Cleaning Up The Federal Reserve Board

The entire Federal Reserve system, that goes back almost a full century, has been corrupted by politics over the years and probably ought to be ended and reconstituted. But that will not happen because of politics.

Also, there should once more be some gold backing to our currency. This will add confidence the world-over to its use of the dollar as an international, convertible currency.

But a move is afoot to streamline it, action that makes sense. One is to remove the Fed's job to enhance full employment. This is impossible while it has to achieve its chief function of monetary management.

Also, the twelve regional bank board presidents ought to have voting power on the Federal Open Market Committee at all times. Now they rotate  their position and only the New York Fed bank president has a permanent seat on that important body.

As a result, you do not get a national consensus of banking influence in the Fed and there is often conflicting ideas on the Fed’s direction. Instead, that direction is influenced by Washington fiscal policy.(See the Earl J. Weinreb NewsHole® comments.)

Stop Beating Up on Speculators

Politicians who should know better but instead are primarily interested in harnessing votes for their next election are always using class warfare as a tool. The rich are a likely scapegoat, followed by “speculators.”

But speculators never really have a fundamental hand in pricing; the law of supply and demand does.

So-called speculators are investors who think prices will go up or down based on market conditions, and really facilitate market actions; they cannot control market exaggeration very long as other traders called arbitragers will even out those conditions.

But politicians are innately what they are, and the public continues to be misinformed by all the talk. (See the Earl J. Weinreb NewsHole® comments.)

The SEC’s Hypocrisy

The Securities & Exchange Commission is the arbiter of what constitutes fraud, though judges and juries at times will disagree.

The SEC will decide, for example, what constitutes financial no-no’s. Yet when they audit the antics of a Ponzi scheme and can find no fraud, they still have the audacity to rule on others who they claim are fraudsters.

I’ve always said that Ponzi schemes are usually easy to spot because the results being claimed by sponsor's are generally too rosy to be true.

Nevertheless, I cannot see how investors in Ponzi schemes can have their profits “clawed back” by bankruptcy trustees when their investments were given SEC periodic audit approval.

One further example; How can you possibly know that software that purports to be able to select securities for investment is acceptable, when deep research shows this type of research has basic flaws? Similar arbitrary advisories may be deemed ill-advised, as others pass the SEC arbitrary gauntlet. (See the Earl J. Weinreb NewsHole® comments.)

We Can All Become Frenchmen --If We’re Lucky?

Many politicians in this country would love to have the U.S. be more like France. Let’s face reality. however. It’s not all brie and wine over there.

Did you know France hasn’t had a budget surplus since 1978? Their debt is now over 85% of GDP and is rising steadily to Greece-like proportions, to well over 90% of GDP. Their tax burden is horrendous. In 2010 it was 42.5% of GDP and rising; one of the highest in Western society. The country now spends over 28% of its GDP on welfare and it’s planning more. 

No small wonder the debt shows up in high unemployment for Europe. It’s employment rate is under 63% compared to Germany’s 76.5% and Switzerland’s 83%.

That’s a lot for U.S. free-spenders to look forward to, with our own, ongoing trillion-dollar budget deficits. Our total worker percentage has been falling while unemployment figures appear to be falling as workers stop looking for non-existent jobs. (See the Earl J. Weinreb NewsHole® comments.)

Importance of Disciplined Strategy

 I have constantly investigated the discipline of strategy use. Discipline is much more essential than strategy usage and upsets the useless market timing plans of the overwhelming majority of investors, professionals as well as just amateurs.

Iron-clad discipline must be part of each strategy. The reason to buy a security has to be an integral part of the eventual reason to sell. That’s discipline. But it isn’t easy to maintain when you’re a Main Street investor having to contend with media noise.

That consists of the usual panoply of opinions, most of which are broker, “adviser,” or salesmen-oriented; inaccurate or biased. ( See the Earl J. Weinreb NewsHole® comments.)

There is Gold and There’s Also Other Gold

Purveyors of gold investments often sell one type without discussing various other forms that you can buy. Or whether everyone ought to be buying gold, even with inflation looming. The public never gets full information, nor the pros and cons of gold ownership.

After all, gold can be in bullion or bars, or coins. And if the latter, they can be rare, or bought just for content. In either instance, they must be stored for safety, and preferably insured.

Furthermore, gold values can be had in mining shares or in the form if mutual funds or ETFs.

There is lots of confusion, and the fear of not getting it exactly right. And I haven’t even gotten to whether gold pricing today is a bubble or not. (See the Earl J. Weinreb NewsHole® comments.)

Maybe We Ought to Stop Using the Term “Capitalism”

Through the ages we have used the strengths of capitalism to help create, broaden and strengthen our society. We have appreciated its advantages without directly attributing those advantages to the actual capitalistic principles.

Capitalism, after all, is nothing more than the use of free market principles, which  all of us use in our private lives to a great extent. Many who call themselves socialists use free market ideas in their everyday actions though they would be the last to realize they do.

It’s when we gave a name to the capitalistic system that we have had a problem. Yet the strengths of capitalism have helped create, broaden and strengthen society.

 while we have developed theories about its disadvantages. Thus, the ideas that “socialism” is superior or perhaps anarchy is best.

However, repeated attempts to initiate experimental socialistic-style government have failed; meanwhile capitalism has become a vulgar expression for many of its alleged enemies.

Furthermore, the ills we attribute to capitalism are never the fault of tampering done by government planners who use cronyism and bureaucratic “regulation” and other heavy-handedness. Much of which have nothing to do with capitalism, but lots to do with socialistic experimentation. (See the Earl J. Weinreb NewsHole® comments.)