US Market Consistently Looking For the 'Easy Way Out'

What a week, huh? I'll bet you wish every week was just like last week. Be careful what you wish for, America.

Last week, the S & P 500 returned 2.8%, thanks mostly to the proactive Fed rate cut of 50 basis points. Do you realize at that pace, you could turn $10,000 into ONE MILLION in just 167 weeks (3 years and 3 months)? That's right, baby (check the math). That's why you stay in the market. That's why you vote republican. Swimmin' pools, movie stars, you get the picture.

In other news, our beloved US Dollar fell 4.1% in terms of gold, thanks mostly to the proactive Fed rate cut of 50 basis points. Do you realize at that pace, a dollar will be worth less than a penny in just 111 weeks (2 years and 2 months)? Brother, can you spare a dime?

Sure you can, you'll have $214,000 by then. Wait a minute, if the dollar is worth one one-hundredth what it used to be that means, in terms of purchasing power, you'll only have (move the decimal two places) $2,140. When you actually become a "millionaire", your nest egg will be worth $926 (adjusted for inflation).

You'll still be much better off than someone with an old fashion savings account. If every week was as good as last week, someone with $100,000 wouldn't even have $100 buying power. Holy moral hazard, Batman!

I know, I know, we are a lot more comfortable thinking, "gold is up," but gold didn't change last week, the value of our currency did. The example above is what could happen if somebody doesn't break out a calculator, and fast.

So why worry about "a little weakness" in the dollar? America is all about growth, well growing deficits, to be specific. And nothing cures a debt problem like monetary collapse. Alarmist? Maybe, but the dollar did even worse last week in terms of oil (4.6%) and silver (7.4%). I would have used those numbers to illustrate my example if I were really trying to scare you. Crunch the numbers for yourself.

I fear currency collapse far more than some bearded freak hiding in a cave. Defending the currency is defending the nation, and failure to do so is the ultimate in cowardice, worse than any tax ever imagined. It is theft by deception. Giga-larcency, if you will. What would Charlton Heston say?

Aaaargh! Where's my Prozac?

Feeling good about doing bad

I stole this heading from the tile of an article that appeared on the last page of TIME magazine about 15 years ago. I am truly sorry that I can not name the author. That piece, entitled "Feeling good about doing bad", was about math tests administered to young adults around the world. Kids from the United States scored the lowest on the test, yet had the highest percentage positive response to the statement, "I am good at math." Korean children had the lowest percentage of positive response, yet scored the highest on the actual test. That little article struck such a big chord with me. Self-esteem begets arrogance, which begets negligence, and doubt can beget diligence, which produces excellence. We are truly a complacent nation, always looking for the easy way out. Japan and China are sending probes to the moon, while we yawn and say, "been there, done that, so long ago we forget how we did it." Sad. The last US astronaut walked on the moon December 14, 1972. less than three months later the Bretton Woods gold standard was abandoned. Maybe we should have just rolled the credits then.

I hope my calculations are wrong (I am US-educated), but maybe someone should check just in case. I hear they take math seriously in China…..