Creativity and the power of the American mind!

Our unwavering obsession with Paris Hilton...?

(...or...our higher education system.)

i am happy to listen to some real Classical Liberals talking about economics and politics.

on the Newsweek interview with Greenspan he was asked which presidential candidate would he like to see winning,

i think what he said is all of them aren't good enough,

which is very very sad, all politicians are just employing tricks to get votes,

a truly free government that maintains minimal coercion, is it possible for that to come back?

Where to begin? There is Gary's pedantic, Babbitt-like writing - did he use his speed reading skills to breeze through Greenspan's tome? - coupled with a profound misunderstanding of economics. Even worse, he acts like a financial guru who has all the answers, provided people just listen to him, history, economics and even common sense be damned. Let's start with his warnings about deficits. To be clear: there is nothing wrong with running a deficit (I refer to governments, not private individuals); the real benchmark is the ratio between debt and gross domestic product (GDP). I could simply tell you a number, a very high number, for our national debt, and, divorced from any context or sense of history, the subsequent wow factor would be huge. Our debt is how much?! My goodness! The end is near! Hardly.

The real important variable is economic growth. If the national debt is a certain number, and the rate of growth another (anything in the plus column), the debt's proportional share of GDP declines. Forget the number -- look at the percentages! That's why, despite high deficits during the Eighties, the economy expanded rapidly and the ratio between debt and GDP *declined*. Conversely, President Hoover was faulted for running a deficit during the early stages of the Great Depression, as if this was the cause of the economy's collapse and not high tariffs and a stock market bubble. FDR faulted Hoover for not running a balanced budget, a convenient political tool but one FDR never honored himself. Nor should he have.

Now, if deficits don't really matter why do we have this debate regularly? Because politcians and citizens conflate public debt with private debt. People go bankrupt; governments do not. The only way for a government to go bankrupt is to lose a war and cease to exist (see the Confederate States of America), or make its currency worthless (see Weimar Germany). Yes, the dollar is low; but all other factors - unemployment, interest rates, the stock market, etc. - are fine. They're better than fine. Don't tell Gary, though; he knows - he reads books, you know - that inflation follows a typical pattern. Rubbish.

Ben Stein, who actually is an economist (and a character actor and author of not insignificant skill), recently penned a column in the New York Times about the causes of inflation. His verdict: nobody knows anything. That is, every theory about the causes of inflation - minus extraordinary circumstances like the kind in pre-Hitler Germany - has been disproven by events. Translation: Gary's arguments are not only old; they're wrong.

What does all of this mean to you, the current or future investor. Well, provided you don't run out and buy gold - thanks for the video, Gary; I wrongly thought you could buy bullion at Costco - the best investment is the stock market . . . index funds. Gold is not a good long-term investment. Look at the numbers -- gold is a loser. Over time, nothing - nothing, not real estate, precious metals or any other fad - has beaten the return from stocks. Period.

A (relatively) low individual tax rate. Although the US Income tax is regressive, repressive, repugnant, and restrictive, it is still lower than that of other developed countries.
Woe is us if the next Congress raises taxes substantially.

Left Hook - when I want advice on weight loss - I seek people who've lost weight. When I want advice on investing - I seek the advice from people who have done it successfully. Having said that - what I gave was a cliff-notes version of what Greenspan said in his book, and I learned a lot. Until reading it, I had no idea that the Fed had such little control over permanent interest rate trends.

The stock market is like gambling. The reason I don't put a lot into it is because if I have a stock, all I do is hit "refresh" on the stock quote page all the time, and I get no work done. Index funds are fine, and I don't have any stocks in an index fund because I would look at it all the time.

Yes, I watch the dollar, and I watch gold prices. But the difference is whatever happens, nothing much can be done quickly - and that to me is the key to investing. I invest whatever I don't need.

Having said all of that, I like my track record. I avoided the dot-com bust. I am avoiding the coming real estate crash in the U.S. - and I'm so glad I told some of my friends NOT to invest in U.S. real estate.

