Sunday, October 31, 2010

7 Fallacies of Economics - Lawrence W. Reed

I found the following article this morning while cruising about the 'net during one of my habitual "coffee and internet" starts to my day. This is a good read on some common economic fallacies that frequently plague our social and political discourse. I remain convinced that absent these, a lot of the problems we presently have simply would not exist.

Here are two of my favorites, both of which Reed has written about in the article, the fallacy of collective terms and the incorrect notion that money and wealth are one an the same:

The fallacy of collective terms. Examples of collective terms are “society,” “community,” “nation,” “class,” and “us.” The important thing to remember is that they are abstractions, figments of the imagination, not living, breathing, thinking, and acting entities. The fallacy involved here is presuming that a collective is, in fact, a living, breathing, thinking, and acting entity.

The good economist recognizes that the only living, breathing, thinking, and acting entity is the individual. The source of all human action is the individual. Others may acquiesce in one’s action or even participate, but everything which occurs as a consequence can be traced to particular, identifiable individuals.

The fallacy of “money is wealth.” The mercantilists of the 1600s raised this error to the pinnacle of national policy. Always bent upon heaping up hoards of gold and silver, they made war on their neighbors and looted their treasures. If England was richer than France, it was, according to the mercantilists, because England had more precious metals in its possession, which usually meant in the king’s coffers.

It was Adam Smith, in The Wealth of Nations, who exploded this silly notion. A people are prosperous to the extent they possess goods and services, not money, Smith declared. All the money in the world—paper or metallic—will still leave one starving if goods and services are not available.

Read more: 7 Fallacies of Economics by Lawrence W. Reed

Thursday, September 09, 2010

Washington Initiative 1098 - Vote No

This one is for my Washington state readers. Folks, we have a job and prosperity killer aimed at our heads right now. It's known as Initiative 1098, which would create an income tax in Washington state if passed, coming to your ballot this November.

The "yes" on 1098 folks are inflating the impact of one part of their initiative - the property tax reduction - in an attempt to mislead people into falling for class warfare BS. Your total property tax bill will not decrease by 20%; it will only drop about 4.5% (and Olympia can just raise it again).

What KOMO failed to get into in this piece is that everyone, no matter how large or small their paycheck, will still have money withheld all year long, and you technically won't "pay" the tax ONLY AFTER you file a return and get it all back. That means you still are out the money all year long anyway, and you still have to pay the same "regressive" sales taxes you do now with less take-home pay and fewer job opportunities.

It also cannot be said enough that after two years go by, Olympia can change the law established by any initiative. If they are given the power to tax income, two years from now they can change the law so that "the rich" will mean "anyone earning money in this state."

Finally, bear in mind that a state cannot print money, only the Feds can do that. One day you will get an IOU in the mail instead of a refund check when the idiots in Olympia spend every dime before actual receipts are counted (they budget based on PROJECTIONS - never forget that!). It has happened before to hundreds of thousands of people living in other states that have income taxes, and since our pack of clowns in Olympia have already run this state into the red, it will happen here.

Vote "no" on 1098 in November. Don't let Olympia into your wallet!

To watch the KOMO video, click here.

Wednesday, September 08, 2010

You Can't See This Post...

..unless you're on my RSS feed, at least.

Paulezimmerman.com is in the midst of a domain registration transfer, which is mostly completed as I type this. I moved the domain from Yahoo! to GoDaddy.com (I took advantage of the Go Daddy $7.49 .com Sale!), which will cut down the overhead of this blog by around 270%. Right now anyone trying to view the blog is getting an error message, but once that clears up, this has been why!

Thanks for reading!

Monday, August 16, 2010

Hypermiling my way home

A while back I read about a concept now known as "hypermiling," which in short is deliberate alteration of one's vehicle and driving habits with the aim of maximizing fuel economy.

This past weekend I was on the road for a bit, and on my return trip I decided to put as many hypermiling techniques into practice as I could (the ones that don't require alterations to the vehicle itself, that is). I drive a 2001 Hyundai Accent, 5 speed manual, with no AC system.

Result: I achieved roughly 51 miles per gallon!

Interested? You should be. Hypermiling works with any vehicle out there. Click here for some further reading on the subject.

