Changing Times

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The markets continued with their same mode of operation yesterday, by first dropping sharply and then climbing back to erase most of the losses. It’s been the same story as there was every reason for the major indexes to tank; except they didn’t.

Higher interest rates, falling durable-goods orders and even a 5% drop in Shanghai stocks could not keep this market down. As I said yesterday, we’ll have to wait and see for the next directional clue.

Reader Robert sent in this interesting piece written by D. Jones, reflecting on the changing times that are upon us:

Frugal McDougall, A Rhyme For Our Times

by D. Jones

Frugal McDougall worked very hard,
Bought things with cash and not credit cards,
And when it came to the things that he bought,
Things that he needed were all that he sought.

Once he was sure that his bills were all paid,
The money left over was carefully saved.
You see in the future he hoped to retire
And knew very well what that would require.

His neighbors were foolish and laden with greed.
They focused on wants instead of on needs.
They went out to dinner about every night.
When you’re middle class that’s one of your rights.

When they got their paychecks they spent every dime.
Having money left over would have been a crime.
Their credit was pushed to its uppermost limit,
When it came to debt they were very deep in it.

When Frugal McDougall would try to explain
The value of saving they all called him names,
So he wouldn’t bother most of the time.
He said it was something like ‘pearls before swine’

Meanwhile the neighbors got credit card offers,
Promising money to fill up their coffers.
Consumed by their greed they filled out every one,
With barely a thought as to what they had done.

And when the cards came they all ran about
Foolishly spending till they were maxed out.
A pool for the yard, perhaps some new skis.
They spent money like it was growing on trees.

Some even went on a cruise to the Med,
Where they all laid around looking tanned and well fed.
No thought was given to how they would pay,
For surely a bill would be coming their way.

In complete disbelief McDougall looked on.
He knew very well that they had it all wrong.
And the foolish idea that was shared by them all
Was that happiness was now on sale at the mall.

He’d been chastened so often he now bit his lip,
For fear if he didn’t he’d let something slip.
His neighbors would learn of his total disdain
For the way that their money was thrown down the drain.

Instead he would focus on his quiet life,
With his quiet children and his quiet wife.
In their simple way their needs were all met,
And their simple life was quite free of debt.

Then one day his neighbor came home joyously
In a gigantic brand new s. u. v.
Frugal McDougall just stood there and gawked,
Confused and bewildered and totally shocked.

He knew that his neighbor made twelve bucks and hour
And shouldn’t have this kind of purchasing power.
And when asked how he paid for this monstrosity
The neighbor replied, “with my home equity.”

The debt didn’t matter, the man was a dunce,
Whose only concern had been “how much a month.”
The neighborhood pondered what he had just said
And one by one light bulbs came on in their heads.

Then sure enough the very next day,
New cars appeared in every driveway.
McDougall now cautioned that they should take heed,
All this debt served no legitimate need,

Instead they were putting their futures at risk.
The response they delivered was angry and brisk.
Frugal McDougall was called a big fool,
And other mean names that were equally cruel.

“We are all rich,” they boldly declared
As Frugal McDougall stood there and stared.
“Our homes are all worth more than twice what we paid!
The good life is ours and should not be delayed!”

But Frugal McDougall refused to be goaded
And as he expected the debt bomb exploded.
The neighborhood values were starting to fall,
Faster and faster effecting them all.

Then as his neighbor stood looking distressed,
The new s. u. v. was being repossessed.
Soon all around, the neighborhood toys,
The ones that had recently brought so much joy,

Were all repossessed or put up for sale.
The pleasures they brought had grown a bit stale.
Purse strings were tightened as jobs were now lost.
It seems the free money came at a steep cost.

Banks were collapsing as everyone bailed
From upside down houses and lifestyles that failed.
All of the debt that could not be repaid,
Was now wreaking havoc that would not be stayed.

Government bailouts now came on the scene
As political leaders were all very keen
To keep credit flowing and money being spent,
So trillions of dollars were foolishly lent,

In a desperate attempt to keep prices high,
A fact that they won’t even try to deny.
These actions were more than a little perverse,
For adding more debt only made the mess worse.

This of course left them with one thing to do.
They needed more sources of tax revenue,
So small businesses that were already hurting
Were saddled with costly additional burdens.

Many scaled back hoping they could prevail
But quite a few more of them now simply failed.
So many neighbors were now out of work,
They turned on McDougall and called him a jerk!

The papers had all said that he was to blame,
Though none had specifically called him by name.
In a foolish attempt to curry some favor
It seems that they now blamed the problem on savers.

They said “greedy savers are hording their cash
And collectively made the economy crash.”
His penchant for saving was very well known.
Poor McDougall’s cover was thoroughly blown.

“Tax him,” folks cried as they all shook their fists
“And tax him some more if he tries to resist!
He has more money than he’ll ever need,”
They cried in a horrid expression of greed.

Poor Frugal McDougall was truly confused,
Saddened, frustrated and now feeling used.
He’d tried to warn people of what lay ahead,
But they didn’t listen and blamed him instead.

