Saturday, August 8, 2009

It's Time to Weed...

My wife told me it was time to weed...something about a tumbleweed growing in our backyard - I don't understand - don't we want to make our yard inviting to prairie creatures? Besides, this weed isn't that big is it? (That thing cutting off the upper left corner of the picture is part of my arm)

I finally made it down to Wal-Mart to get string for my weed eater so I could clean up around the front yard too. Here's the before picture of around our tree:

And here's the after picture:

So now that I've made our front and back yards uninhabitable for prairie creatures, it's time for me to go get my ears lowered - something about me looking like one of the original Beatles...

Thursday, August 6, 2009

Dr. Phil at My House Part II

I came home today from work and found out that Fred wants to quit karate. For those who are not aware, we signed both Fred and Jr. up for one year's worth of karate in May (cost over $900; classes are twice a week). I didn't have time to debate with Fred as I get home in just enough time to load up the troops and go to karate. On the way to karate, Fred gave her reasoning for wanting to quit. The reasons are as follows - (1) school is starting up soon and it will be too stressful with school, art and church to keep doing karate; (2) it hurts; and (3) she feels sick (i.e. headaches, runny nose - you know allergies!)

I didn't really know where to go with it and being a little upset and disappointed played the "let me paint you a picture" card and explained that Mom and I had shelled out over $900 for their karate lessons and that she would be throwing away half of that money if she stopped going to karate. Yeah, I know, probably not the right way to go about things especially with a nine year old - but I'm an accountant, that really hurts. Fred answers back with we don't have to get her anything for Christmas or anything else like MacDonald's until all the money was recovered - (WOO-HOO! I bet that would go over well with her for the next two years - uh, your sisters get a kids meal but you don't because of that promise you made, remember? I can hear the fits now - no thank you!)

So we get to karate and I have Fred sit and watch Jr. with me and George. After class we drive home and I'm thinking about the whole thing and come up with a plan. First, I'm going to my room and cooling off - yes, I removed myself from the situation. Second, I'm going to talk with Fred by herself (wouldn't Dr. Phil be so proud).

How did it go? I invited Fred in and we talked. I didn't realize how much I don't know how my daughter's mind works. Listen to this - I begin tackling the issues by telling Fred that stress is a part of life. Fred's response "Yes, but I don't want to have so much stress I get brain damage and die." If you are like me, you are like "WHAT? Brain damage?" If Fred was trying shock and awe, I think she accomplished her mission. How does a nine year old come up with that? I'm trying to connect the dots. Clueless still? Yeah, me too, until Fred explains that her GATE teacher told her that too much stress damages the brain (for those who don't know what GATE stands for, GATE = Gifted and Talented Education; you can tell Fred is gifted purely by the fact she is nine and we are nearing the end of summer and she is quoting her GATE teacher.) But there's more, her GATE teacher even showed a movie to the class on the subject of stress and the brain and how the brain is surrounded by water and floats in it - I couldn't make this stuff up. Okay, so we now know why stress is such a big concern. I try to explain that people can withstand a lot of stress and that she is going to have more stress in her life as she gets older; moms and dads have much more stress than what she has; there's a lot of stress going on "America's Got Talent" (Fred has a dream of being on that show); pioneers endured an enormous amount of stress; etc. I don't know if I got my point across.

What about the part where it hurts? Apparently she was kicking in one of the classes and she heard a pop and thought her knee went in and out of her socket and she wasn't trying to recover but her teacher got after her by saying "not to be lazy" and to keep kicking. I tried to explain to her that the teacher didn't know the leg hurt and that we just needed to let him know and he would be more mindful in the future. Fred's response was but when so and so was there the teacher asked her if she was all right. Aargh! I just had to assure her that we need to inform the teacher and he will do better.

Then I told her that there's nothing I could do about the allergies. She would just have to work through those. I told her I have allergies and I have to deal with them as best I can too.

I left the conversation with that she would need to make the decision on her own about karate, but I would be disappointed if she chose to stop as it was my feeling that if you make a decision to do something like karate, you need to see it through.

I'll have to wait and see where this goes - can't wait until the other two get older and also can't wait until Fred's a teenager!

