Money – Page 4 – Politics and Religion

Debt slaves

President Trump was on Facebook this morning touting the “record stock market”. Its all a house of cards of course. Business in this country is so fake it makes me sick. For some reason we have a country full of people that think you can have a vibrant economy built on service. Banking, insurance, retail, software… hardly. On top of that, they are so poorly run we have to subsidize them in various ways.

It wasn’t clear whether the Fed is pumping $72 billion a week or a month into the stock market. Between that and the 0% interest money we’ve been subsidizing them with the last 20 years. We had to do that after they crashed the economy with the dot com bubble during 2001-2003. Then we had to keep the border open to supply them with cheap labor.

There’s probably not a more incompetent collection of crooks on the planet. ‘The gang that couldn’t shoot straight’. Business couldn’t stand on their own 2 feet to save their lives. Labor has had to survive onslaught after onslaught of off shoring, flooding with refugees and flooding with Mexicans. You’re so full of it Trump its coming out your ears. Time after time after time those MFs drive a business into the ground, they’re handed a Golden Parachute and the employee is handed an unemployment slip right before Christmas.

The most obvious ripoff of America is in executive compensation. Whereas labor has risen roughly 10x since 1955 ($4K a year to $40K a year, the rate of inflation) CEO salaries are 100x (10 times the rate of inflation). $150K annual in 1955 to $13 million annual in 2019. That’s why they had to offshore production and quit paying dividends to shareholders: They are in effect stealing from the company. The business motto used to be make the company rich, now its make themselves rich. Whereas CEO to line worker ratio used to be 30x, its now 300x.

Swimming with sharks

Still getting ripped off. You go through life and you think you’ve learned all their sneaky tricks, and there’s no way they’re going to get you this time! And they do. T Rowe Price PRHSX Health Science Fund is an interesting example. On Friday the 13th the share price was $84 and change. By Monday it had dropped 5% to $80. What happened? Was the market experiencing a decline? No its been going up .23% everyday for the past week. Well that’s weird, the rising tide is lifting all boats but yours?

Monday just happened to be the day the fund was paying long term and short term capital gains for the year. A huge event for your mutual fund. I wanted to get rid of the fund, but not until I got that year end payout. So $84 dollars a share, the 52 week high, everything’s looking good to get the payout and sell, then it tanks. 5%. I assume at the higher share price the fund would have had to payout more in gains. At the lower price they save 5%. They’re going to screw you, the only question is how.

T Rowe Price and American Century are part of that rare breed of fund families that can lose money during a period of all-time record breaking highs.

What changed Alan?

“The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”

Alan ‘Big Al’ Greenspan

What changed Alan? You thought that and said that in 1968, what changed in the intervening 50 years? You’d never say that today, did truth change? Did gold change? Did you change?

It never ends

Bjorklund, John F.; Bjorklund-79-05-05.JPG; Chicago, Illinois, PC #14 leaving Union Station for Detroit, MI; 1971-04-11; Still Image; 35mm Color Slide; 35 mm; Center for Railroad Photography and Art; Bjorklund-79-05-05.JPG; © 2016, Center for Railroad Photography and Art

[Penn Central Railroad] “Its bankruptcy in 1970 shocked the financial world.” Yeah? How do you figure that Benjamin Graham? I’m nearing the end of The Intelligent Investor by Benny boy there and all I come away with is contempt for American business. He himself describes how Penn hadn’t paid income taxes for 8 years (not having income is a bad thing). He talked about the earnings per share being created out of thin air. That when they bankrupted in 1970 the last legitimate bond had been issued in 1968.

And “the financial world was shocked”? Oh come now. Shareholders were, but nobody on the inside was shocked. They knew. Its all part of the game. Our bought and paid for government came to the rescue in 1976 with this bastard creation known as ‘Conrail’ (Consolidated Rail Corporation), a government funded holding company. Graham couldn’t even be honest there, its a taxpayer funded boondoggle. And the people they bailed out were the owners, not the stockholders.

The shenanigans that have gone on with railroads in this country are criminal. All I know are the crudest of basic concepts, not the finer points of their skullduggery. The way they brought over slave labor from China to build the transcontinental so the barons wouldn’t have to pay real wages. The land taking for nothing. The bribes to insure the railroad went through this town and not the other. The taxpayer funded improvements to the lines. Its just sickening.

And then! When all that wasn’t enough and they drove their monopoly into the ground through mismanagement, the taxpayers bailed them out 1 more time through Conrail! It just never ends.

The Great Divide

That picture for me is the best representation of what I call “the great divide”. The rise of Him (Trump) has caused much consternation in many areas. Sports, Hollywood, families, even within the Republican Party! On the right side of the picture is Trumper Joe Kernen. On the left is Andrew Someone and Becky Whoever. Maybe in the previous groups I listed they are not known to be great thinkers, but business people are supposed to be clear eyed, unemotional thinkers.

