Initial Comment
The other side of the (Gold) Coin—but of course. As much as Mr. Farrell offends my sensibilities with this article, I can’t help but agree with him from a pragmatic framework. Nevertheless, I think one should make a ton of money and then find a way to put it to good use. But why does that not happen? Why does it end up that those Goldman Sachs people can never get enough. You see, money becomes an end in and of itself.
Money doesn’t buy happiness—it buys time. But be careful because if you have time on your hands and you waste it, you’re wasting a valuable resource—your life. If you have time and nothing to do, no projects, it breeds boredom.
Currently, there is a tremendous struggle occurring between the haves and the have nots; between wall street and main street. The polies (politicians) just soak up being the center of attention while they absorb all of the dollars coming their way like a sponge soaks up water.
It won’t end well. I’m for population control; nothing drastic—just the idea that people should be responsible and not have more kids than they can afford. But now we have cultural elements from other countries that believe it’s acceptable to have 13 year old children running across the border to deliver babies in US hospitals. Why? Because those 13 year olds will be voting in US Elections a few years from now if the polies have their way.
By the way, call me crazy but the policy that anyone born in the US is automatically a US citizen needs to be reviewed.But I could list 500 of them–antiquated policies and polies, that need to be reviewed! DSA
Six investing rules for a worst-case scenario
By Paul B. Farrell, MarketWatch
April 28, 2009
ARROYO GRANDE, Calif. (MarketWatch) — So Congress enacts financial reforms. Big deal. Wall Street must be drunk on Dom Perignon, celebrating the huge paid-offs from their successful $400 million investment in “kill reform” lobbyists. And that GOP concession? Phony. Wall Street will reward them for the loopholes denuding Dodd’s financial reforms.
And even with all his rants about fat-cats, Obama wins. Expect Wall Street to spend another $400 million to keep Obama in office for a second term.
“Change? Yes we can?” That’s funny today. Obama is now Wall Street’s best asset, their new Trojan Horse replacing Hank Paulson, a troika with Ben Bernanke, Tim Geithner. Wall Street always gets what it wants.
And you can bet they’ll cough up yet another $400 million keeping lawyers and lobbyists busy fighting SEC regulations, to make sure its back to business-as-usual with free-market Reaganomics capitalism. Spending $400 million is chump change compared to the hundreds of billions Wall Street gets cheap from the Treasury and Fed, by playing us taxpayers for suckers after screwing up the economy and triggering the 2008 meltdown.
Yes, we’re suckers, and Wall Street will take advantage of us the next time they melt down, coming soon. What can you do? Shift focus from them to you.
You need a whole new strategy. Are you ready? OK. First, let’s assume you really are tired of the pain of fighting Wall Street. You are? Good. Then you’ve had an epiphany … an awakening … you’ve had one of those rare ah-ha! moments … what Zen masters call enlightenment … you finally see the light … the futility of denying reality … and as you see into this new reality, you surrender the fight, you accept these six secret wisdoms underlying your new investment strategy:
1. Accept that Wall Street money calls the shots in Washington. Period!
Seriously, you stop fighting Wall Street. They won. Admit it. You join with Wall Street in spirit. You flow with this new reality, without being tortured by inner anger because it’s eating you up, worse than marching with the Tea Party. Acceptance works for the president, he’s obviously “at one” with Wall Street. Peace of mind is more important.
Besides, if you think about it, there’s nothing you can do about it. Voting out the bums? That’ll just increase gridlock. Wall Street loves gridlock, makes Washington even easier to manipulate. But if you’re one of the new enlightened investors you accept this new reality even if you’re certain Wall Street’s insatiable greed will eventually destroy America’s cherished democracy and capitalism (which it will).
2. Accept that population is a ticking time-bomb set for 2050
Yes, if Wall Street’s takeover of Washington won’t kill us, the global population bomb will. So you must also accept the larger, global reality: That absent a global disaster of epic proportions, the world population will increase 50% from 6.3 billion to roughly 9.1 billion by 2050, largely in developing nations, as the U.N. predicts. And you realize adding 2.8 billion new humans, all demanding an upgrade to the American Standard of Living will place unsustainable demands on the world’s natural resources.
The coming population boom was highlighted recently in Mother Jones magazine, exposing huge golden investment opportunities for the future. Julia Whitty’s article, “The Last Taboo,” exposes the global cover-up uniting “the Vatican, lefties, conservatives, environmentalists and scientists in a conspiracy of silence.”
Cover-up? Yes. Denial that this population explosion is destined to deplete the planet’s limited resources and destroy civilization. Get it? This conspiracy will make certain absolutely nothing is done to rein in future demand for commodities, putting ever increasing demands on limited natural resources, driving up prices and creating fabulous opportunities for enlightened investors.
3. Accept that commodities growth rate lags population demand
In a second incredible Mother Jones piece, Clive Thompson challenges us with the other self-sabotaging economic taboo in the our blind disregard of the limits of growth: “Nothing Grows Forever. Why Do We Keep Pretending the Economy Will?” Why? Because the human brain cannot face the truth.
And the truth is that world governments and the planet’s 6.3 billion people are on a collision course with the limits of our planet’s resources. Our civilization is on a path of self-destruction, we are in denial and suicidal, not a psychotic playing Russian roulette, more like a divinely inspired kamikaze pilot.
