We’re sitting in our favorite café in Paris. On the corner are two security guards trying to look inconspicuous. One speaks into an ear-mounted telephone. The other stares straight ahead. What are they looking for? Who are they meant to guard?
“They’re still guarding Carla,” [Sarkozy’s wife...who lives in the area...] said a bar patron.
Maybe. But we’re always surprised by how much people think they know that ain’t so… Our friend Dylan Grice told us about a study where people were asked a simple question and then asked how sure they were about their answer. Those who were 100% sure were only right 70% of the time.
After a few minutes the undercover cops disappear…
Dear Readers looking for investment advice should know better by now. If you think we know something about investing you’ve mixed us up with someone else. Besides, when it comes to the markets nobody knows anything.
We don’t even believe in investing…not the way most people think of it.
What we do know is that you can’t expect to get something for nothing…not in the world of finance and investment. So you can’t expect to earn a lot from your investments…unless you are lucky, or smart, or the feds rig the system in your favor. Which, of course, is what they’ve done for the last 40 years!
No kidding. In the early ’70s, the feds created a new kind of money. Dollars…with nothing behind them other than the feds themselves. If they wanted, they could destroy the dollar. Or keep it solid. It was entirely up to them.
In the event, they destroyed it slowly. In the early ’70s, we recall buying gasoline for 25 cents a gallon. Now, it was over $3 when we left the US a week ago. It’s lost more than 90% of its value!
But this destruction had consequences that were different for the “rich” than they were for the working classes. Financial assets rose with the inflation of the money supply. The price of labor did not. Stocks went up 13 times. Consumer prices (excluding gasoline) went up about half as much.
No wonder the rich got richer!
And now the same dumbbell economists who encouraged the feds to mess up the monetary system are whining about ‘inequality.’
Here’s Brian Fung kvetching in The Atlantic. He says income equality is not just an economic problem; it’s a matter of life or death. No kidding:
Growing income inequality in the United States has Americans talking about justice and economic fairness, but a new study suggests the burgeoning wealth gap is threatening more than just our pocketbooks. It might be raising our risk for an early death.
In one of the few studies to track the health effects of income inequality over time, one Ohio State University (OSU) researcher has discovered that an increase in inequality leads mortality rates to begin rising after five years. Inequality-linked mortality peaks about two years later, before tapering off five years after that. All told, even a modest increase in American societal inequality more than doubles an average individual’s cumulative risk of death over the next 12 years.
Drawing data from the US National Health Interview Survey for the years 1986 to 2004, the study found that for every 0.01 increase in the Gini coefficient — a standard measure of a country’s economic disparity where 0 represents perfect societal equality and 1 represents maximum inequality — an average person’s cumulative risk of death increased by 112 percent in the next dozen years. Hui Zheng, the OSU sociologist who ran the study, replicated the results using three different measures of inequality across a sample of more than 700,000 Americans aged 30 and older. He then ran the same test on 18- to 25-year-olds, with similar results.
Does inequality itself cause you to die young? If some guy in your town gets filthy rich, will your life expectancy go down? What if some guy gets extremely poor…like Mike Tyson, said to be the poorest man in the world, because he has such a huge debt to the IRS? Will that take years off the lives of the rich?
We don’t know exactly what insight Mr. Fung is discovering. But we are pretty sure that he doesn’t either. Income inequality in itself is not going to shorten anyone’s life…unless he gets depressed about it and blows his brains out.
Even then, we’ll never really know why he did it.
Nobody knows anything. Especially economists.
Bill Bonnerfor The Daily Reckoning
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill's daily reckonings from more than a decade: 1999-2010.
Bill if you get depressed about having too much money, just send some to me.
I have some already but I don’t get depressed about having more than other people. Not at all.
bNonsencical research by so called intelligent people.Another exercise in futility. No matter what the fed or entire mankind do to keep the dollar solid it will only move south. Gold and silver are naturally solid.No one sees gold or silver flying in the wind.Neither of the two is rubbish. Paper is paper.Paper as being representative of gold is something else.
Maybe they’re getting government vouchers to drink MD20/20
for 12 years?
You know we’re in trouble when it cost 2.5 cents to make a penny.
Talk about worthless money!
“Silent killer” — hilarious! Thanks for the laugh Bill!
Besides, demonstrating their ingenuity in building wide-body buses that fly in the air. French are equally adept in terms of creating intangible societal tools and getting them documented. Without the 3 essentials, equality, liberty, fraternity, human life expectancy would be at high risk. That may result in sudden demise without any other visible syptoms of complications.
Bill, I find myself in the rare position of disagreeing with you.
The way income inequality causes life expectancy to go down is: the added stress caused by income inequality leads to increasing hypertension and clogging of the arteries, both of which lead to heart disease. And, of course, heart disease results in heart attacks and death.
States with greater income inequality have lower rates of life expectancy, and the same is true for nations across the world. Multiple studies have confirmed this.
Blowing your brains out is not the only way to die early. Mais c’est plus romantique!
Bill, if I ever get any money I’m going to let you invest it for me.
Thanks to the tireless efforts of the Federal Reserve, currency in circulation is up $72.5 billion in the last year - which equates to $234 for every man, woman and child in America. And after rifling through his wife's purse yielded fruitless results, The Mogambo Guru has launched an all-out investigation to find his share. Read on...
With so much turmoil and political strife throughout the world, it can be difficult to realize how bright the future of technology is. Luckily, Stephen Petranek hasn't lost sight of that. Today, he describes seven important stories that will shape the future... and how a few savvy investors can make a killing in the process. Read on...
The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk. John Goodman explains why this is such a dangerous proposition...
The biotech industry has dominated the market so far this year; and early investors in this sector have practically won the lottery. But with such an incredible run up, could this bull market be nearing exhaustion? Greg Guenthner investigates, and offers some sage advice for investors willing to take a chance. Read on...
Generally speaking, gold miners are bad businesses. They bury perfectly good cash in the ground and tend to issue lots of shares just to stay afloat. So when one comes along that actually turns out to be a good business, it's important to take note. Chris Mayer has found just such a company. Read on...