Stalinist Obama Administration Trying to Silence Dissent

I've warned before of they tyranny of this administration and the US Government in general.

The Obama Administration, including the intellectually deficient and criminal AG Eric Holder, continue to put the screws to those that disagree with the administration----which, according to Gallup Polls, was nearly 60% of the US population.  Not only are they continuing to persecute conservative groups with IRS actions, they continue to blame conservative voices and media outlets for their own problems and continue to let the NSA run riot over your Constitutional rights.  Now the government is persecuting Bitcoin founder who has succeeded in creating a digital currency that is INDEPENDENT of the government and government manipulation. 

Oh, and private (encrypted) email accounts, outside of the spying by NSA, are NOT allowed!!  Any dissent will not be tolerated!!  Got it?

From IBD:

• Attorney General Eric Holder's Southern District of New York office has indicted conservative author, activist and filmmaker Dinesh D'Souza — producer of the critical film "2016: Obama's America" — on what can only be called spurious charges of campaign fraud.
• One of the few conservative political action committees in Hollywood with enough heft to make a difference, the 1,500-member Friends of Abe, has found its application to the IRS for tax-exempt status strangely held up in endless reconsiderations of whether it merits such treatment.
• The chairman of Standard & Poor's Ratings Services, Harold McGraw III, claims former Treasury Secretary Timothy Geithner personally warned him that his firm would be held "accountable" for its downgrade of U.S. Treasury debt — before the government charged S&P in a $5 billion mortgage fraud case.
• Conservative guerrilla filmmaker James O'Keefe's investigative group, whose devastating videos of misconduct led to the dismantling of Acorn, is being audited by New York for a second time.
• New IRS rules on 501(c)(4) nonprofit groups conveniently leave labor unions and big business groups unmolested, but have a direct negative impact on Tea Party and other conservative groups.

These are not mere coincidences and that's not all:

• I wrote recently that brilliant and conservative neurosurgeon Ben Carson was visited by the IRS after politely criticizing ObamaCare (correctly in hindsight) in a prayer breakfast that included "the self-anointed idiot" himself.
• Also, the administration recently shut down all of the encrypted and secure email providers in a heavy-handed attempt to make sure all of your email communications can be reviewed by the NSA and cleared through the "ministry of truth."  After all, if you want email security outside of the prying eyes of the government, you must be a criminal!!  Right?   Any attempt to evade NSA snoops must be crushed!!  
• The IRS is also trying to wiggle into the "Friends of Abe" website to get the names of some estimated 1500 Hollywood conservatives that belong to that social group. “Friends of Abe” is a secretive and very private club for a rare commodity in Hollywood: Conservative entertainers. They are trying to be "secretive" because the members don't want to be blacklisted by Hollywood studio or the US government either!  The group applied several years ago for a tax advantaged IRS status and has been under investigation ever since.   See The Blaze article. 
• Now, the Administration is going after Bitcoin founder Charlie Schrem.  The founder of both Bitcoin and Manhattan gastro-pub Evr, is accused of various trumped-up criminal charges manufactured by the DOJ.   See the ZeroHedge article. 

Welcome to Stalinist America.  When will people wake up??  

FDR Warned Against Unions in Government

From the US Presidency website: Franklin Delano Roosevelt (h/t to Mike Shedlock):

"All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.

Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied"

Obama: Maybe Racism Has Softened My Approval Ratings

Leave it to Obama to get nearly everything wrong.  Wrong-headed is his middle name.

His approval ratings are (finally) in the tank because of the lies, twisting of the truth, failed ideas,  failed performance and an inability to adjust or learn.

Maybe because Obama coasted through life on a wave of affirmative action, being promoted without merit in a truly competitive selection, enjoying the largesse of financial aid by people who actually did real work, and lazily enjoyed his indoctrination into Leftist and even Marxist ideologies found at these elite universities??  Then, with nothing but graduate programs on his resume, we don't even know if he attended class or what grades he received. Now, the whole world has to roll their eyes to the back of their heads why he bumbles and obfuscates and fails in every sphere. Oh, and maybe the fact that he has shown NO capability of learning or adjusting despite 5 years of failure and continued unemployment misery for millions while he "clings" to his historically failed socialist and central planning ideas??   All this because he is black and is "somewhat" intelligent.

Why would I mind??

