Rob Cheng's Blog
Don’t Trust Anyone Over 30

Young people speaking their minds
Getting so much resistance from behind
It’s time we stop look what’s that sound
Everybody look what’s going down

Stephen Stills
For What It’s Worth

When I was young, there was a saying we said, “Don’t trust anyone over 30.” We grew up during a time of protest where the young people united against the draft for the Vietnam war. We also learned how to question authority, and to believe in ourselves and not what everyone was telling us to do.

Here in Brazil, the young people are uniting against the Brazilian government. It has been remarkable and inspiring to see. Millions of people have taken to the streets and it has been done without violence. The Brazilian protests are ironic, because the average life of a Brazilian in the last 10 years has vastly improved. On the other hand, the average life of an American is certainly worse than 10 years ago. That said, I hope that the protests make a difference in Brazil and creates a new government that is less corrupt and more responsive to the basic needs of the people.

When I look at the United States, I am fearful. Perhaps the scariest aspect of American life is the 0% interest rates and cheap money promoted by Alan Greenspan and Ben Bernanke. Zero percent interest rates gives the problems of today priority over the hope of the future. More simply put, our present is more important than the future of our young people. They are robbing our kid’s future to fund a luxurious life style for the ultra wealthy banking elites with the pathetic hope that somehow some of the money will trickle down to the rest of us.

The young people need to become a political movement. Same as in Brazil, they should demand change that will result in a brighter future for them even it places hardship on the older people. It is the truly the only hope for our democracy and the future of the United States.

Federal Reserve Football League

I was talking to a friend of mine about the key monetary problems facing our nation. He sighed and agreed with me but he remarked that the problems were quite complex, and in reality difficult for most people to understand. This is a problem since the US is a democracy, and perhaps the only solution is a better informed electorate.

To that end, I have invented the Federal Reserve Football League. Imagine that the United States is a football team. We compete against all of the other teams in the world and of course the perennial winners such as China, Japan, Europe as well as upcoming teams such as Brazil and Russia.

Different than a football game, the games are played real time and all the time. The scoreboard and the winning teams are determined by unemployment and GDP growth rates. The teams with the lowest unemployment and the highest GDP growth rates win and the others lose.

The problem for anyone that keeps track of these things is that in the last 5 years, the American team is losing. During the recession of 2008, the US team slowed to a grind while the teams of Brazil and China forged ahead.

Just like in football, the press plays a huge role and they applied huge pressure on our coach, Ben Bernanke, to improve the team’s performance NOW. So Ben Bernanke started trading draft picks for veterans. He traded the American team’s first round draft pick for the next 5 years, for a bunch of very high paid albeit older stars. Just like in football and perhaps Dan Snyder and the Washington Redskins, this type of strategy rarely works, and the American team still is not winning vis a vis the competition.

Bernanke is frustrated but he doubles down on his strategy, and he trades away the next 5 years of first round draft picks. Of course, because the draft picks are so far into the future, the stimulus to the team is marginal, and the team still cannot compete well against the new superstars in China and Brazil.

So this is where my analogy ends. Bernanke has forced interest rates to 0% for over 5 years now with marginal results. Just like in football, if you trade away all of your draft picks for players, you are sacrificing the future for the present. That is what Bernanke is doing today. He is discounting the future of our young people and that of the country. It is hard to imagine a football team that has traded away the next 10 years of draft picks but that in essence is what Bernanke has done to our country.

Waiting for the Crash

Every day, I read the morning news
to see if I'm OK
So many people and their views
but I'm waiting for the day

One number's up, the others down
which way will the markets go?
it'll happen in a blink of an eye
only Goldman Sachs will know

I'm waiting for the crash
it'll happen in a flash
my head is spinning
i truly fear
the day i lose my cash

Chairman Ben, Chairman Ben
What you're doing won't last
Cheap Money's a drug
and the  hangover's coming fast

And you Barack, a democrat
with your drones, spies and tanks
it was up to you and only you
to stand up to the banks

we're waiting for the crash
it'll happen in a flash
our heads are spinning
we truly fear
the day we lose our cash

i want to stop this crash
i know i'm not alone
how can we come together
to knock the king from his throne?

yea yea yea, the game is rigged
the smart money's in and we're left out
we got to stop pretending
take to the streets and shout

we're waiting for the crash
it'll happen in a flash
our heads are spinning
we truly fear
the day we lose our cash