All economies change but in a way the economics of day to day living remain the same. For years the American consumer had not saved well or saved on a regular basis to any real extent. When the recession hit and the economic world fell to pieces many people lost their jobs and were unable to save at that point even if they wanted to. The rest of the American consumer became afraid of their economic future and feared for the day they might loose their job so they began to save as protection should that day ever come. Saving is a good thing but the saving as well as the new carefulness toward spending has made the consumer a rare species at the mall. Spending is down and seems to be contracting a bit as the new school year turns the corner. The demands on parents who must make the rush to buy the tools the young will need for school as well as a new wardrobe is a forced play to make parents open their wallets. This is spending that, most likely, must take place. The trick for the consumer is to shop wisely and watch the budget if one is set in place. The individual's saving program will go on but the economy will get a boost from the spending consumer if they spend wisely. If over the next four months the consumer can save and spend wisely at the same time then the economy will improve greatly and that is a benefit for each individual. You must save and spend but you must do so wisely.

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In some circles supporting the Tea Party movement can get one ousted from the group. It seems hard to believe in this day and age people will condemn an entire political group because of what they heard some of the members of the group may have said or done. I wrote an article yesterday telling people that a number of the people running for office under the Tea Party label are what I would call frauds. I never said all were frauds and I did investigate. It is up to the people who support the party to do the same investigating I did to find out the truth about those running for office. Those in or associated with the Tea Party in general are good people who are voicing their constitutional right to free speech. We do not have to agree or disagree with them but we must allow them to exercise their rights. To call them bad, or racist or anti-emetic is just wrong. Some of the people may fit into that category but there are just as many in the Republican and Democratic parties. It is our responsibility as citizens of this country to allow people to speak and then decide for ourselves if we do or do not agree with them. If we do not agree with the thoughts or beliefs of an individual it does not mean that all who gathered to hear the speech or are affiliated with that individual's party hold dearly to the same thoughts and beliefs expounded. There is a responsibility every one of us have which is to hear what people say and judge for our selves the right and wrong of their words. It is also wrong to label all Tea Party members as anything other good citizens who have a different view than we have. It is fine to label an individual for what they are, such as a fraud, but that label has to stop at that individual and should not be passed on to label those who do not deserve it. If anyone thinks I am wrong I suggest walking a mile it the other persons shoes and think about what someone may say about which is not true.

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I have spoken with many tea party supporters from many different areas around country and surely the one thing I see is they all believe in the candidates they support. There is only one problem I have with that scenario which is, what the candidates say and how they have preformed, in and out of politics and over time, is an issue. Looking a bit deeper we see these candidates coming up a might short of the reality check. Many of them talk the talk but few of them walk the walk. In quite a number if instances these changelings were the politicians of the ilk we all despise and are presently trying to rid the government of. Many were even backhandedly rejected by their own parties. That does not make them bad people but a thought does come to mind questioning how these individuals all saw the new light and have reversed their personal beliefs with the new talk in the blink of an eye. Perhaps it is because those regular citizens in the Tea Party need leaders these second hand politicians figured out how to tell the throngs of listeners what they really wanted to hear. However, they failed to tell the truth about what will become of this talk if they are elected. If I am correct, and I generally am, many people will start to see these false saviors for what they are and when the ballot is in hand they will vote for what they know good or bad. The Arizona election the other day showed the projected looser six weeks ago took the trophy. Perhaps the Tea Party is more transparent then we believed.

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Everyone knows that we all need water, food and energy to survive. With those three commodities in adequate supply anyone can stay alive. And believe it or not, alive, is the operative word. If you are dead you can do nothing. Lack of water will kill you in a few days. The lack of food will take an individual three times as long to die as does the lack of water. Energy is required to supply heat in many parts of this planet. The lack of energy, which serves as the heat supply in the most basic living conditions, is a necessity. One can live longer with out heat but the end result is generally death. The lack of energy exposes each individual to the extremes of the weather. These extremes can range from frying the brain to freezing to death. Heat from a camp fire warms and lights the night keeping the wild animals away. Heat from a fire was man's earliest form of energy. Today energy keeps man safe but just like fire it can turn and become a danger to all exposed to it. All forms of energy seem to carry a dangerous threat of one type or another. To extrapolate this thought energy is as dangerous but as necessary as water and food. Once we all realize this constant we will be safe from each other because such a realization is our defensive and offensive weapon at the same time. It is the MAD (Mutual Assured Destruction) defense with out the nuclear threat. If we do not learn to share then we will all die from either thirst, hunger, or the lack of defensive energy. Our global world and economy is will soon become a share or die adventure. The operative phrase here is share or die.

