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Monday, March 24, 2014

Government Complicity In The College Tuition Bubble

This has nothing to do with the quality of the schools or the standard of the education students receive. It has everything to do with Government intervention in the marketplace. Did you ever think about how a person with no credit or colateral can borrow $200,000.00? In a normal market, they can't. How can colleges continue to charge insane tuition if there is no way for a person to pay for it?

Well there is...enter The Government. They will lend you ANY AMOUNT it will take to pay for college. Without the Goverment and the taxpayer money behind them, colleges would not be able to get these outlandish tuitions and they would have to streamline. Under the present structure there is no incentive to do so and the costs continue to rise. And why not, it's not like you can't get the money to pay for it, right? It is an artificial economic prop and it can't be sustained. It is a bubble of the Government's own making. 

The solution is to get Government out of the student loan business. The last time I checked, there is no provision in the U.S. Constitution that gives the Federal Government the madate or reason to fund peoples college education. What they are doing is against logic and market principles and as we see now, they haven't done anybody any favors.

Just like the housing bubble, college tuition credit is way over what the market is generating for a college educated worker. What we are seeing now is bank tellers and waiters with college degrees and $60,000.00+ in debt burden. What are they going to buy with that much debt? Not much. They are now removed from the economy until they can get that debt under control. It has nothing to do with payment options. You either have the money or you don't and these kids don't. It's not coming in so they can't pay it out. You can't get blood out of a stone.

So of what value is a college education if there are no jobs to take advantage of an advanced and educated workforce? The ends do not justify the means.

If you are carrying a 6% interest rate or more (up to 9.37%), that's a mortgage. A 30 year mortgage. I know people in their 40s with good jobs who still owe $20 to $30K. This is what you've got to look forward to kids. Perhaps the government can take the payments out of your Social Security checks.

We are starting to see this insidious debt creep in the housing market. Couples, both with outstanding college loans, are not qualifying for mortgages. The government already tried that mortgage give-a-way thing and that didn't work out too well so I wouldn't be expecting them to get in on that deal again so these potential buyers with no potential aren't going to be getting any help from them.

The job market cannot sustain all these people with such debt and something has got to give. The College Tuition Pyramid Scheme will unravel.

It can do nothing else.

Monday, March 17, 2014

Russia Annexes Crimea, Saves $ 98 Million

No wonder Russia wanted Crimea. No wonder Ukraine didn’t want to let the region go. Russia was paying Ukraine $ 98 Million to keep their ships in port in Crimea. And when the troops got paid, I’m pretty sure that they didn’t all send the money back to momma on the Volga. The local Crimean businesses made a bundle on having the Russian naval base there.

So now Russia is that much richer and Ukraine is that much poorer.
But the trouble is only beginning for Ukraine. The Ukrainian version of “George Bush’s Fault’ is going to manifest itself as other cash-starved or soon to be cash-starved regions of Ukraine vie for a chance to vote on a referendum to rejoin Russia. Now the Ukrainian region of Donetsk wants one.
This is obviously all Vladimir Putin’s fault.

The rest of Ukraine seems just as divided. There are factions that wish to rejoin Russia and there are the Ukrainian Nationalists who wish to stay an autonomous nation and join the EU.  This is going to have to be sorted out and having a vote will be a good start. The trick is to pull it off without the country descending into chaos.
The situation in Ukraine is beginning to play out in a fashion reminicent of the old "Bloody Kansas" turmoil in the days leading up to the U.S. Civil War. This was when the Kansas territory was given a chance a vote whether to join the Union as a "Free" state or a "Slave" state and bloody clashes took place between Free State and Pro Slavery factions. This lead to increased polarization, deeper divisions and then to civil war.
The Ukrainian insurrection that toppled its president is nothing less than a revolution. Not a particularly bloody one but with the absence of power, history has shown, there is an increasing risk there will be a clash between powerful groups to fill that gap and as we have seen, they are very wide apart in their views to say the least.

This is Vladimir Putin’s fault.
There have been many promises made by the U.S. and the EU as to guarantees of support both financially, politically and militarily. These are not going to happen nearly to the satisfaction of Ukraine’s interim government which is not only having to deal with a vote of their own and the loss of Crimea but also the potential of a breakup of the rest of the country.

Somehow I don’t think the losing parties in the Ukrainian elections are going to take it sitting down.
This is Vladimir Putin’s fault.

So whether you think the Crimean vote was legitimate or coerced or whatever, Ukraine is going to have bigger problems down the road with whichever group gains control of the country. The loss of Crimea is a big blow financially but if they don’t address other more pressing issues first, the Crimean vote will look like a good idea and then other regions will follow suit.  
Who’s fault will that be?



Saturday, March 8, 2014

EU Motives, Propaganda, Ukraine and Russia

Not a whole lot of truth coming out of the Western press right now on the Ukraine/Russia standoff.

