Investors (sometimes called lemmings) since time immemorial, have a distinct propensity to blindly follow the herd, propelled by corporate-banker-media public relations fiction.
This week, we continue with a list of Common Misconceptions in Today?s News that we started last week.
Common Misconceptions in Today?s News ? PART TWO
Fund managers know better than you where your hard earned money should reside. They prefer that it be in their fund where you must park it for years. This way they can take their 1-2% annual fee plus an average 20% of the net. While we are certain they would like to earn nice gains for you, the reality is, many of these managers could care less as long as they get theirs. This game is a goner in our view. We are not totally against buy and hold but rather suggest that trading often (not day trading) has distinct advantages. Look over the following ideas and misconceptions we think are fraught with wild risk.
17.) It?s easier to open a new USA business now than ever before. Loans are available and sales are out there for the taking. Try to get a new business loan and you will quickly learn otherwise. Even large, stable companies cannot borrow as before because bankers would rather take the spread on government bonds, pay themselves big bonuses and keep the taxpayer cash in their till with no perceived loan risks. At the end, this all fails anyway and the fiat paper collapses, collapsing those banks; too bad for them. Have you noticed how many are leaving the banking business? One reporter said over 600 prominent bankers resigned just this year. What do they know that they aren?t telling us?
18.) Middle Eastern wars and social problems are over. Peace and prosperity are just ahead. War is big business and defense companies in the Western World need a steady stream of demand for their stuff to burn and get blown-up so they can make and sell more. The Middle East is on fire primarily due to religious differences, greed, blackmail, politics and the insanity of old men in funny clothes. War will spread, not diminish. The scary part is that nuclear devices are out there in never-never land, missing and not under any control. It?s only a matter of time.
19.) We are winning the hearts and minds of folks living in the Middle East. Policy, politics and religion within the Middle East are quite different than those of their neighbors and western world nations. Thousands of years of ideas instilled in minds throughout the region will not change, ever.
20.) The $16 Trillion in USA debt is manageable. We just need more time to work our way out of it. There is no possible way to extricate from this debt or most of the debts in other nations dumped on taxpayers and governments by central bankers to promote their schemes. In the USA, the Federal Reserve could write-off many billions in phony issued paper and cooperate to balance the USA national budget; but this never happens. It ends the hard way with crashing bond market values and collapsing economies. It either gets paid or it?s written-off. Written-off = the ending.
21.) Send your kid to college, and load ?em up on student debt and there will be a great job out there right after graduation. Thousands of kids have shiny new degrees and no jobs. Yet, the trades are crying for help and have work for trained youngsters right now. The problem is we have too many college degrees and no demand for those skills. Yet, trade jobs demanding training go begging. Colleges and universities impose big bills on kids that take years to repay. It?s better to get a degree on the Internet for $7,500 (four years) and keep working and living at home while going through it. Some degrees obviously have mandatory campus residency but so many do not. New reports tell us one million freshly minted college grads from the class of 2008 have gone home to live with their parents, as they cannot find work.
22.) The new Obamacare Health Plan will work fine and it?s cheaper and better than old ideas. As one congress woman said, ?We have to pass the law to see what?s in it.? Well it?s passed and many still cannot see what?s in it and these new rules have turned into a huge expensive mess?if in fact the law stays on the books. It?s our view that many just pay the fine and stay away from it.? Medicine will be ruined over years. It?s already a mess with needless and very expensive healthcare plans. We are not health care experts, but things worked fine before HMOs were introduced. We opt to pay cash and get a -38% discount. This shows us what HMOs really cost.
23.) Illegal immigration is under control and the social make-up of the NEW United States is being managed for a great and golden future. We?ve noticed certain immigration problems have been resolved as 1.4 reported million Mexican folks simply went back to Mexico as there was more available work there than in the USA. What does that tell us about our nation? Other nationalities are pouring into the USA and Canada having long-term and very serious implications. As the story goes, these billions in new welfare burdens will hammer the national economies creating other kinds of social problems due to no assimilation into American society.
24.) Just because there are 50 million on food stamps doesn?t mean those folks can?t get a job. The unemployed jobless rate in the USA is only 8% or so. That number can be managed. True unemployment in the USA is 25%. That includes those receiving welfare checks, those getting no checks and thrown off the rolls, and those vastly underemployed working only part time at minimum wage to eat and survive. Numerous former major industries like housing have been nearly, totally ruined. Good manufacturing jobs are mostly gone forever to foreign nations on pure economics. The very fabric of society has been permanently changed.
