Investing in a "Get Over It" World
Being an obvious hate-monger seeking whom I might rend on this beautiful spring day I was pleased–well, as pleased as my sour, twisted, racist, homophobic, xenophobic, mean-spirited psyche allows–with the following letter to savage. While the puppy worries my sheepskin slipper beneath my desk I shall answer the reader’s questions (real and implied.) He–the puppy–and I like to start our days being destructive.
I used to enjoy W&G when it was about investing. Sadly it seems to have morphed into Fox and Whiskey News. The health care bill gives back to people who need it a tiny bit of our tax dollars. It passed. Please get over it.
Really, I keep wanting to renew the several newsletters I have paid for and used to enjoy but I (sic) every time I start to write a check I ask myself “do I really want to support an organization that hates American government, hates the fed, hates that minorities may actually get something for their taxes?” and put it away.
Please tell me this is just a phase!
Sorry, Writer, political forces have always had profound socioeconomic effects, which means that only a genuine free market in the absence of governmental pressures would allow us to analyze investment possibilities without considering what King John and the Sheriff of Nottingham are doing and whether Richard would be any better if he returned. If you want to reduce investment to sheer statistics and luck, divorced from what goes on in the real world, I suggest you play the slots, buy lottery tickets, or frequent Bingo parlors.
This “phase” will last as long as market forces are skewed by “I won!” and the politics of envy and robbing us, Chiun, and Matsumi to pay Pablo, Abdullah, those who are “entitled” to eat without working, the unions, the Greenies, lawyers, and other voting blocks. This is not racism or prejudice, it is a grasp of budgeting, cause and effect, and how we choose profitable investments.
Gary, does this person really subscribe to any of our newsletters? How could anyone who read Morning Whiskey conclude that we regard ourselves as entertainers or followers of others, that we “hate” the government and the Fed (in the sense the Writer meant that) or that we regard the health “care” bill as intended to give “minority taxpayers” something in return for their tax dollars? I read every word I don’t write published on W&G and during a year of articles and comments on what is wrong with the legislation we have never phrased them in any way other than the deleterious financial effects which will ensue, Constitutional issues, and mention of hardships which will accrue to “ordinary families” and businesses which have to make profits of some sort or cut jobs or go belly up, as all too many have already, including Circuit City, Linens ‘n’ Things, Block Buster, and just a bank or two. Recent disclosures, per regulations, reveal precisely how “little” corporate wealth will be redistributed to the government for the poor dears who don’t know about many ways to get health care for free, including just clogging emergency rooms, citizens or not.
Actions have consequences. If I employed 53 workers at present I would fire at least four of them immediately and decide whether it made more sense to automate or move my operation overseas. The Laws of Thermodynamics do not work precisely in the financial arena. Expect not “an equal and opposite reaction” but an expanded reaction to the massive tax hikes and increase in costs, bureaucracies, and regulations which will cause harm to family budgets, small firms, and even large corporations out of all proportion to the putative good expanded insurance coverage could produce. Those, in turn, will avalanche across the financial landscape resulting in more businesses closing, higher prices, and fewer goods and services purchased, which leads to fewer taxes collected, and higher and more taxes levied. What an odd world when trillions of dollars that must come out of working capital and widespread misery are touted as “giving back a tiny bit of our tax dollars,” even if we will all be covered for sex change operations. It would be interesting to know how much Obamacare will end up costing the Writer, along with the whack coming from Cap and Trade, the Food “Safety” Bill, and the drive towards “amnesty” for tens of millions of illegal aliens–in direct increases, that is, not in the ultimate causation. My personal concern stops well short of tripling my mandatory insurance costs for less adequate care.
The challenge is “to get over it” and return to analyzing business and financial, economic, sociological, resource, and foreign issues in the pragmatic lights of “this is now” and “this is what is coming from the folks who brought us Obamacare,” so I shall try. We can start with what Hank Reardon said, wearily: “We’ll just have to work a little harder.” Okay, a lot harder and smarter.
In order to choose good investments we must attempt to foresee future needs, desires, trends, and actions and the effects of behavior and legislation. Our bets must factor in the probability of inflation, the effects of taxation and proposed new legislation, and what is going on in BRIC, OPEC, and the EU, along with how much further it is “safe” to attempt to back Israel into dangerous corners and topple Netanyahu’s government. Writer, this is a process that deserves one of those warnings, “Closed course, professional driver, do not attempt this at home.” As the wise old gunslinger said to the wannabe, “Go to pitchin’ hay, son. You’ve got the hands for it.”
The goal is to increase our working capital/provide for our old ages in inflation-adjusted terms, to put it very simply, indeed. W&G experts specialize in gold, energy, emerging technologies, and commodities because the first necessity is to lock in current worth by investing in items with intrinsic value, which are also the ones we expect to hold and increase in value. We do not roll the dice casually and hope for the best. One method–which I sure wouldn’t try–is to “just get over it” and go with the political flow. You want investment advice, Writer? Short coal and go long LNG because the big money is behind destroying the coal industry in favor of LNG. Mercury is probably a good long term hold, against the fast-approaching day when it will be forbidden to manufacture or import far superior and safer incandescent light bulbs. That might be a method much to the Writer’s taste, because he appears to understand the politics of economics. Darn those profiteers selling the gullible wheel chairs and prosthetic devices…but consider buying a chair before the big tax hits.
