The ol’ one-two punch of a doubling of inflation from June last year to this June along with skyrocketing commodities futures prices has hit the nail into the forehead of poor ol’ Joe Six Pack. He’s stayin’ home and workin’ three jobs.
A person resembling an evil chipmunk that you and I may personally know has made over 20% a year for several years now in commodities returns because of a simple tried and true correlation between commodity and equity prices. It doesn’t hurt that this geek Ron Jaworski is best buddies with the guys who drive the commodity prices, e.g. those rough and tumble white people in southern Africa that know which mines will “hit”. Hedge the Tsx Venture Exchange penny stocks with convertible warrants on those self same companies, whose owners you get shattered with when you’re in
So what does this mean to poor ol’ Joe Six Pack, e.g. you and me who make over $50,000 and not much more after taxes if you manage to hit the magical $110,000 in personal income mark, which includes everyone that owns a house on the East or West Coast. It means that we all pay ALL of the taxes for the other half of the country, who are basically supported by government transfer programs of some type such as government pensions, social security, SSI, SSDI, the earned income credit, and government health care, food , and Section 8 and other housing and energy assistance.
Poor ol’ Joe Six Pack’s paycheck is now worth another 2.5% less than it was last June. Joe Six Pack’s bank doesn’t wanna lend to him even for new business ventures because the inflation rate went from 2.6% to 5.2% in one year. Joe Six Pack’s bank wants Joe Six Pack’s money now! They want to buy commodities, and they have a lot of bad loans. Joe Six Pack has to help them get cash flow to make up for bad loans, so they squeeze Joe for payment and up his interest rate.
So Joe Six Pack has no money to spend.
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