As you know Delta Airlines is close to bankruptcy. Their income is less than their outgo. They are running out of money. In order to stay in business they must either take in a lot more cash or cut expenses. In today's economy they cannot raise their fares as they will sell even fewer tickets because competition is fierce.
If you can't take in more money the only alternative is to cut internal expenses. The first to go are the non-operating employees - the little guys on the ground have the smallest paychecks and are now doing the jobs of those who were laid off. That leaves us with the aircraft mechanics and pilots.
Of course the plane is not going to go anywhere without them, but these are the highest paid people in the company beside the executives. The bosses have said to the pilot's union either take a pay cut or we go out of business and you have no job at all. The unions know you can't get blood out of a turnip.
What has all this got to do with investing? I won't buy Delta stock now as I don't know if they will be in business next year. No, but I want you to keep this in mind as we look at the budget of the United States. Uncle Sugar is now spending way more than he is taking in in taxes. The politicians want to increase the payout for Medicare and protect (?) Social Security. These are both threatened even though they tell us they won't touch them. Doesn't this sound something like Delta Airlines?
There is not too much difference except Uncle can keep printing money out of thin air. (That's what the Fed does.) As this goes on and on it means that every dollar we have is becoming watered down. We call it inflation. It is really a hidden tax.
Some time out there in the not too distant future those guys in Washington are going to tell us that YOU are going to have to take less benefits in Social Security and Medicare among many other things. "They can't do that!" Oh yes they can! It either that or you will see your savings disappear right before your eyes called inflation.
Politicians keep promising more "entitlement" programs and these are slowly strangling the country. Many of the European countries are trying to cut back on their give-away programs, but the people vote out the politicians who want to balance budgets until some day the economy will vanish just as the Weimar Republic did in Germany. Everyone goes equally broke.
About 50% of voters don't pay any income tax at all and they don't care. All they know is that some smooth-talking politician is promising them more.
As a voter you have to begin to understand that you cannot have your cake and eat it too or like the Delta pilots you won't have any airplane to fly.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
al@mutualfundstrategy.com; 1-888-345-7870
The United States is losing its industrial capacity quite rapidly.... Read More
We have brain drain issues in Silicon Valley, we have... Read More
How can any human being today, anywhere in this world,... Read More
Fifteen hours is a tremendous barrier. It is the obstacle... Read More
Recently I met a man in a coffee shop, a... Read More
As we increase our populations every new soul will require... Read More
Some call it the "unofficial" or "informal" economy, others call... Read More
1. United States of America (USA)In the United States, legislation... Read More
Today we have a new franchise report from the Federal... Read More
Rule of Thumb for exporting technology. The American People need... Read More
Many in the World Media are quick to judge the... Read More
Originally published in 1958, "The Ugly American" (Lederer & Burdick)... Read More
I'VE ALWAYS ARGUED THAT ECONOMIC ILLITERACY IS VERY COSTLY.This is... Read More
Freedom is in the eyes of the beholder. In Communist... Read More
I'm getting a little tired of being lectured by that... Read More
Most citizens agree that we need the Federal Trade Commission... Read More
America has some monetary issues, which need to be addressed.... Read More
This is no time for the Black community to sue... Read More
This is the third in a short series of four... Read More
MUD ? Much Unnecessary DisclosureThe Federal Trade Commission recently asserted... Read More
Societies have always had a problem of what to do... Read More
I would like to discuss a few issues we have... Read More
Quit paying the DEA to chase marijuana. We could save... Read More
Is Ohio Manufacturing Sector really unable to compete in the... Read More
Well we have certainly been reading a lot about prison... Read More
In his bid for the presidency, John Kerry pronounced a... Read More
You have probably heard of the Sarbaines Oxley Law (SOX)... Read More
The Presidents Before Washington:From the moment that the first Declaration... Read More
What has really changed in the housing market with regards... Read More
The first reaction of economies in transition is a sharp... Read More
With gasoline prices at the pump climbing strongly into the... Read More
Let's put the religious part of the debate for a... Read More
There are many types of fuels besides that gasoline we... Read More
Regarding the issues with the Space Shuttle and the in... Read More
Recently on C-SPAN, there were two gentlemen debating free trade... Read More
This is the beginning of the end for the man... Read More
One of my favourite pieces of music is the Sex... Read More
If recent speeches by US officials on Iran's plans to... Read More
Streamlining Homeland Security with a Free market flair? An idea... Read More
..."history may judge us to be the real bully if,... Read More
In order to win the presidency in America, candidates must... Read More
Long Term Environmental Effect of Plastics, Composites and Other Materials... Read More
After 9-11 insurance rates on Independent Truck Drivers and smaller... Read More
Much of our personal and cultural perspective on the world... Read More
Bosnia-Herzegovina (heretofore "Bosnia") is an artificial polity with four, tangentially... Read More
Possible UAV materials are infinite: Foam, Composite, Balsa Wood, Plastic,... Read More
The other day I was sucker punched, hoodwinked, bamboozled, had... Read More
America has some monetary issues, which need to be addressed.... Read More
Sizing up North Korea is important for a war there.... Read More
Why are we over regulating the franchising industry? What are... Read More
Which companies are most affected by fuel? Who really bears... Read More
The current field of political sciences is dominated by a... Read More
There's a new Michigan state register in the works... Read More
With new environmental technologies and modern efficiency methods in mining... Read More
Fuel costs seem to rank high in surveys of US... Read More
How many legs does a dog have if you call... Read More
The paper industry in the US is hurting. Due to... Read More
Lecture given at the Netherlands Economic Institute (NEI) on 18/4/2001Human... Read More
Many non-profit groups are feeling upset that they are allowed... Read More
The current political efforts aimed at improving the American public... Read More
The cause of America is in a great measure the... Read More
Well, another election has come and gone in the US... Read More
The partisan feuding in the U.S. Senate over federal judicial... Read More
The Flow of Trade is a major consideration of civilizations... Read More
Is it just me or are you concerned that illegal... Read More
The United States has enemies, which call the country the... Read More
Political |