1-Oct-10 News -- McDonald's threatens end to health benefits

Discussion of Web Log and Analysis topics from the Generational Dynamics web site.
John
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1-Oct-10 News -- McDonald's threatens end to health benefits

Post by John »

1-Oct-10 News -- McDonald's threatens end to worker health benefits

Congress passes punitive tariff bill directed at China

** 1-Oct-10 News -- McDonald's threatens end to worker health benefits
** http://www.generationaldynamics.com/cgi ... 01#e101001


Contents:
"McDonald's threatens to end health benefits for 30,000 workers"
"Congress passes punitive tariff bill directed at China"
"Additional links"
Iran laying plans for coup in Bahrain
North/South Korea political talks end in failure
Attempted coup in progress in Ecuador
Holland bans burga in deal with anti-Islam Freedom party
10 most overpriced products you should avoid

OLD1953
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Re: 1-Oct-10 News -- McDonald's threatens end to ealth benefits

Post by OLD1953 »

Health care in the US is a mess, and trying to change one part of the system without fixing the other parts will simply make a bigger mess. The AMA and state medical boards (controlled by AMA members, usually) are fairly open about their policies being intended to produce a shortage of medical professionals, and that's hardly something that helps cut costs. It's not by chance that doctors in the US make more money than anywhere else, nobody else has the AMA to contend with.

What's needed is an honest system analysis and a complete overhaul from top to bottom, all the way from licenses and malpractice up to and including determining how medical schools are managed and whether or not medical services are public services or for profit private enterprise - IOW should we follow the public utility model of guaranteed profit with guaranteed reliable services or should private enterprise be given free reign, with the consequent boom/bust cycles typical of business? (Don't try calling ME names, I'm just raising the questions, not offering answers. There is no sin in questions. Though many certainly seem to think so. LOL)

The insurance industry - well, to recite a fairly recent antedote from memory, this happened in Tennessee, about 2001.

The insurers came running to the state insurance board threatening to leave Tennessee without any medical malpractice insurance at all. There would be NO malpractice insurance because they were losing money, terrible number of malpractice suits, blah blah blah. All would pull out on the same day, etc.

This board was composed of some old cynical types so they actually did their job (shock!). They called in the state comptroller and asked him how many suits were filed the previous year. He told them (memory here, but I'm sure it's pretty accurate) about 200. How many won? Less than 100. What were the awards? IIRC, they averaged about 200K per each. So how much were they charging each doctor in the state for medical malpractice insurance? Oh, that averages 80,000$ each.

The board members looked at each other, then they told the insurance companies they'd have to open their books and prove they were actually losing money. The companies refused, on grounds of this being secret information, and left Nashville vowing there would be no malpractice insurance in TN in six months.

Guess what, they did not get their price increase, and TN still has malpractice insurance to this day.

Simple rule, people lie. Especially for money.

The China thing - everything I've read lately claims the US savings rate is up, not zero. Roach needs to either quit living in the past or to provide whatever figures he's using.

OFC, the excess of US bonds being bought by China are responsible for keeping their money low as much as anything else. So it goes.

Iran trying to take over Baharain is ridiculous, but they seem serious about it.

ridgel
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Re: 1-Oct-10 News -- McDonald's threatens end to ealth benefits

Post by ridgel »

Dumbest financial decisions I've seen by far in my lifetime have been made by the Federal Reserve. Talk about price controls! They set the time value of money artificially low by diktat, and then play dumb when the infrastructure and manufacturing sector crumble for lack of capital. It makes anything Nixon did with chicken and steel look like a schoolboy prank by comparison.

As far as overpriced movie popcorn and hotel minibars - no doubt. But I'm willing to bet no one ever went broke and lost their family because of those two. Concentrate on the big expenses and the frequent expenses and the rest falls into line. For working people, buying a bag of prewashed veggies is probably a good deal in terms of time saved and staying healthy. And if a $3 cup of coffee is your thing, it's a heck of a lot cheaper than shrinks and prozac. Know what you're spending, but keep it in perspective.

vincecate
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Re: 1-Oct-10 News -- McDonald's threatens end to ealth benefits

Post by vincecate »

OLD1953 wrote: OFC, the excess of US bonds being bought by China are responsible for keeping their money low as much as anything else.
China has reduced its treasury holdings by about $100 billion over the last year. Now they are using dollars to buy up resources (lots in Africa and Australia). This includes farmland, which John has noted. Anyway, you should talk about China's buying treasuries in the past tense.

http://www.treas.gov/tic/mfh.txt

Note that foreigners seem to be leaving GSE debt, like rats leaving a sinking ship, as they did in 2008:

http://www.zerohedge.com/article/guest- ... l-agencies
http://housingdoom.com/2010/09/24/forei ... r-22-2010/

Hyperinflation seems to start when government deficits get to 40% of spending and after a few years people stop buying their bonds and they have to print money. To me it looks like the US is getting close, like in the next couple years.

http://pair.offshore.ai/38yearcycle/#hyperinflation

John, see how I stay on topic again? :-) My mind is occupied...

John
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Re: 1-Oct-10 News -- McDonald's threatens end to ealth benefits

Post by John »

Dear Vince,
vincecate wrote: > John, see how I stay on topic again? :-) My mind is
> occupied...
Yes, it's a truly amazing and wonderful skill.

As you know, I've been saying that gold has been in a bubble for
several years. At today's prices, even mainstream pundits are
talking about gold being in a bubble. What's your opinion?

