During the past few months I have been spending lots of time watching cable TV news and business channels.  I am in a constant state of information gathering in support of my business activity and for personal purposes.  I have logged most of my time watching CNBC during the business day, MSNBC's Morning Joe, Fox News Channel (O'Reilly and Van Susteren) at night with a smattering of CNN (more since exCNBCer Erin Burnett started her new OutFront program). 

2011 has been a year of rebellion in many areas of the world.  We have seen riots in major European cities due to economic issues created by government debt problems (ex. Greece, Italy).  Many middle eastern nations have rioted against their governments.  Egypt and Libya have overthrown their dictators in recent months.  Today, Moammar Gadhafi was killed by Libyan rebels.  When one is watching all of the action in the form of short video clips and sound bites from the comfort of one's home or office it almost feels like we are watching a movie or participating in  a video game.  It almost doesn't seem real.

Tomorrow, my wife and I are catching a plane to Rome and on Monday will be begin a Mediterranean cruise that is scheduled to take us to Egypt, Israel, Turkey and several Greek islands during the next two weeks.  We will be visiting some of the lands that we normally get to observe only on TV.  While our sample size is small and our time limited, we expect to get at least a flavor of what is happening in southern Europe and the middle east.  We are simply tourists trying to get a better understanding of the history and culture of this part of the world.

Hopefully, our trip will be peaceful and we can leave each place better informed and more educated than we are today.  Each of us needs to do our part to try and help make the entire world a better and safer place for everyone.

TPM 

The Shadow Market - How a Group of Wealthy Nations and Powerful Investors Secretly Dominate the World by Eric J. Weiner was published approximately one year ago, the fall of 2010.  The book includes updated information as recent as midyear 2010. If you want to find out where the real financial power is in the world today Mr. Weiner explains it to you in his book. 

Incredible amounts of wealth are now held by governments and sovereign wealth funds around the globe. The negative US balance of trade and massive deficit spending during recent years has created pockets of wealth and economic development in nations around the world.  The US has gotten poorer relative to the rest of the world as it has created massive debts through non productive spending.  Mr. Weiner explains how governments are buying farmland and natural resources across the world so they can provide for their future development.

I suggest you read The Shadow Market and think about what has changed since the manuscript has finished in the summer of 2010.  Political power among nations is shifting with the rise and fall of economic power.

TPM

The US continues to suffer through the effects of a major recession/depression caused by the failed policies of the US government and Federal Reserve.  The 9.1 percent reported unemployment rate plus the reports of millions of "underemployed" workers is headline news everyday and the cause of our politicians gnashing of teeth.  However, there is a lot more to the story that is not reported everyday that provides a very different slant on the unemployment situation.

It is now fairly well documented that the US has about 3 million open jobs at the moment.  Companies can't find skilled workers like machine tool operators, tool and die makers, and  field technicians.  There is a shortage of truck drivers in many areas of the country.  There are thousands of jobs in agricultural that Americans will not take.  I watched one CEO being interviewed on CNBC the other day that confirmed that unemployment compensation by the government is a life style option for people he is attempting to recruit to work full time for his company.  Millions of immigrants are working in the US in jobs that most Americans don't want because they are too hard and they have to get their hands dirty.

The bottom line is that the social safety net that is in place in most of the US is providing a life style that is too rich.  It is allowing people to avoid taking jobs where they have to work extremely hard and get their hands dirty.  The massive US federal government deficits are subsidizing people and allowing them to avoid difficult life decisions concerning where they live and how they work.  If life was really tough we would be seeing people move in mass to places like North Dakota and north central Pennsylvania where major oil and gas developments have created major shortages of workers and where jobs are plentiful.

Many people in the US and particularly a significant percentage of our young people have gotten extremely soft during the good times of the past 20 years.  Now that life is a lot tougher they are rebelling from doing the hard work many of their parents and grandparents had to do when they were young.  It is time for the US government to back off on many of its social safety net programs and force these people to get the training they need to get employed and get their hands dirty.  

All honest work deserves respect.  Many extremely successful people started their lives with nothing and worked extremely hard to achieve success and made it to the top.  It is time for the new generation of workers to earn our respect by doing what they have to do to provide for themselves and get their hands dirty.