25.) All of those thousands of bureaucratic rules, red tape etc. won?t hurt current or new business. Small business in the USA is leading the way out of the recession. National, state and local governments have the ability to keep passing stupid rules. To justify their very existence they insist on new and ridiculous laws and rules creating such a burden with ?politically correct stuff? that small business cannot grow, many are failing and new ones are not being started. This red tape load is just too much to carry and deal with for small business people.
26.) Big companies have loads of cash and will spend it on expansion and new jobs. Big companies have slimmed down, and are not hiring but rather finding ways to fire more employees and/or have one person do the job of three or four. They are saving cash to survive Greater Depression II with reduced sales demand and higher expenses. This is a no-growth negative environment that continues until the next world war.
27.) All government large and small is shrinking; it not expanding. Salaries, benefits and working conditions in governments greatly exceed private industry and business. Some are reducing employment rolls but only if they are forced to do so having no funds. Unions don?t care and continue to ask for more in a contentious environment. Eventually, some government bodies file bankruptcy and then do not have the ability to sell bonds to continue operations. Some political entities have merged with counties, or other towns and cities. It just keeps going until there is no way out.
28.) Defense industry spending is being curtailed. Our nation is at greater risk. Some kinds of very expensive defense products like certain missiles or airplanes are being mothballed. However, the defense industries shall continue forward making stuff for war. When the next war begins, expansion begins anew and more spending is the norm with dramatic waste throughout the process. War is the ultimate jobs program as civilians make war products and soldiers go fight.
29.) Free speech remains the norm. You can do or say anything you wish. This nation is free.? There is little peace and tranquility among many cultures as several are jealous of the others getting more free stuff.? This creates dissention, rivalry and violence. Politically correct speech has gotten ridiculously childish. It has gotten to the point where people either say what they think, argue and fight; or say nothing for fear of offending someone. Free speech is no longer our MO. Political correctness has trumped.
30.) Government leaders worldwide have things under total control and really know what they are doing. There are so many problems in the world created by economic imbalances that several new and serious problems have emerged.? If we had the time and inclination we could easily list 100 things that would set-off serious problems domestically and internationally. World leaders are figuratively going to ?step in it? and then the real adventure begins. Who knows where or when?
31.) The president?s re-election is good for the United States and the world. These folks are very smart, work hard and will do the right thing for us and for the world at large. There are thousands of others reporting on the elections having information that we do not. We have seen so many defective and negative things regarding elections we?ll just refrain from comment on this one.
32.) Politics and voting are fair and balanced. There are rules and they will be followed very carefully. There is great fear of voter fraud and unfair elections in several nations and states. We noticed lawsuits on this in Nevada in the last election and expect it to spread. We suggest that all eligible voters get out and vote. If you don?t vote you can?t complain. Hope for the best.
These ideas are common in the news and on the street. If you believe this nonsense, you will believe anything. Wake up!
In closing, we will reiterate what works.
Stuff That Works
Understand your market and educate yourself to do a few things right. You do not need 50 stocks and 40 others to make money. Some of the best of the best do only one thing.? Look where you would be right now if you had piled into physical gold and silver in the year 2000.
While all eyes are on Europe?s destruction, the USA?s test comes November 6th. It might even arrive sooner if the broader stock markets slide out of control during September 23-25.
Meanwhile, we suggest you gravitate toward physical gold and silver and only the best-of-the-best of related stocks supporting that view.? In our work, we are busy looking for options and selling ideas for the broader stock markets heading toward the dustbin of destruction. Last week we recommended two new ones in Trader Tracks Newsletter. We see more coming in this new seasonal beginning.
The Greater Depression Repression II is swiftly taking hold now and layoffs will be legendary. Housing has an additional -20% drop from the current USA national average.? Joblessness goes to 30%-35% and food stamps reach over 50 million to 60 million. We will get a 2013-2014 World War in the Middle East and when Obama is reelected, inflation goes to hyperinflation. Not happy stuff but it?s not the end of the world either.
Somebody please tell us when the global bond markets crash for good and we?ll tell you when this can all get better and we can start all over again, maybe with a partially backed fiat gold currency.
Roger Wiegand is the writer and editor of Trader Tracks Newsletter for gold, silver and energy traders. Roger provides recommendations for short and long term traditional stock shares, futures and commodities trading with specifics for individual trades. Stay tuned for more of Traderrog?s insights and predictions via his exciting new daily audio subscription.? Coming soon! Details at www.wavelengthpublishing.com
Roger also is a regular contributor to The Korelin Economics Report (www.kereport.com) the highest rated Internet radio program listened to throughout the world. It specializes in politics and hard assets. He is also a regular guest on the Weekend Edition of The Korelin Economics Report, which airs on radio stations across the U.S. on Saturdays and Sundays.
Source: http://www.kereport.com/2012/10/01/lemmings-investors-gold-part/
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