John

The Grey Badger
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Re: 1-Oct-10 News -- McDonald's threatens end to ealth benefits

Post by The Grey Badger »

ridgel wrote: (snip)

As far as overpriced movie popcorn and hotel minibars - no doubt. But I'm willing to bet no one ever went broke and lost their family because of those two. Concentrate on the big expenses and the frequent expenses and the rest falls into line. For working people, buying a bag of prewashed veggies is probably a good deal in terms of time saved and staying healthy. And if a $3 cup of coffee is your thing, it's a heck of a lot cheaper than shrinks and prozac. Know what you're spending, but keep it in perspective.
With three of these you're buying something else besides the product. With the precut veggies, as you said, you're buying time. With the coffee shop coffee, you're buying a seat in a social space - may as well point out that it's cheaper to drink your beer at home from a 6-pack than to go to the pub: rather misses the point.

And bottled water makes the best car stash because it doesn't leak. You can fill up a cooler jug, of course, and refill your own water bottle from it, but even so, if you're on the road, you're best off with a 12-pack of those horrible overpriced bottles.

vincecate
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Re: 1-Oct-10 News -- McDonald's threatens end to ealth benefits

Post by vincecate »

John wrote: As you know, I've been saying that gold has been in a bubble for several years. At today's prices, even mainstream pundits are talking about gold being in a bubble. What's your opinion?
You have to look at gold and the dollar as two currencies. The world gets about 1% more gold each year and maybe 6 to 10% more dollars on a typical year. They print a trillion new dollars per year now and 70 or 80 years ago it was around a billion new dollars each year. So dollars are being produced about 1,000 times faster now, but gold is produced only a little faster. So gold is never going back to $20/oz, right?

The real danger now is that people might stop buying US treasuries and then as the huge number of existing bonds come due, the US will print huge numbers of new dollars to cover them (yes, sell bonds to the Fed who prints). Treasuries are paying less than the real inflation rate and probably will keep doing so as inflation goes up. Also, when all of the deficit has to be covered by printing, as they are not able to sell new bonds, that will cause more printing too. But the real shocker is when several trillion short term bonds come due the first year and nobody wants to roll them over. They just want their cash. Printing of dollars will be far faster than it has ever been before. And gold will just get another 1% each year. So the exchange rate between gold and dollars will shift.

In the same way nobody now thinks gold will ever go back down to $20/oz, I think within a few years nobody will expect it to ever go back down below $5,000.

Regression toward the mean does not work when one side is cheating and the other side is honest. Since 1914 the dollar is a dishonest measuring stick. You need to be very careful when using it.

Another way to look at this is that either bonds or gold is a bubble. For a bubble to pop the production of that asset has to increase until the supply exceeds demand and the price goes down. What is easier to ramp up production for, bonds or gold? Companies are turning on their bond printers already and ramping up fast. The treasury is already printing bonds at record speed. Gold is at 1% per year and steady or decreasing. So which will pop first?

When the bond bubble pops people will get cash for their bonds as they come due. So there will be far more dollars created. So the exchange rate between dollars and gold will change such that gold becomes priced even higher.

In a bubble the common man is buying the asset. Today the common man is selling gold jewelry and has never even seen a gold coin, let alone invested in one. So many people are in bonds (including of course the biggest buyer, the Fed) that interest rates are near zero percent. That means bonds are very highly valued. So which looks like a bubble?

While I am ranting, one more thing. When I buy gold jewelry from people almost everyone is happy with the price I offer. When I try to buy silver jewelry almost everyone thinks the price is too cheap and does not sell. My percentage off the spot price is the same for gold and silver. I also think silver is too cheap. Silver is only like 22 times what it was 200 years ago, but there is more than 1,000 times more dollars being printed each year.

One more edit. John, to me you are like brainy superman in how you can understand and explain so many things about the world. But you have this one kryptonite type problem in not really groking how continued printing of paper money makes it worth less all the time. I think shows up in your views of gold, and even a bit on your stock market comments. :-)

OLD1953
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Re: 1-Oct-10 News -- McDonald's threatens end to health benefits

Post by OLD1953 »

Silver. Comstock Lode. 16 to 1. No reply, so I'll amplify.

The traditional ratio of silver to gold went to the devil when the actual material ratio went through the roof while the Comstock Lode was mined out. For silver to return to a 16 to 1 ratio would require a decline in existing silver of large proportions. Given that photography is no longer a major sink (sans xray records, and THEY are rapidly being replaced by CAT scans) as it was, and silver would seem unlikely to ever return to 16 to 1. At 22 to 1, silver is overpriced or gold is cheap - and I'd wager on the former at this time.

geneOwets

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vincecate
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Re: 1-Oct-10 News -- McDonald's threatens end to ealth benefits

Post by vincecate »

vincecate wrote:
John wrote: As you know, I've been saying that gold has been in a bubble for several years. At today's prices, even mainstream pundits are talking about gold being in a bubble. What's your opinion?
Regression toward the mean does not work when one side is cheating and the other side is honest. Since 1914 the dollar is a dishonest measuring stick. You need to be very careful when using it.
John, you never really responded to my above post. You must agree that the dollar of 2010 is not as valuable as the dollar of 1914. Right? Even if the exchange rate to some other paper currencies is the same, the buying power in real commodities is not. Even though there is 200 years of stable prices before 1914 you do not expect current prices to return to far below 1914 levels so that the average comes back down to 1914 levels. Inflation messes with your return to the mean idea. Gold would have to have some negative value for many decades to bring the average back down to 1930 price for gold. Not going to happen. Similar thing will be clear about 1980 price for gold in a few years.

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