US Stock Market Stumble - Reprint

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Didn't your MOTHER ever teach you not to be greedy? Don't you wish you had listened?

It's okay, unless you were totally absorbed in imaginary wealth, you'll make it through. The rest of you are screwed. Not my fault, you did it to yourself.

The US stock market stumble isn't the end of the world.

It's the equalizer to bring the high and mighty back into the realm of reality. As it looks at this writing, not even gold is a sacred investment, but that isn't a surprise to people who have looked with open minds rather than open wallets. THERE IS ONLY SO MUCH WEALTH IN THE WORLD. It has always has been that way, and so it will ever be.

For the other 90% of us, there's some really good news. The inflated prices we've been paying for years to boost the incomes of the greedy few at the top are going to drop. It is not inconceivable that we'll see gasoline below 2 bucks a gallon again, and while it won't show up at the grocery store for a few months yet, we'll be seeing the benefits at department stores this holiday season. Those of us who work hard for our money rather than playing with other people's futures are being put on steadier footings than we've had for many years.
Credit is not real wealth. It never was. It never will be.

Go to http://www.myspace.com/illusnist, and read the blog posted November 14, 2007, titled "notes from my debit card." There is nothing happening today that wasn't already in progress a year ago. NOTHING. It has been in progress for over 200 years, perhaps as much as 2000 years.

An excerpt:

For exhibit number two, we'll introduce the influence of government. Like any other business, government wants your money as well. In exchange for your money, government will tell you what to buy, and when to buy and how to buy and why its important to buy it now. They won't TELL YOU they are telling you this. That would collapse the markets. In capitalism, the government is responsible for maintaining the markets. It must regulate the local currency exchange, and modify something that I will call "base value" as needed to keep the economy active. This second part sounds good until some wise-ass points out that "base value" is any arbitrary value. In other words, it isn't real. It is a value that is generated by a very select group of people (in the U.S., this group is the federal reserve, or simply "The Fed"), which has little or no actual basis in reality, but relies of the whims of current events. This number, while being imaginary, is the "base value" on which everything else is priced. And there you have exhibit two, parts A (government guides consumer buying) and B (government sets arbitrary base value of currency). If desired, we could complicate things by adding part C (government prohibits monopolies under exhibit number one to prevent competition under exhibit number two, parts A and B).

Hallelujah, noel, be it heaven or hell, the Christmas we get, we deserve.

Stock Market Woes

Are you having stock market woes?  For many, but only a small percentage of the population, the current stock market implosion is a terrible thing.  For the vast majority of us, it will make our lives a little better.  Let me explain it to you, slowly, and without using too many large words.

When the stock market is high, people were buying those high priced stocks instead of selling them are being set up for failure.  You see, when the price of a stock falls, the value goes down, and a stockholder takes a loss.  On the other hand, as that stock drops, so does the value of that stock as it filters down to the consumer market, and we see companies having price lowering wars to try and lure us in.  They need your money.

Okay, so now mainstreet, who expensive politicians are claiming to want to help, is finally getting a break in a continuous rise in pricing that has gone on for nearly a decade.  Fuel is costing less, food is costing less, the value of items are going down, and it is being reflected in our bank accounts in a way that bail-out billions and tax-payer rebates could never do.  The little guy is not hurt by falling stocks, but helped by them, because the value of that person's money suddenly goes up.

And if you have a few thousand dollars you'd like to do something with, ignore the Wall Street experts who are telling you to hold on to it.  Now is the time to invest, if ever there was one.  Think about it.  Are you more likely to make a profit on stock purchased at 35 a share, or stock purchased at the low of 17 a share?  Come on, folks, this is not rocket science.  The golden rule of stock trading is BUY LOW - SELL HIGH.  The people who don't want you to buy stocks now are the ones who purchased it at a higher price, and hope to drive the value up again to regain some lost revenue.  BUY LOW.  Don't even think about selling anything.  Whatever you have, keep it.  

That includes for selling a car or home.  You can't sell it for the same value it had, so don't try.  HOWEVER, if we BUY LOW, now is excellent for purchasing a home.  Builders are unloading property at record prices right now, to get out from under them.  If you purchase a home now, you are almost certainly guaranteed to make a profit on owning the home in just a few years.  BUY LOW.

