George Soros, famous billionaire investor and currency speculator, was being honored as “Globalist of the Year” earlier this week and took the opportunity to describe China’s rising influence, how it’s been accomplished it, and the uncertainty of how it’ll use its new-found power. The most interesting part is how the nation leverages its trade surplus to accumulate wealth to the government.
[Read more...]Soros: China Uses Currency to Transfer Wealth to its Government
November 16, 2010 by Leave a Comment
Plus Ça Change (Plus C’est La Même Chose)
November 9, 2010 by Leave a Comment
This past week provided an excellent example of this old French saying, which translates somewhat inelegantly into English as: “The more things change, the more they stay the same.� The US mid-term elections may have resulted, as expected, in a large victory for the Republicans, who now control the House of Representatives. But notwithstanding some grand headlines in the press, this is highly unlikely to change current US or global economic and financial market trends.
[Read more...]Let Them Eat Losses
July 26, 2010 by Leave a Comment
This had nothing to do with the so-called “Trickle Down� theory. This was “Gush Up.� In Bush/Obama economics, the richest and biggest that had lost billions through bad investments, or were in danger of going bust, had to be rescued. If the Über-Rich weren’t saved, there would be nothing left to trickle down to the population below. By government decree, those taxpayers who had never felt any trickle to begin with, now had to finance the failed financiers.
[Read more...]Corporate CEOs Won’t Invest in America, Why Should You?
July 13, 2010 by Leave a Comment
There is no end of economists, analysts, and reporters filling the air with investment recommendations. Is the stock market oversold? Should we invest for inflation or deflation? And so on.
That is talk. American CEOs are voting with their feet. Since they aren’t investing in the United States, does it make sense for the individual stockholder or bondholder to do so?
[Read more...]Rising Private Sector Leverage
June 11, 2010 by Leave a Comment
What changed over the last century? One hundred years ago government was small, money was hard, and leverage could be found and used, but it was costly in real terms since there was deflation most times.
Then came the Fed: Money was cheap. Although there were slumps, asset values, unlike trees, actually did grow to the sky. In the 19th century you might not be a loser if you waited to buy a house, horse, or commodity.
[Read more...]Forced to Accept Risk
June 11, 2010 by Leave a Comment
Even before the financial crisis of 2008 arose, there were signs that the operation of a centrally managed fi at currency system was creating stress.
Consider the dilemma of retirement. On one hand, many might not have saved much, because throughout life government had stepped in to take care of every need from health care, elder care, child care, tuition, or even to make unaffordable mortgages affordable.
[Read more...]Politicians Meddling in Markets Gets Messy
May 18, 2010 by Leave a Comment
Economists fully expect governments to get hands on with markets, and indeed, some structure is useful. Property rights and rule of law help markets to function more efficiently. With basic order markets are good at discovering prices and getting investments, products, and services where they are needed most.
[Read more...]The Permanent Bailout Bill
April 23, 2010 by Leave a Comment
President Obama is proposing a new bill to establish a permanent bailout fund. The bill proposes that this fund, run by unelected bureaucrats, will have the power to decide if banks and financial companies are in trouble and will have the authority to step in before problems become too bad.
The natural question is why the newly established fund should be any better than all the federal institutions we already have — none of which detected the last crises in time.
[Read more...]US Job Recovery Needs the Help of Angels
April 22, 2010 by Leave a Comment
As we’ve written before, large corporations, especially the kind that have been first in line for bailouts, are not the economy’s main source of new job creation. Instead, start ups and entrepreneurial companies contribute most to adding new jobs in the sectors of the US economy where there are growing markets and emerging opportunities.
[Read more...]
Beware of Government “Extras”
Beware the government that provides “more.” Fear the government that provides “extra.”
“More government” always means more of something, but not always more of something a productive individual desires. More government means more rules and regulations, more agencies to enforce the proliferating rules and regulations, more taxes to pay for the proliferating agencies that enforce the proliferating rules and regulations. Before long, “more government” begins to feel a lot like “less” — less opportunity, less liberty, and certainly less after-tax income.
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