Illusion Maker

Economic Double-Dip? Try a Triple

"The transfer"
Bank pay 0% for money.
Moving free cash in to Stocks.
Stocks move up.
Bank Happy.
At the end when rates move back up, ho will hold the bag ?
Not the Banks.

2010 Investing: A Tale of Two Economies

"education is still the best predictor of success,"

I am not so sure.There are to many educated idiot driving unpaid BMW.

Innovation, hard work, some luck and a fully paid used car will make more millionaires than any school will ever do.

Equality is a ridiculous and naive goal. Most politicians talking about equality are really looking for more power. When every one is equal the master is in total control.

The freedom of equal opportunity however needs to be absolutely protected even if we recognize that it can not be fully possible. I may not have a talent for music but I admire people that have received this unequal gift of nature,

At the Olympics in a specific discipline there is only one ho gets a gold medal. Should I stop swimming ?

America attracted ambitious people from all over and the last thing they wanted is equality.

The present equality philosophy is not fair and comes mostly from the academic and Government systems. It is base on a non rational perception of value. Government employees use equality because they have no reference to real valuation. To them, same job or same education equals same pay. Since no one buys there products on a voluntary basis its impossible to place a real valuation on there job.

The disparity of wealth in a real free market economy is not a problem at all its actually a very positive motivation.

The problem with the present deliberate inequalities is very different and has to do with the creation of a plutocracy disguised as a liberal democracy.

The Government and the financial world's pirates diluting wealth,the Crony Capitalism system,the Federal Reserve diluting people wages to hide the irresponsible massive debts, and the Government deresponsabilisation of the individual are the major cause of deliberate inequalities. This is very different from the inequalities of a dynamic constantly changing free economy.

Small business in the US create 75% of jobs. They generally have no and should never have special treatment but he gets all the favors and the billions and why? Ho benefits from ever increasing new bureaucratic regulations ? It's the less or none competitive corporation's the one's that have been downsizing for 20 years, that created nothing other than using Wall Street easy money to buy and eliminate innovative corporations.They often had no internal growth. They expand by acquisition destroying jobs in the process until they eventually destroyed themselves.

That's when the government comes in with even more billions to subsidizes there failures and preserve the past. This is often done with the same over paid incompetent management and corporate princes.

Since the financial crisis, thanks to the government of the people big corporation that failed have gotten even bigger. A little bit more deliberate concentration of wealth.


On Dec 29 11:12 AM American in Paris wrote:

> I think you have been suckered by American myths.
>
> Take all Japanese and American companies and sort them by revenues,
> profits, profit margins. etc.
>
> The striking difference is that the Japanese CEOs always make less
> than American counteparts. The average disparity is not small - it
> is greater than 50%.
>
> You have to be very naive to think that talent and drive are the
> main factors in determining success. In certain fields that is true,
> but in others it is not.
>
> As a simple example, it is well known that graduating from certain
> Ivy Schools that has strong Wall Street connections like Princeton
> are essential for getting the best trading jobs on Wall Street.
>
>
> Yet if you went to another great school, say Stanford or Berkeley
> or Oberlin or Swarthmore, your chances are greatly diminished. <br/>
>
> As Nassim Taleb has pointed, the critical factor in success is often
> luck.
>
> Take Paulson. He had a mediocre hedge fund career before he made
> a huge bet on the housing crisis.
>
> Now everyone thinks he is a genius. But statistically speaking, inferring
> he is a genuis is like basing statistics on a single data point.
>
>
> He may have just been lucky.
>
> Also education is still the best predictor of success, and access
> to high quality education is becoming increasingly limited to a small,
> ultra-affluent class.

Bubbles Abroad Shouldn't Prevent the Fed from Acting

The fed is a money dilution factory with the role of protecting the dollar. That's like a fire men with a pyromania problem.
Bubbles need money to push them up and then failures need money or 0% to survive. Dilution is our cancer. It pays for wars and all the Government extravaganza. Its much easier for unaccountable politician to have a central bank than face the taxpayer with the real bills. That is until the entire economy becomes a gigantic Argentina.

Here is an nice example.
www.lewrockwell.com/na...

Is the Fed Buying Stocks to Reflate the Banks?

This is not such an unlikely scenario.
Where do banks get all the money ?
Where is it going ?
Is this the biggest transfer in human history ?
Save money and get 0% from the banks. Borrow money and pay about the same on loans and more on your cards. Is this interest spread a stimulant or a transfer?
1% rate cause the credit depression. 0% is transferring it from the responsible to the irresponsible.

No one in is right mind lends money at 0%. Banks certainly don't.
When the cost of money is 0% guess where that money is going ?
If you do have some Money, you convert it in to something that does not lose its valuation. If you are a Financial institution you borrow it at 0% and do the same. If you are the Master Printer (The FED) your are the only one that don't need any since you can print it and by Government Bonds to finance such things as stimulus packages. For every dollar printed for the stimulus package we have an equivalent dollar dilution in the economy. That's Houdini's economics. For politicians the added water in the lemonade does increase the lemonade but soon its going to taste a lot more like water.

