Ok, I’ve just got to talk about what I am reading concerning the economy. My disclaimer is that I am not an expert in economics, and have only been indulging in it for the last 8 years or so, with the emphasis in the last 4 years.
About 8 years ago, I bought a course in investing in the stock market that depended on what is called technical trading. It was a reasonably expensive course at the time. I carefully went through the course, put up a $1000 dollars which was all I was willing to try with unless I made money from it, figuring I could recoup at least 50% of it if it didn’t work. I opened an online brokerage account and went about the rather lengthy and time consuming analysis of what to buy according to the stock charts. I bought a small amount of shares in 5 different companies, including one penny stock. Within 30 days, two of them had dropped below the purchase price, way below. I had literally lost $400 of the original $1000. I held onto those 5 stocks for 3 years, watching them steadily erode to the $500 level I had set for myself. In the third year, two of the stocks had come back up somewhat, interestingly; one of them was gold mining operation. I quickly dumped them all for a return of $600 or so minus the brokerage fees. So I ended up over three years losing $400+ of the original $1000. At the same time I gambled the $1000, I was employed with a company that had a 401K plan. I dutifully got into that game and started to track the choices I had with the funds for where to put my meager amount of money. There were about a dozen different funds to choose from. I studied the charts, and tracked the changes, read analyses of the funds and moved money around accordingly, sometimes once a week. We had some guy come to the company and talk about how to invest in the mutual funds offered by the 401K. As usual, he maintained that you must be in for the long haul and not switch funds around, that you would lose money that way. Well, at the end of 4 years of that, I was the only one in the shop that had a modest increase in my 401K funds, the rest of the shop was losing money hand over fist. They all asked me how I did it and I told them that I was constantly moving funds around into different areas according to the returns data I was getting. They asked for examples and I told them exactly what I was doing. Only one guy tried my ideas on it and he saved himself over $3000 loss in one weekend. But, I had such a small amount of money in the fund my returns were also small, but they were positive.
I started, at that time, reading more about how the markets worked and very quickly figured out that the markets are heavily manipulated and the small investor is very lucky to make anything from an independent investment. So, in 2002 I liquidated every one of my paper investments. Made some on the 401K, lost some on stock market. Plus, it took me a year to recover the money taken out by the 401K that was put into federal taxes that I had fully refunded minus the bookkeepers filing fee. I figure I broke even, not counting inflation.
Which brings us to the last couple of years, and particularly the present. I can’t describe the disappointment I hear from people in our area that I have talked to that had depended on 401K’s and IRA’s and stock investments for their retirement. Some of them are looking for work now, any work, to save their house that they bought on mortgage to retire in. They are truly expressing to me the desperation they are feeling since all their income sources are just flat out drying up. For multiple reasons, their really beautiful $300,000 or more place can’t be sold at all, and its evaluation keeps eroding. To top it off, they live way outside the area where they can buy food and supplies and most of them have these gas hog big pickups and SUV’s. The poker table they sat at has not treated them well in the long run. For a number of years, they felt they were winning at the table and felt wealthy. Oh, and by the way, most of them are/were Republican supporters.
Got to say that I am very thankful for the decisions Freeacre and I have made around this issue. We are driving old vehicles, our property is owned free and clear except for taxes and the only debt we have between us is my school loans and there is no way I can make payments on that. We think we have put ourselves in the best position we could with the meager resources we had available for when the shit storm hits.
The point of all this digression is that for years now, trying to get money with paper assets has made a few people actually quite wealthy and a whole bunch that felt wealthy. It appears to me that it was a crap shoot from the very beginning and the players have now been thinned considerably. It was a national casino with the odds stacked against you from the beginning. It has been the largest transfer of wealth to the upper 10% of the population in the recorded history of mankind.
And now, with all that wealth disappearing except for about 5% of the population, the citizens are being asked to pay for the loses for the bad decisions of those that wanted money for doing nothing productive, that is, investing in paper. Unless of course, you want to place paper shuffling in the category of productive output. The really sick part is they are getting it, every damned bit of what they want and the rest of us are stuck with the bill, about 40 trillion dollars worth from the latest estimates I have read on the top end. The lowest estimate I have seen is a total of 5 trillion dollars. A very few of the congress critters we can support. Watch these two videos, excellent.
I am sure that the readers of this blog are reading about the deal with Paulson becoming financial dictator of the
Now the discussion revolves around where this money is going to come from. The government is broke, deep in debt and the tax base is eroding because people aren’t working, and if they are, at lower levels of pay. Bush has largely excluded the taxes from the top income people with the expectation that the worn out trickle down economy actually works. The interest on the national debt is greater than the amount of tax dollars coming in. So, to keep things rolling, the government is borrowing from foreign investors at the rate of 2 billion dollars PER DAY.
Currently, the stock market is going down, precious metals are going up, the dollar is sinking and oil is increasing in price. I expect to see fluctuations in this, but maybe not. And, all of this is going on with the infusion of money to prop everything up by rolling out the printing presses, which will ultimately devalue the dollar even further. Our owners are bending us over while they present royal flushes. .
So where is the money going to come from? It’s called a printing press. So, to pay for all these bailouts, they print money and sell government securities to the overseas investors. Have you heard that they also want to bail out foreign banks that have interests in this country? Talk is circulating about what to do about this situation. More
government oversight and regulation is being bandied about. Cripes, it was the government and the Federal Reserve that caused this mess, can they really cure it without a complete restructuring of the complete financial system? Oh hell yes, let’s just socialize everyone and everything that is in trouble. The big boys just love it when they get the profits when times are good and socialize the losses when times are not so good. Notice how far (to what is called the left) the republicans have moved? We have become an actual economically socialized state, which we have been supposedly fighting against for the last 100 years. Why should we become socialistic? Looks to me that the lack of cheap energy has spurred it on, plus the absolute corruption and greed that permeates our whole society and government. And how did these suckers get into power? We gave it to them every election cycle since before the civil war. We encouraged the great poker game in the economic realm of society. Now the losses are piling up and the game is going to have to fold and the winners get to walk away scott free. Talk about social Darwinism! And by the way, take a look at this information:
http://www.oftwominds.com/blog.html concerning this deal with Paulson.
Am I angry about all of this? Hell yes! Problem is, that means I have to carry around anger about myself too since I participated and voted, and I would also have to be angry at another 300 million or so other people also for doing the same. Appears to me that is not a very productive position to maintain. So what I have left is to admit my stupidity and lack of information and get ready for the consequences of this shit storm. Sure hope you all are doing the same. Aho.