Prediction with bail-out

After Congress passed the $700B bail-out about a month ago, I wanted to write down some predictions that I had about the future with the bail-out and financial crises and instead of actually posting this, have sat on these ideas for the last month.  I am posting these finally, although now some seem kind of obvious.

Those who passed this bail-out say that this is all that is needed.  My first prediction is that this will not be enough and that there will be much more needed.  I think it is a joke that they have divided it into an initial $350B package and then being open for requesting for the other half--as if we'd only use half of it.  We are not only going to use the $700B, but we will be adding more money to bail-out additional companies.  It may not come directly as a second or third bail-out package from Congress, but it will be with taxpayer money, either by taxes, deficit spending, or inflation.

Inflation is going to skyrocket.  The prices of goods is going to go up.  You cannot do what the government is doing and result in a net effect of 0 on the value of money (as if our money has any real value anyway).   If the total money supply is $10T and you add another $1T to it, you will have reduced the value of the existing money by 10%.  Now, the effect won't be immediate, but it will happen.

We will see the international community abandon the dollar as the financial "standard" that it has been.  I think we will see the introduction of a world currency and the slow (or fast) collapse of the dollars value as goods such as oil are then valued in that new standard.  It would not surprise me if we end up abandoning the dollar and switching the US to the new currency. 

We will experience a prolonged and ugly recession.  And the more the politicians and financial people try to intervene and throw money into the system to try to prevent it, the longer and worse it will get. 

We will see a significant movement into socialism as the government takes control of more industry.  This will be done in the name of "saving the economy" but what makes us think we can trust politicians more than CEOs?

The stock market is going to continue to go down.  It probably will have up days, but the fundamentals in the market are bad and you simply cannot create money out of nothing and somehow "save" the system in any permanent and lasting way.  It has to correct itself and the correction won't be pleasant.

Government Bank Purchases

The government bought significant interests in several of the largest banks today. According to this article,

Executives of the country's biggest banks were summoned to a remarkable meeting at the Treasury Department on Monday to be briefed on the plan. Paulson basically told the bank CEOs that they had to accept the government stock purchases for the good of the U.S. economy.

This is incredibly disturbing. Some of the banks needed the money, but others did not, and yet the government forced all of the 9 banks to take the money. Does Wells Fargo or Chase need the money? Sure, they could use it, but this money comes in the form of partial ownership of the banks by the government.

What if you owned a house that the government decided to take partial ownership of, in exchange for some money, and gave you no choice in the matter? Or a business owner who is doing fine and was forced to sell part of the ownership in your company to the government?

Yet another step in our march towards socialism.

God and Story

One thing I have been noticing in reading the Bible is how God does not go about things in a simple way.  The small group I am in at the singles group at church just finished a study on the life of Joseph.  As we were going through his life, I realized that God brought Jacob and the entire family of Israel from the promised land down to Egypt, only to rescue them and take them back to the promised land 400 years later.  This is not simple.  All throughout Scripture, we see this build up of an incredible story--one in which God is the centerpiece.  And I think that is the point!  The master artist, to display his handiwork, does not simple put a few strokes on a canvas to display his ability.  Michelangelo spend years working on the Sistine Chapel, David, and the other masterpieces that we now remember him by.  The greater the work, usually the longer it takes.  Could it not be said that the redemption of mankind is, at least from a human perspective, the greatest of all works?  And while God could go about our redemption in a very simple, straight-forward manner, His purpose seems to be greater than that.  In fact, the length of time and the complexity and chapters in the story make us more and more amazed by Him, more in awe of Him, and give Him more glory.  His purpose is to display Himself.  The story is about Him and as such it reflects Him.

Bail-out

I suggest reading the following article and contacting your Representative and Senator with your comments... this is happening TODAY!

