This latest Rasmussen poll is fascinating and may very well set the (way too early) stage for an election that will be monumentally important to investors.   

An excerpt:

Pit maverick Republican Congressman Ron Paul against President Obama in a hypothetical 2012 match-up, and the race is – virtually dead even.

A new Rasmussen Reports national telephone survey of likely voters finds Obama with 42% support and Paul with 41% of the vote.  Eleven percent (11%) prefer some other candidate, and six percent (6%)  are undecided.

Ask the Political Class, though, and it’s a blowout.  While 58% of Mainstream voters favor Paul, 95% of the Political Class vote for Obama.

Visit us at Manarin.com.

This 1934 cartoon was published by the Chicago Tribune during the FDR administration to  point out that steadily expanding government and a nationalized economy will destroy economic growth.

This video shows you the facts and fallacies surrounding commonly used political terms and types of government.  You must watch this to understand your future.  History does repeat.

Until more people come to a more realistic, fact-based understanding of the government and the economy, little hope exists of tearing away from their quasi-religious attachment to a government they view with misplaced reverence and unrealistic hopes.  Lacking a true religious faith yet craving one, many Americans have turned to the state as a substitute god, endowed with the divine omnipotence required to shower the public with something for nothing in every department – free health care, free retirement security, free protection from hazardous consumer products and workplace accidents, free protection from the Islamic maniacs the U.S. government stirs up with its misadventures in the Muslim world, and so forth.  If you take the government to be Santa Claus, you naturally want every day to be Christmas; and the bigger the Santa, the bigger his sack of goodies.

- Bob Higgs via Marginal Revolution

Here’s an interesting thought:  If governments could create wealth and solve all our economic ills, why don’t they do it all the time?  Why wait until a financial collapse before taking action?

Could it be because they can’t? 

In my view, it’s all part of their smoke and mirrors ploy.  Unfortunately for John and Sally Public, they often get caught up in the hype and believe that Washington will make them better off. 

This is why we invest a great deal of our time helping people master their emotions so they will be better suited to participate in the investment process while ignoring the spinmeisters on Wall Street and in Washington.   

So here we are stuck in the precarious economic environment where everyone is wondering:  Where can I put my retirement money so that it will be safe?

Since 1971 that has become a difficult question to answer. 

That was the year Richard Nixon added a heavy dose of government to the financial world by removing the final link between the money in your pocket and gold.

Question:  Which do you see as the safer long term investment – a portfolio filled with dollar-denominated investments such as bonds and CDs or a portfolio managed by Bernie Madoff?

Think hard because it isn’t an exaggeration to say the value of both are tied to assets created out of thin air. 

Here’s another thought:

John Dewey (1859-1952) once stated “You can’t make socialists out of individualists.  Children who know how to think for themselves spoil the harmony of the collective society.”

It should be noted that Mr. Dewey, a member of 15 Marxist front organizations, is often labeled the “founder of modern education.”

So what does this have to do with your financial safety?  Sadly, too much.

Growing up most people never taught the basics of managing money and the impact Washington has on our bottom line.  With pensions drying up and the risk of reduced Social Security and Medicare benefits, one then has to rely on individual savings and investing habits.    

Look across your peer age group and you will see that the majority of folks around you are totally baffled when it comes to these issues, including virtually every one of this nation’s elected officials.

Consider the baby boomer presidents we’ve had:  Clinton, Bush and Obama.

In 1990, three years before Clinton took office, there were 1,176 federal subsidies.  Near the end of the Bush administration that number had surged to 1,804.  To put this growth in context there were 1,019 subsidy programs in the 1970 federal budget.   

For those approaching retirement who remain convinced Obama’s hurt-the-rich campaign will benefit them, I feel sad.  Their retirement futures grow bleaker by the day until they begin to understand the consequences of Washington’s actions. 

For those informed it is proving to be an excellent wealth building opportunity.     

The gloom is easing up a bit and we’ve experienced a nice stock market rally but there is still the chance we have not seen the end of this shakeout.

Lots of silly arguments on the economy are being made from both sides of the political aisle.  Here are some (slightly altered) paragraphs from an article I wrote last January to clarify the conventional thinking: 

The infusion of what is called “loose money” is always a stimulating consequence for the economy in the short term.  The analogy I often use is pumping oxygenated blood into your body.

The downside to the Federal Reserve’s ability to create money out of nothing does cause malinvestment of capital as we’ve witnessed with the housing and banking fallouts.

Long term, creating money without limit always leads to increased prices and less buying power, which is a problem for people with the bulk of their financial assets in bonds, bank CDs, and other dollar-denominated investments.

Continue Reading »