The country can never be restored to health,
As long as we’re exporting all of our wealth.
Closing our factories, exporting our jobs
Turning the people into angry mobs

And all of this spending with no end in sight
Is the most direct cause of our national plight!
How did this happen, where did it begin?
This foolish game’s left us no way to win.

Now the brave politicians all deny fault
As the nations economy grinds to a halt
Is this the end of the U.S. of A?
Will McDougall’s country now fade away?

He doesn’t know and he really can’t tell,
But from where he’s standing it doesn’t look well.

Contact Ulli

Comments 11

  1. Ulli,

    Wow Ulli that was a great Rhyme and it certainly sums up our modern day culture very well. The people all around me just spend and spend, eat out, drink, travel, new vehicles, new land scaping etc. etc. and then complained when house prices dropped and their 401k tanked. I am sure they are hurting, but won't tell anyone hoping the problem will just go away. I believe I am in the Frugal McDougall's camp and I can say I am in much better shape than I would have been otherwise. I retired voluntarily at an early age very comfortably due to being frugal as well as saving and investing wisely and selling all long investments in March of 2000, bought back long in june 2003 and out again in October 2007 and into bank CDs. My friends snickered at me for buying bank CDs until a few months later after the "Crash of 09", then they we no longer snickering, but stated that they wish they had got out of the market and bought CDs too. Lets face it most of us humans think things will make us happy and in most cases we would really be happier with less instead of more when it comes to things other than the necessary things of life.

    Thanks,
    Anon

  3. Ulli
    The words angry mob was mentioned in this this super good rhyme. Well just how much longer will it be before some famous person, maybe a movie star as and example, organizes a mob to protest our government? At the rate we are going it may happen very soon and if it does I would say the protestors will pop up all over the U.S. in hordes of unemployed and concerned citizens. It happens all over the world in other countries so it may happen here too. I believe people will eventually break and will give there lives for the cause of changing our government by kicking those gov. odfficials out of office and get fresh blood in there. Letting all our jobs go overseas is one thing that proves that the officials only care about themselves and getting votes. Well guess what they may all get voted out of office at all levels such as City, State, and U.S. gov. We have to take back our country or we are going to end up being slaves to other countries like India and China. Trying to control the world is another costly problem as these same gov. officials are always starting a war some place and if one comes to an end then they start another some place else and try to justify it, remember the W.M.D. (weapos of mass deception). That is a good example as to how we are lied to about lots of things.

  4. This poem is wonderful and so very very true. If people would have been more frugal all along and listened to wisdom of those like frugal McDougal, this country wouldn't be in the sad shape it is in today.

    I also consider myself frugal yet enjoy the good things in life.

    Also happiness is liking what you have not having what you like.

  5. Ulli,
    In regards to the Rhyme in todays blog. About the only way I can associate "Change" with O'Bama is what will be left in our pockets at the end of his term in office.

    The wise person talking about an angry mob may turn out to be the only way to resolve our political problems. Once an angry mob forms politicians must pay attention because it costs a lot of money to bring out all the police and National Guard to be used for mob control. It would take lots of gov. money to repair all the damage that usually takes place as well.

    Friendly

  6. Ulli,

    That Frugal McDougall rhyme is great, boy can I see my friends and neighbors in this rhyme, they all live like Frugal's neighbors do.

    My real concern is all that wasteful spending that Obama is doing with our money will cause us frugal people a real serious problem in the future paying for Obama's wasteful spending and I thought Bush was a big spender so his spending was poke change compared to this guy. "Cash for Clunkers", really!!!! Now he wants to add more to that program. All that will do is put people in debt buying new cars that they won't be able to pay for as they lose jobs or hours get cut back over and over.

    Maybe he should consider "Cash for Wives" who are big credit card spenders running their credit up to their limits and keeping them there.

    What's next "Cash for Smokers" or "Cash for Fat People" I mean just look at what is happening to our country. Someone needs to do something or we are all going to be slaves, that is for sure.

  7. I'd like to ask anonymous #1 what method he followed to out in 2000 and in 2003 and out 2007 at just the right times.
    Was it some version of trend following. Please share with us your general rules/guidelines that placed you in such a good position.
    tks

  9. Anon,

    Anon with a question. If the link I sent won't open try manually typing http://www.dailywealth.com in the address bar. Once the website comes up type the follow into the Archive Search blank: (The indicator that nobody believes works but does)without the () and look for that article when the search results comes up. Hope this helps.

  10. Happen every 3 generations-66.6yrs
    Economy builds up by 1st 2 but when
    they begin to retire (when 4th arrives) who's left to work?

    Aged and newborn donn't work so we
    have everyone supported by only one
    generation and economy collapses.
    So the ROOT CAUSE of all this is
    a sun-synchronized human race-

    Google "Solar Mortality Theory" and
    realize history just repeats itself
    AGAIN and AGAIN as long as we over-
    replicate like human-lemmings.

    Final Solution is either increase
    DeathRates or decrease BirthRates
    Sorry about that- Roger Carmichael

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