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Archive for July 29th, 2013

Dodging Thieves 

(A guest essay from “Of Two Minds” – edited)

“Today, as we try to preserve capital and earn a return on it, are we investing, or are we really just trying to dodge thieves?

First of all I question how much real investing is really going on . We continue to lose manufacturing in this country, so in manufacturing, disinvestment is what is going on. People speak of investing in houses, but today’s McMansions, if you look at how they are built, do not qualify as long-term investments. They are built more to allow their owners to participate in a real estate asset bubble rather than to live in and enjoy for generations (which is the purpose houses would be built for in a sane and honest world).

Investments in strip malls and big-box stores do not increase the wealth of the nation. When you have enough retailing, it is enough. You don’t need any more. Adding more retail space is malinvestment. A lot of retail space that is being added now will have to close down if ‘Quantitative Easing’ ever starts tapering in a serious way.

So there is reason to suspect that not very much productive investment is really taking place at all.  Regardless of that, investors still have to dodge the ubiquitous thieves who are swarming all over the landscape.

If you leave your money parked in cash, you will lose it to inflation. Albeit, each person experiences a differing inflation rate; for some people, today’s rate could easily be 10%-15%. That’s how much they lose if they stay in cash.

If you buy commodities futures, you are at the mercy of the thieves who suppress prices with massive naked shorting. Price manipulation is a form of stealing, and many precious metal investors have been victimized lately by the thieves who do it.

If you buy bonds, you are likely buying at the top of a bubble. Running Ponzis in the form of asset bubbles is, of course, another kind of theft.

How about stocks?  I believe that Chinese stocks, like commodity prices, have been manipulated in recent years by the Powers That Be.  Does it make sense that Chinese stocks should have lost 40% of their value since 2010 if their economy is growing 8-10% a year? Does it make sense that U.S. stocks should have gone up as they have? The whole investment environment today stinks of price manipulation.

So the skill we need today is not traditional investing skill; it is thief-dodging skill. It consists of knowing the thieves’ techniques and whom they are targeting, of knowing the bad neighborhoods to avoid, knowing how to avoid being a target, trying to stay one jump ahead of them as they target new victim groups. These are skills people had back in the Dark Ages, and as we enter a new Dark Ages, these are skills we need again.

Millions of middle class people are being wiped out by thieves, and millions more will be wiped out as the trends continue.

~ Jeff W.

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