|The Gross National Debt|
Sorry, I had to replace "Cliff" with the "Massage" because I couldn't stand to say "fiscal cliff" again (even though I just did.
Stocks just got more expensive today. Ron Paul was saying the senate and congress were pretending to argue about the fiscal cliff. I wondered if they were just going to pass something last minute just to boost stocks as fear subsided. Any spending discussions got moved down the road two months from now, so we get to watch the drama queens act it out again.
AND they probably won't be able to agree on any spending cuts then either, so they will kick the can down the road and maybe spend some more because there is always someone somewhere that needs another hand out.
The 5 minute forecast has done a nice little damage assessment
The “Bush tax cuts” are now permanent — or as permanent as anything is in Washington — except for... Couples who make more than $450,000 will revert to Clinton-era rates (single $400,000).
In addition, their tax rate on dividends and long-term capital gains jumps from 15% to 20%
Itemized deductions and the personal exemption start phasing out on couples’ incomes above $300,000 (single $250,000)
Remarkably, the dreaded alternative minimum tax (AMT) has been patched “permanently”
The estate tax exemption falls from $5.2 million to $5 million; the rate jumps from 35% to 40%.
Well, I don't know about you but I'm certainly not making over $400,000 a year, so continue to build your dividends. Remember you don't have to pay social security on your dividend income and its taxed at a much lower rate than your earned income.
Which this article at the News Sentinel reminds us:
The federal budget and “fiscal cliff” debates focus only on yearly deficits and the accumulated debt, not on unfunded liabilities. And since 100 percent of money from payroll taxes for Medicare and Social Security is spent the same year it comes in, no money is available to pay ahead. The annual accrued expenses for those two programs now stand at $7 trillion.
Oh and If you have over $5 million and you are getting old, you might as well spend it to put you under $5 million mark (please seek a tax professional and not my nutty witticisms).
When will all of this blow up? I wish I could tell you. Some bright folks think we will be going sideways for a while longer, but it's better you prepare now. What's cheap and overlooked? Silver of course!
The consensus has a target for $40 to $45 for some time in 2013. Silver won't pay you a dividend but it will likely make you sleep better at night.
Stay tuned for my new years resolution this week. You may want to give it a go yourself.
Till next post!