Wednesday, August 11, 2010

An Easy Forex Trade: Straddling News Events

Lately I've been using a simple method for trading Forex that has been fairly profitable while also putting me back to 100% cash when everything is said and done. Basically, I've been waiting on news events and placing bets on both sides of them.

What I do first is check out the Forex Factory Calendar for upcoming news (you should set it to your time zone). Mostly I've been paying attention to news about the USD and the Euro, in particular the events noted with a red "impact" icon.

Depending on the currency I'm following, I'll pull up a USD/JPY or EUR/USD five minute chart about fifteen to twenty minutes ahead of time and look for a price range the pair has settled into. Usually before a major news release the pairs will range very tightly as traders stop trying to move the pairs significantly due to the uncertainty that results from a pending report.

When there is five minutes or less to go, I place limit orders above and below the price range, usually with ten pip trailing stops programmed in (my broker allows me to do this; I don't know if they all do). (I struck out that last bit because of a nasty surprise my broker just handed me: a trailing stop programmed to be placed when my trade executed was taken out instantly when the trade did execute. The reason is that my broker widened the price spread on the pair enormously right as the news I was following hit. I'm just going to stick with take profit orders instead. It just turned what should have been a 20 pip gain in a matter of seconds into an instant loss.) I place these fairly close to the action, but not too close since price can whip back and forth violently immediately after news hits the wires.

Normally a significant news event will push the price decisively in one direction or the other. If action heads up, my buy limit order is triggered and my trailing stop begins chasing the gains. If price plummets, my sell limit order is activated. All I do after that is cancel the order that wasn't triggered and let the one that was run its course.

This method doesn't always work as intended, and sometimes the gains are not very substantial. When things go wrong, because I have trailing stops automatically put in place the most that can be lost is twenty pips (normally it's just ten, but if price whips back and forth and both your buy and sell limit orders are triggered, you can lose up to twenty). (See above.) Often enough though the gains are substantial and are made very quickly. Depending on your needs, this can be a very effective way to trade.

Saturday, July 24, 2010

Eating On 90 Cents A Day


I recently became acquainted with the blog, Early Retirement Extreme, which is written by a fellow named Jacob. Basically, by practicing intensive, smart frugality and careful investing, Jacob, who is in his early 30's like me, is retired.

One of Jacob's frequent topics is cooking, particularly the costs of feeding one's self. Somewhere in the dozens of articles of his that I've read, I came across an idea that I had not considered before: eat to fuel the body; don't use eating as a source of entertainment.

I'm guessing I saw this in conjunction with one of Jacob's posts on a simple, repetitive diet he maintained for quite some time (and maybe he still does). This is not the first place I've heard of such an idea, however. I've been listening to Dave Ramsey for some time now, and anyone who is familiar with his show no doubt is familiar with Dave's frugal dietary advice: eat beans and rice, and when you get bored switch to eating rice and beans.

I decided to take the plunge.

I started off with a crock pot full of black beans, a can of chili ready tomatoes, and a few spices. When it's time to eat, I put 1/4 of a cup of white rice on the stove and in about twenty minutes I've got my meal. So far I've also made up a batch of simple curried lentils, tried different types of beans (all dried beans, by the way), etc. At first I was concerned that I would get bored, but that doesn't seem to be happening. Once you get your head around the idea that you're eating to live, not living to eat, having the same thing again and again doesn't seem bad at all. (Besides, there are "treat" meals, like the sweet teriyaki marinated pork chops I made today that I'm going to throw on my grill once I'm done writing this).

Further inspired by Jacob's example, I bought a pressure cooker on eBay. It arrived yesterday and I tried making that lentil curry recipe I linked to above. It came out perfect, but inside of my pressure cooker it took only seven minutes to cook, not the forty minutes called for in that recipe.

I did the math and discovered that my beans and rice meals are costing me around thirty cents each. Just thirty cents! In a day, that's 90 cents spent on feeding myself. Over the course of a week, that's only $6.30! In the future the cost will become less per meal because so far I have been purchasing my ingredients in small amounts. Large bulk purchases of rice, beans, lentils, etc will further reduce my meal costs.

Think of the things that it could become possible for you to do if your weekly food budget dropped to less than $10.

Monday, July 05, 2010

A Win-Win Proposal

A few months ago I became involved with a company known as Primerica. You may have heard of them. If not, then in a nutshell, Primerica is a financial services company focused on helping middle income families get protected (insurance), get out of debt, and then get started on building wealth - cover your bases, then swing for the fences.