 

http://www.alternet.org/workplace/100700/the_fiscally_insane_bailout_bill_might_not_pass_--_here's_5_reasons_it_shouldn't/

 

Contact Info:

 

http://www.senate.gov/general/contact_information/senators_cfm.cfm?State=TX

Cornyn, John- (R - TX) (202) 224-2934 - http://cornyn.senate.gov/public/index.cfm?FuseAction=Contact.ContactForm
Hutchison, Kay Bailey- (R - TX) (202) 224-5922 - http://hutchison.senate.gov/contact.cfm

 

White House - comments@whitehouse.gov; 202-456-1111

 

Representative Ken Marchant - (972) 556-0162 - http://www.kennyforcongress.com/ (you may have a different rep)

Housing Meltdown - Explanation

Bailout Plan

In this article , I am in agreement with most of the lawmakers, including the Democrats.  Let me quote parts of this article in references to the proposed (INSANE and STUPID) bail-out plan:

"I understand speed is important, but I'm far more interested in whether or not we get this right," said Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee. "There is no second act to this. There is no alternative idea out there with resources available if this does not work," he added.

Sen. Richard C. Shelby of Alabama, the panel's senior Republican, was even more blunt. "I have long opposed government bailouts for individuals and corporate America alike," ..."We have been given no credible assurances that this plan will work. We could very well send $700 billion, or a trillion, and not resolve the crisis."

"Just because God created the world in seven days doesn't mean we have to pass this bill in seven days," said Rep. Joe Barton, R-Texas.

Added Rep. Darrell Issa, R-Calif., "I am emphatically against it."

Republicans said the sheer size of the bailout would cost each man, woman and child in the United States $2,300.

If approved and implemented, that could push the government's budget deficit next year into the $1 trillion range — far and away a record.

"This massive bailout is not a solution, It is financial socialism and it's un-American," said Sen. Jim Bunning, R-Ky.

Dodd said the administration's initial proposal would have allowed the Treasury secretary to "act with utter and absolute impunity — without review by any agency or court of law" in deciding how to administer the envisioned bailout program.

"After reading this proposal, I can only conclude that it is not just our economy that is at risk, Mr. Secretary, but our Constitution, as well," Dodd said.

I agree, I agree, I agree!  I strongly encourage you to contact your congressman and senators and tell them to vote NO for any government intervention in the markets (you can do this electronically).  Do not believe the bs that we don't have any other choice.  When businesses make stupid decisions, they are responsible for the consequences of those decisions, which in this case is bankruptcy.  It is not the responsibility of the government (and us, since we actually support it with our taxes) to bail them out.

Check out mises.org for some good and common-sense economics.

Election Choices

I think the biggest losers in this election season are the people in America (us!).  In a hotly contested race of X versus Y, what most of us don't realize is that the difference between the two candidates isn't even a single letter (to speak figuratively).  We are faced with a "choice" of very liberal or the most liberal.  This isn't a choice.  The idea that we think we even have one is rather amusing.  I've had some good discussions (and disagreement) with my friend David about this and he has made some excellent points about voting for the person you really would want in office.  We aren't just limited to a two-party system.  We aren't required to vote either Democrat or Republican.  We actually can--shock!--make a real choice!

My standard objection to voting for a third party candidate is that it is a throw-away vote.  Or is it?  I suppose it might be more like stepping outside of the box and going against the flow.  Now, it isn't wise to do something because it goes against the flow.  But let me offer one question: when did we get ourselves to a mindset that "this person will do less of X than the other person" and therefore is a better choice, when neither one is a good choice to begin with!  Would this be how we would treat sin?  What is the "lesser" sin I can commit? (I am using an extreme here as an illustration only.)

That all being said.. my last objection to voting third party is that it seems to be a little idealistic.  I still have not been able to answer my own question of: what am I really accomplishing by voting third party?  Would it be to have a clear conscience?  It's not like I would be contributing to the lesser of the evils.  Or would I?  Isn't my vote a message that says I am disgusted with both parties?  Maybe I am just too much of a pessimist to think that enough of those kinds of votes would actually make a difference.  It seems unrealistic and impractical to think it would.

I am curious... what do you think?