"Gambling" in the stock market seems to have worked for Warren Buffett for over 50 years.

referring to lefthook's argument,
how do you define an economy that is growing "fine"?

and how can you say deficits don't matter at all?

a trade deficit = borrowing money from your trading nations,

but yes, if your economy grows fast enough, you can borrow all you want because you have the ability to pay back,

but during the same time, your trading nations are growing much faster than you,

and yet however much you are growing, you have already used it and consumed it (by running a trade deficit)

so you see countries like China and South Korea and India, they are instead lending money out to the US,

so the rewards of their growth, they get to consume it in the future.


so the US is like a high income person who spends more than his pay check, but you say he is fine, because his income is still growing, so he will be able to pay back the cheque,

but other developing countries, yes their wealth is still small, but they are quickly building up assets and absorbing the debt of the high income person,

China is coming out with 200 billion of USD (200 of their 1300) to start an investment fund, so their national reserve will likely grow even faster.



there is nothing wrong with running a trade deficit,

but to keep running it EVERY YEAR is really just to reap today what you sow tomorrow.

and the fact that you are saying national debt doesnt' matter as long as the country is running,
i think you are trying to say that, the government can always print more money to cover the debt?
if that's what you are thinking, then why haven't the government already have printed more money to cover the debt?

doesn't the recent mortgage bonds problem show that EVEN US bonds can have problem?

if US mortgage bonds can have problem, why can US treasury bond also have problems? yeah its backed by the US government all the way, but what can the government do if the developing nations start selling their bonds? (u can see that for example, when the chinese RMB appreciates, they might sell some cos its not as valuable?)

if everyone starts selling their US t-bills and t-bonds they will still go down,

but the government can always print more money can they?

Ooooh Kaaay!...

How about them Yankees...?

Reason you ask. I would guess one factor has to be government stability, over 230+ years.

Freedom of Religion / Bill of Rights

A big "Thank You" to the Masons.

Terry

OK the main reason the U.S. has been a world leader is protection of property rights. If you are in a country where your business or land can be seized, you don't put a whole effort into making entrepreneurial effort, which results in jobs, new products, innovation, etc. The U.S. not only has a great system of protecting both real and intellectual property, but it has a culture and history of this - which spurs innovation.

dang...you sound so conservative. yet you consider yourself a screaming liberal.

And since Paris Hilton has no itellectual property to protect...or any reasonable hope of having any...we're still obsessed with her. 

Alan Greenspan is an insider to the World Central Banking Establishment. It doesn’t surprise me that he would set-off a smoke screen to cover for his buddies that helped generate this mess. Yes, it’s true that imbalances will resolve themselves but who created them? I’m of the opinion that it’s the same leeches that have been milking civilization since recorded history. In ancient times they were called Money Changers, in modern times we call them Central Banks.

We are all riding on the Titanic. Gary believes we’ve struck an Ice Berg and he’s already abandoned ship. He has his Yacht a safe distance away (Canada) watching to see if we just settle down in the water and drown a lot of third class passengers that are closest to the waterline or if we go all the way to the bottom.


Unfortunately, the economies of this world are joined at the hip. Whatever happens here will affect the world economy no matter where you are, just as it did during the Great Depression. These same Central Bankers caused that event. They induced Deflation of the dollar, which is another way of saying there was very little money in circulation. As a result the economy began to die for a lack of currency to conduct commerce.

Our Current Federal Reserve Chairman Ben S. Bernanke candidly admits the Great Depression of the 1930s was caused by the FED. He apologizes for the actions of his predecessors that led to the suffering and death of millions by saying, "We're very sorry...We won't do it again." If you don’t believe me, then you need to read his speech published on the Federal Reserve's website at the link below. Pay attention to the very last paragraph. Here is tacit admission by the FED leadership that they caused the collapse of economies around the world and precipitated the rise of dictators to power, ultimately leading to World War II.

http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/default.htm

Now if our ship sinks to the bottom from this latest fiasco, it will be the equivalent of the collapse of the Roman Empire, which brought about centuries of turmoil. It was called the Dark Ages, as the remaining powers of the Europe struggled for dominance. Interestingly enough, currency debasement in the form of coin clipping and mixing base metals with gold and silver coins (inflation) was a leading cause for the collapse of Rome. All thanks to the Money Changers of that day.

Ultimately, we need to assure that this process doesn’t happen again because some quantity of Gold will not protect you from this kind of resultant anarchy and turmoil. We can’t change things as long as long as a select group of profiteers controls our currency. That responsibility was first granted to Congress by the Constitution. Congress had to answer to the citizens and this kept things in check. In 1913 Congress delegated this authority away to a Private Bank sponsored by the government called the Federal Reserve. Now we have people that do not answer to us, controlling our monetary policy. They have used this power first to cause a boom with inflation and then a bust with deflation. During the bust cycle, which they can see coming, the Fed stockholders prepare to buy out industries as they fall on hard times. Slowly they gain control of all key industries, including major news media.