$21 Trillion War on Poverty Basically a Failure

The "war on poverty" turns 50 years old this month.  Lyndon Johnson launched a noble experiment in January 1964 in an effort to reduce poverty in this country. He did it as a temporary support to blacks to give them a leg up.  After $20 Trillion in expenditures and a vastly increased cost of permanent government bureaucracies, it hasn't worked. In fact, it may have done more harm than good.

Maybe we're not even taking the right approach at all??  From Cato scholar Michael D. Tanner, “The entire concept behind how we fight poverty is wrong. The vast majority of current programs are focused on making poverty more comfortable – giving poor people more food, better shelter, health care, etc. – rather than giving people the tools that will help them escape poverty.”  There's a saying that if you teach a man how to fish.....

Here's a graph of the US poverty rate from Michelle Obama's Mirror:

From The Foundry Blog at Heritage:

Despite spending nearly $20 trillion since the War on Poverty began, the poverty rate remains nearly as high today as it was in the mid-1960s. Today, government spends nearly $1 trillion annually on 80 federal means-tested programs providing cash, food, housing, medical care and targeted social services for poor and low-income Americans.

Let's be clear, the war on poverty was based on transfer and welfare programs primarily to "help" black Americans including housing projects, food, medical assistance, social programs and even cash. Some time later, affirmative action programs were launched, again for black Americans. So, how's it going?

Since the start of the war on poverty, black kids are doing no better in school, housing projects built for ghetto blacks are all slums (a complete lack of personal responsibility), and drug violence, gun violence, incarcerations, STD infections and black abortions remain at epidemic levels.  Black high school completion rates are about the same as ever.  Black crime is still 7 times the rate of whites.

Black culture is actually much worse now.  Black culture is in virtual collapse with 72% of black babies born without a father in the house. Compare this to only 25% when the war on poverty was started.  I can't think of a single more devastating statistic to describe a cultural collapse than the 72% figure; indicating that the institution of marriage has collapsed.  This, in turn, requires those mothers to work and leave children less supervised, less attended and  less parented except for some heroic grand-parents.
 
These poorly parented kids often act no better than animals and that's an insult to animals!.  The result of the cultural collapse is evident from appalling crime statistics, the fact that 70% of new AIDs cases are black, gonnorhea infection rates are 18 times the white average, and black men commit 56% of homocides even though they are 1/16th of the population.  Blacks commit crime at 6 to 7 times the rate of whites and are incarcerated in that same proportion. Now we have "flash mob robberies" and "knockout assaults" that are overwhelmingly black crimes.  All of this is unchanged or worse than 50 years ago.  

Personal Responsibility Is Important,  But Intelligence Is a Key Limitation

I was watching Bill O'Reilly and he was commenting that personal responsibility is the key missing ingredient in success and avoiding poverty.  He correctly says that you could throw all the money in the world at social programs for people, but if there is laziness, addictions, bad attitudes and bad decisions, it will over-ride any and all social programs. True enough.  Of course the Left never wants to hear about personal responsibility when they are the party by and for the irresponsible.  They want to blame our economic system, take more and more of your tax dollars and piss that money away on programs that aren't working. 

Black kids will never be hired when they can't speak right, they can't dress right, when they have no self-respect, no discipline and no education.  This is the problem today, yesterday and 50 years ago.   No amount of money spent, no government bureaucrat and no bureaucracy can fix this.  Why don't we admit that we've failed?

But Bill O'Reilly misses the fact that intelligence is the key and blacks don't have enough of it. When nearly 90% of blacks have IQs less than the average and 50% have IQs below 85, there is not too much hope for the bottom half of this population.  Some 22% of black people are borderline "retarded"with IQs below 75.  I suggested in my blog that we need a vocational high schools for those 50% who probably can't graduate from "academic" high schools.  We might even need to label "retarded" persons as disabled and guarantee a minimum income.

But there is hope for the top 50% of blacks and especially black women.  
 

Affirmative Action and Desegregation Programs Flop Too

We're 40 years into the affirmative action and a period of desegregation.  The result of affirmative action is that many black students are being admitted into colleges despite lower grades and lower SAT scores.  Even after 40 years of desegregation and affirmative action, there has been no improvement in SAT or any other standardized tests designed to rank students for admissions.   Black and white scores are stagnant but blacks consistently score about 1.1 standard deviation lower than Whites.  See the figures below.  You will find this same gap on ALL standardized academic tests.  In fact, the only scores that are improving are scores of Asians who don't have or need any "programs" to help them.  They just work hard and have the necessary intelligence.

