Severance Insurance

Remember the good old times back in the 1970's when inflation was out of control? Do you remember what we were told was the driving force behind it? The cost of oil. And back in those days you were accused of smoking dope if you thought the price of oil would ever get to $50 a barrel...EVER!

I guess "ever" is now synonymous with 30 years, because here we are. 50 bucks a barrel is a joke. Singapore's market closed this morning at over $96 a barrel. And yet nobody is talking about the impact this is going to have on inflation in the US. Since the price of oil is denominated in US dollars, and the value of the dollar against other currencies is weak, other countries aren't going to feel the pain the way we are. So what does that say? It says to me that the cost of US made goods is going to inflate. It says that foreign made goods will be even more competitive in the US than they already are. It says that a recession is just around the corner. It says that more US jobs are going to be lost not to outsourcing but to our inability to compete in a global market. AND NOBODY IS TALKING ABOUT INFLATION!! The only possible reason is that the really smart economists realize the extent of the problem for mortgage lenders and the fact that 2008 is going to put real meaning behind OREO (other real estate owned in the parlance of the banks). Do you suppose that significant deflation in the housing market is what is driving the economists' silence in inflation? Could be.

The proof of things beginning to unravel is what I've written about over the last couple of days. Merrill Lynch and Bank of America thinning their ranks (there's the finance side) and this morning Chrysler (the manufacturing side) drops the bomb that they're going to thin their ranks by 12,000!

It's clear that these job reductions are just the beginning. The way I see it is that the time is now for SEVERANCE INSURANCE. It would benefit the workers by giving them a more secure source of post employment benefits. It would benefit the corporations because it is cheaper than the way they fund severance now.

We all need to get on the bandwagon. These severance insurance guys are on the right track...in my humble opinion.

willy