This Banking / Corporation Combine is far more powerful than the President or Congress. The President can get a BJ in the Oval Office and the markets takes little notice but if the Fed Chairman gets gas after eating too much, the world’s economy quivers. Furthermore, this institution short circuits the political process and controls our politicians with the money and influence they wield. They still let us pretend to have elections but the Bankers know they own both horses in the race. The media makes as much fuss as possible over hot button social issues, in order to fool the public into believing they have a choice and still control the destiny of this nation. Ultimately these issues are meaningless, as are the elections.

If you still don't believe me, then checkout a statement made by Bill Clinton's close friend Robert Reich. He's a Liberal Democrat.

"The dirty little secret is that both houses of Congress are irrelevant. America's domestic policy is now being run by Alan Greenspan and the Federal Reserve and America's foreign policy is now being run by the International Monetary Fund ... when the president decides to go to war, he no longer needs a declaration of war from Congress." Robert Reich, Secretary of Labor under President Bill Clinton, Jan. 7, 1999, USA Today

It’s true. Robert Reich could have gone further and said, Your vote means nothing because Congress means nothing. These are antiquated symbols and facades of the government we learned of in school. They are now policy implementation devices of the Central Banks. Banks who are not answerable to the people.

I think it would be wise of everyone to read Thomas Jefferson’s insightful letter to his Secretary of the Treasury in 1802.

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.”

What Jefferson warned of took place in 1913 as Congress divested itself of the power granted under the Constitution. The Federal Reserve is Unconstitutional, as the Congress was never granted power to divest itself of responsibilities granted to it. Since 1913 we have had two Global Wars, many regional conflicts, a Great Worldwide Depression unlike anything in human history, and the greatest rise of Corporate Empires ever recorded. It is precisely what Jefferson warned of but I don’t think he could have envisioned the magnitude of what has happened.

Gary, I wish you luck my friend. It takes a brave soul to publicly bear their opinions and risk taking criticism from the peanut gallery. However, I do think you would be wise to study some alternative viewpoints of history and not be so willing to accept the explanations of people who generated the problems in the first place. It's easy to say I'm a Republican or Democrat or Liberal or Conservative but ultimately these have little meaning in light of the far bigger issue of who controls currency and credit. These people have so much Gold they could crash the price overnight and buy it all back again with the money they print. There is no safety from these people except the bright light of exposure.

I enjoy being able to come here and read diverse opinions. I am much like you Gary with respect that I tend to be pessimistic about the situation and have the urge to crawl into a safe haven somewhere. But I believe we must attempt to change things by alerting others who the real enemy is. I would recommend reading Bill Still’s book titled “On the Horns of the Beast.” While it has a somewhat Biblical name, it is anything but. It is a history of Central Banking, the Money Changers and their impact throughout recorded human history. Also there are three videos you can find on Google Video or YouTube. “Money as Debt” “From Freedom to Fascism” and “Banking with Hitler.” This last one is a piece done by the History Channel that I could not believe got past their editors but they never aired again. It shows plainly how the Central Bankers financed both sides during WWII for profit.



Charles Campbell
Campbellsfineportaits.com

Well said!

-Erin

Theres no need to worry about it either way.  We are all in this ship together.  If the US economy goes into a recession, no doubt Canada and Mex will catch a fever.  All the world economies are so interconnected. 

Bottom line, invest in what you know, thats where you will do your best.  You can see the trends and make the proper changes.  If you like realestate, then play there.  If you love the tickertape then play the indexes or individual stocks.  If you like to stow away for the winter, buy gold coins.  You will do well in the long run with just alittle bit of common sense and due dilagence.  Its simple as that.

If I remember right, Greenspan is the one who overreacted in the first place, to allow interest rates to go so low.  Now we are paying for it with a real estate bubble. 

I love the parts in the Reagan Diaries where each economist he confers with gives him different data and predictions.  He saw that it was all hawg wash and they were all just modernday palm readers.  Nobody really knows whats gonna happen til its happened. 

We ARE in this together. I'm going to take a hit too. Why do you think I'm writing about it?