Why the Stock Market Should Crash

The US government has no choice but to inflate since it can never pay it's debts.Those ho think stocks will stay high beacose of inflation should look at what the market did in the double digit inflation of the 70's.

Private Sector Employment Picture Is Shrinking

In most country's non liberal democracy is presently taking us away from liberty and it as become the enemy of freedom.

Big modern governments absolutely needs the illusion of public approval in order to legitimizes there power. The voting public is told that it is there duty to vote. In some country it is mandatory but, if democracy is not conductive to freedom how can voting be a choice. Freedom should be the goal of democracy but what we have now is that power is the goal of democracy. We are ask to sacrifice and told not to ask what the Government can do for us but what we can do for it. This reverse psychology is now accepted by most.

Why should we be surprise that the public sector is growing out of proportion? Are we asked to choose leaders to protect our freedom and property or to choose leaders that will make choices for us?

If most people have now chosen to save more and be prudent with there money, credit and spending habits why is the government doing the exact opposite. Do we vote for this spending orgy of trillions of our dollars? Is this freedom? Ether we are ignorant or we accept to be managed by irresponsible and unaccountable leaders.

If most people opposed the bail out of GM and Chrysler why is the Government going to do the opposite. We all know GM will not be reorganized as it should and that it will be subsidies in such a way to disguise reality. The fifty billion dollars cost is noting less than a differed tax on all Americans to favor a politically friendly group.

The fifty Billons will not show on the buyers price of is new subsidized car. It will come from taxes. In other words money that he will not be spent on other goods or services. If not purchased it will stop being made and that means more real job losses? That is the part the governments statistics will not show.

Money can only be a claim on things and if not it has absolutely no value. Central bankers are creating an economic mirage to fix what they have caused in the first place.

People that think that the government is “us” because they vote for its leaders are living in the Twilight Zone.Some one said “it isn’t necessary for a politician to fool all the people all of the time but a majority on Election Day is enough.

Illiberal democracy can only lead to governments transferring and gaining more and more powers at the expense of the freedom of its resigned, intimidated or misinformed citizens.

Liberty and free markets made America rich. The last thing we need is a parasitic monster sector protecting us from it.







On May 31 09:38 AM Glen L. wrote:

> There is no mystery here, it's in the nature of government to grow
> and eventually suffocate civilization (another word for the civilian
> noninstutional population) and then, of course, itself. Increasing
> militarism is a secondary symptom, which will hasten the downfall.
>
>
> The process might work a little slower in a democracy, but nevertheless
> it's inevitable. The legislature creates and funds the bureaucracy
> which regulates (i.e., strangles) the private sector and grows and
> enriches itself. See Public Choice theory. Obviously this increases
> employment in the public sector to the detriment of private sector
> strength and size. The trend accelerates as private companies begin
> to outsource jobs in other countries with lower taxes and less regulation.
>
>
> In addition, the creation of thousands of new crimes, which also
> have the underlying purpose of growing the state, inexorably increases
> the size of the institutionalized population. Likewise, the growth
> of the military, itself a giant bureaucracy, sucks more and more
> people into its institutions. This whole cycle of bureaucratic growth
> and gradual destruction of civilization fits the classic definition
> of insanity (repeating the same action over and over and expecting
> different results). Thus, more people to run and fill the mental
> institutions.
>
> This process is so obvious to anyone with powers of observation that
> I find it hard to believe you could be shocked by it. The only mystery
> is how to break the cycle, not just for the U.S. but humanity itself.
> Most people seem to have an innate urge to be ruled and controlled
> by coercive governors, otherwise they would refuse to support this
> eternal confidence game. Being a natural optimist, I do believe that
> someday we'll learn how to live together without the State; the alternative,
> sooner or later, is auto-extinction of our species.

Is It Time to Short Bonds?

Don't confuse the Government with America.


On Nov 24 10:33 AM Mr. Cynical wrote:

> Foolish to short treasuries. Fed has basically said it is going to
> manipulate long term rates by buying treasuries for their balance
> sheet.
>
> Everyone knows the fundamentals of US gov't are horrible right now,
> so this seems like a smart play. Because of this, however, on top
> of the fed buying treasuries, ultimately the gov't will step in and
> disallow shorting treasuries to avoid the same fate as Lehman and
> (almost) Citi (shorted to death).
>
> Good luck with your trade. Hopefully you can sleep at night knowing
> you are betting against America.

Alan Greenspan Loses His Mind

I read Greenspan's book. Conclusion he should have chosen to be a musician.
Greenspan pored gasoline in the fire and it looked good but now there is no more wood to burn.
Like big Governments the Fed major function is to fix what it breaks.

They say they have been fighting inflation but since it's creation the dollar is down about 96%. Inflation is not a disease or a problem it's the consequence of the mismanagement of the money supply period .

For all those years since 1913 If we had changed the word inflation to devaluation perhaps the media would have looked at ho is printing instead so call higher prices.