Do You See Any Improvements in Black American SAT Scores After 40 Years of Desegregation and the War on Poverty?

Do You See Any Improvements in Black American SAT Scores After 40 Years of Desegregation and the War on Poverty?

The clock is ticking on affirmative action programs.  When they end, there will be hardly any blacks in graduate programs.  How many?

As an example, there are about 1.74 million students in graduate schools in the US which represents the top 10% of the college age population.  So, assume that only the top 10% of a population can make it to graduate schools.  Using an overall median IQ of 100 and a SD of 15,  the top 10% of the population 'cutoff' equates to a minimum IQ of 118. 

For the black population with a median IQ of 85 and a SD of 13, only 0.5% of that college age population would have an IQ equal or over 118.   That amounts to only 11,500 college age black persons would be theoretically qualified for graduate schools.  That is very, very few out of 1.74 million total students.

In fact, without affirmative action, there would be NO black students in the top graduate or professional school.

13 Game-Changing Reforms For America

Game Changer #1: Get Money Out of Politics and Address Corruption in Corporate Boardrooms

1. Get money out of politics.  Go with all Federal money for national campaigns--no private contributions should be permitted. 
2. Ban lobbyist money too.  Ban SuperPacs.  Just say no.  Make all contributions to national politicians illegal.
3. Downsize and basically eliminate the NSA.  Change the focus of the NSA to the monitoring of all the financial transactions, emails, and phone calls of our national politicians and bureaucrats to enforce the ban on contributions to national politicians.  See Game Changer #3 below.
4. We need the "fresh air" of shareholder democracy at our corporations.  Pass rules that shareholders must approve executive pay packages including stock options, etc. Complete disclosure of pay packages must be made for shareholder vote.  Pass laws that major investors like public pension funds must be on the Boards of Directors (by law).  

Game Changer #2:  Banking and Financial Reforms; Hold Bankers Responsible for Financial Malfeasance and Improve Financial "Visibility"

1. Repeal Dodd-Frank (it's already 5200 pages and not finished nor completely implemented) or bring back the Glass-Steagall separation of regular banking from investment banking.  Limit leverage in both "regular" banks and "investment" banks to 12 to 14 times capital (ie.,conservative).
2. Make bankers responsible for bank failures. Pass laws against "financial malfeasance" where, if convicted, bankers would be liable for jail time and salary claw-backs for serious "financial malfeasance."  If a bank requires government assistance, then the entire executive suite and board should be tried in court for financial malfeasance and face possible jail time.  That will do wonders!
3. No off-balance sheet items---make everything clearly stated on the balance sheet and shareholder reports (and filings with the government regulators). 
4. Put derivatives on exchanges and have banks/investment houses mark-to-market all hedging positions at the end of each day.

Game Changer #3: Restore Constitutional Guarantees

Repeal the Patriot Act and vastly downsize the NSA.  Instead, turn the remaining NSA surveillance focus on the monitoring of all emails, phone calls and transactions of all of the national politicians and the lobbying groups to prevent politicians from being paid for political favors as above.  

Game Changer #4: Immigration Reform Using a Point-Based Ranking System

1. Institute a point-based immigration system similar to Canada's immigration system.  ALL applicants could apply to various categories of immigration and be admitted through quotas and ranked objectively by a point system.  Illegal and undocumented Latinos already in the US should be required to register and should be given a one year visa (with permission to work) then given consideration only through the point-ranking system. Speaking English should be one significant source of "points" for most categories other than "agricultural worker" or "unskilled laborer." See Bring On an Immigration Point System and Canadian Immigration System is Far Superior to the US.
2. Expand immigration from Developed areas of the world and less from 3rd World Nationalities.
3. Invite foreign graduate students, master's and doctoral candidates, to immigration interviews.
4. Allow local law enforcement in The States to check documentation during routine law enforcement. This will appropriately send a message that we are tough on illegal immigration.