IBC, Women, and Changes

I am really sad to read that Dr. Bailey has stepped down from the teaching team at IBC over the recent decision of the elder board regarding women's role in the church. I also read in the Dallas Morning News that Tommy Nelson at Denton Bible has strong disagreement over this decision. The full decision of the elders can be read here, but in brief, "At IBC we recognize that God created both man and woman in His image, that He offers the same Holy Spirit to both men and women at salvation, and that the same spiritual gifts are available to both men and women for service. While the New Testament seems to imply that eldership is reserved for men, the elders of IBC affirm that women in all other roles are scripturally qualified, spiritually blessed, and directly called to use their spiritual gifts to build Christ's Kingdom." Now, this is something that I initially agree with and think it is a good decision. I am stunned that Dr. Bailey would step away from IBC because of it, although in his position as president of DTS, it is not one that would be good for him to be associated with (when did we get to the place where truth, if it is truth, must be avoided because of political or economic reasons? Another subject entirely). I must say I have a great amount of respect for Dr. Bailey and will have him as my teacher starting tomorrow for the Bible Study Methods class I am taking at DTS. I feel really sad about Dr. Bailey not being at IBC or teaching there. I think he added a lot to the teaching staff. I hate to see the church divided over this issue (and yet it is only one of the many). I've been thinking a lot about the decision and have been wondering... Did the elders make the right decision? What was their motivation for doing what they did? And then I realized: I can disagree or agree, as I am convicted and study the subject myself. These are fallible men who make wrong decisions too. Please don't misunderstand me--I am not saying I think they are wrong. I still think they are correct, and if anything, I have serious doubts about why Paul would say some of the things he did about women. But this certainly has caused me to take a step back and think a little more about this. I hope to post more on this in the near future--tonight I just wanted to share what is going through my head and heart as I start to see some of its impact.

Inflation

This article is one that is worth reading and considering carefully:

 

http://biz.yahoo.com/bizwk/080818/aug2008db20080815021990.html

 

The reality of the market is that inflation has increased significantly and is only getting worse.  From a savings perspective, this means that you have to earn the inflation rate plus what your target earnings is.  If you are trying to earn 10% on your money, you'll need to achieve that plus the inflation rate, bringing your target rate to 20+%.  Other savings vehicles will need to be pursued.

A Lesson in Obedience from a Rock and a Stick

Today in the children's ministry the passage we covered was in Numbers 20:1-13.  The children of Israel complained against Moses and Aaron for bringing them out to the wilderness to die because they had no water.  Moses and Aaron went before the Lord and He told them to gather the people in one place and speak to a rock and the rock would bring forth water for all the people.  Moses was so frustrated with the people that after venting at them, he struck the rock twice with his rod.  Because of this, Moses was not allowed to lead the people into the Promised Land.  I was thinking about this and felt like God was really harsh with Moses.  He changed one little thing and was not allowed to go into the land that he had spent most of his life trying to go too.  But in thinking about the passage, some things came to the surface.

1.      God is serious about obedience, even in areas we might think are small.

2.      My frustration is not an excuse for disobedience or modifications to what God has told me to do.

3.      Moses' disobedience was a public act, not one that was private.  Public acts of disobedience have harsher consequences, because of the increased responsibility of the disobedient individual, due to the visibility of the act.

Why was it so important to speak to the rock instead of hitting it?  Primarily, because God said to.  By hitting the rock, it lessened the miracle of water coming out of it.  There had to be a huge amount of noise around the rock, with thousands of people grumbling and Moses speaking to them so that they could hear, and yet no water came out.  If the rock had been under a tremendous amount of pressure, hitting it, as Moses did, could have weakened it to where it would have burst.  There was more possibility of a natural occurrence by hitting the rock.  God wants the glory for what He does (as He deserves).  By speaking to the rock, the fact that water would come out could only be attributed as a true miracle from God.  This is a rather simplistic thought as to one possibility, but the point remains: obedience is important, and carries more weight in public matters.

The Democratic Position on Oil

From http://www.investors.com/editorial/cartoon.asp

Responsibility

One of the areas that I struggle with is misplaced responsibility and is an area I have been growing in with the help of my therapist.  In December of last year, he pointed out that there is a lot of shifting responsibility in my family, with me taking on more responsibility and others taking on less.  In doing so, I was carrying a large weight on my shoulders that was unnecessary.  One of the more freeing things recently has been to decrease what I take responsibility for.  Combined with my previous comments about acceptance, these two have been life-changing for me.

