Saturday, October 25, 2008

My plan for the future




Recently I have been living and working in Japan. I recently separated from the US Navy and decided to stay in the same career field that I was in the Navy. This has proven to be quiet easy, as jobs in the IT field are easy to come by with the right skills and experience. Everything has been going pretty well financially speaking, but as for job satisfaction, it is no longer there. I have come to the realization that I believe it is time to move on and into another career field. I was thinking, as funny and stupid as this might seem, given the current economic situation, to get into the financial industry. This would require me to go to college. The problem here is that I am pretty old. After high school, I gladly gave the country 9 years of my life. It was the best decision that I had ever made. It allowed me to mature, gain real life experience in one of the fastest growing career fields, meet my wife, make friendships that will last for ever, explore the world out side of plainville USA, and know what it was like to sacrifice for others. That was a great 9 years. I served onboard an Aircraft carrier, did a stint in South Korea, and 2 tours in Japan. After separating it was easy to find a job. Unfortunately, I believe that I have become burned out with dealing with the every day operations of an IT operations center. Not to mention, this career field has a salary ceiling that is hard to reach. So, I believe I will head back to my home town in a year or so and go to the University there. It will be a little difficult due to having a family now. But they are supportive of my ideas even if they haven't always been the correct decisions. One good thing is, the GI Bill will be revamped soon, so it should not be too difficult to survive on a 1 part time income and 1 full time. I am just curious if the Financial industry is the correct way to go. Investment banking has been taking a good spanking recently but, history shows that this will not last for ever. I believe that behind doctors, lawyers, professional athletes, celebrities, and politicians, these group of people have the highest paid individuals
in the country. Maybe I am wrong, but I have always had the curiosity to learn more about the stock markets, banking, and anything to do with money. It will take a lot of sacrifice but I believe I could do a pretty good job. But then again, this is just an idea. The country could go bankrupt???? I will take a year or so and pay off the debt that I have, while following the news. If anyone has any experience with this field, I would love to hear.

The reason.....

Good evening (or insert what time of day it is at the moment) my friends...... I hate that phrase. I have heard it often these days. It usually comes out of the mouths of politicians who have lost all touch with what it is like to be a normal citizen. These guys sit in office and argue over who has a better way of thinking all day long. They say what ever it takes to get them elected to the office and then once they are there, they forget almost everything they said. How many times have we heard "I will not raise taxes", "I will fix the budget", or "I will fix the health care system" ?? Daddy Bush's slogan was "No new taxes". Wouldn't you know it, after being elected, he raised taxes. Then we come to the budget. THE DEFICIT IS OVER A TEN TRILLION DOLLARS!!!!!! (as of 25 OCT 10,531,204,422,183 Do you know how much that is?? As of July 2007, the estimated population of the United States was 301,139,947. Now some simple math..... 10,531,204,422,183 divided by 301,139,947 = almost 35,000. So that means we each owe about 35 thousand dollars right now. Now they say we really owe this money to ourselves. Really its to the financial elite who have the money to lend and foreign countries. A quarter of this is owed to foriegn countries. We owe Japan 593 billion dollars, followed by China at 518 billion dollars. Sound a little scary? Well dont get too worried, we will never actually go broke and we have never really been out of debt since the start of this country. But what about Social Security, Medicare, and Medicade? They are growing considerably faster than the economy. It is estimated that sometime between 2030 and 2040, spending for these programs will exceed tax revenue. All other spending (defense, homeland security, law enforcement, education, etc) will require borrowing. This situation would be catastrophic. We would have to increase our dependence on foreign sources for financing. What does that mean?? Well, say we borrow money from country "A". 5 years or so later we still owe them alot of money. They start acting up but we can not do anything because they are funding us.
We will have to eventually choose what we will need to do. Bankruptcy, raising taxes, or cutting payouts. Serious huh?


So that leads to "I will not raise taxes". I will say it like my father says. "I do not care to pay taxes. Raise them if you want. Just make sure that I make enough money to pay them and survive." Right now there are 2 candidates running for president with differing views on a tax plan. Or so they say..... I will not get into details here, but, i can tell you that taxes will go up one way or the other. The question is just on which class of people? The republican point of view is called the trickle down effect. Cut taxes on the highly paid will lead to more jobs, etc, etc. Now the democrat view is the bottom up effect. Cut taxes on the lower class and raise on higher class. Both ways have good intentions im sure but really does it matter? If you raise taxes on the upper class the argument goes, then companies will start laying off people causing unemployment to rise. If you cut taxes on the upper class they will just pocket all the savings. Example: Oil companies. This year while we all felt the pain at the pump and still do, Exxon Mobil and the rest of their pals fattened their pockets and went to the bank. They had tax breaks and did it help any of the rest of us???? And do not forget about Wall Street. What happened there? AIG is a good example. This company tanks and asks the government for help. Government helps and not 2 weeks later all of there top brass are out partying like they just hit the lottery at some fancy resort. I do not think that system works out very well.

Back to Oil. Now this is a topic that I have a very short fuse for. It gets me all worked up inside thinking about this. Oil jumped so high this summer it was pathetic. For a while people where asking why?? why??? why???? Everyone had an assumption. The prices started falling and now no one is thinking about why they went so high in the first place. You do not hear anything about that in the news or anywhere. It is like they are trying to forget. I have an idea. Not so sure but here goes. This is what I think happened. Back before the sub prime collapse, there where some smart hedge fund managers. They had this idea that this real estate thing is not going to last. Before the collapse they started moving their money into oil commodities. It was ok at first. Then the sub prime loan collapse happened. Now, all these other fund managers saw what these other guys where doing and started doing the same thing. Can you really blame them. They where losing lots of money on the sub prime loans so why not invest in something stable. What they did not know is that by doing this in mass it would drive the prices of oil up artificially. They say supply and demand is what raises the price of oil. Im convinced otherwise, or atleast for now. We will see in a few weeks. The countries of OPEC had started to like the higher prices. During the summer when prices where astronomically high, (I will call it the oil crisis) all they could say when asked why prices where so high is, supply and demand. They raised supply to try to convince the rest of the world that they cared and where doing what they could. Now that the prices are tanking, they are not happy. Case in point, Iran. They said "the days of cheap oil is over!" Cheap oil? It has only been a month at most. When asked how high the price should be they said "as high as possible". They then went on to say they should cut production to stabilize prices. I hope this does not work and the prices continues to fall.
I have a theory of why the prices are going down. When the market crashed, all these hedge funds where heavily invested in oil because it was seen as safer. Now they do not see anything as being safe except for the US Dollar. So now they are moving their money into bonds and treasury notes. This of course has hurt the strength of the dollar around the world but it has brought the price of oil down dramatically. Now to fix the strength of the dollar the FED would have to raise interest rates. If they raised interest rates, it would hurt the still recovering banks and mortgage companies. This would in turn send us back in a vicious cycle where no one would be able to get a loan, Oil prices would raise again (because the investors would go back to a commodity because its cheaper right now) and we would start all over again from the beginning. Thats just my theory. Not sure if its right or not but hey its how I feel.

In closing, I would like to say sorry if I offended anyone. I try not too but sometimes not everyone likes to hear what I think. If you have anything you are sick and tired of, please share. Thank you for reading. There will be more to follow I am sure. These are some difficult times and I do not believe they will go away anytime soon.