Game Changer #5:  The Shale Energy Revolution Gives Our Country Time To Transition to Safer Thorium Reactor Technology and a Low Carbon Future

The shale energy revolution is helping to reduce our oil imports and this trend will continue for the next 10 or 15 years.  This gives us time to transition to the next long term solution for our nation's energy supply:  thorium (molten salt) reactors. The US invented these reactors but instead China and Norway are already beginning to use them on a small scale before adopting them for widespread use.  There are many advantages to the use of these reactors compared to Uranium reactors.  See my blogs Thorium Reactors May Solve World's Energy Crisis and How Thorium Reactors Work.

Our nation's future would be secure with widespread use of Thorium Reactors.  It's much more efficient, vastly safer, vastly less quantity and hazard to Thorium waste products.  Thorium reactors can be built intrinsically safe.  Obviously there's no carbon emissions.  Thorium is 4 times more abundant than Uranium.

We need to streamline Federal design requirements, regulation and approvals to encourage rapid adoption of this energy source.  First, we should be using them now on a small scale, pilot plant basis as China and Norway are doing now.  We need pilot plants to work out any design problems before widespread adoption.  All of this will take 10 years, so we need to start now.

The future of this country is electric cars and electric mass transit powered inexpensively by Molten Salt Thorium Reactors.

Game Changer #6: Reform US Tax Code to Bring Back Manufacturing Jobs from Asia

Reform Corporate Tax Codes and bring back manufacturing jobs from Asia!  High corporate tax rates in the US, the highest in the world, creates an incentive for companies to locate and/or stay overseas.  The rest of the world has been lowering their rates and attracting our companies!  And it's worked--to our disadvantage!!  See Businesses Export Jobs Because of High US Corporate Taxes.  

Manufacturing jobs throw off many jobs for the bottom marginally skilled 50% of our population who are suffering so much.  Could anything be more clear?  

 Game Changer #7: Address Income Inequality: Reform the Federal Reserve and Change the Federal Gov't Policies, Rules, Laws and Tax codes that Create the Income Inequality

1. Eliminate the mortgage interest deduction for mortgages for well-off taxpayers (at least) and the preferred capital gains treatment for house sales.  There is no need to encourage speculation in housing and the "flipping"of housing.  These preferred tax treatments helped cause the last bubble/bust that continues to hurt this country.  Another bubble/bust is coming absent reforms.
2. End the never-ending money printing program at the Federal Reserve putting trillions of dollars in the hands of the top 0.01%.  This is inflating all of the assets held by the wealthy and probably creating the next bubble/bust.
3. End the ZIRP policy (Zero interest rates) now: normalize short-term interest rates to match or exceed current inflation rate (ie.,establish a normal fed funds rate).  This helps mom and pop savers and retirees who are trying to scrape-by collecting money on CDs and deposits.
4. Stop the insane policies of the Fed to further increase inflation when it's already near 2%.  This hurts most people and actually helps the top 10% (who can afford inflation hedges).  A target of 2% will causes prices to double every 36 years.
5. End the dual mandate and reform the Federal Reserve.  Their sole functions should be maintain zero inflation and be a lender of last resort only.  The Fed should be mandated to maintain zero inflation (or less) by using rule-based methods to control the growth of debt and monetary aggregates to something like 2 or 3% per annum (consistent with the real growth rate of the economy) which will stabilize prices.  Without excessive credit growth, prices should be steady or decline--not rise.  Imagine people being able to afford housing, medical care and get an education!  Their 2nd mandate has always been to be "a lender of last resort" in a financial crisis consistent with it's original purpose.  First and foremost: the Federal Reserve should NOT be the CAUSE of more financial crises!!!  See Booms and Busts Due to the Federal Reserve.
6. End the insane addiction to the failed Keynesian economics.  Paper money is NOT wealth. Increasing paper money does not increase wealth.  Government spending does not create wealth either.   It causes inflation, hampers growth, distort trade balances, debases the dollar, and hurts the least well-off while helping the wealthy who have 'hedges.' 
7. Balance the Federal Government Budget and keep it balanced. Excessive government spending inflates medical and education costs. Austerity on THE GOVERNMENT itself will be healthy for the real economy and eventually help ordinary people.