Tuesday, August 4, 2009

How States can Fight the Power of the Federal Reserve and Federal Government

I attended a CPA meeting a few weeks back and the speaker was George Burns (no not that "George Burns"). This George Burns is the head of the Nevada Financial Institution Divisions and among other things he mentioned how the Federal government was making a power play against state chartered banks. Before I discuss this power play, first let me explain the duality of our banking system.

Our banking system is comprised of nationally chartered banks and state chartered banks. Nationally chartered banks naturally are supervised by the Federal Government through the "Office of the Comptroller of the Currency" and the Federal Reserve (if the banks are members); state chartered banks are overseen by the state they are chartered in, however, they can also be overseen by the FDIC if they utilize FDIC insurance for their customers and the Federal Reserve (if they become a member). So now that you are familiar with the system, let's talk about the Federal Government power play on state chartered banks.

According to Mr. Burns, none of the bailout money that was handed out went to banks with state charters; it was all given to Nationally chartered banks. Also, that bailout money isn't getting to state chartered banks; thus state chartered banks have less of a safety net right now. The saving grace for many state chartered banks has been that they dealt mostly with retail and commercial loans and so they had higher equity loans than those banks lending to homeowners. At any rate, as the margins of state chartered banks are now being squeezed, and people are fleeing to banks with bailout funds, the state chartered banks are becoming vulnerable. Thus the power play.

After listening to Mr. Burns speak, I wondered why controlling state chartered banks is important to Uncle Sam and the Fed. In my pondering, I came across an article about how California can solve its liquidity problem by following what the state of North Dakota has done. The following is an excerpt from the article:

"North Dakota has beaten the Wall Street credit freeze by generating its own credit. By law, ever since 1919 the State's revenues have been deposited in its own bank, the Bank of North Dakota (BND). Using the 'fractional reserve' lending scheme open to all banks, these deposits are then available to be used as the 'reserves' for creating many times their face value in loans. Other banks in the State do not see the BND as a threat, because it partners with them and backstops them, serving as a sort of central bank for North Dakota. BND's loans are not insured by the Federal Deposit Insurance Corporation (FDIC) but are guaranteed by the State.

"If California followed suit, it would not need to meet the FDIC's capital requirements but could designate state-owned property (parks, buildings and so forth) as its capital base. Applying the 'multiplier effect' by which capital is lent and relent many times over, this base could then generate hundreds of billions of dollars in 'credit.' The State could deposit its revenues in the State bank and pay its payroll through it, generating an even larger deposit base for making new loans. Enough credit could be generated to allow the State not only to meet its short-term budget needs but to buy back its outstanding bonds (or debt). Bond interest and redemption costs on California's General Fund for the current year are estimated at nearly $5 billion -- about 20% of the budget shortfall. All of that money could be saved in interest, since the State would be paying interest to itself.

"The State could do more than just chase the wolf from its door. It could generate enough credit to engage in the sort of economic 'stimulus' being undertaken by the federal government. It could create jobs for the 11.5% of the State's population that are currently unemployed, augmenting the tax base and supplying the incomes necessary to prop up the languishing housing market. Loans for income-producing projects (transportation, energy, housing) could be repaid with the profits generated by the funded projects. And if some of the newly-issued loans were not paid back, they could simply be refinanced. The federal government has been rolling over its loans ever since 1835, the last time the federal debt was actually paid off (under Andrew Jackson)." (Here's a link to the full article and another similar article.)

That article helped me understand how unique state chartered banks could be and how states who created their own bank would be able to take back economic decision making from the Federal Reserve and the Federal Government. States can be in charge of their own destiny by utilizing fractional reserve lending. Wouldn't it be wonderful if a state could kick the habit of dependence on Federal money that comes with strings attached by merely making its own bank? The less dependence a state has on Federal money, the more freedom it has to make decisions that benefit the people who call it home, and the less power Uncle Sam and the Federal Reserve has to manipulate us.

I also ran across some legislation that is making its way through several states. The legislation is a part of a state sovereignty movement. Basically states are trying to remind the Federal Government that it exists for certain purposes spelled out in the constitution and that all other government authority is held by the individual states (here is a link to one article on the movement.) My opinion is that the Federal Government has grown much too big and is involved in matters that should be left to state and local governments. This legislation is a good start, but states should also do what they can to be self-reliant (such as setting up their own North Dakota style bank) and not look for Uncle Sam to give them a handout - trust me those handouts always come with strings.

None dare call it conspiracy


Monster Miata


Flying in a squirrel suit