat on its face, but I’m not scared to admit when I’m wrong (or early). As I said last year, “The problem with putting bold and original predictions in writing is that you’re setting yourself up to look like a jackass. Oh, well. Fukkit.” Here are my 2011 grades. Continue reading →

Posted in Economy, Investing | Tagged , | 5 Comments

Liberty Newswire – 12/16/2011

Posted on December 16, 2011 by

[The Liberty Insight Newswire is an aggregation of what we consider to be important financial and political news and commentary from across the web.]

This week’s newswire discusses the real price tag for the Iraq war, a new wave of foreclosures, China’s shift away from U.S. Treasuries, my energy bill, and the burden of doing business in San Francisco. Continue reading →

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Happy Thanksgiving! Make Next Year’s Feast 10% More Bountiful.

Posted on November 23, 2011 by

The cost of a Thanksgiving dinner is up 13% from last year. So says a new study from the American Farm Bureau Federation which has tracked the cost of a Thanksgiving dinner for ten people– including turkey, stuffing, cranberries, pumpkin pie and all the trimmings– since 1986. According to the study:

While Farm Bureau does not make any scientific claims about the data, it is an informal gauge of price trends around the nation.

A total of 141 volunteer shoppers from 35 states participated in this year’s survey. Farm Bureau’s survey menu has remained unchanged since 1986 to allow for consistent price comparisons.

Farm Bureau volunteer shoppers are asked to look for the best possible prices, without taking advantage of special promotional coupons or purchase deals, such as spending $50 and receiving a free turkey.

In other words, they ask real people to buy a fixed basket of goods each year to find out how much prices have risen and that number comes in at 13%. But how can that be when the government tells us that food inflation is about 4.7% this year. Perhaps, it’s because the hapless shoppers at the AFBF can’t put hedonics, substitution and weighting in their shopping carts.

In other news, that drive to Grandma’s will be 17% more expensive, as average gas prices have gone from $2.87 to $3.35 over the past year. But never fear, the feds assure us that the all important “core” CPI (which excludes superfluous items like food and energy) is only up 2.1% year over year– right on track with their targets.

With these seemingly crazy price rises it’s understandable that many people may not realize that the cost of a Thanksgiving dinner is actually down 10% from last year. (That is, if you save your money in gold, instead of green pieces of paper.) This year, a full Thanksgiving dinner for ten people can be had for less than .03 ounces of gold. In fact, since the AFBF study began in 1986, the price of a turkey dinner has fallen by 60% in terms of gold while it has risen 71% in dollar terms.

So my question to you, dear reader, is this: Are you still saving money in dollars? Why?

It’s time to stop thinking of gold and silver as “investments” and think of them as what they really are– money. Obviously, you need some cash to pay your bills and handle your day-to-day expenses, but for the money you are socking away as savings, doesn’t it make sense to save in a currency that doesn’t lose value every year? If you save in gold and silver, next year’s Thanksgiving dinner could be 10% more bountiful.

With Black Friday approaching, instead of running out to the store for the latest gadget from China that will end up in your garage, consider picking up some silver coins or ingots to slip in your loved ones’ stockings. Or perhaps a shiny gold coin for that special someone. And be sure to check out the Liberty Insight “Money” page to understand why “cash is trash” (as Robert Kiyosaki says) and gold is the ultimate money.

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