Game Changer #8: Replace ObamaCare, Reform Insurance and Curb Medical Costs

ACA will end badly as it doubles down on a broken system.  Fix the system instead and focus on reducing medical costs. The program promises subsidies for 60% of the population. Who's going to pay for that?  How is that going to work?  ObamaCare is already causing huge distortions in health insurance pricing and is too coercive: doctors are fleeing, hospitals are fleeing and most ordinary people would like to flee if they had a choice.   Replace ObamaCare, Reform Health Insurance and Curb Medical Costs

1. Give the States "block grants" of money to spending on Medicaid and Medicare.  Cap the growth of these Federal entitlements to 2% or less.  Let the States spend the money and take steps to better take care of their citizens.  State money would be added onto Federal money as is seen fit by each State.
2. Tort reform to reduce medical costs.
3. Shift individuals to their own medical policies and away from employer coverage (making them portable).  This is the main reason that people get stuck with pre-existing conditions.  Give individuals the tax breaks to have their own insurance policies instead of companies.  Companies would then pay the monies that they would have spent for medical policies directly to employees.  The employees wouldn't pay tax on that money.  Companies could pay health care monies into employees health savings plans.
4. Further encourage/expand medical savings plans which allow for more high-deductible policies (people paying more of their bills; questioning pricing and demanding the lowest price, more "skin in the game"),
5. Transition sick people without coverage and pre-existing conditions to high risk pools with state and federal government support.  BTW, These high risk pools are being eliminated as part of ACA!
6. Reform or replace the Medicaid system to a substantial "premium support" or outright voucher program so that people shop for their own policies. Again government expenditures should be fixed or limited rather than open-ended.  Limiting government expenditures should truly moderate medical cost inflation.
7. Encourage more supply of medical professionals including physicians assistants.
8. "Bust the trusts" of AMA and Big Pharma: outsource drug supply via worldwide bidding and graduate more doctors
9. Allow pharmacists to dispense medicine without a doctor's prescription.  Pharmacists can handle most issues and they know when they don't know enough.

Game Changer #9: Eliminate Public Unions and Reduce the Cost of Government

1. Outlaw public sector unions at local, state and national levels. Even FDR advised this. Teachers unions are hurting our kids and not helping, all other public unions only extort taxpayer money. Government employee benefits are estimated to be 45% too high compared to private sector.  Pensions are driving cities to bankruptcies already and expect more. Zero interest rates are NOT helping pension plans either.
2. Cut public employee costs; kill defined benefit plans for public workers and scrap Davis-Bacon and all prevailing wage laws for public workers.  (hat tip to Mike Shedlock at  Globaleconomicanalysis Blogsite)
3. Pass national "right to work" laws to allow individuals true freedom to join or not join unions.
4. Freeze Federal employees salaries and reduce benefits which have ballooned 45% higher than similar jobs in the private sector.

Game Changer #10: Bring Back Sound Money: Downsize and Reform the Federal Reserve.

1. Downsize the Federal Reserve. Require ordinary citizens and businessmen representation on Federal Reserve boards. Alternatively eliminate Fed Reserve boards all together.  Go with a rule-based system to automatically guide monetary policy.  See item #3.
2. Change the current dual mandate of maintaining full employment and controlling inflation to this dual mandate:  a) maintain ZERO inflation  and b) function as a lender of last resort. Creating a lender of last resort was the original purpose of the Fed.  The Fed was created to reduce the number banking crises and panics that led to prolonged recessions.  That's fine but if money is lent out in an emergency, it must be sterilized and reversed promptly.  No more of this targeting of 2% inflation rate!!  That's terrible! 
3. Change the Fed's charter to require that the Fed abide by a rule-based policy of controlling debt and/or monetary aggregates to allow a increase by 2 to 3% per annum to match the real growth rate of the economy.  Inflation would average at zero percent with this rule, with fluctuations above and below zero.  This has all the advantages of a gold standard but less disadvantages. Yes, short term interest rates would be much more volatile but that's OK.
4. Outlaw money printing (which now stands at $4 TRILLION and threatens future inflation)

Game Changer #11: Require that the Federal Government Balance It's Budget

a)  Consider passing a constitutional amendment or b) Pass a Federal law to require that the Federal Government must balance it's budget just like the vast majority of States.  If there is war, then taxes should rise to pay for them as they did in the past.  I'm leery of exceptions for "national emergencies." Alternatively, hold the line on further debt limit increases.  See The New Civil War: No More Debt!

Balance the budget now.  A reduction of government spending amounting to 4 or 5% of GDP, our current deficit, would have less effect on the economy than is commonly feared.  The US cut government spending from 1945 to 1947 from over 50% of GDP to about 11% of GDP and there was not a huge problem.  Spending was cut sharply after the Korean War as well.  We can balance the budget now.  It would have surprisingly little negative impact (it had relatively small effect when deficits soared).

