By Monty Pelerin, on January 4th, 2010 Casey Research provided the following in an email. Doug Casey is a savvy guy as is David Einhorn who is quoted below. For investors, this might be a good read. At least it should cause you to examine your own investment assumptions.
The Gorilla Trade
Dear Reader,
It has become common for governments to levy large fines against successful companies. For instance, when the EU poked Intel in the eye in 2009 for $1.45 billion for being a tough competitor, an action the U.S. is now looking to get in on itself. Likewise, Microsoft has been forced to pay up over $2 billion and to unbundle much of its own software from its Windows operating system.
For the sake of discussion, let’s assume that, as a regular computer user, I were one of those fully disadvantaged by these miscreants. Let’s further assume that the extent of my lifetime losses – because I personally buy a new computer approximately every couple of years, and Microsoft’s software and Intel’s memory chips were components of those computers – might total the entire $8,000 I estimate I may have spent on their products.
In exchange for my dollars, I’ve received an extraordinarily useful set of tools, starting with the Word processing software I’m using to write you at this very moment. And the amazingly powerful laptop that I’m working on. To achieve the same computational power packed into its two pounds would have required a computer that filled a good-sized
Continue reading Casey on Government as Gorilla
By Monty Pelerin, on December 1st, 2009
School Being Evacuated
1950s School Dance
A post from James Quinn, originally by Casey Research. Funny, true and a marker for how much our schools have been changed. A sad reflection on society.
SCHOOL – 1957 vs 2009
Funny, sad and true. This comes from Casey Research:
SCHOOL — 1957 vs. 2009
Scenario :
Jack goes rabbit shooting before school, pulls into school parking lot with rifle in gun rack.
1957 – Vice principal comes over, looks at Jack’s rifle, goes to his car and gets his rifle and chats with Jack about guns.
2009 – School goes into lockdown, Star Force called, Jack hauled off to jail, and never sees his truck or gun again. Counselors called in for traumatized students and teachers.
Scenario:
Johnny and Mark get into a fistfight after school.
Share/Save
By Monty Pelerin, on November 25th, 2009 This is a letter sent to Casey Research from a senior citizen. His fear is apparent and well-founded. If he is correct (and I believe he is) many of his friends are apt to be wiped out when inflation hits. There are few ways to protect oneself against inflation and none of them are foolproof. That is no reason, however, for pretending that it will not occur. Conventional investments, as he points out, will be devastated.
THE LETTER:
I am a few months short of 70, lived by the rules my entire life, saved my money so as to not burden my children and enjoy the duration. In the late 1980s, I made two mistakes. I told my wife when our investment portfolio reaches “X” amount of money, we can afford to retire. The first mistake was telling her, because we hit that number and she expected I was going to do so. Mercifully, I did not. The second mistake was, I should have actually made the number 20% higher to cover inflation, unexpected expenses, etc. The numbers I used were the result of the computer program Microsoft Money, which supposedly took inflation into consideration.
After 9/11, all things went south and the portfolio fell well below our magic number, which was not only frightening but causes one to lose a whole lot of confidence in himself as an investor. I vowed then and there, if we ever got back above that magic number, I would
Continue reading Some Fear and Wise Advice from a Senior Citizen
By Monty Pelerin, on November 7th, 2009
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Nearly six months ago, I taught a course entitled “Surviving the Crisis.” While not knowing how this crisis will end (either now or back then), I was pretty sure that it could not end given the economic policies put in place. At that time, I stated: “From the standpoint of economics, I don’t think I have ever seen a more harmful set of programs and policies. These started with Bush but have been taken to insane levels by Obama. It defies logic, economics, common sense and history to believe that these programs will help. If implemented and/or continued, they will seriously compromise the nation’s ability to sustain its current standard of living.”
At that point I thought we had reached bottom in terms of economic policy nonsense. Much of what happened, I thought, was the panicked reaction to the financial crisis and the euphoria of a new President. Surely, rational analysis would prevail and policies would change for the better. There was no way to imagine that policies would continue to worsen. At this point, there is no hope for a recovery, despite what one hears in the press. Now I am concerned whether our form of government can be maintained through the next decade. The economic crisis we
Continue reading Why The Economy Will Not Recover
By Monty Pelerin, on October 30th, 2009
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Here is just another ridiculous example of wasted tax dollars from Caseys Daily Dispatch newsletter:
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Cash for Carts
Dear Reader,
You’re going to love this. I came across a recent story from The Wall Street Journal about how Uncle Sam is now paying Americans to buy, of all things, golf carts. Yes, you too can own that great necessity of modern life thanks to the federal tax credit to buy high-mileage cars that was part of President Obama’s stimulus plan.
Here’s an excerpt from the article:
The federal credit provides from $4,200 to $5,500 for the purchase of an electric vehicle, and when it is combined with similar incentive plans in many states the tax credits can pay for nearly the entire cost of a golf cart. Even in states that don’t have their own tax rebate plans, the federal credit is generous enough to pay for half or even two-thirds of the average sticker price of a cart, which is typically in the range of $8,000 to $10,000. “The purchase of some models could be absolutely free,” Roger Gaddis of Ada Electric Cars in Oklahoma said earlier this year. “Is that about the coolest thing you’ve ever heard?”
The golf-cart boom has followed an IRS ruling that golf carts qualify for the electric-car credit as long as they
Continue reading Do You Golf or Just Subsidize Golfers?
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Friedrich von Hayek
Friedrich von Hayek founded the Mont Pelerin Society.
“Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society.
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