TPM

The Occupy Wall Street protest has been going on for about three weeks and has spread to other cities in the US.  All the interviews that I have watched indicate that the protesters don't have a clue about what they are protesting.  It appears that a lot of young people without much to do with their lives have decided to waste their days accomplishing not much.  It is stunning to watch the protesters totally fail to provide a cogent response to very reasonable and fair questions.  Every US citizen has a right to participate in non-violent protests about any issue that concerns them.  However, this group is embarrassing themselves by looking really ignorant of the issues.

However, the fundamental cause of our current economic issues deserves to be protested.   The problems we face today were caused by poor government policies implemented by several presidents and many Congresses since the 1960s.  The Federal Reserve facilitated poor government decision making by its easy money policies that have been in place for over 20 years.  Alan Greenspan, Ben Bernanke and the members of the Federal Reserve Boards can take full credit for creating the economic bubbles that have decimated the US economy.  The US government rapid debt buildup of recent years has prevented the economy from properly contracting from the bubbles that have been created.  The US government's fiscal mismanagement and Federal Reserve's monetary mismanagement have created a horrendous economic environment that will not be resolved positively.   The only question remaining is how the bubbles are ultimately resolved, through massive fiat money creation and inflation or a deflationary depression.

So I say to the Occupy Wall Street folks; Can't you Protest the Right People?  Why aren't you marching in front of Federal Reserve headquarters in Washington and filling the Washington Mall in front of the capitol building.  How about protests in front of the 12 Federal Reserve Regional banks around the country.  I encourage all of you to protest if you wish to do so.  Just get it right and understand what you are doing before you do it.

TPM

I hope everyone in the US is paying attention to the Greece bailout fiasco currently in progress.  The members of the Euro zone are attempting to find a way to keep the government of Greece solvent.  All of the reported approaches rely on new loans to backstop existing Greek government loans with mostly European banks.   All the revenue/interest expense numbers that I have seen clearly indicate that there is no possibility that Greece can ever pay the interest expense much less the principal of their loans. 

The concept of solving debt payment problems with more debt simply doesn't work.  Greece will default and significantly restructure its debt.  In addition to restructuring its debt Greece needs to exit the Euro zone, reinstate its domestic currency and rebuild its national wealth.   Greece has spent and overspent its national wealth.  Greece must start over.  The people of Greece will have to endure a depression as payback for their excesses of recent years.  Unfortunately, there is no other way forward.  One way or the other the bills must be paid by a society that spent excessively without the income or assets needed to pay the bills.

The US is not Greece, at least not yet.  We have our own currency that the US government and Federal Reserve can print at will.  It is unlikely the US will ever be unable to pay its interest expense or payback debt that is due for principal repayment.  However, it is likely that the purchasing power of the US dollar in the future will be much lower than it is today.  Debasement of our currency is the only way the government and Federal Reserve can ever make the numbers work. 

However, we are moving closer and closer to being like Greece.  Our federal government debt to gross domestic product (GDP) ratio continues to climb.  The US government is currently adding and will add in the future more than $1 Trillion per year in new debt for the foreseeable future.  The US must stop adding more debt and begin rebuilding the equity of our country.  It will take years of a reduced standard for our nation to recover from decades of excessive spending and printing fiat money.  Ultimately, it is likely the US will have to return to a modern form of the gold standard in order to restore responsible fiscal management within our government.

Building debt upon debt solves nothing in the end.  It leads to bankruptcy and depression.  It is time for the US government to step forward with a responsible approach to ending the escalation of our the US debt to GDP ratio.  We must deal with the reality of the economic impact our government has created and begin to rebuild our nation.

TPM

I finished reading Annie Duke and John Vorhaus new book Decide to Play Great Poker -  A Strategy Guide to No-Limit Texas Hold'Em.  The book is a very valuable resource for intermediate and advanced amateur poker players.  The book includes extensive discussion and analysis of pre and post flop play in situations that all poker players routinely experience. 

As I read the book I thought about my own style of play as an intermediate level amateur player.   I am looking forward to altering my approach to the game to reflect some of the recommendations included in the book.  I believe that amateur players like myself create bad situations for ourselves too often by playing marginal hands too aggressively out of position.  The bottom line for most poker players is that improving our discipline on hand selection is the key prerequisite if we are to become excellent poker players.  Many of us, including me, need to think more carefully about the situations we are facing at the table before we act.

Decide to Play Great Poker belongs in the library of every poker player that is working hard to improve their game.  Thanks to Annie Duke and John Vorhaus for sharing their insights with all of us.

TPM