Game Changer #12: Acknowledge that about 40 to 50% of Blacks and Hispanics Don't Have the Intellectual Capability to Graduate from US High Schools, We Need An Alternate Path

Black and Hispanic births are already the majority of births in this country; on the way to a white minority by 2040.  But about half of those students don't have the intellectual capability to graduate our current "academic" high schools----so let's focus on teaching them practical job skills and life skills. We need to create a "vocational high school" path for young people who can not graduate an "academic" high school.  It should all be voluntary. The vocational option might appeal to even more young people who are doing fine in our high schools, as currently defined.

There has been no change in the performance of black students on standardized tests despite 40 years of affirmative action and increased spending. We need to be realistic and acknowledge the facts that about 1/2 of those populations will not complete high school. They need a great, practical alternative other than jail or the military. There is no sense to continue trying what is obviously not working.

Game Changer #13: Acknowledge that the Drug War is Lost: Legalize some drugs like Marijuana, tax it and regulate it.

Eliminate Federal laws against marijuana, and possibly for cocaine and minor drugs. Allow the States, the true incubators of public policy, to lead the way as in Colorado. Take away the drug cartel's power! See my blog: It's Time to Legalize Marijuana.

Financial Bubbles Make Stock Investing Difficult

It used to be that the Federal Reserve would trigger recessions by "leaning against" rising inflation pressures, pressures caused by a "too hot" economy.   To combat inflation, rising fed funds rates (the shortest interest rate set by the Federal Reserve) would eventually trip the economy into a recession and, in turn, cause GDP and stock market earnings/prices to cascade lower for a time.  During those recessions, bond prices would rise with the anticipation of lowered interest rates. This is reason for the "classic" investment portfolio mix of  60% stocks and 40% treasury bonds---because of this inverse price action.

Tried and true methods to predict 'traditional' recessions exist and include the Fed Funds interest rate relative to longer term market rates and the ECRI Leading Economic indicators.  But the problem for investors now is that the last two recessions were caused by burst financial bubbles:  the Tech bubble in 2000 and the housing bubble/financial panic in 2008.  With inflation and interest rates currently low, it is almost certain that the next (3rd) recession will be caused by another burst bubble.   Burst bubbles and financial crises can occur suddenly with few warnings and can lead to large investment losses.

Investor's Current Predicament: We Live in a Bubble Economy Caused by Central Banks and Governments

Here's the recent history of financial market bubbles. You can see that our government and Federal Reserve have, in fact, created significant financial instability. This is ironic because the Federal reserve was created to reduce financial stability.   See my blog:  Booms and Busts Caused by Federal Reserve.

 

And here's how stock prices and earnings performed during the last two bubble-induced booms and busts.  Buy and hold works over decades-long timeframes, but you can see how unstable earnings and prices have been in the past 20 years.  Send a letter to thank Alan Greenspan and Ben Bernanke.

Predicting the source and timing of bursting bubbles is very difficult since government authorities (all over the world) have been able to avert further problems after the 2008/2009 crisis by taking unusual measures to "kick the can down the road." An economic depression is "trying" to happen to clean out financial excesses, but the authorities won't let it happen.  But happen it will.  The number of festering problems and debt have risen dramatically all over the world.

Where are the biggest festering financial bubbles in world?  In another way,  you could ask where are the highest chances of financial "accidents?"  It's easier to identify the risks, but extremely difficult to predict the timing of these financial "events" that can hurt your portfolio.

The Biggest Financial Bubbles in the World

Here's my list of bubbles, listed roughly by the estimated magnitude of the bubble (or event):