Sometimes we take responsibility for things we are responsible for, other times we take on responsibility for things we are not responsible for, and still other times we fail to be responsible for things we are responsible for.  The challenge is to distinguish between these.  One easy way of determining this is to ask myself: can I control it?  Let me give an example.

One of my concerns in having contact with my dad was what would transpire between us if the topics of conversation went to areas that we would strongly disagree on.  My therapist pointed out that in my thought processes, I was taking responsibility for how my dad might respond, when in reality, I can't control how he would respond, nor am I expected to do so!  The only thing I am responsible for is my side of the conversation, and I can freely choose to engage or not, depending on my free choice to talk about certain subjects. 

I used to think that I was supposed to "fix" things in my family, or make sure that things went well.  If person X is mean to person Y, then it is up to me to make sure Y is ok and that X won't be mean again.  If my brother was with a woman who treats him poorly, I would feel a burden for him and would try to think of ways that I could help.  If I saw a psychological need, attempted to assist, and if the person was resistant or flat out non-responsive, I would be agitated because I was taking on responsibility for their issue!  In all of these and more, what I found was that it's not my responsibility!

If person X is mean to person Y, it is up to person Y to stand up for him/herself.  My brother is an adult and has the maturity to make decisions on who he chooses to date.  The individual who needs psychological assistance can be given the card of a qualified psychologist.  If I am talking to my dad and he tries to bring up stuff about my brother, I can (and will) remind my dad that I am not interested in how he and my brother relate, but only how he and I relate.

On the surface, this sounds really harsh!  I used to think that real love was the romantic feelings and doing all these wonderful things for everyone and being the great person who is so nice and helpful.  In my reading and studying, what I've realized is that love is the acceptance of another person as wholly other and free.  To put it another way, another person is separate, distinct, and unique from me and how I relate to him or her is in every way possible one that encourages and promotes freedom.  Therefore, anything that I do that takes responsibility away from them ultimately is an unloving thing to do.  It is like trying to help the butterfly out of the cocoon, when it is through the struggle of getting out that strength is built and the butterfly can actually live and fly.  It means living with greater thought and purpose in how I relate to others.

The Wand and it's Master

This was an interesting parallel I observed while reading Harry Potter, although I doubt it was intentional by its author.

 

In the last Harry Potter book, Deathly Hallows, Harry faces Voldemort twice and both times Voldemort casts the killing curse on Harry.  What Voldemort does not realize is that his wand's master is actually Harry, and the wand will never betray its master.  So the first time the killing curse is cast on Harry, the wand kills the only thing in Harry that is not Harry – the part of Voldemort that was inside of Harry.  The second time, the curse backfires and kills Voldemort.

When Christ died on the cross for the sins of the world, He took the "keys of death and Hades" from Satan.  Christ's redemption of us gives us a new master.  When Satan casts curses our way, the curses can only kill or harm that which is dead, the "sin nature".  But because of redemption, because of the work of Christ, the new man or woman, the recreated individual that Christ has made a person to be, is protected.  Satan can threaten and make promises to lock us up or kill us, but the threats are empty.  Yes, he can kill us, physically, and even painfully.  But "do not fear him who can kill the body, but rather He who can kill the body and soul."  Christ is the authority over spiritual death, and this curse of spiritual death is now hollow when cast by Satan against a child of Christ.  The wand will never betray its master.

Pay Attention!

Much of what is being said in the political arena is either a blantant lie or a carefully spun story that makes a candidate look better.  It is critical to actually measure what is being said with what is common sense and what is actual reality.  A great example of this is the ridiculous proposals for making cars more energy efficient.

 

I have seen statements that amount to something like: "Requiring that all cars have fuel efficiency increased by 50% by the year 2020."  Let's measure this statement with a little bit of common sense.  Consider:

• 2020 is 12 years away.
• 12 years ago the price of gas was $1.27, a 239% increase
• Inflation, if we accept the traditional view (which I do not), runs at about 3-5% annually, which at 12 years, compounded at 4%, equals 60%.