Once you've bought a home, a car, and invested in AIG at bargain basement prices, sit on the investments.  The car is going to depreciate anyway, so you can cruise around town while you watch the stock market make a slow turn upward that multiplies the value of your investments.  Stock Market Woes?  Only for those who forgot to BUY LOW, and were stuck with worthless stock.

American Economic Crisis

You know what surprises me the most about the current U.S. economic crisis? It's not the sheer size of the bailout that is required. It's not that without the bailout, the economy can only slip lower. No, those things could be predicted, and anyone of the 3 or 4 people out there who have been reading my useless posts for the past 20 years knows that I've been expecting it. The thing that is a surprise is that no one else realized this was inevitable from the very beginning. And we haven't yet gotten to the exciting part of the ride. Wait until the whole planet finds out that there just isn't enough money to pay the debt, or enough resources to build the products, or enough fuel to power the machines. Cycles do not go forever in one direction, they go high only to fall low and roll around again and again, losing a little more momentum with ever smaller rotations. Until they reach a dead stop.

In the U.S., multi level marketing is illegal. Why is a valid and profitable marketing plan disallowed by law? It was that consideration that first drove home, in my mind, the flaw of the U.S. economic system. You see, MLM cannot be allowed to exist, because it is a model of the U.S. economy in miniature. A company produces a product, and that product is passed through the hands of the company managers to the next lower level of product distributors. The distributors in turn arrange for another level of product distribution below them, and another level below that. And another. And another. The only problem is that the only people who are actually buying the product are the ones at the very bottom of the pyramid, the ones who made the product to begin with, for the people sitting comfortably at the top. Those people live to make a product to earn the money that buys the product that they created. Is there logic in doing the same thing over and over again, and expecting the result to be any different?

Why has no one ever realized the that capitalism never had a hope of working smoothly forever? It cannot be sustained indefinitely by pouring more and more resources into the top tiers of the system. In the end, the people at the bottom simply can't continue to feed the top, produce the product, AND buy the product. This is not a difficult train of logic to follow. It's taught in middle school in the U.S. And yet I have never heard anyone point out the futility that is inherent in the system. Ever.

So here we are, and the people at the top, who own the mortgages on our nation's homes and collect on the balances on our people's credit cards, they are standing in front of us in their $1000 suits and telling us that as American citizens it is our duty to give them enough money to sustain themselves. Giving them the money will not eliminate our mortgages, or ameliorate our debts. We still have to pay the monthly bills, or they'll take everything we have, but we must give them an amount of money that exceeds that very debt as well. Excuse me? Those men in their fancy suits make more money in a single day than I earn in most of a year, and yet it is MY responsibility to bail them out? I think they are going to have to draw me a picture, because I surely don't understand the logic.

Right on, and pigs will fly.

I am a poor person. I rent a room. I pay for my rent, my food, and everything else I must buy with cash. I've always done so. I have done so with a dogged deliberateness that flew in the face of insurance companies who wouldn't insure me because I had no credit. I did it despite automobile dealerships who refused to sell me a car for CASH because I had no established credit. I did it because when the collapse comes, as I've always known it must, I will not be as badly affected by the calamity. I'll still be poor, but guess what? Having lived my life that way, I'll be better able to survive the crash than those whose lives have been dedicated to mounting sums of nonexistent money. I am poor by choice, not by force.

I resent that someone who makes more in a year than I will earn my lifetime needs me to bail them out. I find it laughable and ludicrous that the financial moguls are scrambling for some safe haven in which to continue their inflated egos. I say let them fall. Let them learn to wonder how to pay for next week's groceries, or have to repair a rip in last year's fashions. Let them sell their luxury cars which guzzle the last dregs of fossil fuels and walk to their jobs, or ride the public transportation they've always told me was good enough for such as myself. Let them discover that equality isn't just for the lower class, but it means we are all in the same boat, and that boat has a leak and must be constantly tended to avoid being left adrift without a life raft. Let them wash their dinner dishes with their own hands, and hang their laundry on lines to dry in the sun. After all, it's good enough for me, and they've told me so all my life.

