Thursday, August 20, 2009

Don't let these cretins confiscate your wealth!

I am starting to come full circle with my views as a result of all the nonstop ignorance being spewed by guys like Buffett.

I have gone from deep pessimism on the belief that these misinformed rantings would affect policy in a manner that brings on the very disasters they are taking about.

But now I am now starting to believe that their crazy, uneducated ideas actually will provide the fuel for a massive move in the other direction.

For example, they're all shorting the dollar yet their Armageddon forecasts may actually be causing policy to shift in a manner so as to create a global scarcity of dollars.

We saw the first hint of this last year and early this year when the Fed had to take unprecedented action to supply dollars via the forex swaps. This dollar lending went right over the heads of guys like Buffett, Gross, Schiff, etc. They never even mentioned it. They never understood it and its implications. How smart are they?? Really???

The U.S. current account deficit is dropping, probably in reaction to the rants of the aforementioned. As a result I see the dollar rising, not falling. In fact, their entire argument for a weaker dollar is based on the "debtor nation" idea; that we import more than we export. That's slowly going away.

The short positions of these guys or the short positions of those who follow them will fuel the long-term run higher, I am absolutely certain.

On the debt/inflation front, they have managed to drum up an inordinate fear of deficits, which keeps stimulus to a minimum, which keeps unemployment higher than it otherwise would have been, which keeps inflation low.

There will be no inflation, nor will there be an interest rate spike or massive exodus from Treasuries.

The bad news is, in the long-term, all of this NECESSITATES a lower standard of living for every American--no matter whether they are of the current generation or future generations. What a terrible shame it is for our kids and grandkids.

But if you are a savvy investor you can protect yourself and your families from the outrageous "confiscation" of your wealth and prosperity by these idiots. This is without question a form of tyranny--the tyranny of the ignorant--but you do not have to accept it!

Turn the tables on these cretins who wish to enslave you: cretins like Buffett, Paul Tudor Jones, Pete Peterson, David Walker, Schiff and his followers, and other, ordinary yet misinformed and zealous Americans who believe in this tripe.

It is your duty, no, YOUR RESPONSIBILITY, to do that. All that is asked of you is patience.

You cannot stop the forces that auger for outcomes based upon the REAL fundamentals and the REAL fundamentals are not the ones spoken about by the terrorists. Even THEY cannot stop those fundamentals.

Doing so is like trying to stop the movement of the earth's tectonic plates.

I am convinced that if you take a position against ignorance (i.e. against the rantings of Buffett, Gross, Roubini, Schiff, etc) it will result in you becoming rich beyond your wildest imagination. It WILL happen; it'll just take time.

For those who are patient, the rewards will be great, believe me. Quality rises to the surface...it's the law of the Universe.

In the end this will be, "The greatest wealth transfer in the history of the world," not like that phony sound bite Boone Pickens used to throw around.

5 comments:

Scott C. said...

Mike,

Yes it was wierd that Buffet came out with his panicky vibe on the deficit a day before the White House announced a $250B reduction in the deficit esitmate for FY09. Trying to protect his short on the dollar maybe?

The reduced deficit estimate was said to be due to pulling out a $250B reserve for bank support no longer deemed needed. Bullish sign for banks, don't you think? Also, Hannity quoted Buffet's debt rant yesterday to his 7M audience and then predicted (in effect) that the US stock market was going to zero soon. That does it. I'm buying C and BAC today.

Would you add Laffer to your list of the world-is-ending crowd?

Jersey Kid

Mike Norman said...

Yes...merely saying the world is flat does not make it so, even if 7 million people believe it.

Matt Franko said...

Scott,
I often listen to AM radio (Hannity/Levin/Rush/Savage, etc) on my drive. Do you think they are all "selling gold" like I do? The gold sellers MUST be their biggest advertisers.

Also, remember that the Obama deficit projection you bring up is the Obama Admins deficit ESTIMATE that includes Treasury purchases of financial assets and there is some accrual accounting at play (I never thought it would be as bad as they projected in the first place). My suggestion: stay with Mike here and his on-going analysis of the Daily Treasury Statement, the DTS is more like a "cash basis" accounting and I think more accurate and timely.

Obama's Austin Goolsbee said a while back that any TARP $ returned would go to "deficit reduction" and some firms have returned 10s of billions of $ so now the Admin. have something to brag about in this regard.

I didnt make the link wrt the timing with Buffets NYT article and the Admins. deficit release, good catch...

Be careful with the banks they are all hanging by a very thin "FDIC thread". What I mean by this is that if bank capital comes under pressure again, I think that it will not be as easy for the Obama Admin to go to Congress to get an appropriation as it was for Bush/Paulson ($700B!) due to the reasons that Mike talks about in this post, ie "taxpayer on the hook", "borrow from the Chinese", etc....

Ironically Buffet (Berkshire) is heavily invested in banking Cos. that would suffer greatly if there was political reluctance to making a fiscal transfer to the banks again to recapitalize. After a time I think the Govt would eventually do it, but if this happens it may be painful for bank equity holders until the Govt finally came thru.

googleheim said...

WHY IS IT THAT THE REPUBLICANS ARE BALKING ABOUT HAVING PEOPLE PAY FOR A GOVERNMENT BASED HEALTHCARE PROGRAM WHEN THEY SIMULTANEOUSLY COMPLAIN THAT POOR PEOPLE ALREADY GET FREE HEALTH CARE WITH MEDICAID, CHIP, AND FREE EMERGENCY ROOM.

IF ALL THE IMMIGRANTS GET FREE HEALTHCARE NOW, AND THEN ARE PUSHED INTO A LOW COST VERSION, IS THAT NOT ACCOMPLISHING TWO THINGS -ELLIMINATING THE EXISTING SUBSIDIZED FREE HEALTHCARE, AND FINALLY GETTING THOSE WHO DON'T PAY FOR IT TO FINALLY PAY ?

SO THE QUESTION IS NOT FOR OBAMA SOCIALIZING HEALTHCARE - HE IS ACTUALLY TRYING TO GET PEOPLE TO PAY FOR IT THEREFORE OBAMA IS CAPITALIZING THE EXISTING FREECARE !!!

SO THERE WILL BE REVENUE STREAMS.

THE REPUBLICANS HAVE IT ALL BACKWARDS AGAIN !!

jimbo said...

"Obama's Austin Goolsbee said a while back that any TARP $ returned would go to "deficit reduction""

Yes, but it's really irrelevant either way. Even though the TARP was handled with a congressional appropriation, its net effect was monetary, not fiscal (the money wasn't actually "spent", it was just added to banks Fed accounts. It was counted as "adding to the deficit", but it didn't really add to net financial assets in any meaningful way, and "paying it back" won't remove any.

I suppose it could be a positive, since the TARP was being counted toward the deficit numbers even though it wasn't "real" deficit: maybe the accelerated payback will convince some of the yahoos in D.C. that the government now has more "money to spend"...