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I’m not an economist and this is only my interpretation of what I see happening with the stock market, the economy and the treasury market.

The market has completely panicked. The DOW fell -265 points on August 2nd, 2011 and -512.76 August 4th 2011, as investors fled stocks and put their money into government backed securities like short-term and long-term treasury’s.

The fear of a debt default, which was completely unfounded (politicized by Obama and Geithner), has been eliminated now that the debt ceiling has been increased and the government has the authority to borrow more money. At the same time, the economy appears to be heading towards a double dip recession as the entire year of 2011 had its GDP numbers revised downward. In addition, manufacturing data, unemployment, and the dollar’s value are all getting worse and there doesn’t appear to be any positive momentum to reverse these numbers.

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There’s a lot of talk these days about US Treasury Bills, and a lot of folks don’t know what one is, or why they are important.

US Treasuries are certificates issued by the United States Government. Think of them as IOUs or loans. The government will issue Treasury Bills when they need to raise money they don’t have, usually to fund things like war, big spending projects or in recent times, pay their bills (I won’t get into why that is bad in this post). Treasuries can be bought by any person, or any country.

There are 3 important aspects related to a US Treasury; treasury price, maturity date, and yield (also called the interest rate). The easiest way to explain this is through a couple examples.

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Ask yourself this question: Who prevents a crime targeted at you from happening?

Most people would answer, the Police. But do they? How often has a police officer stopped a home invasion? What about a mugging? How about a home burglary? What about a bank robbery? How often has a police officer stopped a murder from happening? Or a fight from breaking out in a bar? Unless they happen to be in the right place and the right time, it’s unlikely they could prevent any crime from happening.

People who live in nice neighborhoods aren’t crime free because police cars are constantly patrolling the streets. If that were the case, the city of Compton in California would be one of the safest cities in the country. The reason some neighborhoods are nice has to do with the common civil morality of the people who live there. Not because there are police there. When a crime does take place, no matter where that might be, it’s probably because a police officer wasn’t present.

… and when they aren’t present, is when a crime occurs.

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There are many types of taxes that take many different forms depending on where you live. There are excise taxes, fees, tariffs, direct taxes, indirect taxes, federal taxes, and state taxes. Below is a list of taxes most of us pay for in one way or another. This however is not a complete list, because as previously mentioned, it depends on where you live.

• Accounts Receivable Tax
• Building Permit Tax
• Capital Gains Tax
• CDL License Tax
• Cigarette Tax
• Corporate Income Tax
• Court Fines (indirect taxes)
• Dividend Tax
• Dog License Tax
• Federal Income Tax
• Federal Unemployment Tax (FUTA)
• Fishing License Tax
• Franchise Tax
• Food License Tax
• Fuel Permit Tax
• Fuel Excise Tax
• Gasoline Tax
• Diesel Gas Tax
• Hunting License Tax
• Inheritance Tax
• Interest Expense (tax on the money)
• Inventory Tax I
• RS Interest Charges (tax on top of tax)
• IRS Penalties (tax on top of tax)
• Liquor Tax
• Local Income Tax (Where applicable)
• Luxury Taxes
1. Many additional taxes fall under this category depending on State.
• Marriage License Tax
• Medicare Tax
• Property Tax
1. The property taxes is composed of numerous taxes, all dependent upon state and country.
• Real Estate Tax
• Recreational Vehicle Tax
• Road Toll Booth Taxes
• Road Usage Taxes (truckers)
• Sales Taxes
• School Tax
• Septic Permit Tax
• Service Charge Taxes
• Social Security Tax
• State Income Tax
• State Sales Tax (Where applicable)
• State Unemployment Tax (SUTA)
• Telephone Federal Excise Tax
• Telephone Federal, State and Local Surcharge Taxes
• Telephone Federal Universal Service Fee Tax
• Telephone Minimum Usage Surcharge Tax
• Telephone Recurring and Nonrecurring Charges Tax
• Telephone State and Local Tax
• Telephone Usage Charge Tax
• Toll Bridge Taxes Toll
• Tunnel Taxes
• Trailer Registration
• Tax Utility Taxes
• Vehicle License Registration Tax
• Vehicle Sales Tax
• Watercraft Registration Tax
• Well Permit Tax
• Workers’ Compensation Tax

President Obama is just as clueless as former President Bush. Here’s a couple quotes from his most recent town hall style meeting at a windmill factory:

… a future where America is less dependent on foreign oil, more reliant on clean energy produced by workers like you.That will happen by reducing oil imports, tapping domestic energy sources and shifting the nation to renewable and less polluting sources of energy, such as wind.

Why is this such a hard concept to understand!? Windmills and solar panels produce electricity, not oil. Gasoline, diesel and jet fuel come from oil, and oil comes from the ground. It doesn’t ooze from windmills or solar panels.

Therefore, I think it’s safe to say windmills and solar panels do not power airplanes. They do not power diesel trucks. They do not power diesel trains. They do not power tractors. They do not power boats. They do not power helicopters. They do not power barges. They do no power construction equipment. Oil which is refined into gasoline, diesel and jet fuel powers all of these things. So why, Mr. president, do you think more windmills are going to lower our dependence on foreign oil?

If you’re complaining about the price of gas and you’re only getting 8 miles a gallon, you know,” Obama said laughingly. “You might want to think about a trade-in.

I see. So I should trade in my car that gets 17 mpg, bought before you were president when gas prices were actually below $2 a gallon, and now that your policies have caused gas to more than double, I should trade in my car? What if my car is paid off and I can’t afford a car payment on a more economical car? After all, a $45,000 Chevy Volt is a little pricey. With no car payment, I could instead spend that $45,000 I would save by not buying a Chevy volt and buy 20 years worth of gas. Or what about a $25,000 Toyota Prius? I’d love to fit my family of 4 into a Prius and actually have room for a picnic basket and enough power to drive up a 2% grade in the heat of summer with the AC on. You have such great problem solving skills. Not only do you believe our government needs to spend money to save money, you also want us to spend more money to save money. I happen to live in reality, Mr. Obama. You clearly do not.

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