PROFESSIONAL GUESSERS AND FEARFUL INVESTORS

17 08 2011

Authored by William Robert Barber

As the stock markets of the world kinetically vibrate, setting a pace of newly found extremes for sell-off and buy-in, investors surrender to the bafflement of two offers: The first is to accept the blindfold, and the second is to stare-down the oncoming bullet as it races for the spot just above one’s nose.

Speculators of genuine risks are buying gold futures, coin, and billion by following the golden rule for speculation: Prices rise when buyers significantly outperform sellers — of course the opposite rings just as true.

Remember! The purchase of gold does not add capital to a company’s balance sheet; these treasures will not fund research of discovery or invention. An ‘investment’ in gold is a bet founded on the principle of hoarding.

King Midas regularly counted his gold; but he gained no material benefit from the gold until he made a purchase. Obviously, as soon as Midas transacted a purchase, he not only had less gold but the price of gold as a necessity of market dynamics depreciated. When one sells ones — gold which is a requirement in order to attain a product or service — one does so by a conversion to fiat currency. In other words, eventually one is going to sell gold for legal tender; otherwise, there is no benefit to holding on to gold. If I was a holder of gold I would want to be first in line on the selling side because if I am not in the front, the price of gold will be far less valuable to me standing somewhere in the middle of the sellers pack.

Licensed professionals bandy about their theories and conjecture their forecast. All of these suit-and-tie personalities act as if they were/are the bona fide harbingers of repute, each exuding the confidence of an “I knew my horse would win” bettor; of course this is only after the horse race was over.

It is my belief that genius, like wisdom, and luck are results that can only be accurately measured in arrears. No one knows — one only guesses that one knows.

A hypothesis, a tentative explanation of a phenomenon, is a best guess effort to explain what we do not know for sure. I believe all of these professional guessers are sincere hypothesist striving to analyze and present a reasonable rational commentary on an event that quite possibly could be wholly unreasonable and irrational.

The statist that occupy the White House lament that the Stimulus was too small, not big enough because they miscalculated the enormity of the economic Bush debacle. Their premise of finding the economically viable light and the way has not moved one iota from their insistence that Keynesian economics is the answer to the woeful status of present US economic ills.

In keeping with that belief they also believe that the federal government can directly create private sector jobs. Well, the certainty is that the federal government cannot directly create jobs. Other than covertly enhance or overtly embrace governmental bureaucracy, possibly bedfellow, even more openly the unionization of America, government involvement in private business can only increase the cost of doing business, stymie productivity, and – when coupled with Obama’s resolve on super-regulating enterprise – government can only belay growth.

I have no idea why we need to relearn the simple and palpable over and over again. Capitalism is the most potent of economic methodologies/systems. Currently, the federal government is managed by progressive persons who depend on an ever-increasing manifest for governmental largeness; they depend on the viability of increase taxation as a matter of policy. Factually, liberal progressives could not sustain their raison d’être, their howl in the light of a full moon if government is limited in operational scope. Progressives require a big fat bureaucratically enriched government in order to inhale their brand of oxygen.

This American economy will overcome the Keynesian policy of where-for-naught as it intersects with the Obama administration’s design of social justice and class warfare; it will rise above the ills of the EU malaise, it will, with the aid and assist of the Supreme Court, withstand the costly breach of good sense by rescinding ObamaCare. All is to be rightfully settled in the election of 2012.

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IS COMPROMISE A PRINCIPLE?

23 07 2011

Authored by William Robert Barber

Common folks are now concerned about the nation’s sovereign debt, specifically as such concern applies to the fire-breathing monstrous interest-only service on the outstanding debt. When one couples the penalty of interest with the unsustainable, ever increasing cost of governing, rightfully the focus today is on the prudence of raising the debt ceiling without lowering the cost of governing. Of course, this cost-of-governing question has always been answered by an affirmation of “yes” with a behavior of “no”.

Historically, politicians and the appointed of all color, shape, and size have with uncontested consistency found it easier to print money and trade votes for underfunded services than to address the specific challenge. With equal consistency they have created a top-down strategy that simply results in fiscally impaired programs that knowingly, beforehand, promise more than they can fulfill. With PR fanfare they have created departmental bureaucracies that are addicted to doubling down on stupid. These very same politicians, with no hesitation or concern, bank on the public’s acceptance that its issued fiat currency is non-inflationary. All the while, thoughtlessly, in the unending pursuit of raising capital for today’s expenditure, these elected and appointed leaders have inflamed the probability of inflation when they collateralize multiple tomorrows’ tax revenue. These politicians in league with ‘others’, who perceive benefiting from such policies, are very creative; for instance, in lieu of pledging real assets, these financial genies created the securitization of air. They have spooned into the Social Security Trust Fund by replacing the cash for use by the general fund with Treasury promise to pay notes. The Federal Reserve buys Treasuries from the secondary-market with printed funds. And everyday, Fannie and Freddie borrow more monies from taxpayers to satisfy their operational needs. Does any of this sound like a fiscally sustainable system?

They have done all of this while openly competing with private enterprise. The governments of this nation have legitimized, endorsed, and benefited from the distribution of games of chance, cigarettes, and liquor, and earn at least a third on every gallon of gasoline. Let’s agree that this government of ours is the most aggressively prolific of robber barons. And now they want the right to spend more because they have spent all of 14 trillion.

The current debt limit debate has come down to Obama’s pestering for the next election, the newly elected House members sticking to their promise, and the electorates interpretive of the very ethos of what defines America. It has been said by those in the know that “the debt ceiling, means unknown in the present, will be raised. The crises as described by the media will pass.” Withstanding all of that, this next election is a defining affirmation for our country. If Obama should win this one election, liberal progressivism will be validated; the effect of his victory, at a minimum, disabling the conservative momentum. At a maximum it will push the philosophy into dormancy.

This debt limit debate is aligned with a greater purpose. Obama “the great pretender” is focused on reelection. The main stream media, on this go-around, are not so much endorsing Obama as they are in support of liberal progressivism and against the Republicans. Truthfulness takes a backseat to fear mongering, demagoguery, and whatever it takes to win the election. This time compromise will not satisfy the beast nor the paladin.