I love this. For those of you who are interested in the economics of today, may I turn you on to Bill Fleckenstein. I have mentioned him before in my blog and thoroughly enjoy his analysis and thoughts.
He often comes up with fun nicknames for issues and concerns. His most recently created term is “Bailout Nation,” what he affectionately calls the
A Little History Lesson
In our recent past, there existed a lovely investment tool called the “Greenspan Put” which was the widely-held belief during Greenspan’s tenure that you could invest in stocks without worry because under any signs of market stress, Big Al would cut rates and flood the system with cheap money to prop up spending, home purchasing, and investment – and hence the stock market. Now we have the “Bernanke Put” where he is cutting rates, flooding the system with money, buying out junk debt from private corporations, AND providing discount lending to NON BANK institutions. As you might have seen in the video from a previous post, Jim Rogers says this is a repeat of the 1970’s – we’ll have huge inflation and rates over 20% again to fix it.
The big problem is that we are becoming a nation of pansies. As Bill Fleckenstein says, “everyone needs a handout.” This just adds to all of the problems. Just to make it personal (oh how I love to do that), are you in the market to buy a house? Are you prudent and have saved up maybe 20-30k so far? Houses are still unaffordable for you right? You know why? Because the government and Fed are working hard to prop up home prices for the fools who overpaid for them 3 years ago. If the government allowed the markets to work, you could be buying a house soon. Thankfully, you may still have a chance because they can’t keep bailing out the boat forever…
Preview of a future post
On a related and unrelated note, I wish there were more immigration allowed for ambitious educated people. It seems we hold back on college educated (often advanced degree) people coming here (that ridiculous 60k limit on HB-1’s) and we want to fast track a million strawberry pickers. Which do you think would have a better chance of making it here? do you know that immigrants who bring work ethic to this country, and who stay here can solve the problems of real estate and the ponzi scheme we call social security? This will be another post topic soon.