October 12, 2009 Spokesman
The October 12, 2009 Kirkland Rotary meeting was called to order by President Jim Feek at 6:37. Greeter was Barb Seaton. The Pledge of Allegiance was lead by Gary Bruner.
The Inspirational Moment was offered by Dr. Ernie Norhead who recounted a rather unsettling story about the younger generation's understanding of biology and the Constitution and how that relatews to the qualifications to be President of the
Bill Woods introduced Terry Cole, ex-neighbor, and ex-Rotarian.
Brian Tucker introduced Jeff Robinson from Microsoft who is interested in Rotary.
President Jim talked about the current embezzlement investigation at the Seattle 4 Club. Perhaps $350K has disappeared over the past few years, impacting the Club's ability to do good works.
Mary-Alyce Burleigh recounted the Club's most recent community service projects, including money given to the Kirkland Boys and Girls Club, the winter coats distribution at John Muir Elementary, and the dinner served at
Brian Tucker talked about his upcoming trip to
Steve Shinstrom talked about Bunco night this Sat at his house. The theme will be baseball. He also talked about his need for Greeters and Scribes.
John Woodbery was in
Dave Aubry announced a possible wine and food tasting trip to Walla Walla 11/13-11/15. He is soliciting folks to see if there is enough interest. Let him know at 425-827-3811 or daaubry@hotmail.com .
Rich Bergdahl invited folks to go to a Rotary Foundation seminar with him this Saturday.
Rachel Knight announced a Club Past Presidents get-together at Joanne Primavera's.
Presdient Jim told another Scandahoovian joke, actually a series of them, accompanied by numerous groans.
Patti Smith introduced our speaker, the distinguished economist, and often-visiting Rotarian, Richard Carlson, Chairman of Spectrum Economics. His talk was entitled "What Bernanke needs to learn from Bernie". He spelled out a number of events that he sees as inevitable in the current economic situation, thereby giving the lie to the statement that if you laid all the world's economists end-to-end, they still wouldn't reach a conclusion.
We are living in unprecedented times.. We are not out of the woods yet. The difference between Bernanke and Bernie Madoff is that Madoff stole billions, Bernanke needs to steal trillions.. There has been an ethical collapse of US financial institutions. The federal government is involved in the world's largest Ponzi scheme.
Between 1990 and 2007, vast quantities of dollars 'sloshed' around the world creating a series of bubbles.
In the 80s - Commercial real estate
In the 90s - tech stocks
In the 00s it was mortgage bonds
Some areas are stabilizing, but the recovery is statistical and no one is really improving. It is based on unsustainable federal budgets.
Mr. Carlson sys that Congressman Barney Frank is largely to blame because he caused huge pressures to be brought to bear on various agencies and institutions to enable lower income folks to buy homes that they really could not afford.
Never trust a bond rating agency. They always say everything is great until the bottom falls out.
Bad financial professional drove out the good financial professionals.
The US dollar will declines severely in a couple of years - it is already starting in the area of commodity inflation. The economic downturn has slowed this trend.
The next shoe to drop will be the commercial real estate market which will take down another series of banks.
Mushrooming health care costs are eating up most gains in peoples' economic status
Medicare costs will soon be increasing at the rate of $150B/year
Medical "reform" will cost $200B/year
When economies start to recover, we will see a spike in energy costs, especially oil. No drilling is allowed in many areas of this country, many oil regions are politically unstable, nuclear power is next to impossible to permit, but there is a big susplus in natural gas which may help some.
Full 'cap & trade' will cost $200B/year
All this money will directly and indirectly come out of consumers' pockets, leaving them with much less to spend. This will impede a recovery in the traditional consumer-driven areas.
After all the campaign rhetoric, most of the Bush tax cuts were extended. The result of all this will be unsustainable budget deficits, as a percent of GDP.
To have any chance of getting out of this box, we will need to have:
- An end to the moral hazard of the Federal guarantees of risk.
-
Continued loans from
- To let the dollar fall.
- To encourage inflation.
- Raise taxes - a carbon tax is probably the best bet.
- Real health care reform that addresses costs - none of the current proposal do much about this issue.
- To cut Medicare and Social Security somehow.
Inflation will hit 2011-2012. Reelection of incumbents will not occur when they have to solve the above issues because it will be painful.
His closing statement - None of Us Will Die of Boredom - Good Luck!
In the question period that followed, Mr. Carlson also advised:
- Because of the dollar-decline, overseas investing must be part of our portfolios.
- Lock in fixed mortgages now at 4-5%.
- The dollar will decline internationally which will help US manufacturers and our exports.
- His BIG fear - that we will follow the Japanese example and crush our economy with debt and failing businesses kept artificially alive.
- Keep real estate, save & invest, get a low rate mortgage, go for it!
Late announcement - Sarah Brooks is joining Scott Rethke as co-Head Duck.
Alice Volpe had the winning ticket and guessed the right number, collecting thwe $30 pot.
President Jim adjourned the meeting at 7:40PM.
Respectfully submitted,
David Aubry, Acting Scribe