I immediately wonder when I read reports of  Russian troops storming command posts and guarding the borders, do they actually mean to say “Crimean militia troops sympathetic to Russia” or actually, from across the border Russian army troops?

There has been very little distinction between these militia forces which are home grown and who consider Russia to be their homeland and the so called “Invading Russian Army”. Since there are also Russian bases inside Crimea, how would that be an invasion?

The fact that Ukraine has just been taken over by a political faction that is, to be kind, diametrically opposed to a pro-Russia view, it stands to reason that Crimean militia and Crimean based Russian forces would want to isolate Ukrainian troops stationed there. The media is making this look like aggression when it is common sense. I find it remarkable that neither side has fired a shot with bad intent, an unusual result considering who we're talking about. It appears that nobody is looking for a fight on this except the EU and the new Ukrainian regime since the U.S.and EU want to force Russia off of the Black Sea and Ukraine doesn’t want to lose the income from the Crimea which by most reports is doing better economically that the rest of Ukraine.

And nobody really knows how many troops are currently in the Crimea or who they belong to so why is the U.S. media relying on obviously biased statements from the Ukrainian military for a troop figure? It makes no sense since they are clearly going to overstate the number of Russian troops in the area to “prove” a violation of the 1997 Ukrainian agreement that actually allows Russian troops to remain in that region. This is what passes for journalism in the Western hemisphere these days. Why not admit it's impossible to know instead of issuing misleading information? Because it serves the interests of the U.S and EU, that's why.

Can Russia really “seize” a country that is going to vote to join it in two weeks by national referendum? Just wondering. If the Ukraine votes in its new EU friendly government which is very likely, Crimea, an autonomous region with it's own separate system of government it has been reported, can certainly vote to decide where its own fortunes lie. If that’s Russia, well then, the Ukraine would most certainly march against them. Crimea has every reason to believe that the new Ukraine will come after them to forcibly bring them into the EU fold even if they vote to remain separate from both countries.

This is what I see the danger in the region to be, not Russian aggression but EU coercion. These regions have been divided between Western and Eastern leaning factions for ages and none of this is a new thing by any stretch. This is why the EU and especially the United States should stay out of it. Washington, so adept at squandering our resources, our good will and our tolerance for war with its useless, make-work wars over the last number of decades, has gone to the well too many times for the people to get behind them on this. Only perennial war mongers like John McCain and Sean Hanity will think that would be a good idea. People are tired of it all and by the way, we’re broke!

So why shouldn’t Crimea get to vote? Ukraine is going to vote.
Is it because Crimea is going to vote “wrong”? Is this the way of the EU, to recognize the people who will vote “right” and to deny the other? Aesop had a proverb about this: “Any excuse serves a tyrant”.

And Obama’s so called solution is a joke! We all know that outside observers either from the U.N. or the OSCE are totally useless and much like the U.N. itself, has not managed to protect anybody but looks on while people get killed all around them. History has shown that the U.N. has only served to prolong conflicts, not solve them. The OSCE group cannot be trusted in the first place since they work for the EU. Nothing independent about their point of view. Gee, I wonder what they're going to report? Good idea letting those spys walk around the place.

But I think the Whitehouse is welcoming this distraction since it would rather have you looking at the Ukraine "Crisis" than at your own paycheck which continues to shrink as the government programs they have implemented suck your resources and drive you and the company you work for to the poorhouse."Look, Russians on the boarder!" is the old familiar ring from the late 1950s, "Forget about us screwing with Libya, Syria, Egypt, Afghanistan et al, the Russian's are violating the sovereignty of a country! We've got to do something by God!"

And why don’t we just pledge to give Ukraine $100 Billion? We don’t really HAVE the $ 2 Billion anyway so what’s the difference?

One really has to laugh when CNN has earlier reported that some Ukrainian television channels inside the Crimean territory have been replaced by “state run” Russian channels. Considering here in the U.S. CNN is just one of many, many state run television channels. Can't help but stifle a chuckle when I read about "Russian Propaganda" these days. Thanks CNN for the laugh.

I don’t see the crime here other than the escalation of rhetoric and innuendo reported as fact. These days I find I trust the words of Barack Obama and David Cameron much less than those of Vladimir Putin. At least Putin has lied to me a whole lot less. Who'd of thunk that?

And so as I write this, the U.S. seems now willing to send ships and ordinance in the European region to “help”. What this never ending continuation of military blunders coming out of Washington will most likely do is increase the chances of starting WW III since the last two world wars started in Europe and we all know Russia is not going to give up it's access to the Black Sea. It means too much to them as a nation and what it would take to dislodge them from Crimea even if we had the political will to actually attempt it would be too large a price to pay for the world.

Would we destroy the Crimea to save them? Hell, we've done it before, just look at Vietnam, a country we spent a decade to "save" from the Communist Threat by killing upwards of 7 million people there. All in a days work for the United States.

Hold onto your hats!