Does anyone see the aburdity in the statement?  If I increase my car efficiency by 50%, but the price of gas has increased by a greater percent, and inflation has made my purchasing power weaker, I've still lost.  The statement has no value for those living in 2020 and is stated so as to sound "good" in the present.

 

Nevermind the disaster of allowing the government to regulate something else, which prevents a (formerly) "free" market to dictate the design and efficiency of cars.  If we want to drive big-ass cars, we must pay the price to drive them.  If we wish for a cheaper gas bill, we can get a more fuel-efficient car.  Actions and choices have consequences.

 

This does not even get into the falling value of the dollar and why gas prices are really rising.  But I write this to illustrate that we need to be cautious and exercise some careful investigation of what is being stated by all parties, everywhere.  Just because it sounds good and feels right doesn't make it true, practical, or a sound long-term solution.

Acceptance

About six months ago I was told by my therapist that the difficulties in my interactions with my dad were my fault.  Now, I had not seen or talked to my dad for seven years, but my therapist's comment was in reference to some of what had happened many years ago.  The short version is that as I grew older and began to develop my own ideas and opinions that were (in some cases, very) different from what my dad thought, he and I had more and more conflict.  Needless to say, this statement by my therapist came as quite a shock and completely stopped my mental train of thought.  How is it my fault?  After all, dad's supposed to be the adult!

And that is when I was told something that has been life-changing to me.  "Your problems in how you related to your dad were a failure on your part to accept your dad as he is.  You expected your dad to be an objective, unselfish father and that is simply not who he is."  In short, I had failed to accept my dad for who he was and is.  In the last several months, I have come to believe that this statement is not only true, but that acceptance is one of the most important ingredients in successful relationships and in personal growth.  A tremendous amount of pain in our interactions with other people may very well be rooted in our lack of acceptance for who those people are.

At first, I had a very difficult time accepting my therapist's statement.  I wanted a relationship with my dad that would support objective dialogue.  I learned in this difficulty that part of acceptance of another person will involve a mourning of the expectations as they are let go.  I had to learn to accept that the kind of relationship with my dad that I had hoped to have was not to be, but that by accepting him for who he was, we could have a relationship with one another (instead of none at all).  And that is what has happened.  I saw my dad for the first time on New Year's Eve, and applied this concept to our interaction.  I have seen him again and exchanged several emails over the last several months and our interaction has been very positive.  It has been positive in part because I have released my expectations for what I wanted him to be and instead have accepted him for who he is.  This has meant that I steer the conversation clear of certain areas, knowing that he cannot be objective in discussing them.  It means that I accept the fact that I will not receive his approval for certain actions or beliefs I have, and thus there is no point in asking for that approval.  This has been liberating.

You might be thinking that this sounds like a lot of work on my part; that the interaction with him isn't that great because I have to avoid certain topics, that he isn't being what a "real dad ought to be".  Well, it is a lot of work on my part, but it is work I am willing to do (for reasons I hope to discuss further at some point).  As for the interaction not being "great", what do we define as "great", except what we set forth in our expectations of others?  A dad being a "great dad" implies that he is exceeding a set of expectations that one has of what a "good dad" would be.  These expectations may not be realistic and if they do not match the person we compare them too, we have failed to accept the person.  What I am saying is that "great" is relative and when it comes to people, long-term positive interaction occurs as we learn to accept others as they are, instead of holding them to an unrealistic standard of what we want them to be, expect them to be, or think they 'should' be.  In practicality for me, it has meant that I significantly reduce what I expect of my dad, which then leads to having a form of positive interaction with him that is mutually beneficial.

Let me repeat again that acceptance is one of the most important ingredients to successful interaction with other people, whether this interaction takes places in friendships, family circles, or the closest type of interaction, marriage.  On the surface, it seems simple, but doing it is really hard.  Expecting someone to be on time when they are habitually late may not be realistic to who they are.  Expecting someone to do something your way instead of the way they do it may not be consistent with their personality.  It may not be the way you do it, but they aren't you (I have to remind myself of this one constantly!).  I didn't and still don't realize all of the places where this has an impact.  Do I accept this person for who they are now or am I expecting them to change, in some way, either in the short or long-term?