Let the auto insurance companies go, they who have charged me more than the value of all the vehicles I have ever owned regardless that I have rarely sped and never caused an accident; let them fold up and fade away. I've supported them long enough, only to find out that even with the legally required support of an entire population they they have managed to put themselves into a stranglehold of debt. I've paid my share. I've missed my meals so that they could wear their suits, and worked straight through the day and night to give them money I have never seen a return on. I've lived on dried beans and dry rice, stale bread and tap water. Let them find out what it is like to do without, to wear a sweater indoors in the dead of winter, and to rummage through the sofa cushions for a lousy handful of pennies and nickels. Why should I care that they become just like me and my neighbors and their relatives and their friends and a majority of the people that make up and have made this brave nation? What have they ever, even once, done for me in exchange for all they've taken from me?

I haven't eaten at a restaurant in months, not even from the McDonald's dollar menu; I live on simple foods bought at bargain grocers. But I am far from starving, and I am not naked, and I do not get wet when it rains in the night. I do not ask for a hand out on street corners, nor blame my contemporaries for my failures or fallacies. And I am not alone. I am one of hundreds of millions of people scattered all around the globe. In fact, I am in better financial shape than a majority of the world. I am of sound mind and body, and I laugh at jokes and cry out in pain. I do not fear muggers coming out of the fog, because they can see that I've nothing to give them. I do not fear creditors taking my old computer, because it is mine, bought with money earned through hard work and hot sweat. For all the bits of nothing much that I have, my investment is paid and the deal is done. And it has been a fair and honest deal, which allows me peaceful sleep.

I don't envy those businessmen in fancy suits the fall that they must face. It will be hard for them to adjust, and the harsh reality is that many won't adapt at all. But life has always been hard and the idea that it wasn't difficult is not something that the poor people of this country or any other have ever had. They and I cannot afford such convenient lies filled with glitzsy gloss and glamour. For that reason, I cannot summon a false sympathy, or offer any compelling compassion. Let them reap the fruit of what they have sown, and deal with the harvest which they have for so long nurtured, feeding it on the refuse of so many other broken dreams. It isn't my problem, and will have little effect on my way of life. I learned in middle school that capitalism depends on taking from the poor, and lived my life to avoid a collapse that has been building since this country was founded, knowing all the while that it may never come in my lifetime, but prepared for the possibility that it could happen at any time.

When all the money has been channeled to the top of the pyramid, it collapses. MLM plans are illegal for that reason, and to prevent the blatant truth of capitalism from being recognized by the sheeplike masses. I have no sympathy for those who lose the money they've taken in bad deals and fruitless plans. Nor should you. To bail them out will not solve the problem, only postpone it. The only solution is to let the collapse happen, and step aside when the dust billows up from the wreckage of their wasteful expenditures. Whether it happens this year, or next, or twenty years from now, there is no other possible outcome, and we can only begin to rebuild when the rubble lies in a heap that we can pull apart and start with once again.

Illusnist

Financial Crisis?

I'm sorry, but did I fall asleep and miss something important? The Dow Jones, aka Wall Street, has lost more in the past two weeks than it has EVER lost before. Stocks that cost $60/share turned into $1 shares overnight. Investors are going bankrupt, and screaming that they're losing their shirts.

And those same investors are telling you not to buy. Well, duh.

If you buy stocks now, while the price is low, they can never regain their financial advantage. Over YOU. Don't believe everything big business is showing you on the TV, and in the print. The rich and powerful are currently being equalized somewhat, but it can only benefit those of us who hang around on the lower levels.

Think about it. Buying any stock you can afford now, while the bottom has fallen out, is a positive investment. When they put a hole in that drain, your stock is going to skyrocket. Ditto for purchasing a home. If you have the money to invest in real estate, you may never get a better opportunity than you have right now to purchase property at bargain basement prices.

The trick is to have money to invest. Credit is nothing but postponing the inevitable payment, and whether you notice it or not, you are paying a fee for all that "pay later" money. If you are buying with credit, you are actually giving away money to claim you are worth more than you actually are. Someday, the bottom will fall out, and your stock will be worthless, if you follow that path.

Come on, folks. Why is any one telling you not to buy stocks?? The name of the game is to buy low, and sell high, and let me tell you right now, stock prices, even crude oil, are lower right now than they've been in years. Invest now, and plan to sell it back again in about 6 months. The holidays will give everything a boost, and you'll be ready to take a holiday next summer.

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