So with open eyes, you accept this new reality that most commodities and natural resources are not renewable, and have a low (or no) growth rate that is insufficient to keep up with the long-term population growth rate of the planet. In short, you accept that absent a miracle, this simple equation clearly means that human civilization is destined to self-destruct. And as crass, materialistic and amoral as that may seem, you realize that this reality presents investment opportunities for enlightened investors.
4. Accept the same ethics as the Goldman/Paulson Conspiracy
Yes, for the near future, you decide to live by the same code of ethics that Wall Street leaders will live by, the same amoral code used by the greedy souls who packaged and sold toxic debt and bogus derivatives to clueless retirement funds, without disclosing their conspiracy’s deceits, like secretly shorting the same securities they were selling. You go long on obvious opportunities. You also short your bets wherever possible.
After all, that’s the new American way, the new code of ethics used by Wall Street and sanctioned by Obama’s Washington. That’s the ethics Goldman and co-conspirators like John Paulson now play by. That’s also the same code of ethics spread across Washington earlier when Hank Paulson, Goldman’s former CEO, was Treasury secretary.
Since Bush brought Goldman and Wall Street into Washington, all of America has lost its moral compass. Accept it, or be consumed by anger. Think positive, see the opportunities, just as does Goldman, Paulson, even Obama and those lobbyists with their $400 million.
5. In acceptance you discover Peace of Mind
Yes, to remain sane, you must accept life on life’s terms, without fighting the new reality. Scott Peck opens his classic “The Road Less Traveled” with an the eternal massage of The Buddha: “Life is difficult. This is a great truth, one of the greatest truths” but “once we see the truth, we transcend it. Once we truly know that life is difficult — once we truly understand and accept it — then life is no longer difficult.” In acceptance you can, as my mentor Joseph Campbell put it, “go to your death singing.”
The rare enlightened investor understands and accepts that Mother Jones two last taboos will continue blinding the vast majority of the humans on Earth until it’s too late to prevent the inevitable, underscoring “one of the disturbing facts of history … that so many civilizations collapse,” as Jared Diamond warns us in “Collapse.” Throughout history, many “civilizations share a sharp curve of decline,” where their “demise may begin only a decade or two after it reaches its peak population, wealth and power.”
We wrote about Diamond’s 12-part equation last year in “The Coming Population Wars: A 12-Bomb Equation.” Now, with the open mind of an enlightened investors please go back and look closely at Diamond’s 12-part equation as 12 sectors for investing opportunities in stocks, bonds and derivatives. Think like the guys in the Goldman-Paulson conspiracy, because that is the only way to invest in the future.
Remember, Wall Street has indexes for every one of those 12 sectors. Ride their growth in prices up, and short their declines, with no moral qualms. Do whatever’s necessary to take full advantage of all the opportunities on the planet just like the soulless Goldman-Paulson conspiracy … that’s the new winning strategy for enlightened investors.
6. Accept life and live to the max, knowing the end can come any time
Prepare for the coming Big One, which can happen at any time: Tomorrow, 2012, 2050, or maybe “Avatar’s” mythic 2154, a mere four generation in the future.
So here are three suggestions to help you plan ahead:
First, adopt the “Swiss Family Robinson” strategy of hedge fund manager Barton Biggs, Morgan Stanley’s former chief strategist. Buy a remote self-sufficient farm, a “safe haven … capable of growing some kind of food … well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc.” and guns ready to fire “a few rounds over the approaching brigands’ heads.”
Next, listen to Richard Clarke, author of the new “Cyber War,” the guy whose al-Qaida warnings Bush ignored before 9/11. Forbes says Clarke located the headquarters of his $125 million antiterrorist consulting firm in “Culpepper, Va., just beyond the nuclear blast radius of Washington … equipped with backup generators and a cellar full of Pinot Noir.”
Finally, invest in a stockpile of supplies for near-term wars and also the collapse of civilization. Go to LifeAftertheOilCrash.net. Echoing the message of Biggs and Clarke, LATOC reminds us that “civilization as we know it is coming to an end soon. This is … the scientific conclusion of the best paid, most widely respected geologists, physicists, bankers and investors in the world.” Check out LATOC’s Preparedness Store where you’ll find: NitroPak freeze-dried food, Micro-Solar generators, Polar Fleece military clothing, Alpine tents, hand-crank radios, NIMB rechargeable batteries, water filtration units, even good old reliable Coleman stoves. Everything you need that your investor friends next door probably won’t have because they think you’re too paranoid.
Bottom line, you enlightened investors now have a two-pronged strategy: A stockpile of provisions for the Big One that could detonate tomorrow with a nuclear attack in a major American city, as worries Clarke. But may not occur for decades, perhaps around 2050 as the United Nations hints. Either way, you’re protected. In addition, your new investment strategy keeps you active the market, taking advantage of “Goldman-Paulson Conspiracy” opportunities while living happily in the everyday business world … at least until that moment of destiny when, as Diamond would say: “Civilization and the planet experiences a sharp and rapid curve of decline that cannot be stopped.”
About Paul B. Farrell
Paul Farrell writes the column on behavioral economics. He’s the author of nine books on personal finance, economics and psychology, including “The Millionaire Code,” “The Winning Portfolio,” “The Lazy Person’s Guide to Investing.” Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology.
Posted by D.Stewart Armstrong in Articles