 

Christ and Growth

In the movie Prince Caspian, when Lucy sees Aslan for the first time, she is surprised that he is bigger.  Aslan replies, "Every year you grow, so will I."  This statement struck a chord deep within me, as I thought about how this applies to life.

As a child, the music I heard sounded nice; as an adult, I understand more of the form and structure that gives music its melody, harmony, and rhythm.  As a child, I saw the relationship between a man and a woman as a simple arrangement that people do; as an adult, I now see it as a lifetime transformation into oneness and unity with another human being.  Baby formula tasted good for me as a baby, but now a juicy steak is one that satisfies both the palette and appetite.  As I grow older, the size of my world grows in height, depth, and width.

But the greatest joy of all is that Christ has grown throughout all of this.  The Lord I know today is so much bigger than the one I knew several years ago.  Each day He grows larger as I learn more about Him.  Christ is not static and fixed, but alive and walking with me as I grow.  Even better, much of what I was told about Him has been changed, modified, or eliminated as He has brought me into deeper relationship with Himself.

I think perhaps the truth is not that Christ grows as I grow, but that Christ has humbled Himself for me—so that I might come to know Him in my finite, limited form.  It is not He that grows, but me, in that my eyes are continuously opened to a little more of what He has always been.

Post DTS First Semester

I finished the Intro to Theology class I have been taking at DTS this semester and have been reflecting on how different it was from what I expected and what changes have taken place because of it. I was scared of going to DTS, for fear that it would be a return to a religious dogmatism that for so long I've been walking away from. I expected DTS to be like my dad and was guarded and defensive going into the semester. I was not and am not interested in being brainwashed into the "Christianese" way of thinking, where you are a good boy or girl if you always start your sentences with "the Bible says…" And yet for a long time I have wanted to take some Bible classes and deepen my understanding of Scripture. My attitude was: "If this is anything like I think it might be (closed-minded, dogmatic, 'thus saith the Lord'), I'll be sad that the door was closed but I won't continue." Well, I have been very surprised in my experience at DTS. It's difficult to put into words what I feel about it now. I feel like this class introduced me to some concepts that have made the gospel of Christ more relevant and life-giving. I'd go so far to say that the Lord has given me hope. I suppose most Christians in every age have struggled with this question: how is the Bible and Christianity relevant to my culture, in my time, in this place; and yet also relevant to your culture, and in your place, and perhaps even in a different time? Does what the Bible says apply both literally and globally, without variation due to culture? I admit I expected the DTS answer to be YES! To the praise of Christ, it was not! The answer is more like: it depends (more to come on this in the future)!

If you have done any construction, there is quite a lot of preparation of the ground before any concrete can be poured. I expected my DTS experience to be like trying to construct a house without a foundation. The approach to "Christian truth" I was trained in by my parents was riddled with holes. It's a house built on a lot of sand. I was worried that DTS would only mix some clay with the sand and tell me to join the people saying the emperor's clothes were amazing. "But Dad, he's NAKED!" Instead, a crane was brought in, the house was lifted off the sand, trenches dug, pipes laid, pilings dug, and framing for the foundation has been laid. And while it is making a mess, it is a mess that I am excited about! I'm not sure what to expect, but I like what I've seen so far!

There is a scene in the first Lord of the Rings movies where Galdalf is leading the Fellowship through the dark, underground caverns of Moria, the dwarven city. He decided he can "spare a little more light in here" and as his walking stick starts to shine brighter it reveals an enormous cavern with pillars as far as the eye can see. The Fellowship gasps in amazement at the magnificence and enormity of it all. Rather than hitting the bottom and being disappointed with the shallow insufficiency of it all, what I learned this semester has expanded my horizons and made me realize Christ is so much more!

Financial Regulations

From this article on Yahoo Finance (my emphasis):

 

Wall Street profits could take a big hit if the government toughens regulations in a proposed overhaul of the U.S. financial system, the manager of the world's biggest bond fund said on Monday.