1. Housing and property market bubbles in China and the rest of Asia (Thailand, Australia, Singapore, Hong Kong) are a big risk for financial instability there and everywhere. Property prices and debt has rocketed-up in all of these markets.  The Federal Reserve's QE program has also inadvertently fed these bubbles.  Also 'hot money' flows in Asia are again feeding bubbles in that region.  As in 2008, in the US, a financial crisis could erupt in Asia at any time.
2. There easily could be another Asian currency/debt crisis caused by "hot money" flows suddenly reversing.  This caused the last crisis in Asia in 1997.  Federal Reserve tapering (removing it's bond-buying program) has already created financial instability in emerging bond markets and their currency markets.  This could create currency and financial crises in nearly all of the emerging markets.
3. A banking crisis in China causing a recession there could easily have knock-on effects in other parts of Asia, commodity producers and the world.  In general, debt in China has soared in 5 years to levels typically associated with financial crises.  The 'shadow banking system' in China has exploded dramatically because it has been un-regulated.  Attempts to reduce this have already led to surges in inter-bank funding markets in the summer and in December 2013.  This is a "canary in a coal mine" if there ever was one. 
4. Unexpectedly higher interest rates in the US or Japan could pop the Asian and emerging market debt markets---and triggering financial crisis from China to Brazil to Turkey and Indonesia.  Emerging stock markets are already depressed.  
5. An "accident" in the Japanese bond market causing a currency crisis and recession there. The massive QE program there might roil their bond market and starts a loss of confidence there and in Asia.  It could have knock-on effects due to a reversal of "hot money" flows to other Asia economies like Thailand and Indonesia.  
6. The re-emergence of the Euro crisis;  the election of a leader that causes one or more country to exit the currency union and roiling all financial markets.  There is a risk of violence in one of the southern European states could cause a sudden reversal of the barely contained political and financial order.
7. A war between Japan and China in the South China Sea could erupt sending markets reeling.  See Ridiculous Chinese Claims in South China Sea.  There has been a recent escalation of tensions with Japan.  China has suddenly claimed an "exclusion zone" which includes the Senkaku islands claimed by Japan.  The US is bound by a treaty to protect Japan.  
8. Iran going nuclear is the most dangerous change in the political landscape of them all.  It would be a huge disaster for the West and cause other nations in that region to go nuclear as well.  Nobody should trust Iran's mullahs, but the Obama administration idiots are chasing some kind of political "win" for appearance sake with the Iranian idiots. 

"Accelerants" that could help propagate a financial accident into a financial "chain reaction." 

1. The vastly expanded unregulated world-wide derivatives market.  It might not cause a financial panic, but it has the potential to worsen it. The problem?  No one knows how dangerous it is.
2. Vastly expanded worldwide debt levels is much worse even compared to the 2008 debt crisis--especially in China and other Asian countries.   Higher debt=more instability.  By some estimates, world-wide debt has surged 40% to 100 Trillion since the last crisis.
3. the exhaustion of policy tools of fiscal and monetary policy all over the world has added risk to the world economy.  If there are no policy tools left to counter-act the next financial shock, then there is a risk of prolonged depression.

Welcome to the most dangerous investment environment ever.  Be careful out there.  

How to Reduce Income Inequality; It's Not About the Minimum Wage

From my blogs Government Causes Income Inequality and The Real Reasons for Income Inequality, I maintain that government policies cause income inequality.  It has nothing to do with the minimum wage.

We need more and higher quality jobs in this country---and that won't happen by playing "games" with minimum wage laws.  That is equivalent to re-arranging the chairs on the deck of the Titanic.  The US has already hit the iceberg and we're taking water!  Wake up!

If you want to reduce income inequality, the answer is not to raise the minimum wage as our small-minded leaders seem to think.  The answer is to radically reform the Federal Reserve and change various Federal gov't policies, rules, laws and tax codes that end up creating unfair advantages for the wealthy and hurt the poor. We also need a sustained policy to bring back the lost manufacturing jobs which will help this country more than anything else.

