Stop watching reality television. Especially themes around fiscal cliffs. The train has left the station and the U.S taxpayers never heard the whistle. The vast majority are still being conned by the elaborate Wrestle-mania in Washington between Hulk Hogan and Macho Man Randy Savage. (My apologies to those who still believe its real.) So let’s stop watching reality t.v. start planning for the new paradigm: Euro-merica.

The Fed and other central banks around the world have doubled their balance sheets in failed attempts for higher economic growth. Brian Westbury, Chief Economist at First Trust, sums this up brilliantly: “Like we have been saying for many months, quantitative easing will simply keep adding to the already enormous excess reserves in the bank system, not deal with the underlying causes of economic weakness, including the growth in government spending, excessive regulation, and expectations of higher future tax rates. It will not add anything to economic growth and, as long as banks are reluctant to lend aggressively, not cause hyperinflation either.”

The evidence about tax rates and revenues is irrefutable. Milton Friedman proved that all government spending is taxation and does not stimulate the economy. After all, shouldn’t Greece have spent their way to prosperity? Economic truths don’t matter when the mandate is to increase the size and scope of Government. Yet, the mandate is couched with class envy using the sales pitch “tax those who can afford to pay a little more”. Herbert Hoover proved this not only doesn’t work, but also makes matters worse. If you worked more in order to make more money and invest your earnings increased your taxes, you probably won’t work harder. Most of people and companies will choose not to. That’s the effect of confiscatory taxation will have on the economy as a whole.

Reading the Tea Leaves
So the squeeze is on. Increasing taxes, regulations and govt spending will hamper economic recovery and handicap real growth in US Equity Real Estate prices.
The continued printing of dollars may give stocks and real estate some upside because all this money has to go somewhere. The Fed will continue to print money, and the result will be inflationary with a weaker dollar and stronger non-dollar asset prices.

I don’t see a long-term bull market based on sound economic policy: However; owning equities, real estate and commodities do offer opportunities for growth as well as an inflation hedge. Scott Grannis has posted an excellent article on his blog about “Equities as an inflation hedge” here:

US Treasury bonds have traditionally been the asset class to own in conservative portfolios because of their safety and stability. That has changed. Treasury bonds are very expensive (i.e. they pay very little interest) and when interest rates move up, these bonds will drop considerably. I’ve been reducing exposure to these bonds and continue to do so. Inflation will be the pin that pops this balloon.

I may be going out on a limb, but corporate bonds, especially high yield bonds may prove to be less risky when interest rates rise. Also, municipal bonds are still a good investment due to the increase in Fed and State tax rates, as long as you stay out of the junk states like California and Illinois.

Fascinating Story that Illustrates the Paradigm Shift in Education
Sebastian Thrun started an on-line class called “Introduction to Artificial Intelligence” while teaching at Stanford. He used the on-line format because enrollment in the physical class at Stanford was only 200 students. 160,000 people signed up for the class from around the world. 23,000 people finished his course. The top 410 exam scores came from on-line students. The first Stanford student came in at No. 411. He resigned his tenure at Stanford and started
From Andy Kessler’s article:
Forbes also has an article on Salman Khan, the 36-year-old founder of Khan Academy. With 10 million students, Khan Academy is the largest school in the world. The site is used by 6 million uniques students each month who have collectively solved more than 2 million problems per day. Interesting statistic: The US spends $1.3 trillion a year on education yet ranks 25th out of the 34 OECD countries in math, 17th in science and 14th in reading. Read more here:

The Quest for The Best Chili Recipe
I love chili and I’ve tried over a dozen recipes. I may have hit gold with the Cooks Illustrated version. Normally, you have to subscribe to get his recipes but I found it on epicurious. You make the chili powder from scratch using dried ancho and arbol chilies. I only found them at Piggly Wiggly.

“Common Sleep Mistakes Can Wreak Havoc on Your Health, and Increase Risk of Migraines and Dementia” by Dr. Mercola.
Having gone the route of failed CPAP therapy, and three surgical procedures, I can tell you that poor sleep wreaks havoc on you. Two minutes reading this article may change your life.

My Boys Hide When I get out My Scissors
For some reason, I like cutting my two boy’s hair. Santa even gave me a pair of real barber scissors this Christmas! If your curious and you sufficiently bribe your kid, check out this website tutorial and give it a try.
A note of caution: Your first few attempts should NOT be during normal operating hours of your regular barber or hair stylist.