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We are at the end of August 2010 and we still do not know where we stand. Two thirds of the year has passed and there is no consensus on the financial state of the government, the citizenry, or the global economy. The experts are all over the place and each political side is condemning the other for doing, saying, planning and supporting the wrong things. When such confusion controls reality the general answer is there is no answer. As a group the central government, as well as the state and local governments, are stuck in the mud demonstrating their inability to govern or even take a chance on a direction and stick with that direction for more than two weeks. Those who believe in the forecasting knowledge of the marketplace have failed to take a strategy and are at a loss to believe anything the market implies. It seems as if every economist and market reader is reading different brands and styles of tea. It is time for the average citizen to pick a path of safety for themselves and generally ignore the Sooth Sayers and Spin Doctors in the government and on TV. The average citizen needs to save a little money and buy what they need and leave the splurging to others. A little in the bank and comfort at home tied to a job makes that citizen a king in his own right. For right now it can not get any better than that.

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Some people may think this a silly thought but reading the constitution once a year on our birthday would do all of us good. We all think we know about the constitution but most people know very little of this document and what it really states. It really is a simple read and it is a short document so to will not take long to read it through. Strangely enough, I can bet that anyone who reads it through for the first time will wind up reading it over many more times. The more times one reads this document the complexity of the reader's understanding grows and the depth and power of this document become ever more intriguing. With each reading the reader will come away with additional insight into what the founding fathers truly had in mind for this country. Reading it will not make the individual an expert but it will enhance the individual's understanding of what it means to be a citizen and that we have something no other nation possesses.

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I have spoken about the subject of the BP pull out several times already. This writing is to confirm that BP will only honor the amount of money it originally agreed to and then will pay no more. There has been pullout of support vessels and other tactical equipment in the gulf by BP. The government is being forced to look into the methods of payment and the process for coming to the amounts received as payment. In some instances the payments were only ten percent of the damage billed for. Because it is early in the game the government can not give definitive answers at this time. We as Americans can accept this for a bit longer but we all must watch to see if the process continues to degrade. If what seems to be obvious does exist then the public has to stand up and scream for justice. We are close to that point now but with elections just a short time away now is the time to make the elected officials do their jobs and also our bidding. Get the money from BP as soon as possible.

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Cell towers generate income for any land owner who has property in a location a wireless phone service would like to cover for the first time or to cover more effectively. If your property is in one of these prime areas the wireless people will contact you and try to set up an agreement with them to install a tower on your property. They do all the work getting clearance from the necessary agencies and the town and county you live in. When all is said and done they will build the tower. There is a mess while they are installing the tower but they will clean that up so you would not even know they were there except for the one hundred or so foot Steel structure that remains. For this the property owner is rewarded with a monthly income of a reasonable amount. The tower leaves the land owner generally happy but there are some issues that come from the good fortune. The most common one is the neighbors may not speak to you anymore. They think it spoils the look of the area and devalues their homes. Some of the complaining may just be resentment because they were not the ones chosen as the site for the tower. Those people should not worry for long as their turn will come as we use these towers to replace all of our trees providing us with a new type of forest. Just think there will be no leaves in the fall to rake up.

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Have you ever read the formulas published by economists? They are amazing on two counts. The first count is that they are so complex and yet so focused. Economists scoop up handfuls of these formulas and create functional models with them. Once the models are tested, but not proven over time, they are presented as the way things work. Though very complicated they seem to work relatively well after being tested over time. These models are the tools for governments to write laws governing how people will use the market and the marketplace to keep economies moving. This process seems to work well until the greed of individuals and then market segments find ways around the rules. The process breaks down and we have to go back to the drawing board again.