• Eliminate the mortgage interest deduction for mortgages for well-off taxpayers (at least). This helped cause the last bubble and that bust continues to hurt this country. It might yet cause another bubble/bust.
• Eliminate the preferred capital gains treatment of housing capital gains.  There is no need to encourage speculation in housing and the "flipping"of housing.  This preferred tax treatment has helped cause the last bubble and bust that continues to hurt this country. It might yet cause another bubble/bust.
• End the never-ending money printing program at the Federal Reserve putting Trillions of dollars in the hands of the top 0.1%. This is inflating all of the assets preferred by the uber-wealthy and probably creating the next bubble/bust. 
• End the ZIRP policy (Zero interest rates) now: normalize short-term interest rates to match or exceed current inflation rate (ie.,establish a normal fed funds rate).  This helps mom and pop savers and retirees who are trying to scrap by collecting money on CDs and deposits.
• Stop the insane policies of the Fed to further increase inflation when it's already near 2%.  This hurts most people and actually helps the top 10% (who can afford inflation hedges).  Their target of 2% will causes prices to double every 36 years.
• End the dual mandate and reform the Federal Reserve.  Their sole functions should be maintain zero inflation and be lender of last resort.  The Fed should be mandated to maintain zero inflation (or less) by using rule-based methods to control the growth of debt and monetary aggregates to something like 2 or 3% per annum (consistent with the real growth rate of the economy) which will stabilize prices.  Their 2nd mandate should be "lender of last resort" in a financial crisis consistent with it's original purpose.  First thing: the Federal Reserve should NOT be the cause of more financial crises!!!
• End the insane addiction to the failed Keynesian economics.  Paper money is NOT wealth. Increasing paper money does not increase wealth.  Endless Federal deficits hurt the economy, causes interminable trade deficits and eventually hurts the bottom 90%.  It causes inflation, debases the dollar, and hurts the least well-off while helping the wealthy who have 'hedges.'  Imagine people being able to afford housing, medical care and get an education! This dream is being ruined by your government.
• Balance the Federal Government Budget and keep it balanced.  Excessive government spending inflates medical and education costs.  Austerity on THE GOVERNMENT itself will be healthy for the real economy and eventually help ordinary people. 
• End ObamaCare and TRULY reform the healthcare marketplace.  ACA will end badly as it doubles down on a broken system.  Fix the system instead and focus on reducing medical costs.  ObamaCare is already causing huge distortions in health insurance pricing and is too coercive: doctors are fleeing, hospitals are fleeing and most ordinary people would like to flee if they had a choice.   Replace ObamaCare, Reform Health Insurance and Curb Medical Costs
• Reform Corporate Tax Codes and Bring Back Manufacturing Jobs from Asia!  High corporate tax rates in the US, the highest in the world, creates an incentive for companies to locate and/or stay overseas.  We have the highest corporate tax rates in the world.  The rest of the world has been lowering their rates and attract our companies!  It's worked (to our disadvantage)!  Change it!  See Businesses Export Jobs Because of High US Corporate Taxes.

Vote the progressive idiots out of office.  This country needs sound money, sane monetary authorities, and sound federal budgeting including balanced budgets.  Assuming that we can ever get intelligent leader, then truly reform health insurance and government spending per my blog "Replace ObamaCare, Reform Health Insurance and Curb Medical Costs."

Replace ObamaCare, Reform Insurance Rules and Curb Medical Costs

Replace ObamaCare, Reform Insurance and Curb Medical Costs. 

1. Shift individuals to their own medical policies and away from employer coverage (making them portable).  This is the main reason that people get stuck with pre-existing conditions.  Give individuals the tax breaks to have their own insurance policies instead of companies.  Companies would then pay the monies that they would have spent for medical policies directly to employees.  The employees wouldn't pay tax on that money.  Companies could pay health care monies directly into employees health savings plans.
2. Give the States "block grants" of money to spending on Medicaid and Medicare.  Cap the growth of these Federal entitlements to 2% or less (or 0% for a year or two at first).  Let the States spend the money and take steps to better take care of their citizens.  State money would be added onto Federal money as is seen fit by each State.
3. Tort reform to reduce medical costs.
4. Encourage/expand medical savings plans which allow for more high-deductible policies (people paying more of their bills; questioning pricing and demanding the lowest price, more "skin in the game").
5. Bring back and expand the high risk insurance pools that are being eliminated as part of ACA!  Expand these programs to cover folks currently stuck with pre-existing conditions.
6. Reform Medicaid system to a substantial "premium support" or voucher program so that these people shop for their own policies. Again government expenditures should be fixed or limited rather than open-ended.  Limiting government expenditures should truly moderate medical cost inflation--the bane of our existence.
7. Promote change in state insurance rules to honor other states coverage.national to make all policies "portable."  Due to this and Item #1, people will have a policy that they select and it will be portable and not dependent on your current employer and valid in any state that you choose to live.
8. Encourage more supply of medical professionals, 
9. "Bust the trusts" of AMA and Big Pharma: outsource drug supply via worldwide bidding and graduate more doctors
10. Allow pharmacists to dispense medicine without a doctor's prescription.  Pharmacists can handle most issues and they know when they don't know enough.