When divorced from the politics of governmental greed and envy there can be excellent reasons for investments such as our own Byron King’s recommendation of uranium to fuel the vast number of nuclear power plants in China and elsewhere, although not, of course, in the USA.
The best courses for the foreseeable future are seeking cover or getting out from under before more of the Statists’ legislation and regulation are implemented, and analyzing which resources will be more in demand and/or in lessening supply. Concern over the growing insolvency of virtually every country on earth and the likelihood of more bubbles bursting in the coming eighteen months and placing additional stresses on other factors of the economy require that we protect our assets from what is, what we know will come to be, what we infer to be probable, and various combinations and permutations of those. Two lengthy, excellent articles I read this week covered the coming restrictions prognosticated to be placed on capital- and even human flight from the USA. A small blurb mentioned legislation being talked up in Congress at present concerning those, and Reality Check weighed in on this issue today. (Yes, Adam, I’m sure!) Most of my life there have been limits on how much physical cash could be taken out of countries. My conclusion is that anyone considering a move to Argentina, Belize, Panama, or a nation ending in -guay should decide one way or the other fairly soon, since there are reasons to suppose that such immigration will be subject to as much as a forty per cent. penalty in times to come. Some potential host nations are considering the possibility that potential immigrants may find their pension funds cease or will be withheld, rendering new citizens unable to support themselves. We are very close to proscriptions against overseas banking accounts.
More and more one factor needing our most scrupulous attention is taxes, particularly with reference to rising costs which will be the inevitable result of Obamacare, Cap and Trade, bailing out states and more bankers, and frantic attempts to deal with the sharp fall of tax revenue which results from raising rates and in part from giveaways to those who are jobless and not paying taxes. (Los Angeles will be out of money on 5 May and asked for a mere ninety million to tide itself over.) Another is the increasing conflict fomented deliberately by the “post-racial” president and his group. There are things which are far better left unsaid, such as referring to anyone who isn’t an Obamamaniac as a fascist, racist, homophobic, mean-spirited, rednecked, Bible-thumping potential terrorist, thereby raising the suspicions and hatreds of a great many groups against those of us who think we’re kind, hard-working, sensible, good Americans living the principles we were taught sixty and seventy years ago.
The author of the letter above expressed himself as politely as can be done when accusing us of being hate-filled, irrational, immature, elitist scum, but the fact remains that he insulted Gary, W&G, and even me directly and deliberately. It is my opinion, formed over many decades, that we just think the Statists are wrong and frequently very funny, but that they genuinely hate us and seek the destruction of the middle class, in particular that portion of it which creates jobs and enjoys fruits formerly reserved to the ruling, priestly, and warrior classes. They do it for a variety of reasons, but they all work together towards that common goal. The current legislation being pushed has nothing to do with bettering the lot of “the little people” or saving an “endangered” planet. All of it is concerned with increasing the scope and power of government at the cost of intellectual, economic, and uniquely American ideas of freedom. Wry laughter; I suppose that is sour grapes; “it’s immoral, it’s illegal, and I ain’t gettin’ any.”
“Please get over it.” One might as easily expect results from talking to Nancy Pelosi or attempting to explain corporate income tax to a grapefruit as to show this writer why it is irrational to endeavor to “get over it.” Wipe it out of our minds, do not consider the consequences, accept that we have no power to stop the destruction of our nation and a way of life that lead to increasing prosperity for all who worked for a hundred and seventy-five years? Discard our principles and stop being poor sports?`
The ways of the market are ineluctable, Writer, and the reactions of humans predictable. The “compassion” of Roosevelt, Marshall, LBJ, and Obama cost more than any nation can pay, something Cyrus of Persia demonstrated a couple of thousand years ago and King Saud is learning. A very expensive ruling class and bread and circuses plus fiat currency are always a recipe for disaster. The mortgage the House ran up is so far under water it cannot be paid off, period. Ours is the story of Detroit, writ large. During its heyday Detroit was the fourth largest city in the USA, the pride of American manufacturing. Today the population is 400,000 Hispanics, 300,000 Muslims, and a couple of hundred thousand who are also on the dole or running Mom & Pop stores. There is not one single chain grocery store left, and even WalMart has given up, there. Those who created jobs and had jobs left, driven away by unbearable rates of taxation and over-regulation and rising crime. The streets belong to gangs while City Hall yaps for higher taxes and demands even more aid from the state Capitol and the Feds. Sorry; they’re tapped out, too. Pampered union workers discovered that running a fork lift doesn’t pay $85K in the real world but commands little more than minimum wage elsewhere.
The best–for at least the short term–job in America isn’t being a doctor or a lawyer; it is any sort of government position. Higher wages, much better benefits, and great job security…for perhaps another five years.
The facts are all too clear. We aren’t going to get over this “bump in the road.” Those who can will relocate in Latin America or Greek islands, and some of us will continue our efforts to become as self-sufficient as possible. Those with great fortunes and/or political clout are making similar preparations. The bulk of the population is in for times that will make 2010 seem like “the good old days.”
If there is Internet and you can pay your enormous power, telephone, tax, grocery, gasoline, and server bills Christmas of 2012, Writer, tell us then how successful you and the country are in your national socialistic paradise. I will reply, “Get over it.”
April 8, 2010