We mainly do life policies, but through a referral based service we also help people get cheaper auto and home (property and casualty) insurance.

This is my win-win proposal: this service is absolutely free, no obligation, and it can assist you in reducing what you pay each month for these types of insurances. I used it for my own auto and home policies and saw a reduction (and I was placed with Safeco, so we're not talking no-name, fly-by-night insurers, here).

One friend of mine whom I've known since my second go around at Washington State U. used it and reduced his annual premiums for his auto and home policies by a combined $775.

The company behind the service is called Answer Financial. The reason they can find deals like this is that, with your info, they will survey a couple dozen insurers in one shot. Answer Financial is not an insurer, so if they truly cannot find you a better deal they'll tell you so.

You can try this service by one of two ways:

1. Call their toll free number: 1-877-855-8111, or

2. Go to their website: Primerica Secure / Answer Financial

All you will need to make it all happen are two pieces of info:

1. My representative ID: UHGU3
2. My last name: Zimmerman

If you find something that's a better deal than what you have now, you save money each month, and I get a referral fee (in some states I do not, but don't worry about that). That's what makes this win-win.

Since this is a business that I am trying to grow, if I'm able to help you save money on your insurance, then please consider passing this info on to family, friends, or anyone you know who could benefit from it.

Also, please leave a comment here if you land a good deal, and let everyone know how much you're saving. I'm always curious how well this works out for the folks who are using it and I enjoy seeing people putting money back into their own pockets.

Good luck, and thanks!

[Apologies to readers outside of the United States - this is open to people residing in the U.S. only]

Monday, April 12, 2010

Costa Rica: Not Just For Flippant Blog Remarks

The other day I mentioned doing a bit of research into costa rica property. At times people may throw things out there like that, sort of like "screw this, I'm just going to go join the French Foreign Legion." I'm serious though.

Costa Rica, other places, I've been looking into homes away from home (preferably warm - I'd like to skip winter for the rest of my life, thanks). To be precise though, I'm actually thinking in terms of "insurance home" away from "probably soon to be destroyed home."

I feel basically nothing but pessimism toward the future of the U.S. anymore. Sure, I suppose there's hope to be had in November of this year, but I wonder what damage will be done between now and then, what the opposition to the Obama regime might do to snatch defeat from the jaws of victory, and I wonder about the degraded state of the moral fiber of average Americans. There are so many people running around this place now who think it's morally correct to take from the productive to feed an ever swelling population of non-productive people, regardless of the reason the latter has for not being productive, and that to not do so would be a moral wrong. They proclaim rights that do not exist and, when it's momentarily convenient to their ends, they deny the validity of rights that do exist. How do we talk them out of this insanity in time? I used to think it was possible, now I'm not so sure. Whatever good does come of this November's midterm elections, I already think of it only as buying some time for my plans, not a reversal of national fortunes. (Even if it does lead to another conservative revolution, for how long? I've already seen one come and go in my lifetime, and look at how low we've sunk in such a short amount of time since it ended.)

So, with apologies to my ancestors who sacrificed much to get here, I don't think my future lies in the U.S. any longer. While we're busy jumping down into the inky darkness of the chasm that is collectivism, nations around the globe are climbing out. Humanity has made itself increasingly mobile, and as a result capital is vastly more so than it has ever been. Capital can flee a hostile place such as what the U.S. is becoming very quickly; to have a good life, you have to be close behind it and go where it goes.

Infuriating as this is, and as sick, evil and wrong as the people are who are pushing this socialist crap on us, I don't think I can fight them. Physically fight them, I mean. While I do regard what is happening as an attack upon the U.S., I do have to acknowledge that despite the ignorance and laziness of the citizens who accept and even cheer for this destruction, they are choosing it more or less freely. If it's what they really want, I have no right to use force to prevent them from having it. All I can do if I don't want a part in it is to leave, reserving force only for the day where they attempt to physically prevent me from leaving, if that ever happens. So far that is not the case, so when I am ready to I will simply go.

These are disappointing, depressing thoughts to have, but they are mine. If nothing else, one day I'll at least get to sit on a beach with an umbrella drink in one hand and say from a place of prosperity to a nation in ruins, across whatever ocean is between us, "I told you so."

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