Manarin On Money » government

Barack Obama vs. Ron Paul for President in 2012?

Manarin Investment Counsel — Thu, 15 Apr 2010 16:20:50 +0000

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.

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A Planned Economy – Now and Then

Manarin Investment Counsel — Mon, 08 Mar 2010 19:34:27 +0000

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.

Chart of the Day – Presidential Cabinet Appointees with Private Sector Experience

Manarin Investment Counsel — Thu, 17 Dec 2009 17:56:40 +0000

What Do These Political Terms Really Mean?

Manarin Investment Counsel — Wed, 02 Dec 2009 17:09:51 +0000

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.

A Substitute God

Manarin Investment Counsel — Wed, 11 Nov 2009 17:17:36 +0000

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

Looking Forward

Manarin Investment Counsel — Tue, 28 Apr 2009 16:52:40 +0000

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.

Over the next 10 to 20 years the dollar is set to lose much buying power vs. the stock market, which is likely to rise substantially. Inflation in the long run causes all assets to rise while destroying the buying power of the “safe” investments. We will continue to search the global asset pool for bargains and diversify among the best.

Government Ignorance and Your Money

Manarin Investment Counsel — Wed, 03 Sep 2008 20:56:23 +0000

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.

The reason we haven’t seen major waves of inflation like we saw in the 1970s is because the U.S. economy does not have a shortage of goods to sell to domestic and foreign buyers. This is acting like a sponge soaking up all the new money.

Remember the real definition of inflation: It’s the increase in the supply of dollars which causes prices to rise when not enough goods and services are available to absorb the new money.

The difference between now and the Jimmy Carter days was that back then there was a major economic structural problem – factories were not capable of producing enough stuff to soak up the money being created.

But your typical American understands none of this.

Most come out of school with a socialist view of how the world works. The exposure to economics they had (if any) in college typically follows the statist Keynesian model and not the free market Austrian model I support.

Here’s a simple way to differentiate the two:

Keynesians believe the economy is like a gigantic multinational machine and desired outcomes are derived from a centralized authority who evaluate the economy and carry out orders toward progress they foresee. In other words, a planned economy.

Followers of the Austrian model see this as economic suicide. They see the economy as much more complex than any corporation and instead treat is as an ecology. The greatest abundance and prosperity is going to come from decentralization and support from leaders favoring a competitive, free market environment.

The Soviet Union viewed its economy as a machine while the United States did not. Who came out on the losing end?

It’s sad our elected officials in Washington don’t revisit this key lesson.

McCain has admitted in the past that he does not understand economics. This may explain his vote against tax cuts in 2001 and 2003.

And Obama is your classic taxaholic eager to make “the rich” – households earning more than $108,904 annually - pay their fair share. I guess he missed the memo about taxing the most productive members of the population and the punishing consequences it has on the economy.

KEY POINT: Democrat vs Republican. Conservative vs Liberal. None of that matters. Most of the public is oblivious to the real fight which is between liberty and government authority. Nearly everyone in Washington today favors authority.

This is why I frequently draw attention to my belief that the safest way to manage your financial assets through this political/economic environment is to maintain a slice of your portfolio in gold investments and keep the remainder diversified across a menagerie of other ownership positions.

If America ever returns to the Constitution and a gold standard my investment philosophy may change. So who knows – Winston Churchill noted that the U.S. government always finds the right solution, after it has attempted all other alternatives. We’ve muddled through Richard Nixon and Jimmy Carter . . . and survived.

Wait and see, I guess.

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Related Article:

How Much Are You Paying For Big Government?

ODDS & ENDS: Quote of the Day, Beautiful National Geographic Pictures, and A Funny Cartoon

Quote of the Day: “It is the soldier, not the reporter, who has given us freedom of the press. It is the soldier, not the poet, who has given us freedom of speech. It is the soldier, not the campus organizer, who has given us the freedom to demonstrate. It is the soldier, not the lawyer, who has given us the right to a fair trial. It is the soldier, who salutes the flag, who serves under the flag, and whose coffin is draped by the flag, who allows the protestor to burn the flag.” — Father Dennis Edward O’Brien, USMC

Beautiful National Geographic Pictures: Stunning images from around the world. Click here to view.

A Funny Cartoon: How to irritate Porsche owners, scientists, and English majors. Click here to view.