Yet Becky and Andrew see the world completely differently from Joe. It all comes down to tariffs. Americans have been conditioned to shriek in horror and drawback at the mere mention of tariffs! When in actuality tariffs have not caused the world as we know it to end. The predicted price spikes just aren’t there. This is in just 3 years. Imagine how obvious it will be if Trump serves another 5? The majority prefers to spout meaningless clichés and have them stand for definitive argument.

They don’t like being challenged by real world testing. I think their business world view on tariffs as bad, coincides perfectly with their political position as liberals. Emotion based. Liberalism is not fact based. An example is how socialism has never worked as advertised anywhere in the world! Yet they are forever trying to make it so! In the same way leaving your markets wide open while your competitors erect tariff barriers, has never led to anything but economic ruin.

When properly applied, tariffs have never not worked.

History is rife with examples of improper tariffs. Farm commodities are a prime example. Sugar tariffs being one of the worst. Congress was simply placating sugar growers 100 years ago when they did it. There was no other reason to apply tariffs than growers wanted to jack up prices. That’s not a legitimate reason. Ditto for oranges, tomatoes, cotton or a host of other commodities. China, India and Brazil are the 3 large, highly tariffed nations. They are exactly the right reason to have equality in tariffs.

He is stealing from the shareholders

CNBC hasn’t been on my TV for months, close to a year. I am quickly remembering why. They are too political. They are too elitist. And they worship at the Altar of Buffet. God that man is despicable. A good CEO is interested in making the shareholders rich, a benefit of that is making himself rich. Warren Buffet has made himself rich. Every year he flits in and out of the Richest Man in America spot. What does that tell you? Berkshire Hathaway doesn’t pay dividends. Except to Buffet. Get a clue.

Say Buffet is worth around $450 billion. What if he had been satisfied with around $50 billion net worth? What if that $400 billion had been plowed back into shareholder dividends? Can you even begin to imagine what that would have done to the price of shares? The idea of getting truly phenomenal returns? Berkshire Hathaway shares would have been in the stratosphere! He actually would have ended up richer if he’d done what was right.

Seeing your financial future

Many people walked into the global financial crash of 2008 with way too much exposure to the stock market considering their proximity to retirement. I would like nothing better than to punch in the nose those “financial advisors” and union leaders who do not do a better job of advising their people. This stuff is so basic. “Buy low, sell high”, and do not get within 5 years of retirement with the same exposure you had when you were 10, 15 and 20 years out.

What brought this to mind was the market (the Dow Jones Industrial Average and the Standard and Poor’s 500) being at all time record highs. You can find all kinds of historical data that reinforces why a wise person notes times like these. Stats like 50% of the gains in the market occurred on just 33 days (rough example). What they’re trying to show you is that no one knows when the big gains are coming.

Its a matter of wait, wait, wait, wait, boom! Now that we have a 100 year track record to look back on, you can spot certain trends. The 1980’s and 1990’s were probably the biggest boom period stocks have ever seen. Yet people were still caught by the crash of 2000. There should have been some serious profit taking during that 20 year boom. Conversely, the next biggest 2 decade period was the 1920’s and 1930’s. Part of that period was during the “Great Depression”, when stocks were supposed to be “bad”. Ha.

The people who engineered the crash knew exactly what they were doing. In the late 1920’s when everyone was buying high, they stayed out. Waiting for the period after the crash, when everyone else was afraid to buy low. There’s a true story of a secretary who eventually bought a Washington luxury hotel, because after the crash of 1929, she started buying stocks like crazy! (Sylvia Bloom)

Doing the opposite of what the majority of people are doing will rarely harm you when it comes to money. That’s because the people in the know are counting on the “herd effect” in order to fleece the flock. They’re sharks, we’re not. If you understand that you can benefit. Not as well as them, clearly, but you can still benefit. There’s going to be a time to plow money into the market, this ain’t that time.

2019 is coming off a 23% gain. Only 27 times in the past 100 years has the market earned more than 20% in a year. Only 21 times has it earned more than 10%. Now is not the time to buy. The DOW is at 28,100. The S&P 500 is at 3,140. Now this spring or this summer, if they succeed in bringing on a recession to get rid of Trump, that will be the time to buy. When the DOW is at 23,000 and the S&P is around 2,600.

Gold is up $2.50 ($12 to $14.50) in just 14 months. Its okay to be dollar cost averaging into gold, but not to be buying a single big position in it. But if you are within 1 – 3 years of retirement, it is definitely a good time to be dollar cost averaging out of the market, and into something like gold. As soon as the Fed quits pumping trillions into the market, things are going to bottom out. Save your money, wait.

Experts put the day of the Stock Market Crash of 1929 as October 29. The day to buy was October 30th.