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Dr. Robin McCutcheon
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No matter what Econ101 teaches us -- my tips for you: Follow the money - you'll always find the right answer. Do your own research - do lots of your own research so you know the truth when it hits you in the face. When the data points you in a particular direction, forget theory, go that direction.
  • Let the Income Distribution Gap Make You Money 0 comments
    Sep 6, 2011 10:07 AM | about stocks: ABX, GG, AUY, IAG, GFI, HMY, PZG, GPL

    Robert Reich just wrote an opinion piece regarding the dreadful, awful, horrible, very bad way that the income distribution has become more unequal since the early 1970s.  It probably just slipped his mind that Nixon took us off the Gold Exchange Standard August 15, 1971. But that is easy to see in this graph.

    It could be that being a Labor Economist, Dr. Reich has never bothered to study monetary policy or how money is created. Or, possibly, when he did study it, he studied under people who agree that debt being money is a good idea, people who promulgated the idea that monopoly ownership of the money supply is in the public’s best interest. The notion being how can the simple common man actually understand money in all its intricacies? The common folk must have someone far more educated to handle such issues. Right?

    So, how do you use this information to make money? Read on.

    Note that inherent in socialism are equal outcomes—it doesn’t matter from where you start as long as everyone else has what you have and if that does not hold then the system is unfair and unequal. People like Dr. Reich know that the best way to get there is via control of the money supply. Note also that the bottom line of capitalism is that there are NO equal outcomes, not of income nor of anything else. Socialism and capitalism are diametrically opposed ideas.

    So, in order for you to believe Dr. Reich and go along with his ideas you have to fundamentally believe that stealing from one group of people (“the rich”) in order to give to another, more deserving group of people (“the poor”) is morally right. In other words, you have to believe in and condone stealing. What’s a poor Middle Class family to do with all this unequal and unfair income distribution?

    What if you don’t believe Dr. Reich? What if you believe that your productive efforts, most often paid to you in the form of money, belongs to you and you alone? What if you come to see that it’s YOU, my reader, from whom Dr. Reich condones the theft. YOU, my reader, are the people from whom Dr. Reich says, “it’s ok for us, the government, to steal from you, because you’ve been far more productive than the deserving poor.” Or, how about this one, “if you are productive, then you must allow the government to take some of your productivity and give to people who are not as productive as you are.” If you believe this lie, you must stop reading now.

    Socialism and stealing from productive people in order to give to non-productive people walk hand in hand. Socialism and central banking are two sides of the same coin because both ideas allow for theft of your productivity. Socialism condones theft from you through the progressive tax system, i.e., the more productive you are the more is taken from you. And central banking condones theft from you by debasing your currency, so that in order for you to have the same purchasing power you must work longer hours.

    How would those graphs Dr. Reich loves so much look if we had still been on a Gold Exchange Standard? There would have been less printing of money for surely the populace would have seen through the lie that printing money means we can share more wealth. Less printing of money would have meant a stronger dollar, which would have insured a higher purchasing power, which means there would have been less of an income distribution gap. And in Dr. Reich’s world a smaller income distribution gap is better.

    Have you discovered the way I’m making profit on this, yet? First realize that all of Europe is struggling with massive over-borrowing. Standard issue monetary policy dictates that governments must tax and spend their way out of their mutual abyss. That means more income redistribution, only this time it’s redistribution from rich countries to poor countries. German people will not like this when it all finally hits them that they are the productive folks who will bail out the over-borrowed, under-productive countries like Greece.

    Second realize that even the Swiss National Bank is now debasing their currency and the Euro is now in full melt-down territory. It’s coming, you must get ready.

    All other currencies that are totally fiat, are totally subjective in value, and will be completely debased. All senior and junior gold miners are now the best buy. Barrick Gold (ABX), Goldcorp (GG), Yamana Gold (AUY), I AM Gold (IAG), Goldfields (GFI), and Harmony Gold (HMY), are good senior miners to invest in, while Paramount Gold and Silver (PZG) and Great Panther Gold and Silver (GPL) are good junior miners. I also like several penny-stock mini-miners, but they are risky and Seeking Alpha doesn’t let me mention them.



    Disclosure: I am long PZG, GPL.
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