Keeping Up With China's ETFs

http://www.minyanville.com/businessmarkets/articles/exchange-traded-funds-china-short-long/3/11/2010/id/27241?page=1

300% Tax Increase?

Well, if the U.S. doesn't take corrective action, and fast, a 300% tax increase is what's going to have to happen for the country to be able to fulfill on the spending promises that it has made to its citizens.

Let me explain.

Aside from tax revenues evaporating, the biggest problem at the state and local level is skyrocketing costs, primarily from overambitious promises made to public workers -- firefighters, policemen, teachers just to name a few -- for their pensions.

A recent article in The New York Times highlighted a study by Joshua Rauh, an economist at Northwestern University, and Robert Novy-Marx of the University of Chicago, that showed that the 50 states have over $5 trillion in pension obligations.

But here's the kicker -- the states only have about $2 trillion set aside to pay for these obligations, leaving a gap of about $3 trillion.

$3 trillion -- that's pretty bad ... no, let me take that back, that's HORRIFIC.

To put that into perspective, the EU forced Greece to adopt draconian cuts because it had exceeded the EU limit of 60% for its debt-to-GDP ratio.

Under that standard, as you can see on the chart below, Rhode Island and Alaska already exceed that, with New Mexico, Ohio, Mississippi and Illinois not too far behind.

Where do you think they are going to get that $3 trillion from? A booming economy? Another tech revolution?

Hardly.

It's going to come from tax increases and spending cuts, something you are already seeing all across the nation.

Or it's going to come from financial trickery and downright fraud; just consider a few examples as cited by The New York Times of the financial gymnastics that states are doing to balance their budgets:

• New Hampshire was recently ordered by its State Supreme Court to return $110 million that it took from a medical malpractice insurance pool...

• Colorado tried, so far unsuccessfully, to grab a $500 million surplus from its state workers' compensation fund that was privatized in 2002...

• California accelerated its corporate income tax this year, making companies pay 70 percent of their 2010 taxes by June 15...

Jim Rogers: The next crisis has already started

From The Pragmatic Capitalist:

Kirby Daley, senior strategist at Newedge Group, and Jim Rogers claim the next crisis has already started to unfold as sovereign debt worries increase and global central banks only exacerbate the issues...

Watch video here...

The US Dollar

That one really gets me. Do the folks in Washington really think that by pushing China's yuan up — and the dollar down — they're going to save the U.S. economy?

Unfortunately, that's exactly what they think. Because Washington's solution is to pay its debts with cheaper dollars.

I'm not the only one who has caught on to this scheme. Consider these other notable people and what they have to say ...

"It's the ... official policy of the central bank and the United States and to ... debase the currency."
— Jim Rogers, Co-Founder of the Quantum Fund

"The current crisis is ... it's basically the end ... of a 60-year period of continuing credit expansion based on the dollar as the reserve currency."
— George Soros, The world's #1 global investor

"Holding dollars today represents risk ... without ... reward!"
— Joseph Stiglitz, Nobel Prize-winning economist

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Deficit spending is simply a scheme for the `hidden' confiscation of wealth."
— Alan Greenspan, Former Chairman of the Federal Reserve

Pay particular attention to this one ...

"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens ... in a manner which not one man in a million can diagnose."
— John Maynard Keynes