Gross referred to these Wall Street firms as "shadow banks" because they have raised billions in the capital markets, rather from savings and traditional lending. Less stringent regulations had allowed Wall Street to make riskier and more profitable bets than commercial banks.

This "shadow banking system," which consists of all the levered investment conduits, vehicles and structures created by Wall Street, is now facing liquidity constraints.

"Shadow banks will likely be forced to raise expensive capital and/or reduce the bottom line footings of their balance sheets," he said.

I tend to not be for government regulations, but in this instance I am all for them.  This is complaining that if the government toughens the regulations, then the investment bankers will have to have more capital (cash, real wealth) and less levered (debt) investments!  My response to this complaint:

 

Tough.

Contentment

The country song below expresses the value of contentment and maximizing the now.  I am not very good about either, having a tendency to be more like the girl in the song, thinking that I'll be ok "when...".  A game I played as a kid called Character Clues defined contentment in a way I have never forgotten: "Realizing that God has provided all of my needs for my present happiness."

Trace Adkins You're Gonna Miss This

She was starin' out the window of that SUV
Complainin' sayin' I can't wait to turn 18
She said I'll make my own money and I'll make my own roots
Mama put the car in park out there in front of the school
and she kissed her head and said I was just like you

You're gonna miss this
You're gonna want this back
You're gonna wish these days hadn't gone by so fast
These are some good times
So take a good look around
You may not know it now
But you're gonna miss this

Before she knows it she's a brand new bride
In her one bedroom apartment and her daddy stops by
He tells her it's a nice place, she says it'll do for now
Starts talkin' about babies and buyin' a house
Daddy shakes his face and says Baby just slow down

Cuz you're gonna miss this
You're gonna want this back
You're gonna wish these days hadn't gone by so fast
These are some good times so take a good look around
You may not know it now but you're gonna miss this

Five years later there's a plummer workin' on the water heater,
Dogs barkin' phones ringin' one kid's cryin' one kid's screamin',
And she keeps apologizing, he says they don't bother me I got 2 babies of my own one's 36 one's 23 it's hard to believe

But you're gonna miss this
You're gonna want this back
You're gonna wish these days hadn't gone by so fast
These are some good times so take a good look around
You may not know it now
But you're gonna miss this
You're gonna miss this
Yeah, you're gonna miss this

The Fed and Gas Prices

Over the last year gas prices have increased significantly.  As easy as it is to blame greed or even the war in Iraq for the gas problems, the primary culprit is the weakening dollar due to the Fed's economic activity.  Ultimately, the falling value of the dollar contributes to increasing the price for foreign goods (such as oil) because it takes more dollars to buy the same goods.  Why is the dollar falling?  The Fed has been aggressively cutting interest rates to attempt to prevent a recession.  Lower interest rates mean that an investor earns less on their investments then before (anyone seen their interest rates on savings accounts lately?) and thus US-securities become less attractive.  Furthermore, the Fed has been dumping billions of dollars of liquidity into the system to attempt to keep the credit crisis from affecting the economy as a whole (which has not been successful).  Two days ago the Fed announced a $200 billion dollar injection to trade the bad debt of banks for dollars.  They created this money out of nothing.  You can't do that without dropping the value of money by the same amount.  And sure enough, what happened.  Within two days oil rose 10%, is now above $110/barrel, and the Euro is now above $1.55..

 

In short:

 

Cutting interest rates makes the dollar less valuable

Dumping billions of dollars of "new money" reduces the value of the dollar

Therefore, weakening dollar equals increased prices for foreign goods (not to mention the soon-to-be increases in domestic goods)

 

What is disturbing about all of this is that the Fed is attempting to protect the economy from the consequences of poor decisions, instead of letting the market adjust itself.  If a bank was unwise in its lending activity (read, made poor business decisions), natural consequences take over.  If we try to interfere with those, it just makes things worse in the long run.  By dumping money and lowering interest rates, the Fed is playing a very dangerous (and stupid) game in an attempt to stop something that is happening.  It will just make things worse and the recovery longer.  I understand that much of it is political, but it is still stupid.  Politics and economics are not a good mix.