Part of the problem is the second count I spoke of. Greed always finds a way to rear its ugly head but it is never part of any economic formula. The formulas take into account changes in volume, inflation, commodity shortages and most everything else. The problem is the formulas never take into account greed and the damage it does when the greed causes people to break or circumvent the law. If the formulas were structured to take into account corrupt and greed driven schemes there would be bigger safety nets designed to support the public in times of negative impact created by these schemes. If the formulas and the laws which support them were to factor in greed and corrupt activities the rest of us would be safer in the long run.

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Deflation as defined by the talking heads on TV is not true deflation but merely margin compression and margin erosion working together to squeeze prices. Deflation in its purest since is the decline in the value of product groups or all products to levels that reflect a strong loss to the holder of the product if the product were sold. The talking heads are referring to the value of all things going down. Fortunately, that is not what is happening at present, nor what will most likely happen in the near future. What we really are experiencing is the compression of prices and the erosion of perceived profits as goods are sold in the market place.

Margin compression occurs when a product is on the market at a specific price and then the competition puts the product in the market place at a lower price. The first company takes action to maintain sales by lowering the sale price to meet or beat the competition. This means the margin of the first company is now lower and the other
Company most likely started with a lower margin. As this competitive market place struggle continues the prices may even come down more causing both companies to live with still lower margins. The cycle will continue until one or both companies raise their prices. This may or may not start the compression cycle all over again. Unfortunately, this is only half of the problem because margin erosion is also at play.

Margin erosion is when the cost of bring product to market goes up. Generally the cost issues come from the rising costs to run the business. As an example, if the sale price of coffee is eight dollars a pound to the market place and the price of the raw coffee bean goes up dramatically the marketer may raise the prices to offset the new cost and maintain the current margin. The competition will be hit by the same increase. At that point the choice has to be made to either increase prices or absorb the increase and accept a lower margin for the product. If one company accepts the lower margin to keep the market price lower and stay competitive, than the other company will most likely do the same or loose its market share. Keeping the price the same represents margin erosion.

These two market forces are at play right now and they are not going away any time soon. Deflation is when the value of everything is lowered in an almost across the board fashion. It is a market function but is not what is happening now. What we are experiencing now is price correction on a product by product basis. It is the process that keeps runaway inflation in check.

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I just came back from a trip from New Jersey and parts of New York. I was amazed at the amount of construction going on. There was a tremendous amount of road work and bridge repair in process. Small bridges I had been worrying about were being refurbished. Roads were being repaired and some new roads were being established. In one place an obstructive traffic circle in New Jersey, which has been the been a problem for me for the last thirty two years I have used it, was in the process of being dismantled for a new intersection. The construction was not only great to see but there were people working which was even a better sight. The only thing is how do we keep up this progress and make sure every bridge, tunnel, dam, and road not only come up to speed, but we must also figure out how to keep them that way?

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America must start putting its energy into a self correcting mode. It must be a change mode designed to take back lost markets and rediscover new products to manufacture by means of new manufacturing processes. As a nation we are long past the point of just streamlining operations. It is time to invent the new products from process to marketing. The difference here is to sell to the whole world that which they need and want but which is only obtainable from U.S. companies. It is not just one product it is all products. We must learn to do whatever it takes to sell on price. If the products are needed and wanted the only issue is price so we must learn how to get to a price the competition cannot beat. It seems as if it is hard to do but it is not quite as difficult as one might think. American manufacturers and engineers know how to automate and provide product via high speed and extremely high volume machines. This means one person replacing five or ten people yet providing extremely high volume of product to the marketplace. If the manufacturing businesses of this country wants to get back on top they must invest in this sort of production for every product. In that manner the nine people let go from one process can be employed by providing high speed and volume for a different product. If all the companies started doing this we would have everyone capable of working, actually working, and an economy that would once again rock the world.

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The oil has stopped flowing in the gulf for now but we must remember this is an injured well. Plugging up the well is all well and good if the walls hold. If there is a breach or tear in the casing allowing the plug from the top to stand alone is foolish. The integrity of the well shaft though tested has not been stressed enough to assure that the shaft will not spring a leak somewhere else. The well must be plugged at the intersection of the well and the relief well. If BP fails provide a secondary plug the odds are the oil will flow again. We seem to be in a good spot now however, a little extra insurance in the form of a second plug would provide a large extra margin of safety for the gulf's future.

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